Cover Page
Cover Page | 3 Months Ended |
Jan. 29, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jan. 29, 2023 |
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 $.01 per share |
Trading Symbol | AMAT |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 845,118,427 |
Entity Central Index Key | 0000006951 |
Current Fiscal Year End Date | --10-29 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 6,739 | $ 6,271 |
Cost of products sold | 3,594 | 3,312 |
Gross profit | 3,145 | 2,959 |
Operating expenses: | ||
Research, development and engineering | 771 | 654 |
Marketing and selling | 197 | 167 |
General and administrative | 207 | 166 |
Severance and related charges | 0 | (4) |
Total operating expenses | 1,175 | 983 |
Income from operations | 1,970 | 1,976 |
Interest expense | 59 | 57 |
Interest and other income (loss), net | 50 | 6 |
Income before income taxes | 1,961 | 1,925 |
Provision for income taxes | 244 | 133 |
Net income | $ 1,717 | $ 1,792 |
Earnings per share: | ||
Basic (in dollars per share) | $ 2.03 | $ 2.02 |
Diluted (in dollars per share) | $ 2.02 | $ 2 |
Weighted average number of shares: | ||
Basic (in shares) | 845 | 889 |
Diluted (in shares) | 849 | 897 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,717 | $ 1,792 |
Other comprehensive income (loss), net of tax: | ||
Change in unrealized gain (loss) on available-for-sale investments | 23 | (15) |
Change in unrealized net loss on derivative instruments | (56) | (3) |
Other comprehensive income (loss), net of tax | (33) | (18) |
Comprehensive income | $ 1,684 | $ 1,774 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,547 | $ 1,995 |
Short-term investments | 500 | 586 |
Accounts receivable, net | 5,385 | 6,068 |
Inventories | 6,054 | 5,932 |
Other current assets | 1,229 | 1,344 |
Total current assets | 16,715 | 15,925 |
Long-term investments | 2,088 | 1,980 |
Property, plant and equipment, net | 2,494 | 2,307 |
Goodwill | 3,718 | 3,700 |
Purchased technology and other intangible assets, net | 332 | 339 |
Deferred income taxes and other assets | 2,612 | 2,475 |
Total assets | 27,959 | 26,726 |
Current liabilities: | ||
Short-term debt | 199 | 0 |
Accounts payable and accrued expenses | 3,969 | 4,237 |
Contract liabilities | 3,082 | 3,142 |
Total current liabilities | 7,250 | 7,379 |
Long-term debt | 5,458 | 5,457 |
Income taxes payable | 975 | 964 |
Other liabilities | 856 | 732 |
Total liabilities | 14,539 | 14,532 |
Stockholders’ equity: | ||
Common stock | 8 | 8 |
Additional paid-in capital | 8,605 | 8,593 |
Retained earnings | 39,389 | 37,892 |
Treasury stock | (34,347) | (34,097) |
Accumulated other comprehensive loss | (235) | (202) |
Total stockholders’ equity | 13,420 | 12,194 |
Total liabilities and stockholders’ equity | $ 27,959 | $ 26,726 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning Balance, (in shares) at Oct. 31, 2021 | 892 | |||||
Treasury stock, beginning balance (in shares) at Oct. 31, 2021 | 1,119 | |||||
Beginning Balance at Oct. 31, 2021 | $ 12,247 | $ 9 | $ 8,247 | $ 32,246 | $ (27,995) | $ (260) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,792 | 1,792 | ||||
Other comprehensive income (loss), net of tax | (18) | (18) | ||||
Dividends declared | (211) | (211) | ||||
Share-based compensation | 118 | 118 | ||||
Issuance under stock plans (in shares) | 3 | |||||
Issuance under stock plans | $ (235) | (235) | ||||
Common stock repurchases (in shares) | (12) | (12) | (12) | |||
Common stock repurchases | $ (1,803) | $ (1,803) | ||||
Ending Balance, (in shares) at Jan. 30, 2022 | 883 | |||||
Treasury stock, ending balance (in shares) at Jan. 30, 2022 | 1,131 | |||||
Ending Balance at Jan. 30, 2022 | 11,890 | $ 9 | 8,130 | 33,827 | $ (29,798) | (278) |
Beginning Balance, (in shares) at Oct. 30, 2022 | 844 | |||||
Treasury stock, beginning balance (in shares) at Oct. 30, 2022 | 1,173 | |||||
Beginning Balance at Oct. 30, 2022 | 12,194 | $ 8 | 8,593 | 37,892 | $ (34,097) | (202) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,717 | 1,717 | ||||
Other comprehensive income (loss), net of tax | (33) | (33) | ||||
Dividends declared | (220) | (220) | ||||
Share-based compensation | 148 | 148 | ||||
Issuance under stock plans (in shares) | 3 | |||||
Issuance under stock plans | $ (136) | (136) | ||||
Common stock repurchases (in shares) | (2) | (2) | (2) | |||
Common stock repurchases | $ (250) | $ (250) | ||||
Ending Balance, (in shares) at Jan. 29, 2023 | 845 | |||||
Treasury stock, ending balance (in shares) at Jan. 29, 2023 | 1,175 | |||||
Ending Balance at Jan. 29, 2023 | $ 13,420 | $ 8 | $ 8,605 | $ 39,389 | $ (34,347) | $ (235) |
Consolidated Condensed Statem_4
Consolidated Condensed Statements of Stockholders' Equity (Parenthetical) - $ / shares | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2022 | Jan. 29, 2023 | Jan. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per share (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.24 |
Consolidated Condensed Statem_5
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 1,717 | $ 1,792 |
Adjustments required to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 120 | 102 |
Severance and related charges | 0 | (4) |
Share-based compensation | 148 | 118 |
Deferred income taxes | (21) | 1 |
Other | 7 | 16 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 683 | 548 |
Inventories | (122) | (217) |
Other current and non-current assets | 109 | 347 |
Accounts payable and accrued expenses | (567) | (393) |
Contract liabilities | (60) | 321 |
Income taxes payable | 215 | (34) |
Other liabilities | 41 | 61 |
Cash provided by operating activities | 2,270 | 2,658 |
Cash flows from investing activities: | ||
Capital expenditures | (287) | (144) |
Cash paid for acquisitions, net of cash acquired | (20) | 0 |
Proceeds from sales and maturities of investments | 414 | 318 |
Purchases of investments | (406) | (312) |
Cash used in investing activities | (299) | (138) |
Cash flows from financing activities: | ||
Proceeds from commercial paper | 298 | 0 |
Repayments of commercial paper | (100) | 0 |
Common stock repurchases | (250) | (1,803) |
Tax withholding payments for vested equity awards | (136) | (235) |
Payments of dividends to stockholders | (220) | (214) |
Financing cash flows paid for finance leases | (10) | 0 |
Cash used in financing activities | (418) | (2,252) |
Increase in cash, cash equivalents and restricted cash equivalents | 1,553 | 268 |
Cash, cash equivalents and restricted cash equivalents — beginning of period | 2,100 | 5,101 |
Cash, cash equivalents and restricted cash equivalents — end of period | 3,653 | 5,369 |
Reconciliation of cash, cash equivalents, and restricted cash equivalents | ||
Cash and cash equivalents | 3,547 | 5,264 |
Restricted cash equivalents included in deferred income taxes and other assets | 106 | 105 |
Total cash, cash equivalents, and restricted cash equivalents | 3,653 | 5,369 |
Supplemental cash flow information: | ||
Cash payments for income taxes | 69 | 80 |
Cash refunds from income taxes | 4 | 123 |
Cash payments for interest | $ 34 | $ 34 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jan. 29, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation In the opinion of our management, the unaudited interim consolidated condensed financial statements of Applied Materials, Inc. and its subsidiaries (we, us, and our) included herein have been prepared on a basis consistent with the October 30, 2022 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly state the information set forth therein. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 30, 2022 (2022 Form 10-K). 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. Our results of operations for the three months ended January 29, 2023 are not necessarily indicative of future operating results. Our fiscal year ends on the last Sunday in October of each year. Fiscal 2023 and 2022 contain 52 weeks each and the first three months of fiscal 2023 and 2022 each contained 13 weeks. Recent Accounting Pronouncements Accounting Standards Not Yet Adopted Disclosures by Business Entities about Government Assistance. In November 2021, the Financial Accounting Standard Board (FASB) issued an accounting standard update which requires annual disclosures related to certain government assistance received by business entities (Topic 832) including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This authoritative guidance is effective for us in our fiscal 2023 Form 10-K. The adoption of this authoritative guidance is not expected to have a significant impact to our financial results and only impacts the disclosures in our notes to consolidated financial statements. Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. In June 2022, the FASB issued an accounting standard update which clarifies how the fair value of equity securities subject to contractual sale restrictions is determined (Topic 820). The amendment clarifies that a contractual sale restriction should not be considered in measuring fair value. It also requires certain qualitative and quantitative disclosures related to equity securities subject to contractual sale restrictions. This authoritative guidance will be effective for us in the first quarter of fiscal 2025, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated condensed 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 us in the first quarter of fiscal 2024, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated condensed financial statements. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jan. 29, 2023 | |
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. Our net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to our non-complex capital structure. Three Months Ended January 29, January 30, (In millions, except per share amounts) Numerator: Net income $ 1,717 $ 1,792 Denominator: Weighted average common shares outstanding 845 889 Effect of weighted dilutive restricted stock units and employee stock purchase plan shares 4 8 Denominator for diluted earnings per share 849 897 Basic earnings per share $ 2.03 $ 2.02 Diluted earnings per share $ 2.02 $ 2.00 Potentially weighted dilutive securities 2 — Potentially weighted dilutive securities attributable to outstanding restricted stock units are excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value are greater than the average market price of our common stock, and therefore their inclusion would be anti-dilutive. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 3 Months Ended |
Jan. 29, 2023 | |
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 our cash, cash equivalents and investments by security type: January 29, 2023 Cost Gross Gross Estimated (In millions) Cash $ 1,225 $ — $ — $ 1,225 Cash equivalents: Money market funds 1,412 — — 1,412 Bank certificates of deposit and time deposits 80 — — 80 Municipal securities 10 — — 10 Commercial paper, corporate bonds and medium-term notes 820 — — 820 Total Cash equivalents 2,322 — — 2,322 Total Cash and Cash equivalents $ 3,547 $ — $ — $ 3,547 Short-term and long-term investments: Bank certificates of deposit and time deposits $ 7 $ — $ — $ 7 U.S. Treasury and agency securities 444 — 9 435 Non-U.S. government securities* 7 — 1 6 Municipal securities 372 1 10 363 Commercial paper, corporate bonds and medium-term notes 579 1 15 565 Asset-backed and mortgage-backed securities 443 1 15 429 Total fixed income securities 1,852 3 50 1,805 Publicly traded equity securities 85 57 12 130 Equity investments in privately-held companies 573 83 3 653 Total equity investments 658 140 15 783 Total short-term and long-term investments $ 2,510 $ 143 $ 65 $ 2,588 Total Cash, Cash equivalents and Investments $ 6,057 $ 143 $ 65 $ 6,135 _________________________ * Includes Canadian provincial government debt. October 30, 2022 Cost Gross Gross Estimated (In millions) Cash $ 1,199 $ — $ — $ 1,199 Cash equivalents: Money market funds 660 — — 660 U.S. Treasury and agency securities 4 — — 4 Municipal securities 13 — — 13 Commercial paper, corporate bonds and medium-term notes 119 — — 119 Total Cash equivalents 796 — — 796 Total Cash and Cash equivalents $ 1,995 $ — $ — $ 1,995 Short-term and long-term investments: Bank certificates of deposit $ 7 $ — $ — $ 7 U.S. Treasury and agency securities 435 — 13 422 Non-U.S. government securities* 7 — 1 6 Municipal securities 389 — 16 373 Commercial paper, corporate bonds and medium-term notes 595 — 21 574 Asset-backed and mortgage-backed securities 432 — 19 413 Total fixed income securities 1,865 — 70 1,795 Publicly traded equity securities 85 63 26 122 Equity investments in privately-held companies 567 86 4 649 Total equity investments 652 149 30 771 Total short-term and long-term investments $ 2,517 $ 149 $ 100 $ 2,566 Total Cash, Cash equivalents and Investments $ 4,512 $ 149 $ 100 $ 4,561 _________________________ *Includes Canadian provincial government debt. Maturities of Investments The following table summarizes the contractual maturities of our investments as of January 29, 2023: Cost Estimated (In millions) Due in one year or less $ 464 $ 459 Due after one through five years 938 910 Due after five years 7 7 No single maturity date** 1,101 1,212 Total $ 2,510 $ 2,588 _________________________ ** 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 During the three months ended January 29, 2023 and January 30, 2022 gross realized gains and losses on investments were not material. As of January 29, 2023, and October 30, 2022, gross unrealized losses related to our debt investment portfolio were not material. We regularly review our 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 we 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 the three months ended January 29, 2023 and January 30, 2022, we did not recognize material credit losses and the ending allowance for credit losses was not material to our debt investment portfolio. Impairment charges on equity investments in privately-held companies during the three months ended January 29, 2023 and January 30, 2022 were not material. These impairment charges are included in interest and other income, net in the Consolidated Condensed Statement of Operations. The components of gain (loss) on equity investments for the three months ended January 29, 2023 and January 30, 2022 were as follows: Three Months Ended January 29, January 30, (In millions) Publicly traded equity securities Unrealized gain $ 18 $ 1 Unrealized loss (16) (8) Realized gain on sales — 2 Realized loss on sales (1) — Equity investments in privately-held companies Unrealized gain 4 12 Unrealized loss (2) — Realized gain on sales 5 — Realized loss on sales or impairment — (4) Total gain (loss) on equity investments, net $ 8 $ 3 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jan. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our 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. Our 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 We use 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. Our 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, we use 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, we generally obtain non-binding price quotes from brokers. In addition, to validate pricing information obtained from pricing services, we periodically perform supplemental analysis on a sample of securities. We review any significant unanticipated differences identified through this analysis to determine the appropriate fair value. As of January 29, 2023, substantially all of our available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. Our 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: January 29, 2023 October 30, 2022 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Available-for-sale debt security investments Money market funds* $ 1,518 $ — $ 1,518 $ 765 $ — $ 765 Bank certificates of deposit and time deposits — 87 87 — 7 7 U.S. Treasury and agency securities 394 41 435 404 22 426 Non-U.S. government securities — 6 6 — 6 6 Municipal securities — 373 373 — 386 386 Commercial paper, corporate bonds and medium-term notes — 1,385 1,385 — 693 693 Asset-backed and mortgage-backed securities — 429 429 — 413 413 Total available-for-sale debt security investments $ 1,912 $ 2,321 $ 4,233 $ 1,169 $ 1,527 $ 2,696 Equity investments with readily determinable values Publicly traded equity securities $ 130 $ — $ 130 $ 122 $ — $ 122 Total equity investments with readily determinable values $ 130 $ — $ 130 $ 122 $ — $ 122 Total $ 2,042 $ 2,321 $ 4,363 $ 1,291 $ 1,527 $ 2,818 _________________________ * Amounts as of January 29, 2023 and October 30, 2022, include $106 million and $105 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 We did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of January 29, 2023 or October 30, 2022. Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis Our equity investments without readily determinable values consist of equity investments in privately-held companies. We 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. Impairment charges on equity investments in privately-held companies during the three months ended January 29, 2023 and January 30, 2022 were not material. Other The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash equivalents, accounts receivable, commercial paper notes, and accounts payable and accrued expenses, approximate fair value due to their short maturities. As of January 29, 2023, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion and the estimated fair value was $5.2 billion. As of October 30, 2022, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion and the estimated fair value was $4.8 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 10 of the Notes to the Consolidated Condensed Financial Statements for further detail of existing debt. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Jan. 29, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivative Financial Instruments We conduct 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. We use derivative financial instruments, such as foreign currency forward and option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months. The purpose of our 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. We do not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign 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 our 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 as of January 29, 2023 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, we promptly recognize 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 the three months ended January 29, 2023 and January 30, 2022. 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 January 29, 2023 and October 30, 2022, the total outstanding notional amounts of foreign exchange contracts were both $2.1 billion. The fair values of foreign exchange derivative instruments as of January 29, 2023 and October 30, 2022 were not material. 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: Three Months Ended January 29, January 30, (In millions) Derivatives in Cash Flow Hedging Relationships: Foreign exchange contracts $ (49) $ 5 Total $ (49) $ 5 The effects of derivative instruments and hedging activities on the Consolidated Condensed Statements of Operations were as follows: Three Months Ended January 29, 2023 January 30, 2022 Derivatives in Cash Flow Hedging Relationships Derivatives in Cash Flow Hedging Relationships Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amount of Gain (Loss) Excluded from Effectiveness Testing Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amount of Gain (Loss) Excluded from Effectiveness Testing (In millions) Foreign Exchange Contracts: Net Sales $ 6,739 $ 25 $ — $ 6,271 $ 13 $ — Cost of products sold $ 3,594 2 — $ 3,312 (2) — Research, development and engineering $ 771 — — $ 654 1 — Interest Rate Contracts: Interest expense $ 59 (3) — $ 57 (3) — $ 24 $ — $ 9 $ — Amount of Gain or (Loss) Three Months Ended Location of Gain or January 29, January 30, (In millions) Derivatives Not Designated as Hedging Instruments Foreign exchange contracts Interest and other income, net $ (48) $ — Total return swaps - deferred compensation Cost of products sold 1 (1) Total return swaps - deferred compensation Operating expenses 12 (7) Total return swaps - deferred compensation Interest and other income, net (2) — Total $ (37) $ (8) Credit Risk Contingent Features If our 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 January 29, 2023. Entering into derivative contracts with banks exposes us to credit-related losses in the event of the banks’ nonperformance. However, our exposure is not considered significant. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Jan. 29, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount 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. We sold $279 million and $205 million of account receivables during the three months ended January 29, 2023 and January 30, 2022, respectively. We did not discount letters of credit issued by customers or discount promissory notes during the three months ended January 29, 2023 and January 30, 2022. Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Condensed Statements of Operations and were not material for all periods presented. Accounts receivable are presented net of allowance for credit losses of $29 million as of January 29, 2023 and as of October 30, 2022. We sell our products principally to manufacturers within the semiconductor and display industries. While we believe that our allowance for credit losses is adequate and represents our best estimate as of January 29, 2023, we continue to closely monitor customer liquidity and industry and economic conditions, which may result in changes to our estimates. |
Contract Balances
Contract Balances | 3 Months Ended |
Jan. 29, 2023 | |
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. Our 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 Condensed 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: January 29, 2023 October 30, 2022 (In millions) Contract assets $ 155 $ 173 Contract liabilities $ 3,082 $ 3,142 The decrease in contract assets during the three months ended January 29, 2023 was primarily due to a reduction in payments that were conditional upon technical sign off. During the three months ended January 29, 2023, we recognized revenue of approximately $1.6 billion related to contract liabilities at October 30, 2022. Contract liabilities decreased during the three months ended January 29, 2023 due to revenue recognized related to contract liabilities at October 30, 2022, partially 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 January 29, 2023. There were no credit losses recognized on our accounts receivables and contract assets during both the three months ended January 29, 2023 and January 30, 2022. As of January 29, 2023, the amount of remaining unsatisfied performance obligations on contracts with an original estimated duration of one year or more was approximately $4.2 billion, of which approximately 45% is expected to be recognized within 12 months and the remainder is expected to be recognized within the following 24 months thereafter. We have 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 | 3 Months Ended |
Jan. 29, 2023 | |
Balance Sheet Detail [Abstract] | |
Balance Sheet Detail | Balance Sheet Detail January 29, October 30, (In millions) Inventories Customer service spares $ 1,498 $ 1,409 Raw materials 1,829 1,807 Work-in-process 1,094 1,029 Finished goods Deferred cost of sales 697 704 Evaluation inventory 408 422 Manufactured on-hand inventory 528 561 Total finished goods 1,633 1,687 Total inventories $ 6,054 $ 5,932 January 29, October 30, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 462 $ 461 Prepaid expenses and other 767 883 $ 1,229 $ 1,344 Useful Life January 29, October 30, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 387 $ 387 Buildings and improvements 3-30 2,063 2,027 Demonstration and manufacturing equipment 3-5 2,141 2,083 Furniture, fixtures and other equipment 3-5 745 743 Construction in progress 579 389 Gross property, plant and equipment 5,915 5,629 Accumulated depreciation (3,421) (3,322) $ 2,494 $ 2,307 January 29, October 30, (In millions) Deferred Income Taxes and Other Assets Non-current deferred income taxes $ 1,522 $ 1,395 Operating lease right-of-use assets 390 389 Finance lease right-of-use assets 94 — Income tax receivables and other assets 606 691 $ 2,612 $ 2,475 January 29, October 30, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 1,611 $ 1,755 Compensation and employee benefits 564 905 Warranty 302 286 Dividends payable 220 220 Income taxes payable 517 319 Other accrued taxes 28 30 Interest payable 55 39 Operating lease liabilities, current 89 85 Other 583 598 $ 3,969 $ 4,237 January 29, October 30, (In millions) Other Liabilities Defined and postretirement benefit plans $ 117 $ 107 Operating lease liabilities, non-current 287 287 Finance lease liabilities, non-current 85 — Other 367 338 $ 856 $ 732 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Jan. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and 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. Goodwill As of January 29, 2023, our reporting units include Semiconductor Products Group and Imaging and Process Control Group, Applied Global Services, Display and Adjacent Markets and other reporting units recorded under Corporate and Other. Details of goodwill as of January 29, 2023 and October 30, 2022 were as follows: January 29, October 30, (In millions) Goodwill by reportable segment Semiconductor Systems $ 2,446 $ 2,428 Applied Global Services 1,032 1,032 Display and Adjacent Markets 199 199 Corporate and Other 41 41 $ 3,718 $ 3,700 The Semiconductor Products Group and Imaging and Process Control Group combine to form the Semiconductor Systems reporting segment. From time to time, we acquire companies related to our existing or new markets. During the first three months of fiscal 2023, goodwill increased primarily due to the preliminary purchase accounting for an acquisition during the first quarter of fiscal 2023, which was not material to our results of operations or to our balance sheet. Intangible Assets Details of intangible assets other than goodwill were as follows: January 29, 2023 October 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions) Intangible assets with finite lives: Semiconductor Systems $ 1,989 $ (1,685) $ 304 $ 1,985 $ (1,675) $ 310 Applied Global Services 79 (77) 2 79 (77) 2 Display and Adjacent Markets 194 (194) — 194 (194) — Corporate and Other 36 (27) 9 36 (26) 10 Total intangible assets with finite lives $ 2,298 $ (1,983) $ 315 $ 2,294 $ (1,972) $ 322 Intangible assets with indefinite lives: Semiconductor Systems $ 16 $ — $ 16 $ 16 $ — $ 16 Applied Global Services — — — — — — Display and Adjacent Markets — — — — — — Corporate and Other 1 — 1 1 — 1 Total intangible assets with indefinite lives $ 17 $ — $ 17 $ 17 $ — $ 17 Total intangible assets $ 2,315 $ (1,983) $ 332 $ 2,311 $ (1,972) $ 339 The increase in intangible assets during the first three months of fiscal 2023 was primarily due to the preliminary purchase accounting for an acquisition during the first quarter of fiscal 2023, which was not material to our results of operations. Intangible assets with indefinite lives that are not subject to amortization consist primarily of in-process technology, which will be subject to amortization upon commercialization. If an in-process technology project is abandoned, the acquired technology attributable to the project will be written-off. Amortization expense of intangible assets were $11 million and $10 million during the three months ended January 29, 2023 and January 30, 2022, respectively. As of January 29, 2023, future estimated amortization expense of intangible assets with finite lives is expected to be as follows: Amortization Expense (In millions) 2023 (remaining 9 months) $ 31 2024 39 2025 38 2026 37 2027 24 Thereafter 146 Total $ 315 |
Borrowing Facilities and Debt
Borrowing Facilities and Debt | 3 Months Ended |
Jan. 29, 2023 | |
Debt Disclosure [Abstract] | |
Borrowing Facilities and Debt | Borrowing Facilities and Debt Revolving Credit Facilities In February 2020, we 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 we 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. Subsequent to the end of our first quarter of fiscal 2023, we entered into an agreement with our lenders to extend the termination date of the Revolving Credit Agreement from February 2025 to February 2026. The termination date may be further 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 us, plus an applicable margin, which varies according to our public debt credit ratings. No amounts were outstanding under the Revolving Credit Agreement as of January 29, 2023 and October 30, 2022. In addition, we have revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $62 million in aggregate at any time. Our 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 January 29, 2023 and October 30, 2022, no amounts were outstanding under these revolving credit facilities. Short-term Commercial Paper We have a short-term commercial paper program under which we may issue unsecured commercial paper notes of up to a total amount of $1.5 billion. The proceeds from the issuances of the commercial paper program are used for general corporate purposes. As of January 29, 2023, we had commercial paper notes outstanding with an aggregate principal amount of $200 million, which were recorded as short-term debt with a weighted-average interest rate of 4.48% and maturities ranging from 55 days to 63 days. We did not have any commercial paper notes outstanding as of October 30, 2022. Senior Unsecured Notes Debt outstanding as of January 29, 2023 and October 30, 2022 was as follows: Principal Amount January 29, October 30, 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 (12) (12) Total unamortized debt issuance costs (30) (31) Total long-term debt $ 5,458 $ 5,457 |
Leases
Leases | 3 Months Ended |
Jan. 29, 2023 | |
Leases [Abstract] | |
Leases | Leases A contract contains a lease when we have the right to control the use of an identified asset for a period of time in exchange for consideration. A majority of our lease arrangements are operating leases. We also have certain leases that qualify as finance leases. We lease 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. Our finance leases are those that contain a purchase option which we are reasonably certain to exercise at the end of the lease term. Our 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, we use 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. Finance lease expense is generally recognized on a straight-line basis over the life of the underlying leased asset. We 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, we 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: Three Months Ended January 29, 2023 January 30, 2022 (In millions, except percentages) Operating lease cost $ 26 $ 21 Weighted-average remaining lease term (in years) - operating leases 6.2 4.9 Weighted-average remaining lease term (in years) - finance leases 1.7 n/a Weighted-average discount rate - operating leases 2.6% 1.8% Weighted-average discount rate - finance leases 4.6% n/a Supplemental cash flow information related to leases are as follows: Three Months Ended January 29, 2023 January 30, 2022 (In millions) Operating cash flows paid for operating leases $ 26 $ 21 Financing cash flows paid for finance leases $ 10 $ — Right-of-use assets obtained in exchange for operating lease liabilities $ 25 $ 21 Right-of-use assets obtained in exchange for finance lease liabilities $ 94 $ — As of January 29, 2023, the maturities of lease liabilities are as follows: Operating Leases Finance Leases Fiscal (In millions) 2023 (remaining 9 months) $ 74 1 2024 90 91 2025 69 — 2026 38 — 2027 29 — Thereafter 114 — Total lease payments $ 414 $ 92 Less imputed interest (38) (7) Total $ 376 $ 85 |
Leases | Leases A contract contains a lease when we have the right to control the use of an identified asset for a period of time in exchange for consideration. A majority of our lease arrangements are operating leases. We also have certain leases that qualify as finance leases. We lease 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. Our finance leases are those that contain a purchase option which we are reasonably certain to exercise at the end of the lease term. Our 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, we use 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. Finance lease expense is generally recognized on a straight-line basis over the life of the underlying leased asset. We 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, we 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: Three Months Ended January 29, 2023 January 30, 2022 (In millions, except percentages) Operating lease cost $ 26 $ 21 Weighted-average remaining lease term (in years) - operating leases 6.2 4.9 Weighted-average remaining lease term (in years) - finance leases 1.7 n/a Weighted-average discount rate - operating leases 2.6% 1.8% Weighted-average discount rate - finance leases 4.6% n/a Supplemental cash flow information related to leases are as follows: Three Months Ended January 29, 2023 January 30, 2022 (In millions) Operating cash flows paid for operating leases $ 26 $ 21 Financing cash flows paid for finance leases $ 10 $ — Right-of-use assets obtained in exchange for operating lease liabilities $ 25 $ 21 Right-of-use assets obtained in exchange for finance lease liabilities $ 94 $ — As of January 29, 2023, the maturities of lease liabilities are as follows: Operating Leases Finance Leases Fiscal (In millions) 2023 (remaining 9 months) $ 74 1 2024 90 91 2025 69 — 2026 38 — 2027 29 — Thereafter 114 — Total lease payments $ 414 $ 92 Less imputed interest (38) (7) Total $ 376 $ 85 |
Stockholders' Equity, Comprehen
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | 3 Months Ended |
Jan. 29, 2023 | |
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 as of October 30, 2022 $ (75) $ (52) $ (88) $ 13 $ (202) Other comprehensive income (loss) before reclassifications 17 (38) — — (21) Amounts reclassified out of AOCI 6 (18) — — (12) Other comprehensive income (loss), net of tax 23 (56) — — (33) Balance as of January 29, 2023 $ (52) $ (108) $ (88) $ 13 $ (235) Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (in millions) Balance as of October 31, 2021 $ (1) $ (103) $ (169) $ 13 $ (260) Other comprehensive income (loss) before reclassifications (12) 4 — — (8) Amounts reclassified out of AOCI (3) (7) — — (10) Other comprehensive income (loss), net of tax (15) (3) — — (18) Balance as of January 30, 2022 $ (16) $ (106) $ (169) $ 13 $ (278) The tax effects on net income of amounts reclassified from AOCI for the three months ended January 29, 2023 and January 30, 2022 were not material. Stock Repurchase Program In March 2022, our Board of Directors approved a common stock repurchase program authorizing $6.0 billion in repurchases. As of January 29, 2023, approximately $4.7 billion remained available for future stock repurchases under the repurchase program. The following table summarizes our stock repurchases for the three months ended January 29, 2023 and January 30, 2022: Three Months Ended January 29, January 30, (in millions, except per share amount) Shares of common stock repurchased 2 12 Cost of stock repurchased $ 250 $ 1,803 Average price paid per share $ 103.37 $ 145.85 We record 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 we reissue treasury stock at an amount below our 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 In December 2022, our Board of Directors declared a quarterly cash dividend payable in March 2023, in the amount of $0.26 per share. Dividends paid during the three months ended January 29, 2023 and January 30, 2022 totaled $220 million and $214 million, respectively. We currently anticipate 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 our 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 our stockholders. Share-Based Compensation We have 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. In addition, we have an Omnibus Employees’ Stock Purchase Plan (ESPP), which enables eligible employees to purchase our common stock. During the three months ended January 29, 2023 and January 30, 2022, we recognized share-based compensation expense related to equity awards and ESPP shares. The effect of share-based compensation on the results of operations was as follows: Three Months Ended January 29, January 30, (In millions) Cost of products sold $ 54 $ 42 Research, development and engineering 54 43 Marketing and selling 17 14 General and administrative 23 19 Total share-based compensation $ 148 $ 118 The cost associated with share-based awards is recognized over the awards’ service period for the entire award on a straight-line basis, adjusting for estimated forfeitures. We calculate estimated forfeiture rate on an annual basis, based on historical forfeiture activities. Share-based awards granted to certain members of senior management allow for 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 performance and/or market goals, is recognized for each tranche over the service period. The cost of the portion of performance-based equity awards subject to performance goals is recognized based on an assessment of the likelihood that the applicable performance goals will be achieved, and the cost of the portion of performance-based equity awards subject to market goals is recognized based on the assumption of 100% achievement of the goal. As of January 29, 2023, we had $1.0 billion in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards and shares issued under the ESPP, which will be recognized over a weighted average period of 3.1 years. As of January 29, 2023, there were 26 million shares available for grant of share-based awards under the ESIP, and an additional 14 million shares available for issuance under the ESPP. Restricted Stock Units, Restricted Stock, Performance Share Units and Performance Units A summary of the changes in restricted stock units, restricted stock, performance share units and performance units outstanding under our equity compensation plans during the three months ended January 29, 2023 is presented below: Shares Weighted Average (In millions, except per share amounts) Outstanding as of October 30, 2022 11 $ 92.31 Granted 5 $ 102.84 Vested (4) $ 70.61 Canceled — $ 107.71 Outstanding as of January 29, 2023 12 $ 103.81 As of January 29, 2023, 0.8 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance and/or market goals. During the first quarter of fiscal 2023, certain members of senior management were granted awards that are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to the TSR of the companies in the Standard & Poor's 500 Index. Each of these two metrics will be weighted 50% and will be measured over a three-year period. The awards become eligible to vest only if the goals are achieved and will vest only if the grantee remains employed by us through each applicable vesting date, subject to a qualifying retirement based on age and years of service. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. 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. 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 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. Employee Stock Purchase Plans Under the ESPP, substantially all employees may purchase our common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of our common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Our purchasing cycles begin in March and September of each of fiscal year. There were no purchases under our ESPP during either of the three months ended January 29, 2023 or January 30, 2022. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings. Our effective tax rates for the first quarter of fiscal 2023 and 2022 were 12.4 percent and 6.9 percent, respectively. The effective tax rate for the first quarter of fiscal 2023 was higher than the same period in the prior fiscal year primarily due to the settlement of uncertain tax positions and larger excess tax benefits from share-based compensation during the first quarter of fiscal 2022 relative to the first quarter of fiscal 2023. |
Warranty, Guarantees, Commitmen
Warranty, Guarantees, Commitments and Contingencies | 3 Months Ended |
Jan. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty, Guarantees, Commitments and Contingencies | Warranty, Guarantees, Commitments and Contingencies Warranty Changes in the warranty reserves are presented below: Three Months Ended January 29, 2023 January 30, 2022 (In millions) Beginning balance $ 286 $ 242 Warranties issued 62 65 Change in reserves related to preexisting warranty 4 3 Consumption of reserves (50) (56) Ending balance $ 302 $ 254 Our 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, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. As of January 29, 2023, the maximum potential amount of future payments that we could be required to make under these guarantee agreements was approximately $614 million. We have not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. We do 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. We also have agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of January 29, 2023, we have provided parent guarantees to banks for approximately $300 million to cover these arrangements. Legal Matters From time to time, we receive notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions by us in connection with claims made against them. In addition, from time to time, we receive notification from third parties claiming that we may be or are infringing or misusing their intellectual property or other rights. We also are subject to various other legal proceedings, regulatory investigations or inquires, and claims, both asserted and unasserted, that arise in the ordinary course of business. In August 2022, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting information relating to certain China customer shipments. We are cooperating fully with the government. These inquiries are subject to uncertainties, and we cannot predict the outcome of this inquiry, or any other governmental inquires or proceedings that may occur. Although the outcome of the above-described matters, claims and proceedings cannot be predicted with certainty, we do not believe at this time that any will have a material effect on our consolidated financial condition or results of operations. |
Industry Segment Operations
Industry Segment Operations | 3 Months Ended |
Jan. 29, 2023 | |
Segment Reporting [Abstract] | |
Industry Segment Operations | Industry Segment Operations Our three reportable segments are: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. As defined under the accounting literature, our 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 our management organization structure as of January 29, 2023 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to our 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, other consumer-oriented devices and solar energy cells. Each operating segment is separately managed and has separate financial results that are reviewed by our 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 our chief operating decision-maker. The chief operating decision-maker does not evaluate operating segments using total asset information. We derive the segment results directly from our internal management reporting system. The accounting policies we use 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 our 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, we do not allocate to our 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. Net sales and operating income (loss) for each reportable segment were as follows: Three Months Ended Net Sales Operating (In millions) January 29, 2023: Semiconductor Systems $ 5,162 $ 1,917 Applied Global Services 1,369 383 Display and Adjacent Markets 167 8 Corporate and Other 41 (338) Total $ 6,739 $ 1,970 January 30, 2022: Semiconductor Systems $ 4,567 $ 1,771 Applied Global Services 1,320 403 Display and Adjacent Markets 366 76 Corporate and Other 18 (274) Total $ 6,271 $ 1,976 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. Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows: Three Months Ended January 29, January 30, Change (In millions, except percentages) China $ 1,145 17 % $ 1,987 32 % (42) % Korea 1,293 19 % 1,121 18 % 15 % Taiwan 1,968 29 % 1,249 20 % 58 % Japan 456 7 % 561 9 % (19) % Southeast Asia 253 4 % 225 3 % 12 % Asia Pacific 5,115 76 % 5,143 82 % (1) % United States 1,051 16 % 847 14 % 24 % Europe 573 8 % 281 4 % 104 % Total $ 6,739 100 % $ 6,271 100 % 7 % Net sales for Semiconductor Systems by end use application for the periods indicated were as follows: Three Months Ended January 29, January 30, Foundry, logic and other 77 % 60 % Dynamic random-access memory (DRAM) 13 % 25 % Flash memory 10 % 15 % 100 % 100 % The reconciling items included in Corporate and Other were as follows: Three Months Ended January 29, January 30, (In millions) Unallocated net sales $ 41 $ 18 Unallocated cost of products sold and expenses (231) (178) Share-based compensation (148) (118) Severance and related charges — 4 Total $ (338) $ (274) The following customers accounted for at least 10 percent of our net sales for the three months ended January 29, 2023, and sales to these customers included products and services from multiple reportable segments. Percentage of Net Sales Taiwan Semiconductor Manufacturing Company Limited 27 % Samsung Electronics Co., Ltd. 15 % |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Jan. 29, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | In the opinion of our management, the unaudited interim consolidated condensed financial statements of Applied Materials, Inc. and its subsidiaries (we, us, and our) included herein have been prepared on a basis consistent with the October 30, 2022 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly state the information set forth therein. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 30, 2022 (2022 Form 10-K). 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. Our results of operations for the three months ended January 29, 2023 are not necessarily indicative of future operating results. Our fiscal year ends on the last Sunday in October of each year. Fiscal 2023 and 2022 contain 52 weeks each and the first three months of fiscal 2023 and 2022 each contained 13 weeks. |
Recent Accounting Pronouncements | Accounting Standards Not Yet Adopted Disclosures by Business Entities about Government Assistance. In November 2021, the Financial Accounting Standard Board (FASB) issued an accounting standard update which requires annual disclosures related to certain government assistance received by business entities (Topic 832) including (1) the types of assistance, (2) the entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. This authoritative guidance is effective for us in our fiscal 2023 Form 10-K. The adoption of this authoritative guidance is not expected to have a significant impact to our financial results and only impacts the disclosures in our notes to consolidated financial statements. Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. In June 2022, the FASB issued an accounting standard update which clarifies how the fair value of equity securities subject to contractual sale restrictions is determined (Topic 820). The amendment clarifies that a contractual sale restriction should not be considered in measuring fair value. It also requires certain qualitative and quantitative disclosures related to equity securities subject to contractual sale restrictions. This authoritative guidance will be effective for us in the first quarter of fiscal 2025, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated condensed 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 us in the first quarter of fiscal 2024, with early adoption permitted. We are currently evaluating the effect of this new guidance on our consolidated condensed financial statements. |
Revenue Recognition from Contracts with Customers | 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. Our 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 Condensed 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. |
Fair Value Measurement | Our 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. Our 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 We use 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. Our 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, we use 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, we generally obtain non-binding price quotes from brokers. In addition, to validate pricing information obtained from pricing services, we periodically perform supplemental analysis on a sample of securities. We review any significant unanticipated differences identified through this analysis to determine the appropriate fair value. As of January 29, 2023, substantially all of our available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. Our 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. |
Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis | Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis Our equity investments without readily determinable values consist of equity investments in privately-held companies. We 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. Impairment charges on equity investments in privately-held companies during the three months ended January 29, 2023 and January 30, 2022 were not material. |
Derivatives | We do not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign 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 our derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. |
Goodwill and Purchased Intangible Assets | Goodwill and 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. Goodwill As of January 29, 2023, our reporting units include Semiconductor Products Group and Imaging and Process Control Group, Applied Global Services, Display and Adjacent Markets and other reporting units recorded under Corporate and Other. |
Finite-Lived Purchased Intangible Assets | The increase in intangible assets during the first three months of fiscal 2023 was primarily due to the preliminary purchase accounting for an acquisition during the first quarter of fiscal 2023, which was not material to our results of operations. Intangible assets with indefinite lives that are not subject to amortization consist primarily of in-process technology, which will be subject to amortization upon commercialization. If an in-process technology project is abandoned, the acquired technology attributable to the project will be written-off. |
Treasury Stock | We record 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 we reissue treasury stock at an amount below our 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 | 100% achievement of the goal.Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. |
Performance Based Awards | During the first quarter of fiscal 2023, certain members of senior management were granted awards that are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to the TSR of the companies in the Standard & Poor's 500 Index. Each of these two metrics will be weighted 50% and will be measured over a three-year period. The awards become eligible to vest only if the goals are achieved and will vest only if the grantee remains employed by us through each applicable vesting date, subject to a qualifying retirement based on age and years of service. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. 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. 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. |
Warranty | Our 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) | 3 Months Ended |
Jan. 29, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended January 29, January 30, (In millions, except per share amounts) Numerator: Net income $ 1,717 $ 1,792 Denominator: Weighted average common shares outstanding 845 889 Effect of weighted dilutive restricted stock units and employee stock purchase plan shares 4 8 Denominator for diluted earnings per share 849 897 Basic earnings per share $ 2.03 $ 2.02 Diluted earnings per share $ 2.02 $ 2.00 Potentially weighted dilutive securities 2 — |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Investments | The following tables summarize our cash, cash equivalents and investments by security type: January 29, 2023 Cost Gross Gross Estimated (In millions) Cash $ 1,225 $ — $ — $ 1,225 Cash equivalents: Money market funds 1,412 — — 1,412 Bank certificates of deposit and time deposits 80 — — 80 Municipal securities 10 — — 10 Commercial paper, corporate bonds and medium-term notes 820 — — 820 Total Cash equivalents 2,322 — — 2,322 Total Cash and Cash equivalents $ 3,547 $ — $ — $ 3,547 Short-term and long-term investments: Bank certificates of deposit and time deposits $ 7 $ — $ — $ 7 U.S. Treasury and agency securities 444 — 9 435 Non-U.S. government securities* 7 — 1 6 Municipal securities 372 1 10 363 Commercial paper, corporate bonds and medium-term notes 579 1 15 565 Asset-backed and mortgage-backed securities 443 1 15 429 Total fixed income securities 1,852 3 50 1,805 Publicly traded equity securities 85 57 12 130 Equity investments in privately-held companies 573 83 3 653 Total equity investments 658 140 15 783 Total short-term and long-term investments $ 2,510 $ 143 $ 65 $ 2,588 Total Cash, Cash equivalents and Investments $ 6,057 $ 143 $ 65 $ 6,135 _________________________ * Includes Canadian provincial government debt. October 30, 2022 Cost Gross Gross Estimated (In millions) Cash $ 1,199 $ — $ — $ 1,199 Cash equivalents: Money market funds 660 — — 660 U.S. Treasury and agency securities 4 — — 4 Municipal securities 13 — — 13 Commercial paper, corporate bonds and medium-term notes 119 — — 119 Total Cash equivalents 796 — — 796 Total Cash and Cash equivalents $ 1,995 $ — $ — $ 1,995 Short-term and long-term investments: Bank certificates of deposit $ 7 $ — $ — $ 7 U.S. Treasury and agency securities 435 — 13 422 Non-U.S. government securities* 7 — 1 6 Municipal securities 389 — 16 373 Commercial paper, corporate bonds and medium-term notes 595 — 21 574 Asset-backed and mortgage-backed securities 432 — 19 413 Total fixed income securities 1,865 — 70 1,795 Publicly traded equity securities 85 63 26 122 Equity investments in privately-held companies 567 86 4 649 Total equity investments 652 149 30 771 Total short-term and long-term investments $ 2,517 $ 149 $ 100 $ 2,566 Total Cash, Cash equivalents and Investments $ 4,512 $ 149 $ 100 $ 4,561 _________________________ *Includes Canadian provincial government debt. |
Schedule of Contractual Maturities of Investments | The following table summarizes the contractual maturities of our investments as of January 29, 2023: Cost Estimated (In millions) Due in one year or less $ 464 $ 459 Due after one through five years 938 910 Due after five years 7 7 No single maturity date** 1,101 1,212 Total $ 2,510 $ 2,588 _________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities and asset-backed and mortgage-backed securities. |
Schedule of Components of Gain (Loss) on Equity Investment | The components of gain (loss) on equity investments for the three months ended January 29, 2023 and January 30, 2022 were as follows: Three Months Ended January 29, January 30, (In millions) Publicly traded equity securities Unrealized gain $ 18 $ 1 Unrealized loss (16) (8) Realized gain on sales — 2 Realized loss on sales (1) — Equity investments in privately-held companies Unrealized gain 4 12 Unrealized loss (2) — Realized gain on sales 5 — Realized loss on sales or impairment — (4) Total gain (loss) on equity investments, net $ 8 $ 3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial 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: January 29, 2023 October 30, 2022 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Available-for-sale debt security investments Money market funds* $ 1,518 $ — $ 1,518 $ 765 $ — $ 765 Bank certificates of deposit and time deposits — 87 87 — 7 7 U.S. Treasury and agency securities 394 41 435 404 22 426 Non-U.S. government securities — 6 6 — 6 6 Municipal securities — 373 373 — 386 386 Commercial paper, corporate bonds and medium-term notes — 1,385 1,385 — 693 693 Asset-backed and mortgage-backed securities — 429 429 — 413 413 Total available-for-sale debt security investments $ 1,912 $ 2,321 $ 4,233 $ 1,169 $ 1,527 $ 2,696 Equity investments with readily determinable values Publicly traded equity securities $ 130 $ — $ 130 $ 122 $ — $ 122 Total equity investments with readily determinable values $ 130 $ — $ 130 $ 122 $ — $ 122 Total $ 2,042 $ 2,321 $ 4,363 $ 1,291 $ 1,527 $ 2,818 _________________________ deferred income taxes and other assets |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
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: Three Months Ended January 29, January 30, (In millions) Derivatives in Cash Flow Hedging Relationships: Foreign exchange contracts $ (49) $ 5 Total $ (49) $ 5 |
Schedule of Effect of Derivative Instruments on The Consolidated Statement of Operations | The effects of derivative instruments and hedging activities on the Consolidated Condensed Statements of Operations were as follows: Three Months Ended January 29, 2023 January 30, 2022 Derivatives in Cash Flow Hedging Relationships Derivatives in Cash Flow Hedging Relationships Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amount of Gain (Loss) Excluded from Effectiveness Testing Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded Amount of Gain or (Loss) Amount of Gain (Loss) Excluded from Effectiveness Testing (In millions) Foreign Exchange Contracts: Net Sales $ 6,739 $ 25 $ — $ 6,271 $ 13 $ — Cost of products sold $ 3,594 2 — $ 3,312 (2) — Research, development and engineering $ 771 — — $ 654 1 — Interest Rate Contracts: Interest expense $ 59 (3) — $ 57 (3) — $ 24 $ — $ 9 $ — |
Schedule of Derivatives Not Designated As Hedging Instruments in Statement of Operations | Amount of Gain or (Loss) Three Months Ended Location of Gain or January 29, January 30, (In millions) Derivatives Not Designated as Hedging Instruments Foreign exchange contracts Interest and other income, net $ (48) $ — Total return swaps - deferred compensation Cost of products sold 1 (1) Total return swaps - deferred compensation Operating expenses 12 (7) Total return swaps - deferred compensation Interest and other income, net (2) — Total $ (37) $ (8) |
Contract Balances (Tables)
Contract Balances (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Balances | Contract balances at the end of each reporting period were as follows: January 29, 2023 October 30, 2022 (In millions) Contract assets $ 155 $ 173 Contract liabilities $ 3,082 $ 3,142 |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Balance Sheet Detail [Abstract] | |
Schedule of Inventories | January 29, October 30, (In millions) Inventories Customer service spares $ 1,498 $ 1,409 Raw materials 1,829 1,807 Work-in-process 1,094 1,029 Finished goods Deferred cost of sales 697 704 Evaluation inventory 408 422 Manufactured on-hand inventory 528 561 Total finished goods 1,633 1,687 Total inventories $ 6,054 $ 5,932 |
Schedule of Other Current Assets | January 29, October 30, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 462 $ 461 Prepaid expenses and other 767 883 $ 1,229 $ 1,344 |
Schedule of Property, Plant and Equipment, Net | Useful Life January 29, October 30, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 387 $ 387 Buildings and improvements 3-30 2,063 2,027 Demonstration and manufacturing equipment 3-5 2,141 2,083 Furniture, fixtures and other equipment 3-5 745 743 Construction in progress 579 389 Gross property, plant and equipment 5,915 5,629 Accumulated depreciation (3,421) (3,322) $ 2,494 $ 2,307 |
Schedule of Deferred Income Taxes and Other Assets | January 29, October 30, (In millions) Deferred Income Taxes and Other Assets Non-current deferred income taxes $ 1,522 $ 1,395 Operating lease right-of-use assets 390 389 Finance lease right-of-use assets 94 — Income tax receivables and other assets 606 691 $ 2,612 $ 2,475 |
Schedule of Accounts Payable and Accrued Expenses | January 29, October 30, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 1,611 $ 1,755 Compensation and employee benefits 564 905 Warranty 302 286 Dividends payable 220 220 Income taxes payable 517 319 Other accrued taxes 28 30 Interest payable 55 39 Operating lease liabilities, current 89 85 Other 583 598 $ 3,969 $ 4,237 |
Schedule of Other Liabilities | January 29, October 30, (In millions) Other Liabilities Defined and postretirement benefit plans $ 117 $ 107 Operating lease liabilities, non-current 287 287 Finance lease liabilities, non-current 85 — Other 367 338 $ 856 $ 732 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Details of goodwill as of January 29, 2023 and October 30, 2022 were as follows: January 29, October 30, (In millions) Goodwill by reportable segment Semiconductor Systems $ 2,446 $ 2,428 Applied Global Services 1,032 1,032 Display and Adjacent Markets 199 199 Corporate and Other 41 41 $ 3,718 $ 3,700 The Semiconductor Products Group and Imaging and Process Control Group combine to form the Semiconductor Systems reporting segment. |
Schedule of Finite-Lived Intangible Assets | Details of intangible assets other than goodwill were as follows: January 29, 2023 October 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions) Intangible assets with finite lives: Semiconductor Systems $ 1,989 $ (1,685) $ 304 $ 1,985 $ (1,675) $ 310 Applied Global Services 79 (77) 2 79 (77) 2 Display and Adjacent Markets 194 (194) — 194 (194) — Corporate and Other 36 (27) 9 36 (26) 10 Total intangible assets with finite lives $ 2,298 $ (1,983) $ 315 $ 2,294 $ (1,972) $ 322 Intangible assets with indefinite lives: Semiconductor Systems $ 16 $ — $ 16 $ 16 $ — $ 16 Applied Global Services — — — — — — Display and Adjacent Markets — — — — — — Corporate and Other 1 — 1 1 — 1 Total intangible assets with indefinite lives $ 17 $ — $ 17 $ 17 $ — $ 17 Total intangible assets $ 2,315 $ (1,983) $ 332 $ 2,311 $ (1,972) $ 339 |
Schedule of Future Estimated Amortization Expense | As of January 29, 2023, future estimated amortization expense of intangible assets with finite lives is expected to be as follows: Amortization Expense (In millions) 2023 (remaining 9 months) $ 31 2024 39 2025 38 2026 37 2027 24 Thereafter 146 Total $ 315 |
Borrowing Facilities and Debt (
Borrowing Facilities and Debt (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | Debt outstanding as of January 29, 2023 and October 30, 2022 was as follows: Principal Amount January 29, October 30, 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 (12) (12) Total unamortized debt issuance costs (30) (31) Total long-term debt $ 5,458 $ 5,457 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expense | The components of lease expense and supplemental information were as follows: Three Months Ended January 29, 2023 January 30, 2022 (In millions, except percentages) Operating lease cost $ 26 $ 21 Weighted-average remaining lease term (in years) - operating leases 6.2 4.9 Weighted-average remaining lease term (in years) - finance leases 1.7 n/a Weighted-average discount rate - operating leases 2.6% 1.8% Weighted-average discount rate - finance leases 4.6% n/a Three Months Ended January 29, 2023 January 30, 2022 (In millions) Operating cash flows paid for operating leases $ 26 $ 21 Financing cash flows paid for finance leases $ 10 $ — Right-of-use assets obtained in exchange for operating lease liabilities $ 25 $ 21 Right-of-use assets obtained in exchange for finance lease liabilities $ 94 $ — |
Schedule of Operating Lease, Maturities of Lease Liabilities | As of January 29, 2023, the maturities of lease liabilities are as follows: Operating Leases Finance Leases Fiscal (In millions) 2023 (remaining 9 months) $ 74 1 2024 90 91 2025 69 — 2026 38 — 2027 29 — Thereafter 114 — Total lease payments $ 414 $ 92 Less imputed interest (38) (7) Total $ 376 $ 85 |
Schedule of finance lease maturities | As of January 29, 2023, the maturities of lease liabilities are as follows: Operating Leases Finance Leases Fiscal (In millions) 2023 (remaining 9 months) $ 74 1 2024 90 91 2025 69 — 2026 38 — 2027 29 — Thereafter 114 — Total lease payments $ 414 $ 92 Less imputed interest (38) (7) Total $ 376 $ 85 |
Stockholders' Equity, Compreh_2
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Loss, After-Tax Basis | Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows: Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (in millions) Balance as of October 30, 2022 $ (75) $ (52) $ (88) $ 13 $ (202) Other comprehensive income (loss) before reclassifications 17 (38) — — (21) Amounts reclassified out of AOCI 6 (18) — — (12) Other comprehensive income (loss), net of tax 23 (56) — — (33) Balance as of January 29, 2023 $ (52) $ (108) $ (88) $ 13 $ (235) Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (in millions) Balance as of October 31, 2021 $ (1) $ (103) $ (169) $ 13 $ (260) Other comprehensive income (loss) before reclassifications (12) 4 — — (8) Amounts reclassified out of AOCI (3) (7) — — (10) Other comprehensive income (loss), net of tax (15) (3) — — (18) Balance as of January 30, 2022 $ (16) $ (106) $ (169) $ 13 $ (278) |
Schedule of Stock Repurchases | The following table summarizes our stock repurchases for the three months ended January 29, 2023 and January 30, 2022: Three Months Ended January 29, January 30, (in millions, except per share amount) Shares of common stock repurchased 2 12 Cost of stock repurchased $ 250 $ 1,803 Average price paid per share $ 103.37 $ 145.85 |
Schedule of Effect of Share-Based Compensation on The Results of Operations | The effect of share-based compensation on the results of operations was as follows: Three Months Ended January 29, January 30, (In millions) Cost of products sold $ 54 $ 42 Research, development and engineering 54 43 Marketing and selling 17 14 General and administrative 23 19 Total share-based compensation $ 148 $ 118 |
Schedule of Restricted Stock Units And Restricted Stock Activity | A summary of the changes in restricted stock units, restricted stock, performance share units and performance units outstanding under our equity compensation plans during the three months ended January 29, 2023 is presented below: Shares Weighted Average (In millions, except per share amounts) Outstanding as of October 30, 2022 11 $ 92.31 Granted 5 $ 102.84 Vested (4) $ 70.61 Canceled — $ 107.71 Outstanding as of January 29, 2023 12 $ 103.81 |
Warranty, Guarantees, Commitm_2
Warranty, Guarantees, Commitments and Contingencies (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in The Warranty Reserves | Changes in the warranty reserves are presented below: Three Months Ended January 29, 2023 January 30, 2022 (In millions) Beginning balance $ 286 $ 242 Warranties issued 62 65 Change in reserves related to preexisting warranty 4 3 Consumption of reserves (50) (56) Ending balance $ 302 $ 254 |
Industry Segment Operations (Ta
Industry Segment Operations (Tables) | 3 Months Ended |
Jan. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales And Operating Income (Loss) For Each Reportable Segment | Net sales and operating income (loss) for each reportable segment were as follows: Three Months Ended Net Sales Operating (In millions) January 29, 2023: Semiconductor Systems $ 5,162 $ 1,917 Applied Global Services 1,369 383 Display and Adjacent Markets 167 8 Corporate and Other 41 (338) Total $ 6,739 $ 1,970 January 30, 2022: Semiconductor Systems $ 4,567 $ 1,771 Applied Global Services 1,320 403 Display and Adjacent Markets 366 76 Corporate and Other 18 (274) Total $ 6,271 $ 1,976 |
Schedule of Revenue From External Customers by Geographic Areas | Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows: Three Months Ended January 29, January 30, Change (In millions, except percentages) China $ 1,145 17 % $ 1,987 32 % (42) % Korea 1,293 19 % 1,121 18 % 15 % Taiwan 1,968 29 % 1,249 20 % 58 % Japan 456 7 % 561 9 % (19) % Southeast Asia 253 4 % 225 3 % 12 % Asia Pacific 5,115 76 % 5,143 82 % (1) % United States 1,051 16 % 847 14 % 24 % Europe 573 8 % 281 4 % 104 % Total $ 6,739 100 % $ 6,271 100 % 7 % |
Schedule of Disaggregation of Revenue | Net sales for Semiconductor Systems by end use application for the periods indicated were as follows: Three Months Ended January 29, January 30, Foundry, logic and other 77 % 60 % Dynamic random-access memory (DRAM) 13 % 25 % Flash memory 10 % 15 % 100 % 100 % |
Schedule of Reconciliations of Total Segment Operating Income To Consolidated Operating Income (Loss) | The reconciling items included in Corporate and Other were as follows: Three Months Ended January 29, January 30, (In millions) Unallocated net sales $ 41 $ 18 Unallocated cost of products sold and expenses (231) (178) Share-based compensation (148) (118) Severance and related charges — 4 Total $ (338) $ (274) |
Schedule of Companies Accounted For At Least 10 Percent of Net Sales | The following customers accounted for at least 10 percent of our net sales for the three months ended January 29, 2023, and sales to these customers included products and services from multiple reportable segments. Percentage of Net Sales Taiwan Semiconductor Manufacturing Company Limited 27 % Samsung Electronics Co., Ltd. 15 % |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Numerator: | ||
Net income | $ 1,717 | $ 1,792 |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 845 | 889 |
Effect of dilutive restricted stock units and employee stock purchase plan shares (in shares) | 4 | 8 |
Denominator for diluted earnings per share (in shares) | 849 | 897 |
Basic earnings per share (in dollars per share) | $ 2.03 | $ 2.02 |
Diluted earnings per share (in dollars per share) | $ 2.02 | $ 2 |
Potentially dilutive securities (in shares) | 2 | 0 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 | Jan. 30, 2022 |
Summary of Cash, Cash Equivalents and Investments | |||
Cash | $ 1,225 | $ 1,199 | |
Total Cash equivalents | 2,322 | 796 | |
Total Cash and Cash equivalents | 3,547 | 1,995 | $ 5,264 |
Equity investments and equity securities without readily determinable, cost | 658 | 652 | |
Equity investments and equity securities without readily determinable, gross unrealized gains | 140 | 149 | |
Equity investments and equity securities without readily determinable, gross unrealized losses | 15 | 30 | |
Equity investments and equity securities without readily determinable, fair value | 783 | 771 | |
Total short-term and long-term investments cost | 2,510 | 2,517 | |
Gross unrealized gains on short-term and long-term investments | 143 | 149 | |
Gross unrealized losses on short-term and long-term investments | 65 | 100 | |
Total short-term and long-term investments | 2,588 | 2,566 | |
Cash, cash equivalents and investments, cost | 6,057 | 4,512 | |
Cash, cash equivalents and investments, gross unrealized gains | 143 | 149 | |
Cash, cash equivalents and investments, gross unrealized losses | 65 | 100 | |
Cash, cash equivalents and investments, estimated fair value | 6,135 | 4,561 | |
Total fixed income securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 1,852 | 1,865 | |
Gross unrealized gains on fixed income securities | 3 | 0 | |
Gross unrealized losses on fixed income securities | 50 | 70 | |
Estimated fair value of fixed income securities | 1,805 | 1,795 | |
Bank certificates of deposit and time deposits | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 7 | ||
Gross unrealized gains on fixed income securities | 0 | ||
Gross unrealized losses on fixed income securities | 0 | ||
Estimated fair value of fixed income securities | 7 | ||
Bank certificates of deposit and time deposits | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 7 | ||
Gross unrealized gains on fixed income securities | 0 | ||
Gross unrealized losses on fixed income securities | 0 | ||
Estimated fair value of fixed income securities | 7 | ||
U.S. Treasury and agency securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 444 | 435 | |
Gross unrealized gains on fixed income securities | 0 | 0 | |
Gross unrealized losses on fixed income securities | 9 | 13 | |
Estimated fair value of fixed income securities | 435 | 422 | |
Non-U.S. government securities | CANADA | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 7 | 7 | |
Gross unrealized gains on fixed income securities | 0 | 0 | |
Gross unrealized losses on fixed income securities | 1 | 1 | |
Estimated fair value of fixed income securities | 6 | 6 | |
Municipal securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 372 | 389 | |
Gross unrealized gains on fixed income securities | 1 | 0 | |
Gross unrealized losses on fixed income securities | 10 | 16 | |
Estimated fair value of fixed income securities | 363 | 373 | |
Commercial paper, corporate bonds and medium-term notes | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 579 | 595 | |
Gross unrealized gains on fixed income securities | 1 | 0 | |
Gross unrealized losses on fixed income securities | 15 | 21 | |
Estimated fair value of fixed income securities | 565 | 574 | |
Asset-backed and mortgage-backed securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Cost of fixed income securities | 443 | 432 | |
Gross unrealized gains on fixed income securities | 1 | 0 | |
Gross unrealized losses on fixed income securities | 15 | 19 | |
Estimated fair value of fixed income securities | 429 | 413 | |
Publicly traded equity securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Equity investments cost | 85 | 85 | |
Equity investments unrealized gain | 57 | 63 | |
Equity investments unrealized loss | 12 | 26 | |
Equity investments estimated fair value | 130 | 122 | |
Equity investments in privately-held companies | |||
Summary of Cash, Cash Equivalents and Investments | |||
Equity securities without readily determinable, cost | 573 | 567 | |
Equity securities without readily determinable, gross unrealized gains | 83 | 86 | |
Equity securities without readily determinable, gross unrealized losses | 3 | 4 | |
Equity securities without readily determinable, fair value | 653 | 649 | |
Money market funds | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 1,412 | 660 | |
Bank certificates of deposit and time deposits | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 80 | ||
U.S. Treasury and agency securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 4 | ||
Municipal securities | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | 10 | 13 | |
Commercial paper, corporate bonds and medium-term notes | |||
Summary of Cash, Cash Equivalents and Investments | |||
Total Cash equivalents | $ 820 | $ 119 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investments - Summary of Contractual Maturity (Details) $ in Millions | Jan. 29, 2023 USD ($) |
Contractual maturities of investments | |
Due in one year or less, Cost | $ 464 |
Due after one through five years, Cost | 938 |
Due after five years, Cost | 7 |
No single maturity date, Cost | 1,101 |
Total short-term and long-term investments cost | 2,510 |
Due in one year or less, Estimated Fair Value | 459 |
Due after one through five years, Estimated Fair Value | 910 |
Due after five years, Estimated Fair Value | 7 |
No single maturity date, Estimated Fair Value | 1,212 |
Estimated fair value of short-term and long-term investments | $ 2,588 |
Cash, Cash Equivalents and In_5
Cash, Cash Equivalents and Investments - Gain (Loss) on Equity Investments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Gain (Loss) on Securities [Line Items] | ||
Total gain (loss) on equity investments, net | $ 8 | $ 3 |
Publicly traded equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Unrealized gain | 18 | 1 |
Unrealized loss | (16) | (8) |
Realized gain on sales | 0 | 2 |
Realized loss on sales or impairment | (1) | 0 |
Equity investments in privately-held companies | ||
Gain (Loss) on Securities [Line Items] | ||
Unrealized gain | 4 | 12 |
Unrealized loss | (2) | 0 |
Realized gain on sales | 5 | 0 |
Realized loss on sales or impairment | $ 0 | $ (4) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 | Jan. 30, 2022 |
Equity investments with readily determinable values | |||
Restricted cash equivalents included in deferred income taxes and other assets | $ 106 | $ 105 | |
Restricted Cash Equivalents, Statement of Financial Position [Extensible Enumeration] | Deferred Income Taxes and Other Assets, Noncurrent | Deferred Income Taxes and Other Assets, Noncurrent | |
Money market funds | |||
Equity investments with readily determinable values | |||
Restricted cash equivalents included in deferred income taxes and other assets | $ 106 | $ 105 | |
Bank certificates of deposit and time deposits | |||
Assets: | |||
Available-for-sale debt security investments | 7 | ||
U.S. Treasury and agency securities | |||
Assets: | |||
Available-for-sale debt security investments | 435 | 422 | |
Municipal securities | |||
Assets: | |||
Available-for-sale debt security investments | 363 | 373 | |
Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Available-for-sale debt security investments | 565 | 574 | |
Asset-backed and mortgage-backed securities | |||
Assets: | |||
Available-for-sale debt security investments | 429 | 413 | |
Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 130 | 122 | |
Recurring Fair Value Measurements | |||
Assets: | |||
Available-for-sale debt security investments | 4,233 | 2,696 | |
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 130 | 122 | |
Total | 4,363 | 2,818 | |
Recurring Fair Value Measurements | Money market funds | |||
Assets: | |||
Available-for-sale debt security investments | 1,518 | 765 | |
Recurring Fair Value Measurements | Bank certificates of deposit and time deposits | |||
Assets: | |||
Available-for-sale debt security investments | 87 | 7 | |
Recurring Fair Value Measurements | U.S. Treasury and agency securities | |||
Assets: | |||
Available-for-sale debt security investments | 435 | 426 | |
Recurring Fair Value Measurements | Non-U.S. government securities | |||
Assets: | |||
Available-for-sale debt security investments | 6 | 6 | |
Recurring Fair Value Measurements | Municipal securities | |||
Assets: | |||
Available-for-sale debt security investments | 373 | 386 | |
Recurring Fair Value Measurements | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Available-for-sale debt security investments | 1,385 | 693 | |
Recurring Fair Value Measurements | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Available-for-sale debt security investments | 429 | 413 | |
Recurring Fair Value Measurements | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 130 | 122 | |
Recurring Fair Value Measurements | Level 1 | |||
Assets: | |||
Available-for-sale debt security investments | 1,912 | 1,169 | |
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 130 | 122 | |
Total | 2,042 | 1,291 | |
Recurring Fair Value Measurements | Level 1 | Money market funds | |||
Assets: | |||
Available-for-sale debt security investments | 1,518 | 765 | |
Recurring Fair Value Measurements | Level 1 | Bank certificates of deposit and time deposits | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | U.S. Treasury and agency securities | |||
Assets: | |||
Available-for-sale debt security investments | 394 | 404 | |
Recurring Fair Value Measurements | Level 1 | Non-U.S. government securities | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Municipal securities | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 130 | 122 | |
Recurring Fair Value Measurements | Level 2 | |||
Assets: | |||
Available-for-sale debt security investments | 2,321 | 1,527 | |
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | 0 | 0 | |
Total | 2,321 | 1,527 | |
Recurring Fair Value Measurements | Level 2 | Money market funds | |||
Assets: | |||
Available-for-sale debt security investments | 0 | 0 | |
Recurring Fair Value Measurements | Level 2 | Bank certificates of deposit and time deposits | |||
Assets: | |||
Available-for-sale debt security investments | 87 | 7 | |
Recurring Fair Value Measurements | Level 2 | U.S. Treasury and agency securities | |||
Assets: | |||
Available-for-sale debt security investments | 41 | 22 | |
Recurring Fair Value Measurements | Level 2 | Non-U.S. government securities | |||
Assets: | |||
Available-for-sale debt security investments | 6 | 6 | |
Recurring Fair Value Measurements | Level 2 | Municipal securities | |||
Assets: | |||
Available-for-sale debt security investments | 373 | 386 | |
Recurring Fair Value Measurements | Level 2 | Commercial paper, corporate bonds and medium-term notes | |||
Assets: | |||
Available-for-sale debt security investments | 1,385 | 693 | |
Recurring Fair Value Measurements | Level 2 | Asset-backed and mortgage-backed securities | |||
Assets: | |||
Available-for-sale debt security investments | 429 | 413 | |
Recurring Fair Value Measurements | Level 2 | Publicly traded equity securities | |||
Equity investments with readily determinable values | |||
Equity investments with readily determinable values | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Senior Notes - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, principal amount | $ 5,500 | $ 5,500 |
Estimated Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt fair value | $ 5,200 | $ 4,800 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Narrative (Details) - USD ($) $ in Billions | 3 Months Ended | |
Jan. 29, 2023 | Oct. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Time period for hedging of foreign currency transaction | 24 months | |
Time period over which majority of after tax gain loss related to derivatives to be reclassified into earnings | 12 months | |
Foreign exchange contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, notional amount | $ 2.1 | $ 2.1 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Gain (Loss) on Derivatives in AOCI (Details) - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Effective portion - gain (loss) recognized in AOCI | $ (49) | $ 5 |
Foreign exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Effective portion - gain (loss) recognized in AOCI | $ (49) | $ 5 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Derivatives in Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net Sales | $ 6,739 | $ 6,271 |
Cost of products sold | 3,594 | 3,312 |
Research, development and engineering | 771 | 654 |
Marketing and selling | 197 | 167 |
General and administrative | 207 | 166 |
Interest expense | 59 | 57 |
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | 24 | 9 |
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | 0 | 0 |
Foreign exchange contracts | Sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | 25 | 13 |
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | 0 | 0 |
Foreign exchange contracts | Cost of products sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | 2 | (2) |
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | 0 | 0 |
Foreign exchange contracts | Research, development and engineering | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | 0 | 1 |
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | 0 | 0 |
Interest rate contracts | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | (3) | (3) |
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | $ 0 | $ 0 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Gain/Loss Recognized in Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedging instruments | $ (37) | $ (8) |
Foreign exchange contracts | Interest and other income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedging instruments | (48) | 0 |
Total return swaps - deferred compensation | Interest and other income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedging instruments | (2) | 0 |
Total return swaps - deferred compensation | Cost of products sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedging instruments | 1 | (1) |
Total return swaps - deferred compensation | Operating expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedging instruments | $ 12 | $ (7) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | 3 Months Ended | ||
Jan. 29, 2023 | Jan. 30, 2022 | Oct. 30, 2022 | |
Receivables [Abstract] | |||
Factored accounts receivable | $ 279,000,000 | $ 205,000,000 | |
Discounted letters of credit | 0 | 0 | |
Discounted promissory notes | 0 | $ 0 | |
Allowance for credit losses | $ 29,000,000 | $ 29,000,000 |
Contract Balances - Schedule of
Contract Balances - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 155 | $ 173 |
Contract liabilities | $ 3,082 | $ 3,142 |
Contract Balances - Narrative (
Contract Balances - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 1,600 | |
Accounts receivable, credit losses | 0 | $ 0 |
Contract assets, credit losses | 0 | $ 0 |
Long-term Contract with Customer | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 4,200 |
Contract Balances - Expecting T
Contract Balances - Expecting Timing of Satisfaction (Details) - Long-term Contract with Customer | Jan. 29, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of revenue expected to be recognized within twelve months | 45% |
Expected timing of satisfaction | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 24 months |
Balance Sheet Detail - Inventor
Balance Sheet Detail - Inventories (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Inventories | ||
Customer service spares | $ 1,498 | $ 1,409 |
Raw materials | 1,829 | 1,807 |
Work-in-process | 1,094 | 1,029 |
Finished goods | ||
Evaluation inventory | 408 | 422 |
Deferred cost of sales | 697 | 704 |
Manufactured on-hand inventory | 528 | 561 |
Total finished goods | 1,633 | 1,687 |
Inventories | $ 6,054 | $ 5,932 |
Balance Sheet Detail - Other Cu
Balance Sheet Detail - Other Current Assets (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Other Current Assets [Abstract] | ||
Prepaid income taxes and income taxes receivable | $ 462 | $ 461 |
Prepaid expenses and other | 767 | 883 |
Other Current Assets | $ 1,229 | $ 1,344 |
Balance Sheet Detail - Property
Balance Sheet Detail - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Oct. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 5,915 | $ 5,629 |
Accumulated depreciation | (3,421) | (3,322) |
Property, Plant and Equipment, Net | 2,494 | 2,307 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 387 | 387 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 2,063 | 2,027 |
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 | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 2,141 | 2,083 |
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 | |
Furniture, fixtures and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 745 | 743 |
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 | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 579 | $ 389 |
Balance Sheet Detail - Deferred
Balance Sheet Detail - Deferred Income Taxes and Other Assets (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Balance Sheet Detail [Abstract] | ||
Non-current deferred income taxes | $ 1,522 | $ 1,395 |
Operating lease right-of-use assets | 390 | 389 |
Finance lease right-of-use assets | 94 | 0 |
Income tax receivables and other assets | 606 | 691 |
Deferred Income Taxes and Other Assets | $ 2,612 | $ 2,475 |
Balance Sheet Detail - Accounts
Balance Sheet Detail - Accounts Payable and Accrued Expense (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 1,611 | $ 1,755 |
Compensation and employee benefits | 564 | 905 |
Warranty | 302 | 286 |
Dividends payable | 220 | 220 |
Income taxes payable | 517 | 319 |
Other accrued taxes | 28 | 30 |
Interest payable | 55 | 39 |
Operating lease liabilities, current | 89 | 85 |
Other | 583 | 598 |
Accounts Payable and Accrued Expenses | $ 3,969 | $ 4,237 |
Balance Sheet Detail - Other Li
Balance Sheet Detail - Other Liabilities (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Other Liabilities | ||
Defined and postretirement benefit plans | $ 117 | $ 107 |
Operating lease liabilities, non-current | 287 | 287 |
Finance lease liabilities, non-current | 85 | 0 |
Other | 367 | 338 |
Other Liabilities | $ 856 | $ 732 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill and Other Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Goodwill [Line Items] | ||
Goodwill | $ 3,718 | $ 3,700 |
Corporate and Other | ||
Goodwill [Line Items] | ||
Goodwill | 41 | 41 |
Semiconductor Systems | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 2,446 | 2,428 |
Applied Global Services | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 1,032 | 1,032 |
Display and Adjacent Markets | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | $ 199 | $ 199 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 11 | $ 10 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Finite-lived intangible assets | ||
Intangible assets with finite lives: | $ 2,298 | $ 2,294 |
Accumulated Amortization | (1,983) | (1,972) |
Total | 315 | 322 |
Intangible assets with indefinite lives: | 17 | 17 |
Intangible assets, gross (excluding goodwill) | 2,315 | 2,311 |
Intangible assets, net (excluding goodwill) | 332 | 339 |
Operating Segments | Semiconductor Systems | ||
Finite-lived intangible assets | ||
Intangible assets with finite lives: | 1,989 | 1,985 |
Accumulated Amortization | (1,685) | (1,675) |
Total | 304 | 310 |
Intangible assets with indefinite lives: | 16 | 16 |
Operating Segments | Applied Global Services | ||
Finite-lived intangible assets | ||
Intangible assets with finite lives: | 79 | 79 |
Accumulated Amortization | (77) | (77) |
Total | 2 | 2 |
Intangible assets with indefinite lives: | 0 | 0 |
Operating Segments | Display and Adjacent Markets | ||
Finite-lived intangible assets | ||
Intangible assets with finite lives: | 194 | 194 |
Accumulated Amortization | (194) | (194) |
Total | 0 | 0 |
Intangible assets with indefinite lives: | 0 | 0 |
Corporate and Other | ||
Finite-lived intangible assets | ||
Intangible assets with finite lives: | 36 | 36 |
Accumulated Amortization | (27) | (26) |
Total | 9 | 10 |
Intangible assets with indefinite lives: | $ 1 | $ 1 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Amortization Expense | ||
2023 (remaining 9 months) | $ 31 | |
2024 | 39 | |
2025 | 38 | |
2026 | 37 | |
2027 | 24 | |
Thereafter | 146 | |
Total | $ 315 | $ 322 |
Borrowing Facilities and Debt -
Borrowing Facilities and Debt - Narrative (Details) - USD ($) | 1 Months Ended | ||
Feb. 29, 2020 | Jan. 29, 2023 | Oct. 30, 2022 | |
Debt Instrument [Line Items] | |||
Commercial paper | $ 1,500,000,000 | ||
Short-term debt | 199,000,000 | $ 0 | |
Short Term Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term debt | $ 200,000,000 | ||
Debt, weighted average interest rate | 4.48% | ||
Short Term Commercial Paper | Minimum | |||
Debt Instrument [Line Items] | |||
Debt securities, held-to-maturity, threshold period past due | 55 days | ||
Short Term Commercial Paper | Maximum | |||
Debt Instrument [Line Items] | |||
Debt securities, held-to-maturity, threshold period past due | 63 days | ||
Foreign Line of Credit | |||
Debt Instrument [Line Items] | |||
Available credit agreement | $ 62,000,000 | ||
Outstanding credit facilities | 0 | 0 | |
Unsecured Debt | Revolving Credit | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 5 years | ||
Available credit agreement | $ 1,500,000,000 | ||
Accordion feature, increase limit | 500,000,000 | ||
Accordion feature, higher borrowing capacity option | $ 2,000,000,000 | ||
Outstanding credit facilities | $ 0 | 0 | |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Short-term debt | $ 0 |
Borrowing Facilities and Debt_2
Borrowing Facilities and Debt - Debt Outstanding (Details) - USD ($) $ in Millions | Jan. 29, 2023 | Oct. 30, 2022 |
Debt Instrument [Line Items] | ||
Total long-term senior notes | $ 5,458 | $ 5,457 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, principal amount | 5,500 | 5,500 |
Total unamortized discount | (12) | (12) |
Total unamortized debt issuance costs | $ (30) | (31) |
Senior Notes | 3.900% Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as percent) | 3.90% | |
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 (as percent) | 3.30% | |
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 (as percent) | 1.75% | |
Long-term debt, principal amount | $ 750 | 750 |
Effective Interest Rate | 1.792% | |
Senior Notes | 5.100% Senior Notes Due 2035 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as percent) | 5.10% | |
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 (as percent) | 5.85% | |
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 (as percent) | 4.35% | |
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 (as percent) | 2.75% | |
Long-term debt, principal amount | $ 750 | $ 750 |
Effective Interest Rate | 2.773% |
Leases - Lease Expense and Supp
Leases - Lease Expense and Supplemental Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 26 | $ 21 |
Weighted-average remaining lease term (in years) - operating leases | 6 years 2 months 12 days | 4 years 10 months 24 days |
Weighted-average remaining lease term (in years) - finance leases | 1 year 8 months 12 days | |
Weighted-average discount rate - operating leases | 2.60% | 1.80% |
Weighted average discount rate, Finance leases | 4.60% | |
Operating cash flows paid for operating leases | $ 26 | $ 21 |
Financing cash flows paid for finance leases | 10 | 0 |
Right-of-use assets obtained in exchange for operating lease liabilities | 25 | 21 |
Right-of-use assets obtained in exchange for finance lease liabilities | $ 94 | $ 0 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Millions | Jan. 29, 2023 USD ($) |
Operating Leases | |
2023 (remaining 9 months) | $ 74 |
2024 | 90 |
2025 | 69 |
2026 | 38 |
2027 | 29 |
Thereafter | 114 |
Total lease payments | 414 |
Less imputed interest | (38) |
Total | 376 |
Finance Leases | |
2023 (remaining 9 months) | 1 |
2024 | 91 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total lease payments | 92 |
Less imputed interest | (7) |
Total | $ 85 |
Stockholders' Equity, Compreh_3
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Changes in Components of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | $ 12,194 | $ 12,247 |
Other comprehensive income (loss) before reclassifications | (21) | (8) |
Amounts reclassified out of AOCI | (12) | (10) |
Other comprehensive income (loss), net of tax | (33) | (18) |
Ending Balance | 13,420 | 11,890 |
Unrealized Gain (Loss) on Investments, Net | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (75) | (1) |
Other comprehensive income (loss) before reclassifications | 17 | (12) |
Amounts reclassified out of AOCI | 6 | (3) |
Other comprehensive income (loss), net of tax | 23 | (15) |
Ending Balance | (52) | (16) |
Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (52) | (103) |
Other comprehensive income (loss) before reclassifications | (38) | 4 |
Amounts reclassified out of AOCI | (18) | (7) |
Other comprehensive income (loss), net of tax | (56) | (3) |
Ending Balance | (108) | (106) |
Defined and Postretirement Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (88) | (169) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified out of AOCI | 0 | 0 |
Other comprehensive income (loss), net of tax | 0 | 0 |
Ending Balance | (88) | (169) |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | 13 | 13 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified out of AOCI | 0 | 0 |
Other comprehensive income (loss), net of tax | 0 | 0 |
Ending Balance | 13 | 13 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (202) | (260) |
Other comprehensive income (loss), net of tax | (33) | (18) |
Ending Balance | $ (235) | $ (278) |
Stockholders' Equity, Compreh_4
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2022 | Jan. 29, 2023 | Jan. 30, 2022 | Mar. 31, 2022 | |
Equity [Line Items] | ||||
Amount authorized by board of directors to repurchase shares | $ 6,000,000,000 | |||
Remaining authorized repurchase amount | $ 4,700,000,000 | |||
Dividends declared per share (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.24 | |
Payments of dividends | $ 220,000,000 | $ 214,000,000 | ||
Employee Stock | ||||
Equity [Line Items] | ||||
Performance of total shareholder return | 100% | |||
Total unrecognized compensation expense | $ 1,000,000,000 | |||
Weighted average period for unrecognized compensation expense to be recognized (in years) | 3 years 1 month 6 days | |||
Performance Shares | ||||
Equity [Line Items] | ||||
Additional performance-based awards to be earned upon certain levels of achievement (in shares) | 0.8 | |||
Award measurement metric relative weight | 50% | |||
Award measurement period | 3 years | |||
Performance Shares | Minimum | ||||
Equity [Line Items] | ||||
Award vesting rights, percentage of target amount | 0% | |||
Performance Shares | Maximum | ||||
Equity [Line Items] | ||||
Award vesting rights, percentage of target amount | 200% | |||
Employee Stock Incentive Plan | ||||
Equity [Line Items] | ||||
Number of shares available for grant (in shares) | 26 | |||
Employee Stock Purchase Plan | ||||
Equity [Line Items] | ||||
Number of shares available for grant (in shares) | 14 | |||
Employee stock purchase plan purchase period | 6 months | |||
Employee Stock Purchase Plan | Employee Stock | ||||
Equity [Line Items] | ||||
Purchase price of common stock | 85% |
Stockholders' Equity, Compreh_5
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Equity [Abstract] | ||
Common stock repurchases (in shares) | 2 | 12 |
Cost of stock repurchased | $ 250 | $ 1,803 |
Average price paid per share (in dollars per share) | $ 103.37 | $ 145.85 |
Stockholders' Equity, Compreh_6
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Share-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation | $ 148 | $ 118 |
Cost of products sold | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation | 54 | 42 |
Research, development and engineering | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation | 54 | 43 |
Marketing and selling | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation | 17 | 14 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share-based compensation | $ 23 | $ 19 |
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 shares in Millions | 3 Months Ended |
Jan. 29, 2023 $ / shares shares | |
Restricted stock units, restricted stock, performance shares and performance units | |
Beginning balance (in shares) | shares | 11 |
Granted (in shares) | shares | 5 |
Vested (in shares) | shares | (4) |
Canceled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 12 |
Weighted Average Grant Date Fair Value | |
Beginning of period (in dollars per share) | $ / shares | $ 92.31 |
Granted (in dollars per share) | $ / shares | 102.84 |
Vested (in dollars per share) | $ / shares | 70.61 |
Canceled (in dollars per share) | $ / shares | 107.71 |
Ending balance (in dollars per share) | $ / shares | $ 103.81 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate provision (as percent) | 12.40% | 6.90% |
Warranty, Guarantees, Commitm_3
Warranty, Guarantees, Commitments and Contingencies - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 286 | $ 242 |
Warranties issued | 62 | 65 |
Change in reserves related to preexisting warranty | 4 | 3 |
Consumption of reserves | (50) | (56) |
Ending balance | $ 302 | $ 254 |
Warranty, Guarantees, Commitm_4
Warranty, Guarantees, Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended |
Jan. 29, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard product warranty period | 12 months |
Maximum potential amount of future payments for letters of credit or other guarantee instruments | $ 614 |
Parent guarantees to banks | $ 300 |
Industry Segment Operations - N
Industry Segment Operations - Narrative (Details) | 3 Months Ended |
Jan. 29, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Industry Segment Operations -_2
Industry Segment Operations - Net Sales and Operating Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Net sales and operating income (loss) for each reportable segment | ||
Net Sales | $ 6,739 | $ 6,271 |
Operating Income (Loss) | 1,970 | 1,976 |
Corporate and Other | ||
Net sales and operating income (loss) for each reportable segment | ||
Net Sales | 41 | 18 |
Operating Income (Loss) | $ (338) | $ (274) |
Semiconductor Systems | Sales Revenue | Product Concentration Risk | ||
Net sales and operating income (loss) for each reportable segment | ||
Percentage of net sales | 100% | 100% |
Semiconductor Systems | Foundry, logic and other | Sales Revenue | Product Concentration Risk | ||
Net sales and operating income (loss) for each reportable segment | ||
Percentage of net sales | 77% | 60% |
Semiconductor Systems | Dynamic random-access memory (DRAM) | Sales Revenue | Product Concentration Risk | ||
Net sales and operating income (loss) for each reportable segment | ||
Percentage of net sales | 13% | 25% |
Semiconductor Systems | Flash memory | Sales Revenue | Product Concentration Risk | ||
Net sales and operating income (loss) for each reportable segment | ||
Percentage of net sales | 10% | 15% |
Semiconductor Systems | Operating Segments | ||
Net sales and operating income (loss) for each reportable segment | ||
Net Sales | $ 5,162 | $ 4,567 |
Operating Income (Loss) | 1,917 | 1,771 |
Applied Global Services | Operating Segments | ||
Net sales and operating income (loss) for each reportable segment | ||
Net Sales | 1,369 | 1,320 |
Operating Income (Loss) | 383 | 403 |
Display and Adjacent Markets | Operating Segments | ||
Net sales and operating income (loss) for each reportable segment | ||
Net Sales | 167 | 366 |
Operating Income (Loss) | $ 8 | $ 76 |
Industry Segment Operations -_3
Industry Segment Operations - Net Sales by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 6,739 | $ 6,271 |
Change | 7% | |
Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 5,115 | 5,143 |
Change | (1.00%) | |
China | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,145 | 1,987 |
Change | (42.00%) | |
Korea | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,293 | 1,121 |
Change | 15% | |
Taiwan | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,968 | 1,249 |
Change | 58% | |
Japan | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 456 | 561 |
Change | (19.00%) | |
Southeast Asia | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 253 | 225 |
Change | 12% | |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,051 | 847 |
Change | 24% | |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 573 | $ 281 |
Change | 104% | |
Sales Revenue | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 100% | 100% |
Sales Revenue | Asia Pacific | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 76% | 82% |
Sales Revenue | China | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 17% | 32% |
Sales Revenue | Korea | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 19% | 18% |
Sales Revenue | Taiwan | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 29% | 20% |
Sales Revenue | Japan | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 7% | 9% |
Sales Revenue | Southeast Asia | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 4% | 3% |
Sales Revenue | United States | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 16% | 14% |
Sales Revenue | Europe | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net sales | 8% | 4% |
Industry Segment Operations - R
Industry Segment Operations - Reconciliations of Total Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 29, 2023 | Jan. 30, 2022 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net Sales | $ 6,739 | $ 6,271 |
Share-based compensation | (148) | (118) |
Severance and related charges | 0 | 4 |
Income from operations | 1,970 | 1,976 |
Corporate and Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Net Sales | 41 | 18 |
Unallocated cost of products sold and expenses | (231) | (178) |
Share-based compensation | (148) | (118) |
Severance and related charges | 0 | 4 |
Income from operations | $ (338) | $ (274) |
Industry Segment Operations - P
Industry Segment Operations - Percentage by Customer (Details) - Customer Concentration Risk - Sales Revenue | 3 Months Ended |
Jan. 29, 2023 | |
Taiwan Semiconductor Manufacturing Company Limited | |
Entity-Wide Revenue, Major Customer [Line Items] | |
Percentage of net sales | 27% |
Samsung Electronics Co., Ltd. | |
Entity-Wide Revenue, Major Customer [Line Items] | |
Percentage of net sales | 15% |