Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 28, 2018 | Dec. 07, 2018 | Apr. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | APPLIED MATERIALS INC /DE | ||
Entity Central Index Key | 6,951 | ||
Current Fiscal Year End Date | --10-28 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 28, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 958,606,093 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 49,674,881,854 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Income Statement [Abstract] | |||
Net sales | $ 17,253 | $ 14,537 | $ 10,825 |
Cost of products sold | 9,436 | 8,005 | 6,314 |
Gross profit | 7,817 | 6,532 | 4,511 |
Operating expenses: | |||
Research, development and engineering | 2,019 | 1,774 | 1,540 |
Marketing and selling | 521 | 456 | 429 |
General and administrative | 481 | 434 | 390 |
Total operating expenses | 3,021 | 2,664 | 2,359 |
Income from operations | 4,796 | 3,868 | 2,152 |
Interest expense | 234 | 198 | 155 |
Interest and other income, net | 132 | 61 | 16 |
Income before income taxes | 4,694 | 3,731 | 2,013 |
Provision for income taxes | 1,381 | 297 | 292 |
Net income | $ 3,313 | $ 3,434 | $ 1,721 |
Earnings per share: | |||
Basic (in dollars per share) | $ 3.27 | $ 3.20 | $ 1.56 |
Diluted (in dollars per share) | $ 3.23 | $ 3.17 | $ 1.54 |
Weighted average number of shares: | |||
Basic (in shares) | 1,013 | 1,073 | 1,107 |
Diluted (in shares) | 1,026 | 1,084 | 1,116 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 3,313 | $ 3,434 | $ 1,721 |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized net gain on investments | (51) | 23 | 16 |
Change in unrealized net loss on derivative instruments | 4 | 7 | (3) |
Change in defined and postretirement benefit plans | (17) | 21 | (36) |
Other comprehensive income (loss), net of tax | (64) | 51 | (23) |
Comprehensive income | $ 3,249 | $ 3,485 | $ 1,698 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,440 | $ 5,010 |
Short-term investments | 590 | 2,266 |
Accounts receivable, net | 2,565 | 2,338 |
Inventories | 3,722 | 2,930 |
Other current assets | 430 | 374 |
Total current assets | 10,747 | 12,918 |
Long-term investments | 1,568 | 1,143 |
Property, plant and equipment, net | 1,407 | 1,066 |
Goodwill | 3,368 | 3,368 |
Purchased technology and other intangible assets, net | 213 | 412 |
Deferred income taxes and other assets | 470 | 512 |
Total assets | 17,773 | 19,419 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,721 | 2,450 |
Customer deposits and deferred revenue | 1,347 | 1,665 |
Total current liabilities | 4,068 | 4,115 |
Long-term debt | 5,309 | 5,304 |
Income taxes payable | 1,254 | 392 |
Other liabilities | 303 | 259 |
Total liabilities | 10,934 | 10,070 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Preferred stock: $.01 par value per share; 1 shares authorized; no shares issued | 0 | 0 |
Common stock: $.01 par value per share; 2,500 shares authorized; 967 and 1,060 shares outstanding at 2018 and 2017, respectively | 10 | 11 |
Additional paid-in capital | 7,274 | 7,056 |
Retained earnings | 20,874 | 18,258 |
Treasury stock: 1,019 and 917 shares at 2018 and 2017, respectively | (21,194) | (15,912) |
Accumulated other comprehensive loss | (125) | (64) |
Total stockholders’ equity | 6,839 | 9,349 |
Total liabilities and stockholders’ equity | $ 17,773 | $ 19,419 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 28, 2018 | Oct. 29, 2017 |
Stockholders’ equity: | ||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,500,000,000 | 2,500,000,000 |
Common stock, shares outstanding | 967,000,000 | 1,060,000,000 |
Treasury stock, shares | 1,019,000,000 | 917,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | |
Beginning Balance, (in shares) at Oct. 25, 2015 | 1,160 | 793 | |||||
Beginning Balance at Oct. 25, 2015 | $ 7,613 | $ 11 | $ 6,575 | $ 13,967 | $ (12,848) | $ (92) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,721 | 1,721 | |||||
Other comprehensive income (loss), net of tax | (23) | (23) | |||||
Dividends | (436) | (436) | |||||
Share-based compensation | 201 | 201 | |||||
Issuance under stock plans, net of a tax benefit, (in shares) | 14 | ||||||
Issuance under stock plans, net of a tax benefit $55 and $23 for 2017 and 2016, respectively | $ 33 | 33 | |||||
Common stock repurchases, (in shares) | 96 | 96 | 96 | ||||
Common stock repurchases | $ (1,892) | $ 0 | $ (1,892) | ||||
Ending Balance, (in shares) at Oct. 30, 2016 | 1,078 | 889 | |||||
Ending Balance at Oct. 30, 2016 | 7,217 | $ 11 | 6,809 | 15,252 | $ (14,740) | (115) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 3,434 | 3,434 | |||||
Other comprehensive income (loss), net of tax | 51 | 51 | |||||
Dividends | (428) | (428) | |||||
Share-based compensation | 220 | 220 | |||||
Issuance under stock plans, net of a tax benefit, (in shares) | 10 | ||||||
Issuance under stock plans, net of a tax benefit $55 and $23 for 2017 and 2016, respectively | $ 27 | 27 | |||||
Common stock repurchases, (in shares) | 28 | 28 | 28 | ||||
Common stock repurchases | $ (1,172) | $ 0 | $ (1,172) | ||||
Ending Balance, (in shares) at Oct. 29, 2017 | 1,060 | 917 | |||||
Ending Balance at Oct. 29, 2017 | 9,349 | $ 11 | 7,056 | 18,258 | $ (15,912) | (64) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of new accounting standard | [1] | 0 | (3) | 3 | |||
Net income | 3,313 | 3,313 | |||||
Other comprehensive income (loss), net of tax | (64) | (64) | |||||
Dividends | (694) | (694) | |||||
Share-based compensation | 258 | 258 | |||||
Issuance under stock plans, net of a tax benefit, (in shares) | 9 | ||||||
Issuance under stock plans, net of a tax benefit $55 and $23 for 2017 and 2016, respectively | $ (40) | (40) | |||||
Common stock repurchases, (in shares) | 102 | 102 | 102 | ||||
Common stock repurchases | $ (5,283) | $ (1) | $ (5,282) | ||||
Ending Balance, (in shares) at Oct. 28, 2018 | 967 | 1,019 | |||||
Ending Balance at Oct. 28, 2018 | $ 6,839 | $ 10 | $ 7,274 | $ 20,874 | $ (21,194) | $ (125) | |
[1] | Represents the reclassification adjustment related to the early adoption of Accounting Standards Update (ASU) 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. See Note 1. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Oct. 29, 2017 | Oct. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Tax benefit included in issuance under stock plans | $ 55 | $ 23 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 3,313 | $ 3,434 | $ 1,721 |
Adjustments required to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 457 | 407 | 389 |
Deferred income taxes | 94 | (11) | 21 |
Other | 4 | (9) | 38 |
Share-based compensation | 258 | 220 | 201 |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts receivable | (226) | (37) | (542) |
Inventories | (792) | (879) | (216) |
Other current and non-current assets | (93) | (157) | 30 |
Accounts payable and accrued expenses | 179 | 370 | 184 |
Customer deposits and deferred revenue | (318) | 289 | 611 |
Income taxes payable | 886 | 121 | 173 |
Other liabilities | 25 | 41 | (44) |
Cash provided by operating activities | 3,787 | 3,789 | 2,566 |
Cash flows from investing activities: | |||
Capital expenditures | (622) | (345) | (253) |
Cash paid for acquisitions, net of cash acquired | (6) | (68) | (16) |
Proceeds from sales and maturities of investments | 3,276 | 2,743 | 1,234 |
Purchases of investments | (2,077) | (4,856) | (1,390) |
Cash provided by (used in) investing activities | 571 | (2,526) | (425) |
Cash flows from financing activities: | |||
Debt borrowings, net of issuance costs | 0 | 2,176 | 0 |
Debt repayments | 0 | (205) | (1,207) |
Proceeds from common stock issuances | 124 | 97 | 88 |
Common stock repurchases | (5,283) | (1,172) | (1,892) |
Tax withholding payments for vested equity awards | (164) | (125) | (77) |
Payments of dividends to stockholders | (605) | (430) | (444) |
Cash provided by (used in) financing activities | (5,928) | 341 | (3,532) |
Increase (decrease) in cash and cash equivalents | (1,570) | 1,604 | (1,391) |
Cash and cash equivalents — beginning of year | 5,010 | 3,406 | 4,797 |
Cash and cash equivalents — end of year | 3,440 | 5,010 | 3,406 |
Supplemental cash flow information: | |||
Cash payments for income taxes | 300 | 194 | 157 |
Cash refunds from income taxes | 63 | 61 | 113 |
Cash payments for interest | $ 219 | $ 186 | $ 151 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 28, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Applied Materials, Inc. and its subsidiaries (Applied or the Company) after elimination of intercompany balances and transactions. All references to a fiscal year apply to Applied’s fiscal year which ends on the last Sunday in October. Fiscal 2018 , 2017 and 2016 contained 52, 52, and 53 weeks, respectively. Each fiscal quarter of 2018 and 2017 contained 13 weeks. The first fiscal quarter of 2016 contained 14 weeks, while the second, third and fourth quarters of fiscal 2016 contained 13 weeks. Certain prior year amounts have been reclassified to conform to current year presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Cash Equivalents All highly-liquid investments with a remaining maturity of three months or less at the time of purchase are considered to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. Investments All of Applied’s investments, except equity investments held in privately-held companies, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are recorded at fair value based upon quoted market prices, and any temporary difference between the cost and fair value of an investment is presented as a separate component of accumulated other comprehensive income (loss). The specific identification method is used to determine the gains and losses on investments. Interest earned on cash and investments, as well as realized gains and losses on sale of securities, are included in interest and other income, net in the accompanying Consolidated Statements of Operations. Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Allowance for Doubtful Accounts Applied maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and any customer-specific issues Applied has identified. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to Applied or its payment trends, may require Applied to further adjust its estimates of the recoverability of amounts due to Applied. Bad debt expense and any reversals are recorded in marketing and selling expenses in the Consolidated Statement of Operations. Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) basis. Applied adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. Applied fully writes down inventories and noncancelable purchase orders for inventory deemed obsolete. Applied performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by Applied, additional inventory adjustments may be required. Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30 years; demonstration and manufacturing equipment, 3 to 5 years; software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 5 years. Land improvements are amortized over the shorter of 15 years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term. Intangible Assets Goodwill and indefinite-lived assets are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Purchased technology and other intangible assets are presented at cost, net of accumulated amortization, and are amortized over their estimated useful lives of 1 to 15 years using the straight-line method. Long-Lived Assets Applied reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets or asset group may not be recoverable. Applied assesses these assets for impairment based on estimated future cash flows from these assets. Research, Development and Engineering Costs Research, development and engineering costs are expensed as incurred. Sales and Value Added Taxes Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying Consolidated Statements of Operations. Warranty Applied provides for the estimated cost of warranty when revenue is recognized. Estimated warranty costs are determined by analyzing specific product, current and historical configuration statistics and regional warranty support costs. Applied’s warranty obligation is affected by product and component failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. If actual warranty costs differ substantially from Applied’s estimates, revisions to the estimated warranty liability would be required. Income Taxes Applied recognizes a current tax liability for the estimated amount of income tax payable on tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. Applied recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Any changes in judgment related to uncertain tax positions are recognized in Applied’s provision for income taxes in the quarter in which such change occurs. Interest and penalties related to uncertain tax positions are recognized in Applied’s provision for income taxes. Revenue Recognition Applied recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to buyer is fixed or determinable; and collectability is probable. Applied’s shipping terms are customarily FOB Applied shipping point or equivalent terms. Applied’s revenue recognition policy generally results in revenue recognition at the following points: (1) for all transactions where legal title passes to the customer upon shipment or delivery, Applied recognizes revenue upon passage of title for all products that have been demonstrated to meet product specifications prior to shipment; the portion of revenue associated with certain installation-related tasks is deferred, and that revenue is recognized upon completion of the installation-related tasks; (2) for products that have not been demonstrated to meet product specifications prior to shipment, revenue is recognized at customer technical acceptance; (3) for transactions where legal title does not pass at shipment or delivery, revenue is recognized when legal title passes to the customer, which is generally at customer technical acceptance; and (4) for arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred using the relative selling price method utilizing estimated sales prices until delivery of the deferred elements. Applied limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or adjustment. In cases where Applied has sold products that have been demonstrated to meet product specifications prior to shipment, Applied believes that at the time of delivery, it has an enforceable claim to amounts recognized as revenue. Spare parts revenue is generally recognized upon shipment, and services revenue is generally recognized over the period that the services are provided. When a sales arrangement contains multiple elements, such as hardware and services and/or software products, Applied allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. Applied generally utilizes the ESP due to the nature of its products. In multiple element arrangements where more-than-incidental software deliverables are included, revenue is allocated to each separate unit of accounting for each of the non-software deliverables and to the software deliverables as a group using the relative selling prices of each of the deliverables in the arrangement based on the aforementioned selling price hierarchy. If the arrangement contains more than one software deliverable, the arrangement consideration allocated to the software deliverables as a group is then allocated to each software deliverable using the guidance for recognizing software revenue. Derivative Financial Instruments Applied uses financial instruments, such as forward exchange and currency option contracts, to hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months . The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. In certain cases, Applied also uses interest rate swap or lock agreements to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. The terms of derivative financial instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. All of Applied’s derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments. For derivative instruments designated and qualifying as cash flow hedges, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is ineffective, the gain or loss on the associated financial instrument is recorded promptly in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gain or loss on these hedges is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. Foreign Currencies As of October 28, 2018 , all of Applied’s subsidiaries use the United States dollar as their functional currency. Accordingly, assets and liabilities of these subsidiaries are remeasured using exchange rates in effect at the end of the period, except for non-monetary assets, such as inventories and property, plant and equipment, which are remeasured using historical exchange rates. Foreign currency-denominated revenues and costs are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in general and administrative expenses in the Consolidated Statements of Operations as incurred. Concentrations of Credit Risk Financial instruments that potentially subject Applied to significant concentrations of credit risk consist principally of cash equivalents, investments, trade accounts receivable and derivative financial instruments used in hedging activities. Applied invests in a variety of financial instruments, such as, but not limited to, commercial paper, corporate and municipal bonds, United States Treasury and agency securities, and asset-backed and mortgage-backed securities, and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Applied performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. Applied maintains an allowance reserve for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. Applied regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. In addition, Applied utilizes letters of credit to mitigate credit risk when considered appropriate. Applied is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments, but does not expect any counterparties to fail to meet their obligations. In some instances, Applied has entered into security arrangements which require the counterparties to post collateral to further mitigate credit exposure. Recent Accounting Pronouncements Accounting Standards Adopted Inventory Measurement. In July 2015, the Financial Accounting Standard Board (FASB) issued authoritative guidance that requires inventory to be measured at the lower of cost and net realizable value instead of at lower of cost or market. This guidance does not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method but applies to all other inventory including those measured using first-in, first-out (FIFO) or the average cost method. Applied adopted this authoritative guidance in the first quarter of fiscal 2018 prospectively to the measurement of inventory after the effective date. The adoption of this guidance did not have a material impact on Applied’s consolidated financial statements. Share-Based Compensation. In March 2016, the FASB issued authoritative guidance that simplifies several aspects of the accounting for share-based payment transactions, including forfeitures, income tax, and classification on the statement of cash flows. Applied adopted this guidance in the first quarter of fiscal 2018. Upon adoption, Applied elected to continue to estimate forfeitures expected to occur to determine the amount of compensation costs to be recognized in each period. The new standard also required recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital prospectively. In fiscal 2018, Applied recognized an excess tax benefit of $51 million in the Consolidated Condensed Statements of Operations. Additionally, Applied elected to apply the presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares retrospectively. Adopting this guidance increased cash provided by operating activities by $180 million and $100 million with corresponding net decreases in cash provided by financing activities for fiscal 2017 and 2016, respectively. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued authoritative guidance that allows stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) to be reclassified from accumulated other comprehensive income to retained earnings. Applied adopted this guidance at the beginning of the third quarter of fiscal 2018. The stranded income tax effects related to the Tax Act were reclassified from accumulated other comprehensive income to retained earnings in the consolidated statements of stockholders' equity as of October 28, 2018 . Share-Based Compensation: Modification Accounting. In May 2017, the FASB issued an update to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. Applied adopted this guidance in the third quarter of fiscal 2018 on a prospective basis. The impact of the adoption of this guidance will depend on whether the Company makes any future modifications of share-based payment awards. Accounting Standards Not Yet Adopted Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the FASB issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. This authoritative guidance will be effective for Applied in fiscal 2021 on a retrospective basis, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement. In August 2018, the FASB issued authoritative guidance that eliminates, amends, and adds disclosure requirements for fair value measurements. While the amended and new disclosure requirements primarily relate to Level 3 fair value measurements, the authoritative guidance also eliminates disclosure requirements related to the amount and reasons for transfer between Level 1 and Level 2 of fair value hierarchy, policy for timing of transfer between levels, and the valuation processes for Level 3 fair value measurements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020. Early adoption is permitted only for the removal and amendment of certain disclosures, while the new disclosures requirements are to be applied prospectively. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Derivatives and Hedging. In August 2017, the FASB issued authoritative guidance that modifies the recognition and presentation of hedge accounting to better align an entity’s risk management strategies and financial reporting for hedging relationships. The authoritative guidance expands the application of hedge accounting for non-financial and financial risk components and eases certain hedge effectiveness assessment requirements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Receivables: Nonrefundable Fees and Other Costs. In March 2017, the FASB issued authoritative guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 on a modified retrospective basis, with early adoption permitted. Applied is currently evaluating the impact of adopting this new accounting guidance on Applied’s consolidated financial statements. Retirement Benefits. In March 2017, the FASB issued authoritative guidance which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a retrospective basis. The adoption of this guidance is only expected to result in reclassification of other components of net benefit costs outside of income from operations and is not expected to have a significant impact on Applied’s consolidated financial statements. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Business Combinations. In January 2017, the FASB issued authoritative guidance that clarifies the definition of a business to help companies evaluate whether acquisition or disposal transactions should be accounted for as asset groups or as businesses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a prospective basis. The impact of the adoption depends on the facts and circumstances of future acquisition or disposal transactions. Income Taxes: Intra-Entity Asset Transfers. In October 2016, the FASB issued authoritative guidance that requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. Applied will adopt this standard in the first quarter of fiscal 2019 using a modified-retrospective approach resulting in a cumulative-effect adjustment to retained earnings. Applied estimates an increase in deferred tax assets of approximately $1.6 billion with a corresponding increase in retained earnings related to the recognition of income tax effects of intra-entity asset transfers that occurred prior to the adoption date. Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued authoritative guidance which addresses classification of certain cash receipts and cash payments related to the statement of cash flows. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted beginning in the first quarter of fiscal 2020. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Leases. In February 2016, the FASB issued authoritative guidance for lease accounting, which requires lessees to recognize lease assets and liabilities on the balance sheet for certain lease arrangements that are classified as operating leases under the previous standard, and to provide for enhanced disclosures. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 and should be applied using a modified retrospective approach. Early adoption is permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Financial Instruments: Classification and Measurement. In January 2016, the FASB issued authoritative guidance that requires equity investments that do not result in consolidation, and are not accounted for under the equity method, to be measured at fair value, and requires recognition of any changes in fair value in net income unless the investments qualify for a new practicability exception. For financial liabilities measured at fair value, the change in fair value caused by a change in instrument-specific credit risk will be required to be presented separately in other comprehensive income. Applied will adopt this standard in the first quarter of fiscal year 2019. Applied will make elections on whether to apply fair value or the measurement alternative for equity investments without readily determinable fair value on an investment-by-investment basis. For the equity securities without readily determinable fair values, fair value will be applied prospectively to all equity investments that exist as of adoption. Upon adoption, Applied will record a cumulative-effect adjustment to retained earnings for the unrealized gains and losses associated with equity investments with readily determinable fair values. Applied currently estimates a net increase to retained earnings of approximately $21 million with the corresponding net decrease in accumulated other comprehensive income. Revenue Recognition. I n May 2014, the FASB issued authoritative guidance that requires revenue recognition to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and requires certain additional disclosures. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting the guidance. In August 2015, the FASB issued an amendment to defer the effective date by one year and allow entities to early adopt no earlier than the original effective date. With this amendment, the guidance will be effective for Applied in the first quarter of fiscal 2019, which is the Company’s planned adoption date. Applied currently anticipates adopting this new guidance using the full retrospective approach. In fiscal 2016, Applied established a project steering committee and cross-functional implementation team that has identified potential differences that would result from applying the requirements of the new standard to Applied’s revenue contracts. In addition, the implementation team has identified and is now implementing changes to business processes, systems and controls to support recognition and disclosure under the new standard. While the Company’s evaluation of the impact of this new guidance is not complete, Applied currently expects that the new standard will have the following impacts: • Revenue related to the sale of equipment and spares will generally continue to be recognized at a point in time upon the transfer of control. Under this new guidance, the point of time at which revenue is recognized for certain of these products is expected to be earlier than under current revenue recognition guidance as there will be fewer constraints related to customer acceptance. • Revenue related to the sale of services will generally continue to be recognized over time as the services are performed. • Disclosures related to revenue recognition, including contract balances and revenue disaggregation, will be expanded. • Applied continues to evaluate the effect that this new guidance will have on the financial position and results of operations for fiscal 2018. However, for fiscal 2017, Applied expects an increase of our net sales between $140 million and $180 million , or approximately 1% . Applied is nearing completion of retrospectively adjusting financial information and will continue to evaluate the effect that the standard will have on its consolidated financial statements, including disclosures, and its preliminary assessments are subject to change. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Oct. 28, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, restricted stock units, and employee stock purchase plan shares) outstanding during the period. Applied’s net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to the Company’s non-complex capital structure. Fiscal Year 2018 2017 2016 (In millions, except per share amounts) Numerator: Net income $ 3,313 $ 3,434 $ 1,721 Denominator: Weighted average common shares outstanding 1,013 1,073 1,107 Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares 13 11 9 Denominator for diluted earnings per share 1,026 1,084 1,116 Basic earnings per share $ 3.27 $ 3.20 $ 1.56 Diluted earnings per share $ 3.23 $ 3.17 $ 1.54 Potentially dilutive securities — — — Potentially dilutive securities attributable to outstanding stock options and restricted stock units are excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value are greater than the average market price of Applied common stock, and therefore their inclusion would be anti-dilutive. Prior to the adoption of Accounting Standards Update (ASU) 2016-09 Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting in the first quarter of fiscal 2018, the assumed tax benefits upon the exercise of options and vesting of restricted stock units were also included in this calculation. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Oct. 28, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments Summary of Cash, Cash Equivalents and Investments The following tables summarize Applied’s cash, cash equivalents and investments by security type: October 28, 2018 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,489 $ — $ — $ 1,489 Cash equivalents: Money market funds 1,599 — — 1,599 Commercial paper, corporate bonds and medium-term notes 352 — — 352 Total Cash equivalents 1,951 — — 1,951 Total Cash and Cash equivalents $ 3,440 $ — $ — $ 3,440 Short-term and long-term investments: U.S. Treasury and agency securities $ 335 $ — $ 2 $ 333 Non-U.S. government securities* 10 — — 10 Municipal securities 399 — 4 395 Commercial paper, corporate bonds and medium-term notes 705 — 3 702 Asset-backed and mortgage-backed securities 595 — 4 591 Total fixed income securities 2,044 — 13 2,031 Publicly traded equity securities 17 25 4 38 Equity investments in privately-held companies 89 — — 89 Total short-term and long-term investments $ 2,150 $ 25 $ 17 $ 2,158 Total Cash, Cash equivalents and Investments $ 5,590 $ 25 $ 17 $ 5,598 _________________________ * Includes agency debt securities guaranteed by Canada. October 29, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,346 $ — $ — $ 1,346 Cash equivalents: Money market funds 2,658 — — 2,658 U.S. Treasury and agency securities 15 — — 15 Non-U.S. government securities 55 — — 55 Municipal securities 341 — — 341 Commercial paper, corporate bonds and medium-term notes 595 — — 595 Total Cash equivalents 3,664 — — 3,664 Total Cash and Cash equivalents $ 5,010 $ — $ — $ 5,010 Short-term and long-term investments: U.S. Treasury and agency securities $ 667 $ — $ 1 $ 666 Non-U.S. government securities* 161 — — 161 Municipal securities 1,007 — — 1,007 Commercial paper, corporate bonds and medium-term notes 1,024 1 1 1,024 Asset-backed and mortgage-backed securities 379 — 1 378 Total fixed income securities 3,238 1 3 3,236 Publicly traded equity securities 22 78 1 99 Equity investments in privately-held companies 74 — — 74 Total short-term and long-term investments $ 3,334 $ 79 $ 4 $ 3,409 Total Cash, Cash equivalents and Investments $ 8,344 $ 79 $ 4 $ 8,419 ________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. Maturities of Investments The following table summarizes the contractual maturities of Applied’s investments at October 28, 2018 : Cost Estimated Fair Value (In millions) Due in one year or less $ 503 $ 502 Due after one through five years 946 938 No single maturity date** 701 718 Total $ 2,150 $ 2,158 _________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. Gains and Losses on Investments Gross realized gains and losses on sales of investments for each fiscal year were as follows: 2018 2017 2016 (In millions) Gross realized gains $ 29 $ 14 $ 10 Gross realized losses $ 3 $ 1 $ 2 At October 28, 2018 , gross unrealized losses related to Applied’s investment portfolio were not material. Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss is considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. Applied determined that the gross unrealized losses on its marketable fixed income securities at October 28, 2018 , October 29, 2017 and October 30, 2016 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed income securities for fiscal 2018 , 2017 or 2016 . During fiscal 2018 , 2017 and 2016 , Applied determined that certain of its equity investments were other-than-temporarily impaired and, accordingly, recognized impairment charges of $5 million , $10 million and $8 million , respectively. These impairment charges are included in interest and other income, net in the Consolidated Statement of Operations. Unrealized gains and temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (loss), net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive income (loss) to results of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 28, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Applied’s financial assets are measured and recorded at fair value, except for equity investments in privately-held companies. These equity investments are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Fair Value Hierarchy Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments. As of October 28, 2018 , substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. Assets Measured at Fair Value on a Recurring Basis Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below: October 28, 2018 October 29, 2017 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Money market funds $ 1,599 $ — $ 1,599 $ 2,658 $ — $ 2,658 U.S. Treasury and agency securities 297 36 333 192 489 681 Non-U.S. government securities — 10 10 — 216 216 Municipal securities — 395 395 — 1,348 1,348 Commercial paper, corporate bonds and medium-term notes — 1,054 1,054 — 1,619 1,619 Asset-backed and mortgage-backed securities — 591 591 — 378 378 Publicly traded equity securities 38 — 38 99 — 99 Total $ 1,934 $ 2,086 $ 4,020 $ 2,949 $ 4,050 $ 6,999 There were no transfers between Level 1 and Level 2 fair value measurements during fiscal 2018 and 2017 , and Applied did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of October 28, 2018 or October 29, 2017 . Assets and Liabilities Measured at Fair Value on a Non-recurring Basis Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. If Applied determines that an other-than-temporary impairment has occurred, the investment will be written down to its estimated fair value based on available information, such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. Equity investments in privately-held companies totaled $89 million at October 28, 2018 , of which $72 million of investments were accounted for under the cost method of accounting and $17 million of investments had been measured at fair value on a non-recurring basis within Level 3 fair value measurements due to an other-than-temporary decline in value. Equity investments in privately-held companies totaled $74 million at October 29, 2017 , of which $65 million of investments were accounted for under the cost method of accounting and $9 million of investments had been measured at fair value on a non-recurring basis within Level 3 fair value measurements due to an other-than-temporary decline in value. During fiscal 2018 , 2017 and 2016 , Applied determined that certain of its equity investments were other-than-temporarily impaired and, accordingly, recognized impairment charges of $5 million , $10 million and $8 million , respectively. Other The carrying amounts of Applied’s financial instruments, including cash and cash equivalents, accounts receivable, notes payable - short term, and accounts payable and accrued expenses, approximate fair value due to their short maturities. At October 28, 2018 , the aggregate principal and estimated fair value amounts of long-term debt were both $5.4 billion . At October 29, 2017 , the aggregate principal amount of long-term debt was $5.4 billion , and the estimated fair value was $5.8 billion . The estimated fair value of long-term debt is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 10 of the Notes to the Consolidated Financial Statements for further detail of existing debt. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Oct. 28, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivative Financial Instruments Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, euro, Israeli shekel and Taiwanese dollar. Applied uses derivative financial instruments, such as forward exchange contracts and currency option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months . The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. During fiscal 2017, Applied entered into and settled interest rate lock agreements, with a total notional amount of $700 million to hedge against the variability of benchmark interest rates prior to the issuance of the debt. These instruments were designated as cash flow hedges at inception and settled in conjunction with the issuance of debt in March 2017. The $14 million loss from the settlement of the interest rate lock agreement, which was included in AOCI in stockholders’ equity, is being amortized to interest expense over the term of the senior unsecured 10 -year notes issued in March 2017. Applied does not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign currency exchange and interest rate contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the ineffective portion of any hedges, are recognized currently in earnings. All of Applied’s derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and foreign exchange derivatives are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of AOCI in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to foreign exchange derivative instruments included in AOCI at October 28, 2018 is expected to be reclassified into earnings within 12 months . Changes in the fair value of currency forward exchange and option contracts due to changes in time value are excluded from the assessment of effectiveness. Both ineffective hedge amounts and hedge components excluded from the assessment of effectiveness are recognized in earnings. If the transaction being hedged is no longer probable to occur, or if a portion of any derivative is deemed to be ineffective, Applied promptly recognizes the gain or loss on the associated financial instrument in earnings. The amount recognized due to discontinuance of cash flow hedges that were probable not to occur by the end of the originally specified time period were not significant for fiscal years 2018 and 2017 and was a loss of $8 million for fiscal 2016. Additionally, forward exchange contracts are generally used to hedge certain foreign currency denominated assets or liabilities. These derivatives are typically entered into once per month and are not designated for hedge accounting treatment. Accordingly, changes in the fair value of these hedges are recorded in earnings to offset the changes in the fair value of the assets or liabilities being hedged. The fair values of foreign exchange derivative instruments at October 28, 2018 and October 29, 2017 were not material. The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Effective Portion Ineffective Portion and Amount Derivatives in Cash Flow Hedging Relationships Location of Gain or Gain or Gain or (Loss) Gain or (Loss) (In millions) 2018 Foreign exchange contracts AOCI $ 3 $ — $ — Foreign exchange contracts Cost of products sold — 4 19 Foreign exchange contracts General and administrative — (3 ) (7 ) Interest rate contracts Interest expense — (3 ) — Total $ 3 $ (2 ) $ 12 2017 Foreign exchange contracts AOCI $ 35 $ — $ — Foreign exchange contracts Cost of products sold — 7 (3 ) Foreign exchange contracts General and administrative — 7 (2 ) Interest rate contracts AOCI (14 ) — — Interest rate contracts Interest expense — (3 ) — Total $ 21 $ 11 $ (5 ) 2016 Foreign exchange contracts AOCI $ (53 ) $ — $ — Foreign exchange contracts Cost of products sold — (46 ) 2 Foreign exchange contracts General and administrative — — (11 ) Interest rate contracts Interest expense — (2 ) — Total $ (53 ) $ (48 ) $ (9 ) Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Gain or 2018 2017 2016 (In millions) Foreign exchange contracts General and administrative $ (5 ) $ 39 $ (75 ) Total $ (5 ) $ 39 $ (75 ) Credit Risk Contingent Features If Applied’s credit rating were to fall below investment grade, it would be in violation of credit risk contingent provisions of the derivative instruments discussed above, and certain counterparties to the derivative instruments could request immediate payment on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was immaterial as of October 28, 2018 and October 29, 2017 . Entering into derivative contracts with banks exposes Applied to credit-related losses in the event of the banks’ nonperformance. However, Applied’s exposure is not considered significant. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Oct. 28, 2018 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied sells its accounts receivable without recourse. Applied, from time to time, also discounts letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Applied sold $1.6 billion, $746 million and $75 million of accounts receivable during fiscal 2018 , 2017 and 2016 , respectively. Applied discounted letters of credit issued by customers of $37 million in fiscal 2018. There was no discounting of promissory notes in fiscal 2018. Applied did not discount letters of credit issued by customers or discount promissory notes during fiscal 2017 or 2016. Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Statements of Operations and were not material for all years presented. Accounts receivable are presented net of allowance for doubtful accounts of $33 million and $34 million at October 28, 2018 and October 29, 2017 , respectively. Changes in allowance for doubtful accounts in each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 34 $ 51 $ 49 Provision — — 3 Deductions 1 (1 ) (17 ) (1 ) Ending balance $ 33 $ 34 $ 51 _____________________________ 1 Fiscal 2018 , 2017 and 2016 deductions primarily represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections. Applied sells its products principally to manufacturers within the semiconductor and display industries. While Applied believes that its allowance for doubtful accounts is adequate and represents its best estimate as of October 28, 2018 , it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates. |
Balance Sheet Detail
Balance Sheet Detail | 12 Months Ended |
Oct. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Detail | Balance Sheet Detail October 28, October 29, (In millions) Inventories Customer service spares $ 989 $ 595 Raw materials 1,020 603 Work-in-process 505 468 Finished goods 1,208 1,264 $ 3,722 $ 2,930 Included in finished goods inventory is $19 million at October 28, 2018 and $331 million at October 29, 2017 , of newly-introduced systems at customer locations where the sales transaction did not meet Applied’s revenue recognition criteria as set forth in Note 1 . Finished goods inventory includes $350 million and $281 million of evaluation inventory at October 28, 2018 and October 29, 2017 , respectively. October 28, October 29, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 40 $ 57 Prepaid expenses and other 390 317 $ 430 $ 374 Useful Life October 28, October 29, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 245 $ 160 Buildings and improvements 3-30 1,448 1,315 Demonstration and manufacturing equipment 3-5 1,282 1,129 Furniture, fixtures and other equipment 3-5 634 572 Construction in progress 203 135 Gross property, plant and equipment 3,812 3,311 Accumulated depreciation (2,405 ) (2,245 ) $ 1,407 $ 1,066 Depreciation expense was $258 million , $214 million and $200 million for fiscal 2018 , 2017 and 2016 respectively. October 28, October 29, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 996 $ 945 Compensation and employee benefits 639 666 Warranty 209 199 Dividends payable 193 106 Income taxes payable 136 112 Other accrued taxes 112 70 Interest payable 38 38 Other 398 314 $ 2,721 $ 2,450 October 28, October 29, (In millions) Customer Deposits and Deferred Revenue Customer deposits $ 444 $ 381 Deferred revenue 903 1,284 $ 1,347 $ 1,665 Applied typically receives deposits on future deliverables from customers in the Display and Adjacent Markets segment and, in certain instances, may also receive deposits from customers in the Applied Global Services segment. October 28, October 29, (In millions) Other Liabilities Defined and postretirement benefit plans $ 177 $ 160 Other 126 99 $ 303 $ 259 |
Business Combinations
Business Combinations | 12 Months Ended |
Oct. 28, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During fiscal 2017, Applied completed three acquisitions to complement Applied’s existing product offerings and to provide opportunities for future growth within Applied’s Display and Adjacent Markets and Applied Global Services segments. Pro forma results of operations for these acquisitions have not been presented because they are not material to Applied’s consolidated results of operations. The acquired businesses are included in the results for the Display and Adjacent Markets and Applied Global Services segments. The following table represents the final aggregated purchase price allocation for acquisitions completed in fiscal year 2017: Estimated Fair Values (In millions) Fair value of net assets acquired $ 23 Goodwill 55 Purchased technology 31 Purchase price allocated $ 109 Intangible assets are being amortized on a straight-line basis over an estimated weighted-average useful life of 3.5 years . Total transaction costs related to these acquisitions were not material and were expensed as incurred in general and administrative expenses in the Consolidated Statement of Operations. |
Goodwill, Purchased Technology
Goodwill, Purchased Technology and Other Intangible Assets | 12 Months Ended |
Oct. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Purchased Technology and Other Intangible Assets | Goodwill, Purchased Technology and Other Intangible Assets Goodwill and Purchased Intangible Assets Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. Applied regularly monitors current business conditions and considers other factors including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. To test goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, Applied then performs the two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. Under the two-step goodwill impairment test, Applied would in the first step compare the estimated fair value of each reporting unit to its carrying value. Applied determines the fair value of each of its reporting units based on a weighting of income and market approaches. If the carrying value of a reporting unit exceeds its fair value, Applied would then perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If Applied determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, Applied would record an impairment charge equal to the difference. As of October 28, 2018 , Applied’s reporting units include Semiconductor Product Group and Imaging and Process Control Group, which combine to form the Semiconductor Systems reporting segment, Applied Global Services, and Display and Adjacent Markets. In the fourth quarter of fiscal 2018 , Applied performed a qualitative assessment to test goodwill for all of its reporting units for impairment. Applied determined that it was more likely than not that each of its reporting units’ fair values exceeded their respective carrying values and that it was not necessary to perform the two-step goodwill impairment test for any of its reporting units. The evaluation of goodwill and intangible assets for impairment requires the exercise of significant judgment. In the event of future changes in business conditions, Applied will be required to reassess and update its forecasts and estimates used in future impairment analyses. If the results of these future analyses are lower than current estimates, a material impairment charge may result at that time. Details of goodwill were as follows: October 28, 2018 October 29, 2017 (In millions) Semiconductor Systems $ 2,151 $ 2,151 Applied Global Services 1,018 1,018 Display and Adjacent Markets 199 199 Carrying amount $ 3,368 $ 3,368 A summary of Applied’s purchased technology and intangible assets is set forth below: October 28, October 29, (In millions) Purchased technology, net $ 109 $ 288 Intangible assets - finite-lived, net 104 124 $ 213 $ 412 Finite-Lived Purchased Intangible Assets Applied amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 1 to 15 years. Applied evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Applied assesses the fair value of the assets based on the amount of the undiscounted future cash flow that the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset, plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When Applied identifies an impairment, Applied reduces the carrying value of the group of assets to comparable market values, when available and appropriate, or to its estimated fair value based on a discounted cash flow approach. Intangible assets, such as purchased technology, are generally recorded in connection with a business acquisition. The value assigned to intangible assets is usually based on estimates and judgments regarding expectations for the success and life cycle of products and technology acquired. Applied evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, Applied reviews intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable. Management considers such indicators as significant differences in actual product acceptance from the estimates, changes in the competitive and economic environments, technological advances, and changes in cost structure. Details of finite-lived intangible assets were as follows: October 28, 2018 October 29, 2017 Purchased Technology Other Intangible Assets Total Purchased Technology Other Intangible Assets Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,449 $ 252 $ 1,701 $ 1,449 $ 252 $ 1,701 Applied Global Services 33 44 77 33 44 77 Display and Adjacent Markets 163 38 201 163 38 201 Corporate and Other — 9 9 — 9 9 Gross carrying amount $ 1,645 $ 343 $ 1,988 $ 1,645 $ 343 $ 1,988 Accumulated amortization: Semiconductor Systems $ (1,375 ) $ (150 ) $ (1,525 ) $ (1,210 ) $ (131 ) $ (1,341 ) Applied Global Services (29 ) (44 ) (73 ) (28 ) (44 ) (72 ) Display and Adjacent Markets (132 ) (36 ) (168 ) (119 ) (35 ) (154 ) Corporate and Other — (9 ) (9 ) — (9 ) (9 ) Accumulated amortization $ (1,536 ) $ (239 ) $ (1,775 ) $ (1,357 ) $ (219 ) $ (1,576 ) Carrying amount $ 109 $ 104 $ 213 $ 288 $ 124 $ 412 Details of amortization expense for each fiscal year by segment were as follows: 2018 2017 2016 (In millions) Semiconductor Systems $ 184 $ 185 $ 185 Applied Global Services 1 1 1 Display and Adjacent Markets 14 7 — Corporate and Other — — 3 Total $ 199 $ 193 $ 189 Amortization expense for each fiscal year was charged to the following categories: 2018 2017 2016 (In millions) Cost of products sold $ 180 $ 173 $ 167 Research, development and engineering 1 1 2 Marketing and selling 18 19 20 Total $ 199 $ 193 $ 189 As of October 28, 2018 , future estimated amortization expense is expected to be as follows: Amortization Expense (In millions) 2019 $ 57 2020 52 2021 39 2022 65 Total $ 213 |
Borrowing Facilities and Debt
Borrowing Facilities and Debt | 12 Months Ended |
Oct. 28, 2018 | |
Debt Disclosure [Abstract] | |
Borrowing Facilities and Debt | Borrowing Facilities and Debt Applied has credit facilities for unsecured borrowings in various currencies of up to $1.6 billion , of which $1.5 billion is comprised of a committed revolving credit agreement with a group of banks that is scheduled to expire in September 2021 . This agreement provides for borrowings in United States dollars at interest rates keyed to one of various benchmark rates selected by Applied for each advance, plus a margin based on Applied’s public debt rating and includes financial and other covenants. Remaining credit facilities in the amount of approximately $71 million are with Japanese banks. Applied’s ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. No amounts were outstanding under any of these facilities at both October 28, 2018 and October 29, 2017 , and Applied has not utilized these credit facilities. In fiscal 2011, Applied established a short-term commercial paper program of up to $1.5 billion . At October 28, 2018 and October 29, 2017 , Applied did not have any commercial paper outstanding. In March 2017, Applied issued senior unsecured notes in the aggregate principal amount of $2.2 billion and in May 2017, used a portion of the net proceeds to redeem the outstanding $200 million in principal amount of its 7.125% senior notes due in October 2017. Debt outstanding as of October 28, 2018 and October 29, 2017 was as follows: Principal Amount October 28, October 29, Effective Interest Rate Interest Pay Dates (In millions) Long-term debt: 2.625% Senior Notes Due 2020 $ 600 $ 600 2.640% April 1, October 1 4.300% Senior Notes Due 2021 750 750 4.326% June 15, December 15 3.900% Senior Notes Due 2025 700 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 1,200 3.342% April 1, October 1 5.100% Senior Notes Due 2035 500 500 5.127% April 1, October 1 5.850% Senior Notes Due 2041 600 600 5.879% June 15, December 15 4.350% Senior Notes Due 2047 1,000 1,000 4.361% April 1, October 1 5,350 5,350 Total unamortized discount (11 ) (12 ) Total unamortized debt issuance costs (30 ) (34 ) Total long-term debt $ 5,309 $ 5,304 |
Stockholders' Equity, Comprehen
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | 12 Months Ended |
Oct. 28, 2018 | |
Equity [Abstract] | |
Stockholders' Equity, Comprehensive Income and Share-Based Compensation | Stockholders’ Equity, Comprehensive Income and Share-Based Compensation Accumulated Other Comprehensive Income (Loss) Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows: Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 25, 2015 $ 14 $ (15 ) $ (105 ) $ 14 (92 ) Other comprehensive income (loss) before reclassifications 14 (33 ) (42 ) — (61 ) Amounts reclassified out of AOCI 2 30 6 — 38 Other comprehensive income (loss), net of tax 16 (3 ) (36 ) — (23 ) Balance at October 30, 2016 $ 30 $ (18 ) $ (141 ) $ 14 $ (115 ) Other comprehensive income (loss) before reclassifications 24 13 29 — 66 Amounts reclassified out of AOCI (1 ) (6 ) (8 ) — (15 ) Other comprehensive income, net of tax 23 7 21 — 51 Balance at October 29, 2017 $ 53 $ (11 ) $ (120 ) $ 14 $ (64 ) Adoption of new accounting standards (a) 5 (2 ) — — 3 Other comprehensive income (loss) before reclassifications (66 ) 5 (23 ) — (84 ) Amounts reclassified out of AOCI 15 (1 ) 6 — 20 Other comprehensive income (loss), net of tax (51 ) 4 (17 ) — (64 ) Balance at October 28, 2018 $ 7 $ (9 ) $ (137 ) $ 14 $ (125 ) (a) - Represents the reclassification adjustment related to the early adoption of Accounting Standards Update (ASU) 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. See Note 1. The tax effects on net income of amounts reclassified from AOCI for fiscal 2016 was $22 million . The tax effects on net income of amounts reclassified from AOCI for the fiscal years 2018 and 2017, were not material. Stock Repurchase Programs In September 2017, Applied’s Board of Directors approved a common stock repurchase program authorizing up to $3.0 billion in repurchases. In February 2018, the Board of Directors approved a new common stock repurchase program authorizing up to an additional $6.0 billion in repurchases. At October 28, 2018 , $4.3 billion remained available for future stock repurchases under this repurchase program. The following table summarizes Applied’s stock repurchases for each fiscal year: 2018 2017 2016 (In millions, except per share amounts) Shares of common stock repurchased 102 28 96 Cost of stock repurchased $ 5,283 $ 1,172 $ 1,892 Average price paid per share $ 51.55 $ 42.08 $ 19.82 Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. Dividends During fiscal 2018, Applied's Board of Directors declared three quarterly cash dividends of $0.20 per share and one quarterly cash dividend of $0.10 per share. During each of fiscal 2017 and 2016 , Applied’s Board of Directors declared four quarterly cash dividends in the amount of $0.10 per share. Dividends paid during fiscal 2018 , 2017 and 2016 amounted to $605 million , $430 million and $444 million , respectively. Applied currently anticipates that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on Applied’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of Applied’s stockholders. Share-Based Compensation Applied has a stockholder-approved equity plan, the Employee Stock Incentive Plan, which permits grants to employees of share-based awards, including stock options, restricted stock, restricted stock units, performance shares and performance units. In addition, the plan provides for the automatic grant of restricted stock units to non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based awards made under the plan may be subject to accelerated vesting under certain circumstances in the event of a change in control of Applied. Applied also has two Employee Stock Purchase Plans, one generally for United States employees and a second for employees of international subsidiaries (collectively, ESPP), which enable eligible employees to purchase Applied common stock. Applied recognized share-based compensation expense related to stock options, ESPP shares, restricted stock, restricted stock units, performance shares and performance units, and related tax benefits for each fiscal year as follows: 2018 2017 2016 (In millions) Share-based compensation $ 258 $ 220 $ 201 Tax benefit recognized $ 45 $ 60 $ 63 The effect of share-based compensation on the results of operations for each fiscal year was as follows: 2018 2017 2016 (In millions) Cost of products sold $ 87 $ 69 $ 62 Research, development, and engineering 96 83 76 Marketing and selling 31 28 26 General and administrative 44 40 37 Total share-based compensation $ 258 $ 220 $ 201 The cost associated with share-based awards that are subject solely to time-based vesting requirements, less expected forfeitures, is recognized over the awards’ service period for the entire award on a straight-line basis. The cost associated with performance-based equity awards is recognized for each tranche over the service period, based on an assessment of the likelihood that the applicable performance goals will be achieved. At October 28, 2018 , Applied had $368 million in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards and shares issued under Applied’s ESPP, which will be recognized over a weighted average period of 2.4 years . At October 28, 2018 , there were 81 million shares available for grants of share-based awards under the Employee Stock Incentive Plan, and an additional 17 million shares available for issuance under the ESPP. Stock Options Stock options are rights to purchase, at future dates, shares of Applied common stock. The exercise price of each stock option equals the fair market value of Applied common stock on the date of grant. Options typically vest over three to four years, subject to the grantee’s continued service with Applied through the scheduled vesting date, and expire no later than seven years from the grant date. There were no stock options granted during fiscal 2018 , 2017 and 2016 . Outstanding stock options at the end of fiscal 2018 were not material to the consolidated financial statements. Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units Restricted stock units are converted into shares of Applied common stock upon vesting on a one-for-one basis. Restricted stock has the same rights as other issued and outstanding shares of Applied common stock except these shares generally have no right to dividends and are held in escrow until the award vests. Performance shares and performance units are awards that result in a payment to a grantee, generally in shares of Applied common stock on a one-for-one basis, if performance goals and/or other vesting criteria established by the Human Resources and Compensation Committee of Applied’s Board of Directors are achieved or the awards otherwise vest. Restricted stock units, restricted stock, performance shares and performance units typically vest over four years and vesting is usually subject to the grantee’s continued service with Applied and, in some cases, achievement of specified performance goals. The compensation expense related to the service-based awards is determined using the fair market value of Applied common stock on the date of the grant, and the compensation expense is recognized over the vesting period. Certain executive officers were granted awards that are subject to the achievement of specified performance goals (performance-based awards). These awards become eligible to vest only if performance goals are achieved and will vest only if the grantee remains employed by Applied through each applicable vesting date. The fair value of these awards is estimated on the date of grant. If the goals are achieved, the awards will vest, provided that the grantee remains employed by Applied through each scheduled vesting date. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost is based on the awards that are probable to vest and is reflected over the service period and reduced for estimated forfeitures. For performance-based awards granted in fiscal 2018 and 2017, certain awards require the achievement of positive adjusted operating profit and vest ratably over three years . Other awards require the achievement of targeted levels of adjusted operating profit margin and wafer fabrication equipment market share, and the number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. Performance-based awards granted in fiscal 2016 require the achievement of targeted levels of adjusted annual operating profit margin, and additional shares become eligible for time-based vesting if Applied achieves certain levels of total shareholder return relative to a peer group, comprised of companies in the Standard & Poor’s 500 Information Technology Index, measured at the end of a two -year period. A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans is presented below: Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2015 27 $ 16.41 2.2 years $ 440 Granted 11 $ 18.54 Vested (11 ) $ 14.25 Canceled (2 ) $ 17.57 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2016 25 $ 18.28 2.3 years $ 718 Granted 8 $ 31.79 Vested (10 ) $ 16.50 Canceled (1 ) $ 21.25 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 29, 2017 22 $ 23.96 2.2 years $ 1,239 Granted 6 $ 50.62 Vested (9 ) $ 22.15 Canceled (1 ) $ 30.19 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2018 18 $ 32.64 2.0 years $ 600 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 16 $ 31.11 1.9 years $ 523 At October 28, 2018 , 1 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance goals. Employee Stock Purchase Plans Under the ESPP, substantially all employees may purchase Applied common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of Applied common stock at the beginning or end of each 6 -month purchase period, subject to certain limits. Applied issued 3 million shares in each of fiscal 2018 and 2017 , and 6 million shares during fiscal 2016 , under the ESPP. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model are outlined in the following table: 2018 2017 2016 ESPP: Dividend yield 1.68 % 0.99 % 1.76 % Expected volatility 34.4 % 26.3 % 29.3 % Risk-free interest rate 2.09 % 0.92 % 0.47 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $12.02 $9.14 $5.48 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Oct. 28, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Employee Bonus Plans Applied has various employee bonus plans. A discretionary bonus plan provides for the distribution of a percentage of pre-tax income to Applied employees who are not participants in other performance-based incentive plans, up to a maximum percentage of eligible compensation. Other plans provide for bonuses to Applied’s executives and other key contributors based on the achievement of profitability and/or other specified performance criteria. Charges under these plans for fiscal 2018 , 2017 and 2016 were $382 million , $449 million and $312 million , respectively. Employee Savings and Retirement Plan Applied’s Employee Savings and Retirement Plan (the 401(k) Plan) is qualified under Sections 401(a) and (k) of the Internal Revenue Code (the Code). Eligible employees may make salary deferral and catch-up contributions under the 401(k) Plan on a pre-tax basis and on a Roth basis, subject to an annual dollar limit established by the Code. Applied matches 100% of participant salary and/or Roth deferral contributions up to the first 3% of eligible contribution and then 50% of every dollar between 4% and 6% of eligible contribution. Applied does not make matching contributions on any catch-up contributions made by participants. Plan participants who were employed by Applied or any of its affiliates became 100% vested in their Applied matching contribution account balances. Applied’s matching contributions under the 401(k) Plan were approximately $45 million for fiscal 2018 and $38 million for each of fiscal 2017 and 2016 . Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits Several of Applied’s foreign subsidiaries have defined benefit pension plans covering substantially all of their eligible employees. Benefits under these plans are typically based on years of service and final average compensation levels. The plans are managed in accordance with applicable local statutes and practices. Applied deposits funds for certain of these plans with insurance companies, pension trustees, government-managed accounts, and/or accrues the expense for the unfunded portion of the benefit obligation on its Consolidated Financial Statements. Applied’s practice is to fund the various pension plans in amounts sufficient to meet the minimum requirements as established by applicable local governmental oversight and taxing authorities. Depending on the design of the plan, local custom and market circumstances, the liabilities of a plan may exceed the qualified plan assets. The differences between the aggregate projected benefit obligations and aggregate plan assets of these plans have been recorded as liabilities by Applied and are included in other liabilities and accrued expenses in the Consolidated Balance Sheets. Through December 31, 2017, Applied also sponsored a U.S. post-retirement plan that provided covered medical and vision benefits to certain eligible retirees. An eligible retiree also could elect coverage for an eligible spouse or domestic partner who was not eligible for Medicare. Coverage ended entirely for all participants when the plan terminated on December 31, 2017. In addition, Applied also has a post-retirement benefit plan as a result of the acquisition of Varian. Applied’s liability under these post-retirement plans, which was included in other liabilities in the Consolidated Balance Sheets, were immaterial at each of October 28, 2018 and October 29, 2017 . A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for each fiscal year is presented below: 2018 2017 2016 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 506 $ 495 $ 471 Service cost 12 13 13 Interest cost 11 10 13 Plan participants’ contributions 1 2 1 Actuarial (gain) loss 24 (35 ) 77 Curtailments, settlements and special termination benefits (1 ) (1 ) (6 ) Foreign currency exchange rate changes (16 ) 34 (42 ) Benefits paid (12 ) (12 ) (10 ) Plan amendments and business combinations (1 ) — (22 ) Ending projected benefit obligation $ 524 $ 506 $ 495 Ending accumulated benefit obligation $ 490 $ 472 $ 460 Range of assumptions to determine benefit obligations Discount rate 0.6% - 3.1% 0.5% - 3.4% 0.5% - 3.1% Rate of compensation increase 2.4% - 3.5% 2.2% - 3.5% 1.6% - 3.6% Change in plan assets Beginning fair value of plan assets $ 361 $ 310 $ 281 Return on plan assets 17 18 37 Employer contributions 11 16 50 Plan participants’ contributions 1 2 1 Foreign currency exchange rate changes (12 ) 28 (45 ) Divestitures, settlements and business combinations (1 ) (1 ) (4 ) Benefits paid (12 ) (12 ) (10 ) Ending fair value of plan assets $ 365 $ 361 $ 310 Funded status $ (159 ) $ (145 ) $ (185 ) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 19 $ 17 $ 11 Current liability (1 ) (1 ) (2 ) Noncurrent liability (177 ) (161 ) (194 ) Total $ (159 ) $ (145 ) $ (185 ) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 8 $ 6 $ 6 Prior service credit (1 ) (4 ) (16 ) Total $ 7 $ 2 $ (10 ) Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 161 $ 141 $ 186 Prior service credit (2 ) (4 ) (21 ) Total $ 159 $ 137 $ 165 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 365 $ 326 $ 341 Fair value of plan assets $ 186 $ 142 $ 145 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 331 $ 293 $ 307 Fair value of plan assets $ 186 $ 142 $ 145 2018 2017 Plan assets — allocation Equity securities 47 % 47 % Debt securities 32 % 39 % Insurance contracts 10 % 11 % Other investments 10 % 3 % Cash 1 % — % The following table presents a summary of the ending fair value of the plan assets: October 28, 2018 October 29, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 86 $ — $ — $ 86 $ 83 $ — $ — $ 83 Debt securities 19 — — 19 16 — — 16 Insurance contracts — — 36 36 — — 38 38 Other investments — 14 — 14 — 13 — 13 Cash 2 — — 2 2 — — 2 Total assets at fair value $ 107 $ 14 $ 36 157 $ 101 $ 13 $ 38 152 Assets measured at net asset value 208 209 Total $ 365 $ 361 The following table presents the activity in Level 3 instruments for each fiscal year: 2018 2017 (In millions) Balance, beginning of year $ 38 $ 38 Actual return on plan assets: Relating to assets still held at reporting date (1 ) (3 ) Purchases, sales, settlements, net — 1 Currency impact (1 ) 2 Balance, end of year $ 36 $ 38 Applied’s investment strategy for its defined benefit plans is to invest plan assets in a prudent manner, maintaining well-diversified portfolios with the long-term objective of meeting the obligations of the plans as they come due. Asset allocation decisions are typically made by plan fiduciaries with input from Applied’s international pension committee. Applied’s asset allocation strategy incorporates a sufficient equity exposure in order for the plans to benefit from the expected better long-term performance of equities relative to the plans’ liabilities. Applied retains investment managers, where appropriate, to manage the assets of the plans. Performance of investment managers is monitored by plan fiduciaries with the assistance of local investment consultants. The investment managers make investment decisions within the guidelines set forth by plan fiduciaries. Risk management practices include diversification across asset classes and investment styles, and periodic rebalancing toward target asset allocation ranges. Investment managers may use derivative instruments for efficient portfolio management purposes. Plan assets do not include any of Applied’s own equity or debt securities. A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost calculations for each fiscal year is presented below: 2018 2017 2016 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 12 $ 13 $ 13 Interest cost 11 10 13 Expected return on plan assets (20 ) (18 ) (14 ) Amortization of actuarial loss and prior service credit 3 (10 ) 3 Settlement and curtailment loss — — (5 ) Net periodic benefit cost (income) $ 6 $ (5 ) $ 10 Weighted average assumptions Discount rate 2.16 % 1.88 % 2.82 % Expected long-term return on assets 5.41 % 5.38 % 5.38 % Rate of compensation increase 2.66 % 2.69 % 2.71 % Asset return assumptions are derived based on actuarial and statistical methodologies, from analysis of long-term historical data relevant to the country in which each plan is in effect and the investments applicable to the corresponding plan. The discount rate for each plan was derived by reference to appropriate benchmark yields on high quality corporate bonds, allowing for the approximate duration of both plan obligations and the relevant benchmark yields. Future expected benefit payments for the pension plans and the post-retirement plan over the next ten fiscal years are as follows: Benefit Payments (In millions) 2019 $ 12 2020 12 2021 13 2022 13 2023 12 2024-2028 77 $ 139 Company contributions to these plans for fiscal 2019 are expected to be approximately $15 million . Executive Deferred Compensation Plans Applied sponsors two unfunded deferred compensation plans, the Executive Deferred Compensation Plan (Predecessor EDCP) and the 2016 Deferred Compensation Plan (2016 DCP) (formerly known as the 2005 Executive Deferred Compensation Plan), under which certain employees may elect to defer a portion of their following year’s eligible earnings. The Predecessor EDCP was frozen as of December 31, 2004 such that no new deferrals could be made under the plan after that date and the plan would qualify for “grandfather” relief under Section 409A of the Code. The Predecessor EDCP participant accounts continue to be maintained under the plan and credited with deemed interest. The 2016 DCP was originally implemented by Applied effective as of January 1, 2005, and amended and restated as of October 12, 2015, and is intended to comply with the requirements of Section 409A of the Code. In addition, Applied also sponsors a non-qualified deferred compensation plan as a result of the acquisition of Varian. Amounts payable, including accrued deemed interest, totaled $92 million and $63 million at October 28, 2018 and October 29, 2017 , respectively, which were included in other liabilities in the Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before income taxes for each fiscal year were as follows: 2018 2017 2016 (In millions) U.S. $ 439 $ 514 $ 199 Foreign 4,255 3,217 1,814 $ 4,694 $ 3,731 $ 2,013 The components of the provision for income taxes for each fiscal year were as follows: 2018 2017 2016 (In millions) Current: U.S. $ 1,035 $ 67 $ (36 ) Foreign 126 233 351 State 22 9 (2 ) 1,183 309 313 Deferred: U.S. 151 (11 ) 55 Foreign 57 (7 ) (89 ) State (10 ) 6 13 198 (12 ) (21 ) $ 1,381 $ 297 $ 292 A reconciliation between the statutory U.S. federal income tax rate and Applied’s actual effective income tax rate for each fiscal year is presented below: 2018 2017 2016 Tax provision at U.S. statutory rate 23.4 % 35.0 % 35.0 % Changes in U.S. tax law 23.7 — — Resolutions of prior years’ income tax filings (0.7 ) (1.9 ) 3.9 Effect of foreign operations taxed at various rates (15.6 ) (24.9 ) (24.1 ) State income taxes, net of federal benefit 0.2 0.3 0.6 Research and other tax credits (0.7 ) (0.7 ) (1.3 ) U.S. domestic production deduction (0.1 ) (0.2 ) (0.2 ) Share-based compensation (0.7 ) 0.4 0.4 Other (0.1 ) — 0.2 29.4 % 8.0 % 14.5 % On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act includes a reduction to the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent and requires a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries payable over eight years. U.S. deferred tax assets and liabilities were subject to remeasurement due to the reduction of the U.S. federal corporate tax rate. Applied has a blended U.S. federal corporate tax rate of 23.4 percent for fiscal 2018 based on the number of days before and after the effective date of the Tax Act. The U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance on accounting for the income tax effects of the Tax Act. SAB 118 provides a measurement period for companies to complete this accounting. Pursuant to SAB 118, provisional adjustments were recorded when reasonable estimates could be determined. These provisional estimates will be revised as information becomes available and as guidance is issued by the Internal Revenue Service. The accounting for the income tax effects of the Tax Act will be completed during the measurement period, which will not extend beyond one year from the Tax Act enactment date. Applied continues to evaluate certain unrepatriated earnings of foreign subsidiaries used to calculate the transition tax. The remeasurement of U.S. deferred tax assets and liabilities is complete. The Tax Act also includes provisions that do not affect Applied in fiscal 2018, including a provision designed to tax global intangible low-taxed income (“GILTI”). Due to the complexity of the GILTI tax rules, this provision and related tax accounting will continue to be evaluated. An accounting policy choice is allowed to either treat taxes due on future U.S. inclusions related to GILTI in taxable income as a current-period expense when incurred (the “period cost method”) or factor such amounts into the measurement of deferred taxes (the “deferred method”). The calculation of the deferred balance with respect to the new GILTI tax provisions will depend, in part, on analyzing global income to determine whether future U.S. inclusions in taxable income are expected related to GILTI and, if so, what the impact is expected to be. An accounting policy choice has not yet been made. Before the Tax Act, U.S. income tax had not been provided for certain unrepatriated earnings that were considered indefinitely reinvested. Income tax is now provided for all unrepatriated earnings. The effective tax rate for fiscal 2018 was higher than fiscal 2017 primarily due to tax expense of $1.1 billion for the transition tax and remeasurement of deferred tax assets as a result of the Tax Act, partially offset by changes in the geographical composition of income, tax benefits from the lower U.S. federal corporate tax rate, adoption of authoritative guidance for share-based compensation, and the resolution of tax liabilities for uncertain tax positions. In addition, fiscal 2017 included tax benefits from the recognition of previously unrecognized foreign tax credits. The effective tax rate for fiscal 2017 was lower than fiscal 2016 primarily due to the recognition of previously unrecognized foreign tax credits and changes in the geographical composition of income. In addition, fiscal 2016 included unfavorable resolutions and changes related to income tax liabilities for uncertain tax positions as well as the reinstatement of the U.S. federal R&D tax credit retroactive to its expiration in December of 2015 which did not reoccur in fiscal 2017. In the reconciliation between the statutory U.S. federal income tax rate and the effective income tax rate, the effect of foreign operations taxed at various rates represents the difference between an income tax provision at the U.S. federal statutory income tax rate and the recorded income tax provision, with the difference expressed as a percentage of worldwide income before income taxes. This effect is substantially related to the tax effect of pre-tax income in jurisdictions with lower statutory tax rates. The foreign operations with the most significant effective tax rate impact are in Singapore. The statutory tax rate for fiscal 2018 for Singapore is 17% . Applied has been granted conditional reduced tax rates that expire in fiscal 2025, excluding potential renewal and subject to certain conditions with which Applied expects to comply. The tax benefit arising from these tax rates was $ 272 million for fiscal 2018 or $ 0.28 per diluted share. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. The components of deferred income tax assets and liabilities were as follows: October 28, October 29, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 8 $ 13 Inventory reserves and basis difference 117 156 Installation and warranty reserves 7 1 Accrued liabilities 20 31 Deferred revenue 9 15 Tax credits 236 317 Deferred compensation 79 81 Share-based compensation 37 53 Other 48 67 Gross deferred tax assets 561 734 Valuation allowance (230 ) (227 ) Total deferred tax assets 331 507 Deferred tax liabilities: Fixed assets (48 ) (36 ) Intangible assets (38 ) (76 ) Undistributed foreign earnings (32 ) (11 ) Foreign exchange (3 ) (4 ) Total gross deferred tax liabilities (121 ) (127 ) Net deferred tax assets $ 210 $ 380 The following table presents a summary of non-current deferred tax assets and liabilities: October 28, October 29, (In millions) Non-current deferred tax asset $ 222 $ 385 Non-current deferred tax liability (12 ) (5 ) $ 210 $ 380 A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized. Changes in the valuation allowance in each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 227 $ 207 $ 207 Increases 8 20 27 Decreases (5 ) — (27 ) Ending balance $ 230 $ 227 $ 207 At October 28, 2018 , Applied has state research and development tax credit carryforwards of $236 million , including $227 million of credits that are carried over until exhausted and $9 million that are carried over for 15 years and begin to expire in fiscal 2028. Management believes it is more likely than not that all tax credit carryforwards, net of valuation allowance, will be utilized. Applied maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available. Gross unrecognized tax benefits are classified as non-current income taxes payable. A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 2018 2017 2016 (In millions) Beginning balance of gross unrecognized tax benefits $ 391 $ 320 $ 177 Settlements with tax authorities (152 ) (42 ) (25 ) Lapses of statutes of limitation (37 ) (15 ) (2 ) Increases in tax positions for current year 91 95 62 Increases in tax positions for prior years 83 33 109 Decreases in tax positions for prior years (2 ) — (1 ) Ending balance of gross unrecognized tax benefits $ 374 $ 391 $ 320 Tax expense for interest and penalties on unrecognized tax benefits for fiscal 2018 , 2017 and 2016 was $12 million , $17 million and $24 million , respectively. The income tax liability for interest and penalties for fiscal 2018 , 2017 and 2016 was $26 million , $46 million and $33 million , respectively, and was classified as non-current income taxes payable. Included in the balance of unrecognized tax benefits for fiscal 2018 , 2017 and 2016 are $294 million , $284 million , and $302 million , respectively, of tax benefits that, if recognized, would affect the effective tax rate. In fiscal 2018, Applied paid $158 million , including interest and penalties, as a result of a settlement in Israel for fiscal 2011 through fiscal 2015 resulting in the recognition of a tax benefit of $6 million . In fiscal 2017, Applied paid $29 million , including interest and penalties, as a result of a settlement in Italy for fiscal 2011 resulting in the recognition of a tax expense of $6 million . In fiscal 2016, Applied paid $25 million , including interest and penalties, as a result of a settlement in Switzerland for fiscal 2011 through fiscal 2015 resulting in the recognition of a tax expense of $19 million . Applied’s tax returns remain subject to examination by taxing authorities. These include U.S. returns for fiscal 2010 and later years , and foreign tax returns for fiscal 2009 and later years . The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that may be part of the settlement process, is highly uncertain. This could cause fluctuations in Applied’s financial condition and results of operations. Applied continues to have ongoing negotiations with various taxing authorities throughout the year. |
Warranty, Guarantees, Commitmen
Warranty, Guarantees, Commitments and Contingencies | 12 Months Ended |
Oct. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty, Guarantees, Commitments and Contingencies | Warranty, Guarantees, Commitments and Contingencies Leases Applied leases some of its facilities and equipment under non-cancelable operating leases and has options to renew most leases, with rentals to be negotiated. Total rent expense for fiscal 2018 , 2017 and 2016 , was $50 million , $34 million and $38 million , respectively. As of October 28, 2018 , future minimum lease payments are expected to be as follows: Lease Payments Fiscal (In millions) 2019 $ 50 2020 40 2021 28 2022 20 2023 13 Thereafter 22 $ 173 Warranty Changes in the warranty reserves during each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 199 $ 153 $ 126 Provisions for warranty 183 166 135 Changes in reserves related to preexisting warranty 3 1 (12 ) Consumption of reserves (176 ) (121 ) (96 ) Ending balance $ 209 $ 199 $ 153 Applied products are generally sold with a warranty for a 12 -month period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter’s sales. Guarantees In the ordinary course of business, Applied provides standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either Applied or its subsidiaries. As of October 28, 2018 , the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $58 million . Applied has not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. Applied does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements. Applied also has agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of October 28, 2018 , Applied has provided parent guarantees to banks for approximately $149 million to cover these arrangements. Legal Matters From time to time, Applied receives notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions by Applied in connection with claims made against them. In addition, from time to time, Applied receives notification from third parties claiming that Applied may be or is infringing or misusing their intellectual property or other rights. Applied also is subject to various other legal proceedings and claims, both asserted and unasserted, that arise in the ordinary course of business. Although the outcome of the above-described matters, claims and proceedings cannot be predicted with certainty, Applied does not believe that any will have a material effect on its consolidated financial condition or results of operations. |
Industry Segment Operations
Industry Segment Operations | 12 Months Ended |
Oct. 28, 2018 | |
Segment Reporting [Abstract] | |
Industry Segment Operations | Industry Segment Operations Applied’s three reportable segments are: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. As defined under the accounting literature, Applied’s chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon Applied’s management organization structure as of October 28, 2018 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to Applied’s reportable segments. The Semiconductor Systems reportable segment includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, certain remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products. The Display and Adjacent Markets segment includes products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), equipment upgrades and flexible coating systems and other display technologies for TVs, monitor, laptops, personal computers, smart phones, and other consumer-oriented devices. Each operating segment is separately managed and has separate financial results that are reviewed by Applied’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating income is determined based upon internal performance measures used by Applied’s chief operating decision-maker. The chief operating decision-maker does not evaluate operating segments using total asset information. Applied derives the segment results directly from its internal management reporting system. The accounting policies Applied uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics including orders, net sales and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Corporate and Other category includes revenues from products, as well as costs of products sold, for fabricating solar photovoltaic cells and modules, and certain operating expenses that are not allocated to its reportable segments and are managed separately at the corporate level. These operating expenses include costs related to share-based compensation; certain management, finance, legal, human resources, and research, development and engineering functions provided at the corporate level; and unabsorbed information technology and occupancy. In addition, Applied does not allocate to its reportable segments restructuring and asset impairment charges and any associated adjustments related to restructuring actions, unless these actions pertain to a specific reportable segment. Segment operating income also excludes interest income/expense and other financial charges and income taxes. Management does not consider the unallocated costs in measuring the performance of the reportable segments. Information for each reportable segment for and as of the end of each fiscal year were as follows: Net Sales Operating Income (Loss) Depreciation/ Amortization Capital Accounts Receivable Inventories (In millions) 2018: Semiconductor Systems $ 10,903 $ 3,634 $ 303 $ 168 $ 1,755 $ 2,213 Applied Global Services 3,754 1,102 21 33 610 1,243 Display and Adjacent Markets 2,498 679 20 39 248 249 Corporate and Other 98 (619 ) 113 382 (48 ) 17 Total $ 17,253 $ 4,796 $ 457 $ 622 $ 2,565 $ 3,722 2017: Semiconductor Systems $ 9,517 $ 3,173 $ 286 $ 150 $ 1,626 $ 1,760 Applied Global Services 3,017 817 15 21 564 762 Display and Adjacent Markets 1,900 502 12 17 190 367 Corporate and Other 103 (624 ) 94 157 (42 ) 41 Total $ 14,537 $ 3,868 $ 407 $ 345 $ 2,338 $ 2,930 2016: Semiconductor Systems $ 6,873 $ 1,807 $ 277 $ 114 $ 1,524 $ 1,188 Applied Global Services 2,589 682 12 14 559 594 Display and Adjacent Markets 1,206 245 5 6 238 215 Corporate and Other 157 (582 ) 95 119 (42 ) 53 Total $ 10,825 $ 2,152 $ 389 $ 253 $ 2,279 $ 2,050 The reconciling items included in Corporate and Other were as follows: 2018 2017 2016 (In millions) Unallocated net sales $ 98 $ 103 $ 157 Unallocated cost of products sold and expenses (459 ) (507 ) (538 ) Share-based compensation (258 ) (220 ) (201 ) Total $ (619 ) $ (624 ) $ (582 ) For geographical reporting, revenue by geographic location is determined by the location of customers’ facilities to which products were shipped. Long-lived assets consist primarily of property, plant and equipment and are attributed to the geographic location in which they are located. Net sales and long-lived assets by geographic region for and as of each fiscal year were as follows: 2018 2017 2016 (In millions) Net sales: United States $ 1,532 $ 1,474 $ 1,143 China 5,113 2,746 2,259 Korea 3,603 4,052 1,883 Taiwan 2,732 3,291 2,843 Japan 2,405 1,518 1,279 Europe 1,066 816 615 Southeast Asia 802 640 803 Total outside United States 15,721 13,063 9,682 Consolidated total $ 17,253 $ 14,537 $ 10,825 October 28, October 29, (In millions) Long-lived assets: United States $ 1,414 $ 915 China 13 47 Korea 21 21 Taiwan 29 50 Japan 9 8 Europe 50 47 Southeast Asia 25 98 Total outside United States 147 271 Consolidated total $ 1,561 $ 1,186 The following customers accounted for at least 10 percent of Applied’s net sales in each fiscal year, which were for products and services in multiple reportable segments: 2018 2017 2016 Samsung Electronics Co., Ltd. 13 % 23 % 13 % Taiwan Semiconductor Manufacturing Company Limited 11 % 15 % 16 % Intel Corporation 11 % * 11 % Micron Technology, Inc. * * 11 % ______________________________ * Less than 10% |
Unaudited Quarterly Consolidate
Unaudited Quarterly Consolidated Financial Data | 12 Months Ended |
Oct. 28, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Consolidated Financial Data | Unaudited Quarterly Consolidated Financial Data Fiscal Quarter First Second Third Fourth Fiscal Year (In millions, except per share amounts) 2018: Net sales $ 4,204 $ 4,567 $ 4,468 $ 4,014 $ 17,253 Gross profit $ 1,920 $ 2,090 $ 2,027 $ 1,780 $ 7,817 Net income $ 135 $ 1,129 $ 1,173 $ 876 $ 3,313 Earnings per diluted share $ 0.13 $ 1.09 $ 1.17 $ 0.89 $ 3.23 2017: Net sales $ 3,278 $ 3,546 $ 3,744 $ 3,969 $ 14,537 Gross profit $ 1,445 $ 1,600 $ 1,700 $ 1,787 $ 6,532 Net income $ 703 $ 824 $ 925 $ 982 $ 3,434 Earnings per diluted share $ 0.65 $ 0.76 $ 0.85 $ 0.91 $ 3.17 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 28, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Applied Materials, Inc. and its subsidiaries (Applied or the Company) after elimination of intercompany balances and transactions. All references to a fiscal year apply to Applied’s fiscal year which ends on the last Sunday in October. Fiscal 2018 , 2017 and 2016 contained 52, 52, and 53 weeks, respectively. Each fiscal quarter of 2018 and 2017 contained 13 weeks. The first fiscal quarter of 2016 contained 14 weeks, while the second, third and fourth quarters of fiscal 2016 contained 13 weeks. Certain prior year amounts have been reclassified to conform to current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Cash Equivalents | Cash Equivalents All highly-liquid investments with a remaining maturity of three months or less at the time of purchase are considered to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. |
Investments | Investments All of Applied’s investments, except equity investments held in privately-held companies, are classified as available-for-sale at the respective balance sheet dates. Investments classified as available-for-sale are recorded at fair value based upon quoted market prices, and any temporary difference between the cost and fair value of an investment is presented as a separate component of accumulated other comprehensive income (loss). The specific identification method is used to determine the gains and losses on investments. Interest earned on cash and investments, as well as realized gains and losses on sale of securities, are included in interest and other income, net in the accompanying Consolidated Statements of Operations. Equity investments in privately-held companies are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss is considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. |
Allowances for Doubtful Accounts | Allowance for Doubtful Accounts Applied maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and any customer-specific issues Applied has identified. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to Applied or its payment trends, may require Applied to further adjust its estimates of the recoverability of amounts due to Applied. Bad debt expense and any reversals are recorded in marketing and selling expenses in the Consolidated Statement of Operations. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) basis. Applied adjusts inventory carrying value for estimated obsolescence equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. Applied fully writes down inventories and noncancelable purchase orders for inventory deemed obsolete. Applied performs periodic reviews of inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by Applied, additional inventory adjustments may be required. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30 years; demonstration and manufacturing equipment, 3 to 5 years; software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 5 years. Land improvements are amortized over the shorter of 15 years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term. |
Intangible Assets | Intangible Assets Goodwill and indefinite-lived assets are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Purchased technology and other intangible assets are presented at cost, net of accumulated amortization, and are amortized over their estimated useful lives of 1 to 15 years using the straight-line method. |
Long-Lived Assets | Long-Lived Assets Applied reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets or asset group may not be recoverable. Applied assesses these assets for impairment based on estimated future cash flows from these assets. |
Research, Development and Engineering Costs | Research, Development and Engineering Costs Research, development and engineering costs are expensed as incurred. |
Sales and Value Added Taxes | Sales and Value Added Taxes Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying Consolidated Statements of Operations. |
Warranty | Warranty Applied provides for the estimated cost of warranty when revenue is recognized. Estimated warranty costs are determined by analyzing specific product, current and historical configuration statistics and regional warranty support costs. Applied’s warranty obligation is affected by product and component failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. If actual warranty costs differ substantially from Applied’s estimates, revisions to the estimated warranty liability would be required. Applied products are generally sold with a warranty for a 12 -month period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter’s sales. |
Income Taxes | Income Taxes Applied recognizes a current tax liability for the estimated amount of income tax payable on tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. Applied recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Any changes in judgment related to uncertain tax positions are recognized in Applied’s provision for income taxes in the quarter in which such change occurs. Interest and penalties related to uncertain tax positions are recognized in Applied’s provision for income taxes. |
Revenue Recognition | Revenue Recognition Applied recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to buyer is fixed or determinable; and collectability is probable. Applied’s shipping terms are customarily FOB Applied shipping point or equivalent terms. Applied’s revenue recognition policy generally results in revenue recognition at the following points: (1) for all transactions where legal title passes to the customer upon shipment or delivery, Applied recognizes revenue upon passage of title for all products that have been demonstrated to meet product specifications prior to shipment; the portion of revenue associated with certain installation-related tasks is deferred, and that revenue is recognized upon completion of the installation-related tasks; (2) for products that have not been demonstrated to meet product specifications prior to shipment, revenue is recognized at customer technical acceptance; (3) for transactions where legal title does not pass at shipment or delivery, revenue is recognized when legal title passes to the customer, which is generally at customer technical acceptance; and (4) for arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred using the relative selling price method utilizing estimated sales prices until delivery of the deferred elements. Applied limits the amount of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of products or services, future performance obligations or subject to customer-specified return or adjustment. In cases where Applied has sold products that have been demonstrated to meet product specifications prior to shipment, Applied believes that at the time of delivery, it has an enforceable claim to amounts recognized as revenue. Spare parts revenue is generally recognized upon shipment, and services revenue is generally recognized over the period that the services are provided. When a sales arrangement contains multiple elements, such as hardware and services and/or software products, Applied allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. Applied generally utilizes the ESP due to the nature of its products. In multiple element arrangements where more-than-incidental software deliverables are included, revenue is allocated to each separate unit of accounting for each of the non-software deliverables and to the software deliverables as a group using the relative selling prices of each of the deliverables in the arrangement based on the aforementioned selling price hierarchy. If the arrangement contains more than one software deliverable, the arrangement consideration allocated to the software deliverables as a group is then allocated to each software deliverable using the guidance for recognizing software revenue. |
Derivative Financial Instruments | Derivative Financial Instruments Applied uses financial instruments, such as forward exchange and currency option contracts, to hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months . The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. In certain cases, Applied also uses interest rate swap or lock agreements to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. The terms of derivative financial instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. All of Applied’s derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments. For derivative instruments designated and qualifying as cash flow hedges, the effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is ineffective, the gain or loss on the associated financial instrument is recorded promptly in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gain or loss on these hedges is recorded promptly in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. Applied does not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign currency exchange and interest rate contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the ineffective portion of any hedges, are recognized currently in earnings. All of Applied’s derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and foreign exchange derivatives are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of AOCI in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to foreign exchange derivative instruments included in AOCI at October 28, 2018 is expected to be reclassified into earnings within 12 months . Changes in the fair value of currency forward exchange and option contracts due to changes in time value are excluded from the assessment of effectiveness. Both ineffective hedge amounts and hedge components excluded from the assessment of effectiveness are recognized in earnings. If the transaction being hedged is no longer probable to occur, or if a portion of any derivative is deemed to be ineffective, Applied promptly recognizes the gain or loss on the associated financial instrument in earnings. The amount recognized due to discontinuance of cash flow hedges that were probable not to occur by the end of the originally specified time period were not significant for fiscal years 2018 and 2017 and was a loss of $8 million for fiscal 2016. Additionally, forward exchange contracts are generally used to hedge certain foreign currency denominated assets or liabilities. These derivatives are typically entered into once per month and are not designated for hedge accounting treatment. Accordingly, changes in the fair value of these hedges are recorded in earnings to offset the changes in the fair value of the assets or liabilities being hedged. Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, euro, Israeli shekel and Taiwanese dollar. Applied uses derivative financial instruments, such as forward exchange contracts and currency option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months . The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. |
Foreign Currencies | Foreign Currencies As of October 28, 2018 , all of Applied’s subsidiaries use the United States dollar as their functional currency. Accordingly, assets and liabilities of these subsidiaries are remeasured using exchange rates in effect at the end of the period, except for non-monetary assets, such as inventories and property, plant and equipment, which are remeasured using historical exchange rates. Foreign currency-denominated revenues and costs are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in general and administrative expenses in the Consolidated Statements of Operations as incurred. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject Applied to significant concentrations of credit risk consist principally of cash equivalents, investments, trade accounts receivable and derivative financial instruments used in hedging activities. Applied invests in a variety of financial instruments, such as, but not limited to, commercial paper, corporate and municipal bonds, United States Treasury and agency securities, and asset-backed and mortgage-backed securities, and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. Applied performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. Applied maintains an allowance reserve for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. Applied regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. In addition, Applied utilizes letters of credit to mitigate credit risk when considered appropriate. Applied is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments, but does not expect any counterparties to fail to meet their obligations. In some instances, Applied has entered into security arrangements which require the counterparties to post collateral to further mitigate credit exposure. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted Inventory Measurement. In July 2015, the Financial Accounting Standard Board (FASB) issued authoritative guidance that requires inventory to be measured at the lower of cost and net realizable value instead of at lower of cost or market. This guidance does not apply to inventory that is measured using last-in, first out (LIFO) or the retail inventory method but applies to all other inventory including those measured using first-in, first-out (FIFO) or the average cost method. Applied adopted this authoritative guidance in the first quarter of fiscal 2018 prospectively to the measurement of inventory after the effective date. The adoption of this guidance did not have a material impact on Applied’s consolidated financial statements. Share-Based Compensation. In March 2016, the FASB issued authoritative guidance that simplifies several aspects of the accounting for share-based payment transactions, including forfeitures, income tax, and classification on the statement of cash flows. Applied adopted this guidance in the first quarter of fiscal 2018. Upon adoption, Applied elected to continue to estimate forfeitures expected to occur to determine the amount of compensation costs to be recognized in each period. The new standard also required recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital prospectively. In fiscal 2018, Applied recognized an excess tax benefit of $51 million in the Consolidated Condensed Statements of Operations. Additionally, Applied elected to apply the presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares retrospectively. Adopting this guidance increased cash provided by operating activities by $180 million and $100 million with corresponding net decreases in cash provided by financing activities for fiscal 2017 and 2016, respectively. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued authoritative guidance that allows stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) to be reclassified from accumulated other comprehensive income to retained earnings. Applied adopted this guidance at the beginning of the third quarter of fiscal 2018. The stranded income tax effects related to the Tax Act were reclassified from accumulated other comprehensive income to retained earnings in the consolidated statements of stockholders' equity as of October 28, 2018 . Share-Based Compensation: Modification Accounting. In May 2017, the FASB issued an update to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. Applied adopted this guidance in the third quarter of fiscal 2018 on a prospective basis. The impact of the adoption of this guidance will depend on whether the Company makes any future modifications of share-based payment awards. Accounting Standards Not Yet Adopted Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the FASB issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. This authoritative guidance will be effective for Applied in fiscal 2021 on a retrospective basis, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Fair Value Measurement: Changes to the Disclosure Requirements for Fair Value Measurement. In August 2018, the FASB issued authoritative guidance that eliminates, amends, and adds disclosure requirements for fair value measurements. While the amended and new disclosure requirements primarily relate to Level 3 fair value measurements, the authoritative guidance also eliminates disclosure requirements related to the amount and reasons for transfer between Level 1 and Level 2 of fair value hierarchy, policy for timing of transfer between levels, and the valuation processes for Level 3 fair value measurements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020. Early adoption is permitted only for the removal and amendment of certain disclosures, while the new disclosures requirements are to be applied prospectively. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Derivatives and Hedging. In August 2017, the FASB issued authoritative guidance that modifies the recognition and presentation of hedge accounting to better align an entity’s risk management strategies and financial reporting for hedging relationships. The authoritative guidance expands the application of hedge accounting for non-financial and financial risk components and eases certain hedge effectiveness assessment requirements. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Receivables: Nonrefundable Fees and Other Costs. In March 2017, the FASB issued authoritative guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date to more closely align with expectations incorporated in market pricing. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 on a modified retrospective basis, with early adoption permitted. Applied is currently evaluating the impact of adopting this new accounting guidance on Applied’s consolidated financial statements. Retirement Benefits. In March 2017, the FASB issued authoritative guidance which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a retrospective basis. The adoption of this guidance is only expected to result in reclassification of other components of net benefit costs outside of income from operations and is not expected to have a significant impact on Applied’s consolidated financial statements. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Business Combinations. In January 2017, the FASB issued authoritative guidance that clarifies the definition of a business to help companies evaluate whether acquisition or disposal transactions should be accounted for as asset groups or as businesses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019 on a prospective basis. The impact of the adoption depends on the facts and circumstances of future acquisition or disposal transactions. Income Taxes: Intra-Entity Asset Transfers. In October 2016, the FASB issued authoritative guidance that requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. Applied will adopt this standard in the first quarter of fiscal 2019 using a modified-retrospective approach resulting in a cumulative-effect adjustment to retained earnings. Applied estimates an increase in deferred tax assets of approximately $1.6 billion with a corresponding increase in retained earnings related to the recognition of income tax effects of intra-entity asset transfers that occurred prior to the adoption date. Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued authoritative guidance which addresses classification of certain cash receipts and cash payments related to the statement of cash flows. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2019. The adoption of this guidance is not expected to have a significant impact on Applied’s consolidated financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2021. Early adoption is permitted beginning in the first quarter of fiscal 2020. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Leases. In February 2016, the FASB issued authoritative guidance for lease accounting, which requires lessees to recognize lease assets and liabilities on the balance sheet for certain lease arrangements that are classified as operating leases under the previous standard, and to provide for enhanced disclosures. The authoritative guidance will be effective for Applied in the first quarter of fiscal 2020 and should be applied using a modified retrospective approach. Early adoption is permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements. Financial Instruments: Classification and Measurement. In January 2016, the FASB issued authoritative guidance that requires equity investments that do not result in consolidation, and are not accounted for under the equity method, to be measured at fair value, and requires recognition of any changes in fair value in net income unless the investments qualify for a new practicability exception. For financial liabilities measured at fair value, the change in fair value caused by a change in instrument-specific credit risk will be required to be presented separately in other comprehensive income. Applied will adopt this standard in the first quarter of fiscal year 2019. Applied will make elections on whether to apply fair value or the measurement alternative for equity investments without readily determinable fair value on an investment-by-investment basis. For the equity securities without readily determinable fair values, fair value will be applied prospectively to all equity investments that exist as of adoption. Upon adoption, Applied will record a cumulative-effect adjustment to retained earnings for the unrealized gains and losses associated with equity investments with readily determinable fair values. Applied currently estimates a net increase to retained earnings of approximately $21 million with the corresponding net decrease in accumulated other comprehensive income. Revenue Recognition. I n May 2014, the FASB issued authoritative guidance that requires revenue recognition to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and requires certain additional disclosures. This new standard will supersede most current revenue recognition guidance, including industry-specific guidance. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting the guidance. In August 2015, the FASB issued an amendment to defer the effective date by one year and allow entities to early adopt no earlier than the original effective date. With this amendment, the guidance will be effective for Applied in the first quarter of fiscal 2019, which is the Company’s planned adoption date. Applied currently anticipates adopting this new guidance using the full retrospective approach. In fiscal 2016, Applied established a project steering committee and cross-functional implementation team that has identified potential differences that would result from applying the requirements of the new standard to Applied’s revenue contracts. In addition, the implementation team has identified and is now implementing changes to business processes, systems and controls to support recognition and disclosure under the new standard. While the Company’s evaluation of the impact of this new guidance is not complete, Applied currently expects that the new standard will have the following impacts: • Revenue related to the sale of equipment and spares will generally continue to be recognized at a point in time upon the transfer of control. Under this new guidance, the point of time at which revenue is recognized for certain of these products is expected to be earlier than under current revenue recognition guidance as there will be fewer constraints related to customer acceptance. • Revenue related to the sale of services will generally continue to be recognized over time as the services are performed. • Disclosures related to revenue recognition, including contract balances and revenue disaggregation, will be expanded. • Applied continues to evaluate the effect that this new guidance will have on the financial position and results of operations for fiscal 2018. However, for fiscal 2017, Applied expects an increase of our net sales between $140 million and $180 million , or approximately 1% . Applied is nearing completion of retrospectively adjusting financial information and will continue to evaluate the effect that the standard will have on its consolidated financial statements, including disclosures, and its preliminary assessments are subject to change. |
Fair Value Measurements | Fair Value Measurements Applied’s financial assets are measured and recorded at fair value, except for equity investments in privately-held companies. These equity investments are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when events or circumstances indicate that an other-than-temporary decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Fair Value Hierarchy Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments. As of October 28, 2018 , substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. Goodwill and purchased intangible assets with indefinite useful lives are not amortized, but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. Applied regularly monitors current business conditions and considers other factors including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. To test goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, Applied then performs the two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. Under the two-step goodwill impairment test, Applied would in the first step compare the estimated fair value of each reporting unit to its carrying value. Applied determines the fair value of each of its reporting units based on a weighting of income and market approaches. If the carrying value of a reporting unit exceeds its fair value, Applied would then perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If Applied determines that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, Applied would record an impairment charge equal to the difference. |
Finite-Lived Purchased Intangible Assets | Finite-Lived Purchased Intangible Assets Applied amortizes purchased intangible assets with finite lives using the straight-line method over the estimated economic lives of the assets, ranging from 1 to 15 years. Applied evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset group may not be recoverable. Applied assesses the fair value of the assets based on the amount of the undiscounted future cash flow that the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset, plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When Applied identifies an impairment, Applied reduces the carrying value of the group of assets to comparable market values, when available and appropriate, or to its estimated fair value based on a discounted cash flow approach. Intangible assets, such as purchased technology, are generally recorded in connection with a business acquisition. The value assigned to intangible assets is usually based on estimates and judgments regarding expectations for the success and life cycle of products and technology acquired. Applied evaluates the useful lives of its intangible assets each reporting period to determine whether events and circumstances require revising the remaining period of amortization. In addition, Applied reviews intangible assets for impairment when events or changes in circumstances indicate their carrying value may not be recoverable. Management considers such indicators as significant differences in actual product acceptance from the estimates, changes in the competitive and economic environments, technological advances, and changes in cost structure. |
Treasury Stock | Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. |
Share-based Compensation | The cost associated with share-based awards that are subject solely to time-based vesting requirements, less expected forfeitures, is recognized over the awards’ service period for the entire award on a straight-line basis. The cost associated with performance-based equity awards is recognized for each tranche over the service period, based on an assessment of the likelihood that the applicable performance goals will be achieved. |
Performance based awards | The fair value of these awards is estimated on the date of grant. If the goals are achieved, the awards will vest, provided that the grantee remains employed by Applied through each scheduled vesting date. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost is based on the awards that are probable to vest and is reflected over the service period and reduced for estimated forfeitures. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Earnings Per Share [Abstract] | |
Elements used in computing both basic and diluted net earnings per share | Applied’s net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to the Company’s non-complex capital structure. Fiscal Year 2018 2017 2016 (In millions, except per share amounts) Numerator: Net income $ 3,313 $ 3,434 $ 1,721 Denominator: Weighted average common shares outstanding 1,013 1,073 1,107 Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares 13 11 9 Denominator for diluted earnings per share 1,026 1,084 1,116 Basic earnings per share $ 3.27 $ 3.20 $ 1.56 Diluted earnings per share $ 3.23 $ 3.17 $ 1.54 Potentially dilutive securities — — — |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash, cash equivalents and investments | The following tables summarize Applied’s cash, cash equivalents and investments by security type: October 28, 2018 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,489 $ — $ — $ 1,489 Cash equivalents: Money market funds 1,599 — — 1,599 Commercial paper, corporate bonds and medium-term notes 352 — — 352 Total Cash equivalents 1,951 — — 1,951 Total Cash and Cash equivalents $ 3,440 $ — $ — $ 3,440 Short-term and long-term investments: U.S. Treasury and agency securities $ 335 $ — $ 2 $ 333 Non-U.S. government securities* 10 — — 10 Municipal securities 399 — 4 395 Commercial paper, corporate bonds and medium-term notes 705 — 3 702 Asset-backed and mortgage-backed securities 595 — 4 591 Total fixed income securities 2,044 — 13 2,031 Publicly traded equity securities 17 25 4 38 Equity investments in privately-held companies 89 — — 89 Total short-term and long-term investments $ 2,150 $ 25 $ 17 $ 2,158 Total Cash, Cash equivalents and Investments $ 5,590 $ 25 $ 17 $ 5,598 _________________________ * Includes agency debt securities guaranteed by Canada. October 29, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In millions) Cash $ 1,346 $ — $ — $ 1,346 Cash equivalents: Money market funds 2,658 — — 2,658 U.S. Treasury and agency securities 15 — — 15 Non-U.S. government securities 55 — — 55 Municipal securities 341 — — 341 Commercial paper, corporate bonds and medium-term notes 595 — — 595 Total Cash equivalents 3,664 — — 3,664 Total Cash and Cash equivalents $ 5,010 $ — $ — $ 5,010 Short-term and long-term investments: U.S. Treasury and agency securities $ 667 $ — $ 1 $ 666 Non-U.S. government securities* 161 — — 161 Municipal securities 1,007 — — 1,007 Commercial paper, corporate bonds and medium-term notes 1,024 1 1 1,024 Asset-backed and mortgage-backed securities 379 — 1 378 Total fixed income securities 3,238 1 3 3,236 Publicly traded equity securities 22 78 1 99 Equity investments in privately-held companies 74 — — 74 Total short-term and long-term investments $ 3,334 $ 79 $ 4 $ 3,409 Total Cash, Cash equivalents and Investments $ 8,344 $ 79 $ 4 $ 8,419 ________________________ * Includes agency debt securities guaranteed by non-U.S. governments, which consist of Canada and Germany. |
Contractual maturities of investments | The following table summarizes the contractual maturities of Applied’s investments at October 28, 2018 : Cost Estimated Fair Value (In millions) Due in one year or less $ 503 $ 502 Due after one through five years 946 938 No single maturity date** 701 718 Total $ 2,150 $ 2,158 _________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities. |
Schedule of gross realized gains and losses on sales of investments | Gross realized gains and losses on sales of investments for each fiscal year were as follows: 2018 2017 2016 (In millions) Gross realized gains $ 29 $ 14 $ 10 Gross realized losses $ 3 $ 1 $ 2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial assets/liabilities measured at fair value on a recurring basis | Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below: October 28, 2018 October 29, 2017 Level 1 Level 2 Total Level 1 Level 2 Total (In millions) Assets: Money market funds $ 1,599 $ — $ 1,599 $ 2,658 $ — $ 2,658 U.S. Treasury and agency securities 297 36 333 192 489 681 Non-U.S. government securities — 10 10 — 216 216 Municipal securities — 395 395 — 1,348 1,348 Commercial paper, corporate bonds and medium-term notes — 1,054 1,054 — 1,619 1,619 Asset-backed and mortgage-backed securities — 591 591 — 378 378 Publicly traded equity securities 38 — 38 99 — 99 Total $ 1,934 $ 2,086 $ 4,020 $ 2,949 $ 4,050 $ 6,999 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of derivative instruments on the consolidated statement of operations | The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Effective Portion Ineffective Portion and Amount Derivatives in Cash Flow Hedging Relationships Location of Gain or Gain or Gain or (Loss) Gain or (Loss) (In millions) 2018 Foreign exchange contracts AOCI $ 3 $ — $ — Foreign exchange contracts Cost of products sold — 4 19 Foreign exchange contracts General and administrative — (3 ) (7 ) Interest rate contracts Interest expense — (3 ) — Total $ 3 $ (2 ) $ 12 2017 Foreign exchange contracts AOCI $ 35 $ — $ — Foreign exchange contracts Cost of products sold — 7 (3 ) Foreign exchange contracts General and administrative — 7 (2 ) Interest rate contracts AOCI (14 ) — — Interest rate contracts Interest expense — (3 ) — Total $ 21 $ 11 $ (5 ) 2016 Foreign exchange contracts AOCI $ (53 ) $ — $ — Foreign exchange contracts Cost of products sold — (46 ) 2 Foreign exchange contracts General and administrative — — (11 ) Interest rate contracts Interest expense — (2 ) — Total $ (53 ) $ (48 ) $ (9 ) |
Derivatives not designated as hedging instruments in statement of operations | Amount of Gain or (Loss) Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Gain or 2018 2017 2016 (In millions) Foreign exchange contracts General and administrative $ (5 ) $ 39 $ (75 ) Total $ (5 ) $ 39 $ (75 ) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Receivables [Abstract] | |
Changes in allowance for doubtful accounts | Changes in allowance for doubtful accounts in each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 34 $ 51 $ 49 Provision — — 3 Deductions 1 (1 ) (17 ) (1 ) Ending balance $ 33 $ 34 $ 51 _____________________________ 1 Fiscal 2018 , 2017 and 2016 deductions primarily represent releases of allowance for doubtful accounts credited to expense as a result of an overall lower risk profile of Applied’s customers and cash collections. |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | October 28, October 29, (In millions) Inventories Customer service spares $ 989 $ 595 Raw materials 1,020 603 Work-in-process 505 468 Finished goods 1,208 1,264 $ 3,722 $ 2,930 |
Other current assets | October 28, October 29, (In millions) Other Current Assets Prepaid income taxes and income taxes receivable $ 40 $ 57 Prepaid expenses and other 390 317 $ 430 $ 374 |
Property, plant and equipment, net | Useful Life October 28, October 29, (In years) (In millions) Property, Plant and Equipment, Net Land and improvements $ 245 $ 160 Buildings and improvements 3-30 1,448 1,315 Demonstration and manufacturing equipment 3-5 1,282 1,129 Furniture, fixtures and other equipment 3-5 634 572 Construction in progress 203 135 Gross property, plant and equipment 3,812 3,311 Accumulated depreciation (2,405 ) (2,245 ) $ 1,407 $ 1,066 |
Accounts payable and accrued expenses | October 28, October 29, (In millions) Accounts Payable and Accrued Expenses Accounts payable $ 996 $ 945 Compensation and employee benefits 639 666 Warranty 209 199 Dividends payable 193 106 Income taxes payable 136 112 Other accrued taxes 112 70 Interest payable 38 38 Other 398 314 $ 2,721 $ 2,450 |
Customer deposits and deferred revenue | October 28, October 29, (In millions) Customer Deposits and Deferred Revenue Customer deposits $ 444 $ 381 Deferred revenue 903 1,284 $ 1,347 $ 1,665 |
Other liabilities | October 28, October 29, (In millions) Other Liabilities Defined and postretirement benefit plans $ 177 $ 160 Other 126 99 $ 303 $ 259 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table represents the final aggregated purchase price allocation for acquisitions completed in fiscal year 2017: Estimated Fair Values (In millions) Fair value of net assets acquired $ 23 Goodwill 55 Purchased technology 31 Purchase price allocated $ 109 |
Goodwill, Purchased Technolog_2
Goodwill, Purchased Technology and Other Intangible Assets (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Details of goodwill were as follows: October 28, 2018 October 29, 2017 (In millions) Semiconductor Systems $ 2,151 $ 2,151 Applied Global Services 1,018 1,018 Display and Adjacent Markets 199 199 Carrying amount $ 3,368 $ 3,368 |
Summary of purchased technology and intangible assets | A summary of Applied’s purchased technology and intangible assets is set forth below: October 28, October 29, (In millions) Purchased technology, net $ 109 $ 288 Intangible assets - finite-lived, net 104 124 $ 213 $ 412 |
Finite-lived intangible assets | Details of finite-lived intangible assets were as follows: October 28, 2018 October 29, 2017 Purchased Technology Other Intangible Assets Total Purchased Technology Other Intangible Assets Total (In millions) Gross carrying amount: Semiconductor Systems $ 1,449 $ 252 $ 1,701 $ 1,449 $ 252 $ 1,701 Applied Global Services 33 44 77 33 44 77 Display and Adjacent Markets 163 38 201 163 38 201 Corporate and Other — 9 9 — 9 9 Gross carrying amount $ 1,645 $ 343 $ 1,988 $ 1,645 $ 343 $ 1,988 Accumulated amortization: Semiconductor Systems $ (1,375 ) $ (150 ) $ (1,525 ) $ (1,210 ) $ (131 ) $ (1,341 ) Applied Global Services (29 ) (44 ) (73 ) (28 ) (44 ) (72 ) Display and Adjacent Markets (132 ) (36 ) (168 ) (119 ) (35 ) (154 ) Corporate and Other — (9 ) (9 ) — (9 ) (9 ) Accumulated amortization $ (1,536 ) $ (239 ) $ (1,775 ) $ (1,357 ) $ (219 ) $ (1,576 ) Carrying amount $ 109 $ 104 $ 213 $ 288 $ 124 $ 412 |
Summary of amortization expense | Details of amortization expense for each fiscal year by segment were as follows: 2018 2017 2016 (In millions) Semiconductor Systems $ 184 $ 185 $ 185 Applied Global Services 1 1 1 Display and Adjacent Markets 14 7 — Corporate and Other — — 3 Total $ 199 $ 193 $ 189 |
Schedule of categories amortization expense was charged to | Amortization expense for each fiscal year was charged to the following categories: 2018 2017 2016 (In millions) Cost of products sold $ 180 $ 173 $ 167 Research, development and engineering 1 1 2 Marketing and selling 18 19 20 Total $ 199 $ 193 $ 189 |
Future estimated amortization expense | As of October 28, 2018 , future estimated amortization expense is expected to be as follows: Amortization Expense (In millions) 2019 $ 57 2020 52 2021 39 2022 65 Total $ 213 |
Borrowing Facilities and Debt (
Borrowing Facilities and Debt (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Debt Disclosure [Abstract] | |
Debt Outstanding | Debt outstanding as of October 28, 2018 and October 29, 2017 was as follows: Principal Amount October 28, October 29, Effective Interest Rate Interest Pay Dates (In millions) Long-term debt: 2.625% Senior Notes Due 2020 $ 600 $ 600 2.640% April 1, October 1 4.300% Senior Notes Due 2021 750 750 4.326% June 15, December 15 3.900% Senior Notes Due 2025 700 700 3.944% April 1, October 1 3.300% Senior Notes Due 2027 1,200 1,200 3.342% April 1, October 1 5.100% Senior Notes Due 2035 500 500 5.127% April 1, October 1 5.850% Senior Notes Due 2041 600 600 5.879% June 15, December 15 4.350% Senior Notes Due 2047 1,000 1,000 4.361% April 1, October 1 5,350 5,350 Total unamortized discount (11 ) (12 ) Total unamortized debt issuance costs (30 ) (34 ) Total long-term debt $ 5,309 $ 5,304 |
Stockholders' Equity, Compreh_2
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Equity [Abstract] | |
Components of accumulated other comprehensive income, net of tax | Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows: Unrealized Gain (Loss) on Investments, Net Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges Defined and Postretirement Benefit Plans Cumulative Translation Adjustments Total (In millions) Balance at October 25, 2015 $ 14 $ (15 ) $ (105 ) $ 14 (92 ) Other comprehensive income (loss) before reclassifications 14 (33 ) (42 ) — (61 ) Amounts reclassified out of AOCI 2 30 6 — 38 Other comprehensive income (loss), net of tax 16 (3 ) (36 ) — (23 ) Balance at October 30, 2016 $ 30 $ (18 ) $ (141 ) $ 14 $ (115 ) Other comprehensive income (loss) before reclassifications 24 13 29 — 66 Amounts reclassified out of AOCI (1 ) (6 ) (8 ) — (15 ) Other comprehensive income, net of tax 23 7 21 — 51 Balance at October 29, 2017 $ 53 $ (11 ) $ (120 ) $ 14 $ (64 ) Adoption of new accounting standards (a) 5 (2 ) — — 3 Other comprehensive income (loss) before reclassifications (66 ) 5 (23 ) — (84 ) Amounts reclassified out of AOCI 15 (1 ) 6 — 20 Other comprehensive income (loss), net of tax (51 ) 4 (17 ) — (64 ) Balance at October 28, 2018 $ 7 $ (9 ) $ (137 ) $ 14 $ (125 ) (a) - Represents the reclassification adjustment related to the early adoption of Accounting Standards Update (ASU) 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. See Note 1. |
Summary of stock repurchases | The following table summarizes Applied’s stock repurchases for each fiscal year: 2018 2017 2016 (In millions, except per share amounts) Shares of common stock repurchased 102 28 96 Cost of stock repurchased $ 5,283 $ 1,172 $ 1,892 Average price paid per share $ 51.55 $ 42.08 $ 19.82 |
Total share-based compensation and related tax benefits | Applied recognized share-based compensation expense related to stock options, ESPP shares, restricted stock, restricted stock units, performance shares and performance units, and related tax benefits for each fiscal year as follows: 2018 2017 2016 (In millions) Share-based compensation $ 258 $ 220 $ 201 Tax benefit recognized $ 45 $ 60 $ 63 |
Effect of share-based compensation on the results of operations by expense type | The effect of share-based compensation on the results of operations for each fiscal year was as follows: 2018 2017 2016 (In millions) Cost of products sold $ 87 $ 69 $ 62 Research, development, and engineering 96 83 76 Marketing and selling 31 28 26 General and administrative 44 40 37 Total share-based compensation $ 258 $ 220 $ 201 |
Restricted stock units and restricted stock activity | A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans is presented below: Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In millions, except per share amounts) Non-vested restricted stock units, restricted stock, performance shares and performance units at October 25, 2015 27 $ 16.41 2.2 years $ 440 Granted 11 $ 18.54 Vested (11 ) $ 14.25 Canceled (2 ) $ 17.57 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 30, 2016 25 $ 18.28 2.3 years $ 718 Granted 8 $ 31.79 Vested (10 ) $ 16.50 Canceled (1 ) $ 21.25 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 29, 2017 22 $ 23.96 2.2 years $ 1,239 Granted 6 $ 50.62 Vested (9 ) $ 22.15 Canceled (1 ) $ 30.19 Non-vested restricted stock units, restricted stock, performance shares and performance units at October 28, 2018 18 $ 32.64 2.0 years $ 600 Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest 16 $ 31.11 1.9 years $ 523 |
Significant valuation assumptions in relation to ESPP | Underlying assumptions used in the model are outlined in the following table: 2018 2017 2016 ESPP: Dividend yield 1.68 % 0.99 % 1.76 % Expected volatility 34.4 % 26.3 % 29.3 % Risk-free interest rate 2.09 % 0.92 % 0.47 % Expected life (in years) 0.5 0.5 0.5 Weighted average estimated fair value $12.02 $9.14 $5.48 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Retirement Benefits [Abstract] | |
Changes in benefit obligations and plan assets including post-retirement benefits | A summary of the changes in benefit obligations and plan assets, which includes post-retirement benefits, for each fiscal year is presented below: 2018 2017 2016 (In millions, except percentages) Change in projected benefit obligation Beginning projected benefit obligation $ 506 $ 495 $ 471 Service cost 12 13 13 Interest cost 11 10 13 Plan participants’ contributions 1 2 1 Actuarial (gain) loss 24 (35 ) 77 Curtailments, settlements and special termination benefits (1 ) (1 ) (6 ) Foreign currency exchange rate changes (16 ) 34 (42 ) Benefits paid (12 ) (12 ) (10 ) Plan amendments and business combinations (1 ) — (22 ) Ending projected benefit obligation $ 524 $ 506 $ 495 Ending accumulated benefit obligation $ 490 $ 472 $ 460 Range of assumptions to determine benefit obligations Discount rate 0.6% - 3.1% 0.5% - 3.4% 0.5% - 3.1% Rate of compensation increase 2.4% - 3.5% 2.2% - 3.5% 1.6% - 3.6% Change in plan assets Beginning fair value of plan assets $ 361 $ 310 $ 281 Return on plan assets 17 18 37 Employer contributions 11 16 50 Plan participants’ contributions 1 2 1 Foreign currency exchange rate changes (12 ) 28 (45 ) Divestitures, settlements and business combinations (1 ) (1 ) (4 ) Benefits paid (12 ) (12 ) (10 ) Ending fair value of plan assets $ 365 $ 361 $ 310 Funded status $ (159 ) $ (145 ) $ (185 ) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 19 $ 17 $ 11 Current liability (1 ) (1 ) (2 ) Noncurrent liability (177 ) (161 ) (194 ) Total $ (159 ) $ (145 ) $ (185 ) Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period Actuarial loss $ 8 $ 6 $ 6 Prior service credit (1 ) (4 ) (16 ) Total $ 7 $ 2 $ (10 ) Amounts recognized in accumulated other comprehensive loss Net actuarial loss $ 161 $ 141 $ 186 Prior service credit (2 ) (4 ) (21 ) Total $ 159 $ 137 $ 165 Plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 365 $ 326 $ 341 Fair value of plan assets $ 186 $ 142 $ 145 Plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 331 $ 293 $ 307 Fair value of plan assets $ 186 $ 142 $ 145 2018 2017 Plan assets — allocation Equity securities 47 % 47 % Debt securities 32 % 39 % Insurance contracts 10 % 11 % Other investments 10 % 3 % Cash 1 % — % |
Summary of ending fair value of the plan assets | The following table presents a summary of the ending fair value of the plan assets: October 28, 2018 October 29, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) Equity securities $ 86 $ — $ — $ 86 $ 83 $ — $ — $ 83 Debt securities 19 — — 19 16 — — 16 Insurance contracts — — 36 36 — — 38 38 Other investments — 14 — 14 — 13 — 13 Cash 2 — — 2 2 — — 2 Total assets at fair value $ 107 $ 14 $ 36 157 $ 101 $ 13 $ 38 152 Assets measured at net asset value 208 209 Total $ 365 $ 361 |
Activity in Level 3 instruments | The following table presents the activity in Level 3 instruments for each fiscal year: 2018 2017 (In millions) Balance, beginning of year $ 38 $ 38 Actual return on plan assets: Relating to assets still held at reporting date (1 ) (3 ) Purchases, sales, settlements, net — 1 Currency impact (1 ) 2 Balance, end of year $ 36 $ 38 |
Schedule of net benefit costs and weighted average assumptions used | A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost calculations for each fiscal year is presented below: 2018 2017 2016 (In millions, except percentages) Components of net periodic benefit cost Service cost $ 12 $ 13 $ 13 Interest cost 11 10 13 Expected return on plan assets (20 ) (18 ) (14 ) Amortization of actuarial loss and prior service credit 3 (10 ) 3 Settlement and curtailment loss — — (5 ) Net periodic benefit cost (income) $ 6 $ (5 ) $ 10 Weighted average assumptions Discount rate 2.16 % 1.88 % 2.82 % Expected long-term return on assets 5.41 % 5.38 % 5.38 % Rate of compensation increase 2.66 % 2.69 % 2.71 % |
Schedule of expected benefit payments | Future expected benefit payments for the pension plans and the post-retirement plan over the next ten fiscal years are as follows: Benefit Payments (In millions) 2019 $ 12 2020 12 2021 13 2022 13 2023 12 2024-2028 77 $ 139 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of income from operations before income taxes | The components of income before income taxes for each fiscal year were as follows: 2018 2017 2016 (In millions) U.S. $ 439 $ 514 $ 199 Foreign 4,255 3,217 1,814 $ 4,694 $ 3,731 $ 2,013 |
Components of the provision for income taxes | The components of the provision for income taxes for each fiscal year were as follows: 2018 2017 2016 (In millions) Current: U.S. $ 1,035 $ 67 $ (36 ) Foreign 126 233 351 State 22 9 (2 ) 1,183 309 313 Deferred: U.S. 151 (11 ) 55 Foreign 57 (7 ) (89 ) State (10 ) 6 13 198 (12 ) (21 ) $ 1,381 $ 297 $ 292 |
Effective income tax rate continuing operations tax rate reconciliation | A reconciliation between the statutory U.S. federal income tax rate and Applied’s actual effective income tax rate for each fiscal year is presented below: 2018 2017 2016 Tax provision at U.S. statutory rate 23.4 % 35.0 % 35.0 % Changes in U.S. tax law 23.7 — — Resolutions of prior years’ income tax filings (0.7 ) (1.9 ) 3.9 Effect of foreign operations taxed at various rates (15.6 ) (24.9 ) (24.1 ) State income taxes, net of federal benefit 0.2 0.3 0.6 Research and other tax credits (0.7 ) (0.7 ) (1.3 ) U.S. domestic production deduction (0.1 ) (0.2 ) (0.2 ) Share-based compensation (0.7 ) 0.4 0.4 Other (0.1 ) — 0.2 29.4 % 8.0 % 14.5 % |
Components of deferred income tax assets and liabilities | The components of deferred income tax assets and liabilities were as follows: October 28, October 29, (In millions) Deferred tax assets: Allowance for doubtful accounts $ 8 $ 13 Inventory reserves and basis difference 117 156 Installation and warranty reserves 7 1 Accrued liabilities 20 31 Deferred revenue 9 15 Tax credits 236 317 Deferred compensation 79 81 Share-based compensation 37 53 Other 48 67 Gross deferred tax assets 561 734 Valuation allowance (230 ) (227 ) Total deferred tax assets 331 507 Deferred tax liabilities: Fixed assets (48 ) (36 ) Intangible assets (38 ) (76 ) Undistributed foreign earnings (32 ) (11 ) Foreign exchange (3 ) (4 ) Total gross deferred tax liabilities (121 ) (127 ) Net deferred tax assets $ 210 $ 380 The following table presents a summary of non-current deferred tax assets and liabilities: October 28, October 29, (In millions) Non-current deferred tax asset $ 222 $ 385 Non-current deferred tax liability (12 ) (5 ) $ 210 $ 380 |
Summary of valuation allowance | Changes in the valuation allowance in each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 227 $ 207 $ 207 Increases 8 20 27 Decreases (5 ) — (27 ) Ending balance $ 230 $ 227 $ 207 |
A reconciliation of gross unrecognized tax benefits | A reconciliation of the beginning and ending balances of gross unrecognized tax benefits in each fiscal year is as follows: 2018 2017 2016 (In millions) Beginning balance of gross unrecognized tax benefits $ 391 $ 320 $ 177 Settlements with tax authorities (152 ) (42 ) (25 ) Lapses of statutes of limitation (37 ) (15 ) (2 ) Increases in tax positions for current year 91 95 62 Increases in tax positions for prior years 83 33 109 Decreases in tax positions for prior years (2 ) — (1 ) Ending balance of gross unrecognized tax benefits $ 374 $ 391 $ 320 |
Warranty, Guarantees, Commitm_2
Warranty, Guarantees, Commitments and Contingencies (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | As of October 28, 2018 , future minimum lease payments are expected to be as follows: Lease Payments Fiscal (In millions) 2019 $ 50 2020 40 2021 28 2022 20 2023 13 Thereafter 22 $ 173 |
Changes in the warranty reserves | Changes in the warranty reserves during each fiscal year were as follows: 2018 2017 2016 (In millions) Beginning balance $ 199 $ 153 $ 126 Provisions for warranty 183 166 135 Changes in reserves related to preexisting warranty 3 1 (12 ) Consumption of reserves (176 ) (121 ) (96 ) Ending balance $ 209 $ 199 $ 153 |
Industry Segment Operations (Ta
Industry Segment Operations (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Information for each reportable segment for and as of the end of each fiscal year were as follows: Net Sales Operating Income (Loss) Depreciation/ Amortization Capital Accounts Receivable Inventories (In millions) 2018: Semiconductor Systems $ 10,903 $ 3,634 $ 303 $ 168 $ 1,755 $ 2,213 Applied Global Services 3,754 1,102 21 33 610 1,243 Display and Adjacent Markets 2,498 679 20 39 248 249 Corporate and Other 98 (619 ) 113 382 (48 ) 17 Total $ 17,253 $ 4,796 $ 457 $ 622 $ 2,565 $ 3,722 2017: Semiconductor Systems $ 9,517 $ 3,173 $ 286 $ 150 $ 1,626 $ 1,760 Applied Global Services 3,017 817 15 21 564 762 Display and Adjacent Markets 1,900 502 12 17 190 367 Corporate and Other 103 (624 ) 94 157 (42 ) 41 Total $ 14,537 $ 3,868 $ 407 $ 345 $ 2,338 $ 2,930 2016: Semiconductor Systems $ 6,873 $ 1,807 $ 277 $ 114 $ 1,524 $ 1,188 Applied Global Services 2,589 682 12 14 559 594 Display and Adjacent Markets 1,206 245 5 6 238 215 Corporate and Other 157 (582 ) 95 119 (42 ) 53 Total $ 10,825 $ 2,152 $ 389 $ 253 $ 2,279 $ 2,050 |
Segment Reconciling Items in Corporate and Other | The reconciling items included in Corporate and Other were as follows: 2018 2017 2016 (In millions) Unallocated net sales $ 98 $ 103 $ 157 Unallocated cost of products sold and expenses (459 ) (507 ) (538 ) Share-based compensation (258 ) (220 ) (201 ) Total $ (619 ) $ (624 ) $ (582 ) |
Net sales and long-lived assets by geographic region | Net sales and long-lived assets by geographic region for and as of each fiscal year were as follows: 2018 2017 2016 (In millions) Net sales: United States $ 1,532 $ 1,474 $ 1,143 China 5,113 2,746 2,259 Korea 3,603 4,052 1,883 Taiwan 2,732 3,291 2,843 Japan 2,405 1,518 1,279 Europe 1,066 816 615 Southeast Asia 802 640 803 Total outside United States 15,721 13,063 9,682 Consolidated total $ 17,253 $ 14,537 $ 10,825 October 28, October 29, (In millions) Long-lived assets: United States $ 1,414 $ 915 China 13 47 Korea 21 21 Taiwan 29 50 Japan 9 8 Europe 50 47 Southeast Asia 25 98 Total outside United States 147 271 Consolidated total $ 1,561 $ 1,186 |
Companies accounted for at least 10 percent of Applied's net sales | The following customers accounted for at least 10 percent of Applied’s net sales in each fiscal year, which were for products and services in multiple reportable segments: 2018 2017 2016 Samsung Electronics Co., Ltd. 13 % 23 % 13 % Taiwan Semiconductor Manufacturing Company Limited 11 % 15 % 16 % Intel Corporation 11 % * 11 % Micron Technology, Inc. * * 11 % ______________________________ * Less than 10% |
Unaudited Quarterly Consolida_2
Unaudited Quarterly Consolidated Financial Data (Tables) | 12 Months Ended |
Oct. 28, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Consolidated Financial Data | Unaudited Quarterly Consolidated Financial Data Fiscal Quarter First Second Third Fourth Fiscal Year (In millions, except per share amounts) 2018: Net sales $ 4,204 $ 4,567 $ 4,468 $ 4,014 $ 17,253 Gross profit $ 1,920 $ 2,090 $ 2,027 $ 1,780 $ 7,817 Net income $ 135 $ 1,129 $ 1,173 $ 876 $ 3,313 Earnings per diluted share $ 0.13 $ 1.09 $ 1.17 $ 0.89 $ 3.23 2017: Net sales $ 3,278 $ 3,546 $ 3,744 $ 3,969 $ 14,537 Gross profit $ 1,445 $ 1,600 $ 1,700 $ 1,787 $ 6,532 Net income $ 703 $ 824 $ 925 $ 982 $ 3,434 Earnings per diluted share $ 0.65 $ 0.76 $ 0.85 $ 0.91 $ 3.17 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Property Plant and Equipment Useful Life) (Details) | 12 Months Ended |
Oct. 28, 2018 | |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 30 years |
Demonstration and manufacturing equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Demonstration and manufacturing equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture, fixtures and other equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture, fixtures and other equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Term of amortization | 15 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Term of amortization | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Intangible Assets) (Details) | 12 Months Ended |
Oct. 28, 2018 | |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets estimated useful lives | 15 years |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets estimated useful lives | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Derivative Financial Instruments) (Details) | 12 Months Ended |
Oct. 28, 2018 | |
Accounting Policies [Abstract] | |
Time period for hedging of foreign currency transactions | 24 months |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - (Recent Accounting Pronouncements) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Jan. 27, 2019 | Oct. 29, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net deferred tax assets | $ 210 | $ 380 | $ 210 | $ 380 | |||||||||
Retained earnings | 20,874 | 18,258 | 20,874 | 18,258 | |||||||||
Accumulated other comprehensive loss | (125) | (64) | (125) | (64) | |||||||||
Net Sales | $ 4,014 | $ 4,468 | $ 4,567 | $ 4,204 | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | 17,253 | 14,537 | $ 10,825 | ||
Accounting Standards Update 2016-09 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Excess tax benefit | $ 51 | ||||||||||||
Excess tax benefit from share-based compensation, financing activities | 180 | 100 | |||||||||||
Excess tax benefit from share-based compensation, operating activities | $ 180 | $ 100 | |||||||||||
Accounting Standards Update 2014-09 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Increase in revenue (percent) | 1.00% | ||||||||||||
Scenario, Forecast | Accounting Standards Update 2016-16 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net deferred tax assets | $ 1,600 | ||||||||||||
Retained earnings | 1,600 | ||||||||||||
Scenario, Forecast | Accounting Standards Update 2016-01 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Retained earnings | $ 21 | ||||||||||||
Accumulated other comprehensive loss | $ (21) | ||||||||||||
Minimum | Accounting Standards Update 2014-09 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net Sales | $ 140 | ||||||||||||
Maximum | Accounting Standards Update 2014-09 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Net Sales | $ 180 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Numerator: | |||||||||||
Net income | $ 876 | $ 1,173 | $ 1,129 | $ 135 | $ 982 | $ 925 | $ 824 | $ 703 | $ 3,313 | $ 3,434 | $ 1,721 |
Denominator: | |||||||||||
Weighted average common shares outstanding (in shares) | 1,013 | 1,073 | 1,107 | ||||||||
Effect of dilutive stock options, restricted stock units and employee stock purchase plan shares (in shares) | 13 | 11 | 9 | ||||||||
Denominator for diluted earnings per share (in shares) | 1,026 | 1,084 | 1,116 | ||||||||
Basic earnings per share (in dollars per share) | $ 3.27 | $ 3.20 | $ 1.56 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.89 | $ 1.17 | $ 1.09 | $ 0.13 | $ 0.91 | $ 0.85 | $ 0.76 | $ 0.65 | $ 3.23 | $ 3.17 | $ 1.54 |
Potentially dilutive securities (in shares) | 0 | 0 | 0 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments (Cash, Cash Equivalents and Investments by Security Type) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cash | $ 1,489 | $ 1,346 | ||
Total Cash equivalents | 1,951 | 3,664 | ||
Total Cash and Cash equivalents | 3,440 | 5,010 | $ 3,406 | $ 4,797 |
Equity investments in privately-held companies | 89 | 74 | ||
Cost of short-term and long-term investments | 2,150 | 3,334 | ||
Gross unrealized gains on short-term and long-term investments | 25 | 79 | ||
Gross unrealized losses on short-term and long-term investments | 17 | 4 | ||
Estimated fair value of short-term and long-term investments | 2,158 | 3,409 | ||
Cash, cash equivalents and investments, cost | 5,590 | 8,344 | ||
Cash, cash equivalents and investments, gross unrealized gains | 25 | 79 | ||
Cash, cash equivalents and investments, gross unrealized losses | 17 | 4 | ||
Cash, cash equivalents and investments, estimated fair value | 5,598 | 8,419 | ||
Money market funds | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 1,599 | 2,658 | ||
U.S. Treasury and agency securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 15 | |||
Municipal securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 341 | |||
Commercial paper, corporate bonds and medium-term notes | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 352 | 595 | ||
Fixed income securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 2,044 | 3,238 | ||
Gross unrealized gains on fixed income securities | 0 | 1 | ||
Gross unrealized losses on fixed income securities | 13 | 3 | ||
Estimated fair value of fixed income securities | 2,031 | 3,236 | ||
U.S. Treasury and agency securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 335 | 667 | ||
Gross unrealized gains on fixed income securities | 0 | 0 | ||
Gross unrealized losses on fixed income securities | 2 | 1 | ||
Estimated fair value of fixed income securities | 333 | 666 | ||
Municipal securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 399 | 1,007 | ||
Gross unrealized gains on fixed income securities | 0 | 0 | ||
Gross unrealized losses on fixed income securities | 4 | 0 | ||
Estimated fair value of fixed income securities | 395 | 1,007 | ||
Commercial paper, corporate bonds and medium-term notes | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 705 | 1,024 | ||
Gross unrealized gains on fixed income securities | 0 | 1 | ||
Gross unrealized losses on fixed income securities | 3 | 1 | ||
Estimated fair value of fixed income securities | 702 | 1,024 | ||
Asset-backed and mortgage-backed securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 595 | 379 | ||
Gross unrealized gains on fixed income securities | 0 | 0 | ||
Gross unrealized losses on fixed income securities | 4 | 1 | ||
Estimated fair value of fixed income securities | 591 | 378 | ||
Publicly traded equity securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of publicly traded equity securities | 17 | 22 | ||
Gross unrealized gains on publicly traded equity securities | 25 | 78 | ||
Gross unrealized losses on publicly traded equity securities | 4 | 1 | ||
Estimated fair value of publicly traded equity securities | 38 | 99 | ||
Canada | Non-U.S. government securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 10 | |||
Gross unrealized gains on fixed income securities | 0 | |||
Gross unrealized losses on fixed income securities | 0 | |||
Estimated fair value of fixed income securities | $ 10 | |||
Canada and Germany | Non-U.S. government securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Total Cash equivalents | 55 | |||
Canada and Germany | Non-U.S. government securities | ||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | ||||
Cost of fixed income securities | 161 | |||
Gross unrealized gains on fixed income securities | 0 | |||
Gross unrealized losses on fixed income securities | 0 | |||
Estimated fair value of fixed income securities | $ 161 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investments (Contractual Maturities) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Due in one year or less, cost | $ 503 | |
Due after one through five years, cost | 946 | |
No single maturity date, cost | 701 | |
Cost of short-term and long-term investments | 2,150 | $ 3,334 |
Due in one year or less, estimated fair value | 502 | |
Due after one through five years, estimated fair value | 938 | |
No single maturity date, estimated fair value | 718 | |
Estimated fair value of short-term and long-term investments | $ 2,158 | $ 3,409 |
Cash, Cash Equivalents and In_5
Cash, Cash Equivalents and Investments (Gains and Losses on Investments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Gains and Losses on Investments | |||
Gross realized gains | $ 29 | $ 14 | $ 10 |
Gross realized losses | $ 3 | $ 1 | $ 2 |
Cash, Cash Equivalents and In_6
Cash, Cash Equivalents and Investments (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Fixed income securities | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $ 0 | $ 0 | $ 0 |
Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | $ 5,000,000 | $ 10,000,000 | $ 8,000,000 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Assets: | ||
Investment securities | $ 2,158 | $ 3,409 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Investment securities | 4,020 | 6,999 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Investment securities | 1,934 | 2,949 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Investment securities | 2,086 | 4,050 |
Fair Value, Measurements, Recurring | Money market funds | ||
Assets: | ||
Investment securities | 1,599 | 2,658 |
Fair Value, Measurements, Recurring | Money market funds | Level 1 | ||
Assets: | ||
Investment securities | 1,599 | 2,658 |
Fair Value, Measurements, Recurring | Money market funds | Level 2 | ||
Assets: | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency securities | ||
Assets: | ||
Investment securities | 333 | 681 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency securities | Level 1 | ||
Assets: | ||
Investment securities | 297 | 192 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency securities | Level 2 | ||
Assets: | ||
Investment securities | 36 | 489 |
Fair Value, Measurements, Recurring | Non-U.S. government securities | ||
Assets: | ||
Investment securities | 10 | 216 |
Fair Value, Measurements, Recurring | Non-U.S. government securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Non-U.S. government securities | Level 2 | ||
Assets: | ||
Investment securities | 10 | 216 |
Fair Value, Measurements, Recurring | Municipal securities | ||
Assets: | ||
Investment securities | 395 | 1,348 |
Fair Value, Measurements, Recurring | Municipal securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Municipal securities | Level 2 | ||
Assets: | ||
Investment securities | 395 | 1,348 |
Fair Value, Measurements, Recurring | Commercial paper, corporate bonds and medium-term notes | ||
Assets: | ||
Investment securities | 1,054 | 1,619 |
Fair Value, Measurements, Recurring | Commercial paper, corporate bonds and medium-term notes | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Commercial paper, corporate bonds and medium-term notes | Level 2 | ||
Assets: | ||
Investment securities | 1,054 | 1,619 |
Fair Value, Measurements, Recurring | Asset-backed and mortgage-backed securities | ||
Assets: | ||
Investment securities | 591 | 378 |
Fair Value, Measurements, Recurring | Asset-backed and mortgage-backed securities | Level 1 | ||
Assets: | ||
Investment securities | 0 | 0 |
Fair Value, Measurements, Recurring | Asset-backed and mortgage-backed securities | Level 2 | ||
Assets: | ||
Investment securities | 591 | 378 |
Fair Value, Measurements, Recurring | Publicly traded equity securities | ||
Assets: | ||
Investment securities | 38 | 99 |
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 1 | ||
Assets: | ||
Investment securities | 38 | 99 |
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 2 | ||
Assets: | ||
Investment securities | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Fair value of transfers from Level 1 to Level 2 | $ 0 | $ 0 | |
Fair value of transfers from Level 2 to Level 1 | 0 | 0 | |
Long-term debt principal amount | 5,400,000,000 | 5,400,000,000 | |
Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Impairments of investments | 5,000,000 | 10,000,000 | $ 8,000,000 |
Reported Value Measurement | Short Term And Long Term Investments | Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 89,000,000 | 74,000,000 | |
Portion at Cost | Short Term And Long Term Investments | Equity investments in privately-held companies | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | 72,000,000 | 65,000,000 | |
Estimate of Fair Value Measurement | Level 2 | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Long-term debt fair value | 5,400,000,000 | 5,800,000,000 | |
Estimate of Fair Value Measurement | Short Term And Long Term Investments | Equity investments in privately-held companies | Fair Value, Measurements, Nonrecurring | Level 3 | |||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||
Equity investments in privately-held companies measured on non-recurring basis | $ 17,000,000 | $ 9,000,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Derivative [Line Items] | ||||
Time period for hedging of foreign currency transactions | 24 months | |||
Gain or (Loss) | $ 3,000,000 | $ 21,000,000 | $ (53,000,000) | |
Amortization period for the loss on settlement of interest rate swap agreement | 12 months | |||
Loss recognized due to discontinuance of cash flow hedges that were not probable | $ 8,000,000 | |||
Interest Rate Contract | ||||
Derivative [Line Items] | ||||
Gain or (Loss) | (14,000,000) | |||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Contract | ||||
Derivative [Line Items] | ||||
Notional amount | $ 700,000,000 | |||
Gain or (Loss) | $ (14,000,000) | |||
Senior Notes | Ten Year Senior Notes Issued March 2017 | ||||
Derivative [Line Items] | ||||
Debt instrument term | 10 years |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Derivatives in Cash Flow Hedging Relationships) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | $ 3 | $ 21 | $ (53) |
Gain or (Loss) Reclassified from AOCI into Income | (2) | 11 | (48) |
Gain or (Loss) Recognized in Income | 12 | (5) | (9) |
Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 3 | 35 | (53) |
Gain or (Loss) Reclassified from AOCI into Income | 0 | 0 | 0 |
Gain or (Loss) Recognized in Income | 0 | 0 | 0 |
Foreign exchange contracts | Cost of products sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | 4 | 7 | (46) |
Gain or (Loss) Recognized in Income | 19 | (3) | 2 |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | (3) | 7 | 0 |
Gain or (Loss) Recognized in Income | (7) | (2) | (11) |
Interest Rate Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | (14) | ||
Gain or (Loss) Reclassified from AOCI into Income | 0 | ||
Gain or (Loss) Recognized in Income | 0 | ||
Interest Rate Contract | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) | 0 | 0 | 0 |
Gain or (Loss) Reclassified from AOCI into Income | (3) | (3) | (2) |
Gain or (Loss) Recognized in Income | $ 0 | $ 0 | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | $ (5) | $ 39 | $ (75) |
Foreign exchange contracts | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income | $ (5) | $ 39 | $ (75) |
Accounts Receivable, Net (Narra
Accounts Receivable, Net (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Receivables [Abstract] | ||||
Accounts receivable sold | $ 1,600,000,000 | $ 746,000,000 | $ 75,000,000 | |
Discount letters of credit issued during period | 37,000,000 | 0 | 0 | |
Discount applied to promissory notes | 0 | 0 | 0 | |
Allowance for doubtful accounts | $ 33,000,000 | $ 34,000,000 | $ 51,000,000 | $ 49,000,000 |
Accounts Receivable, Net (Net o
Accounts Receivable, Net (Net of Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Changes in allowance for doubtful accounts | |||
Beginning balance | $ 34 | $ 51 | $ 49 |
Provision | 0 | 0 | 3 |
Deductions | (1) | (17) | (1) |
Ending balance | $ 33 | $ 34 | $ 51 |
Balance Sheet Detail (Inventory
Balance Sheet Detail (Inventory) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 |
Inventories | |||
Customer service spares | $ 989 | $ 595 | |
Raw materials | 1,020 | 603 | |
Work-in-process | 505 | 468 | |
Finished goods | 1,208 | 1,264 | |
Total Inventories | 3,722 | 2,930 | $ 2,050 |
Inventory at customer locations included in finished goods | 19 | 331 | |
Evaluation inventory | $ 350 | $ 281 |
Balance Sheet Detail (Other Cur
Balance Sheet Detail (Other Current Assets) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Other Current Assets | ||
Prepaid income taxes and income taxes receivable | $ 40 | $ 57 |
Prepaid expenses and other | 390 | 317 |
Total other current assets | $ 430 | $ 374 |
Balance Sheet Detail (Property,
Balance Sheet Detail (Property, Plant and Equipment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 3,812 | $ 3,311 | |
Accumulated depreciation | (2,405) | (2,245) | |
Net property, plant and equipment | 1,407 | 1,066 | |
Depreciation | 258 | 214 | $ 200 |
Land and improvements | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | 245 | 160 | |
Building and improvements | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 1,448 | 1,315 | |
Building and improvements | Minimum | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Building and improvements | Maximum | |||
Property, Plant and Equipment, Net | |||
Useful life | 30 years | ||
Demonstration and manufacturing equipment | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 1,282 | 1,129 | |
Demonstration and manufacturing equipment | Minimum | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Demonstration and manufacturing equipment | Maximum | |||
Property, Plant and Equipment, Net | |||
Useful life | 5 years | ||
Furniture, fixtures and other equipment | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 634 | 572 | |
Furniture, fixtures and other equipment | Minimum | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Furniture, fixtures and other equipment | Maximum | |||
Property, Plant and Equipment, Net | |||
Useful life | 5 years | ||
Construction in progress | |||
Property, Plant and Equipment, Net | |||
Gross property, plant and equipment | $ 203 | $ 135 |
Balance Sheet Detail (Accounts
Balance Sheet Detail (Accounts Payable and Accrued Expenses) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 996 | $ 945 |
Compensation and employee benefits | 639 | 666 |
Warranty | 209 | 199 |
Dividends payable | 193 | 106 |
Income taxes payable | 136 | 112 |
Other accrued taxes | 112 | 70 |
Interest payable | 38 | 38 |
Other | 398 | 314 |
Accounts payable and accrued expenses | $ 2,721 | $ 2,450 |
Balance Sheet Detail (Customer
Balance Sheet Detail (Customer Deposits) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Customer Deposits and Deferred Revenue | ||
Customer deposits | $ 444 | $ 381 |
Deferred revenue | 903 | 1,284 |
Customer deposits and deferred revenue | $ 1,347 | $ 1,665 |
Balance Sheet Detail (Other Lia
Balance Sheet Detail (Other Liabilities) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Other Liabilities | ||
Defined and postretirement benefit plans | $ 177 | $ 160 |
Other | 126 | 99 |
Other liabilities | $ 303 | $ 259 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - 2017 Acquisitions $ in Millions | 12 Months Ended |
Oct. 29, 2017USD ($)acquisition | |
Business Acquisition [Line Items] | |
Number of acquisitions | acquisition | 3 |
Weighted average useful life (in years) | 3 years 6 months |
Transaction costs | $ | $ 0 |
Business Combinations (Purchase
Business Combinations (Purchase Price Allocation) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 3,368 | $ 3,368 |
2017 Acquisitions | ||
Business Acquisition [Line Items] | ||
Fair value of net assets acquired | 23 | |
Goodwill | 55 | |
Purchased technology | 31 | |
Purchase price allocated | $ 109 |
Goodwill, Purchased Technolog_3
Goodwill, Purchased Technology and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Goodwill [Line Items] | ||
Goodwill | $ 3,368 | $ 3,368 |
Semiconductor Systems | ||
Goodwill [Line Items] | ||
Goodwill | 2,151 | 2,151 |
Applied Global Services | ||
Goodwill [Line Items] | ||
Goodwill | 1,018 | 1,018 |
Display and Adjacent Markets | ||
Goodwill [Line Items] | ||
Goodwill | $ 199 | $ 199 |
Goodwill, Purchased Technolog_4
Goodwill, Purchased Technology and Other Intangible Assets (Purchased Technology and Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | $ 213 | $ 412 |
Purchased technology, net | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | 109 | 288 |
Intangible Assets | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Purchased technology and intangible assets | $ 104 | $ 124 |
Goodwill, Purchased Technolog_5
Goodwill, Purchased Technology and Other Intangible Assets (Narrative) (Details) | 12 Months Ended |
Oct. 28, 2018 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 1 year |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 15 years |
Goodwill, Purchased Technolog_6
Goodwill, Purchased Technology and Other Intangible Assets (Finite-lived Intangible Assets) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Amortized intangible assets | ||
Gross carrying amount | $ 1,988 | $ 1,988 |
Accumulated amortization | (1,775) | (1,576) |
Carrying amount | 213 | 412 |
Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,645 | 1,645 |
Accumulated amortization | (1,536) | (1,357) |
Carrying amount | 109 | 288 |
Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 343 | 343 |
Accumulated amortization | (239) | (219) |
Carrying amount | 104 | 124 |
Operating Segments | Semiconductor Systems | ||
Amortized intangible assets | ||
Gross carrying amount | 1,701 | 1,701 |
Accumulated amortization | (1,525) | (1,341) |
Operating Segments | Semiconductor Systems | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 1,449 | 1,449 |
Accumulated amortization | (1,375) | (1,210) |
Operating Segments | Semiconductor Systems | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 252 | 252 |
Accumulated amortization | (150) | (131) |
Operating Segments | Applied Global Services | ||
Amortized intangible assets | ||
Gross carrying amount | 77 | 77 |
Accumulated amortization | (73) | (72) |
Operating Segments | Applied Global Services | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 33 | 33 |
Accumulated amortization | (29) | (28) |
Operating Segments | Applied Global Services | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 44 | 44 |
Accumulated amortization | (44) | (44) |
Operating Segments | Display and Adjacent Markets | ||
Amortized intangible assets | ||
Gross carrying amount | 201 | 201 |
Accumulated amortization | (168) | (154) |
Operating Segments | Display and Adjacent Markets | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 163 | 163 |
Accumulated amortization | (132) | (119) |
Operating Segments | Display and Adjacent Markets | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 38 | 38 |
Accumulated amortization | (36) | (35) |
Corporate and Other | ||
Amortized intangible assets | ||
Gross carrying amount | 9 | 9 |
Accumulated amortization | (9) | (9) |
Corporate and Other | Purchased technology, net | ||
Amortized intangible assets | ||
Gross carrying amount | 0 | 0 |
Accumulated amortization | 0 | 0 |
Corporate and Other | Other Intangible Assets | ||
Amortized intangible assets | ||
Gross carrying amount | 9 | 9 |
Accumulated amortization | $ (9) | $ (9) |
Goodwill, Purchased Technolog_7
Goodwill, Purchased Technology and Other Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 199 | $ 193 | $ 189 |
Cost of products sold | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 180 | 173 | 167 |
Research, development, and engineering | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 1 | 1 | 2 |
Marketing and selling | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 18 | 19 | 20 |
Operating Segments | Semiconductor Systems | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 184 | 185 | 185 |
Operating Segments | Applied Global Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 1 | 1 | 1 |
Operating Segments | Display and Adjacent Markets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 14 | 7 | 0 |
Corporate and Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 0 | $ 0 | $ 3 |
Goodwill, Purchased Technolog_8
Goodwill, Purchased Technology and Other Intangible Assets (Future Estimated Amortization Expense) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Future estimated amortization expense | ||
2,019 | $ 57 | |
2,020 | 52 | |
2,021 | 39 | |
2,022 | 65 | |
Carrying amount | $ 213 | $ 412 |
Borrowing Facilities and Debt_2
Borrowing Facilities and Debt (Narrative) (Details) - USD ($) | 1 Months Ended | ||||
May 31, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Mar. 31, 2017 | Oct. 30, 2011 | |
Line of Credit Facility [Line Items] | |||||
Available revolving credit agreement | $ 1,600,000,000 | ||||
Amount outstanding | 0 | $ 0 | |||
Commercial paper program amount | $ 1,500,000,000 | ||||
Senior Notes | 3.300% Senior Notes Due 2027 and 4.350% Senior Notes due 2047 | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 2,200,000,000 | ||||
Senior Notes | 7.125% Senior Notes Due 2017 | |||||
Line of Credit Facility [Line Items] | |||||
Debt redeemed | $ 200,000,000 | ||||
Stated interest rate | 7.125% | ||||
Commercial paper, corporate bonds and medium-term notes | |||||
Line of Credit Facility [Line Items] | |||||
Commercial paper outstanding | 0 | $ 0 | |||
Revolving Credit | |||||
Line of Credit Facility [Line Items] | |||||
Available revolving credit agreement | 1,500,000,000 | ||||
Foreign Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Available revolving credit agreement | $ 71,000,000 |
Borrowing Facilities and Debt_3
Borrowing Facilities and Debt (Debt Outstanding) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 |
Schedule of debt | ||
Long-term debt principal amount | $ 5,400 | $ 5,400 |
Total long-term debt | 5,309 | 5,304 |
Senior Notes | ||
Schedule of debt | ||
Long-term debt principal amount | 5,350 | 5,350 |
Total unamortized discount | (11) | (12) |
Total unamortized debt issuance costs | $ (30) | (34) |
Senior Notes | 2.625% Senior Notes Due 2020 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 2.625% | |
Schedule of debt | ||
Long-term debt principal amount | $ 600 | 600 |
Effective Interest Rate | 2.64% | |
Senior Notes | 4.300% Senior Notes Due 2021 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.30% | |
Schedule of debt | ||
Long-term debt principal amount | $ 750 | 750 |
Effective Interest Rate | 4.326% | |
Senior Notes | 3.900% Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.90% | |
Schedule of debt | ||
Long-term debt principal amount | $ 700 | 700 |
Effective Interest Rate | 3.944% | |
Senior Notes | 3.300% Senior Notes Due 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.30% | |
Schedule of debt | ||
Long-term debt principal amount | $ 1,200 | 1,200 |
Effective Interest Rate | 3.342% | |
Senior Notes | 5.100% Senior Notes Due 2035 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.10% | |
Schedule of debt | ||
Long-term debt principal amount | $ 500 | 500 |
Effective Interest Rate | 5.127% | |
Senior Notes | 5.850% Senior Notes Due 2041 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.85% | |
Schedule of debt | ||
Long-term debt principal amount | $ 600 | 600 |
Effective Interest Rate | 5.879% | |
Senior Notes | 4.350% Senior Notes Due 2047 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.35% | |
Schedule of debt | ||
Long-term debt principal amount | $ 1,000 | $ 1,000 |
Effective Interest Rate | 4.361% |
Stockholders' Equity, Compreh_3
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 9,349 | $ 7,217 | $ 7,613 | |
Adoption of new accounting standard | [1] | 0 | ||
Other comprehensive income (loss) before reclassifications | (84) | 66 | (61) | |
Amounts reclassified out of AOCI | 20 | (15) | 38 | |
Other comprehensive income (loss), net of tax | (64) | 51 | (23) | |
Ending Balance | 6,839 | 9,349 | 7,217 | |
Unrealized Gain (Loss) on Investments, Net | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 53 | 30 | 14 | |
Adoption of new accounting standard | 5 | |||
Other comprehensive income (loss) before reclassifications | (66) | 24 | 14 | |
Amounts reclassified out of AOCI | 15 | (1) | 2 | |
Other comprehensive income (loss), net of tax | (51) | 23 | 16 | |
Ending Balance | 7 | 53 | 30 | |
Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (11) | (18) | (15) | |
Adoption of new accounting standard | (2) | |||
Other comprehensive income (loss) before reclassifications | 5 | 13 | (33) | |
Amounts reclassified out of AOCI | (1) | (6) | 30 | |
Other comprehensive income (loss), net of tax | 4 | 7 | (3) | |
Ending Balance | (9) | (11) | (18) | |
Defined and Postretirement Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (120) | (141) | (105) | |
Adoption of new accounting standard | 0 | |||
Other comprehensive income (loss) before reclassifications | (23) | 29 | (42) | |
Amounts reclassified out of AOCI | 6 | (8) | 6 | |
Other comprehensive income (loss), net of tax | (17) | 21 | (36) | |
Ending Balance | (137) | (120) | (141) | |
Cumulative Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | 14 | 14 | 14 | |
Adoption of new accounting standard | 0 | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |
Amounts reclassified out of AOCI | 0 | 0 | 0 | |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | |
Ending Balance | 14 | 14 | 14 | |
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning Balance | (64) | (115) | (92) | |
Adoption of new accounting standard | [1] | 3 | ||
Other comprehensive income (loss), net of tax | (64) | 51 | (23) | |
Ending Balance | $ (125) | $ (64) | $ (115) | |
[1] | Represents the reclassification adjustment related to the early adoption of Accounting Standards Update (ASU) 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. See Note 1. |
Stockholders' Equity, Compreh_4
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Narrative) (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Oct. 28, 2018USD ($)$ / sharesshares | Jul. 29, 2018$ / shares | Apr. 29, 2018$ / shares | Jan. 28, 2018$ / shares | Oct. 29, 2017$ / shares | Jul. 30, 2017$ / shares | Apr. 30, 2017$ / shares | Jan. 29, 2017$ / shares | Oct. 30, 2016$ / shares | Jul. 31, 2016$ / shares | May 01, 2016$ / shares | Jan. 31, 2016$ / shares | Oct. 28, 2018USD ($)employee_stock_purchase_planshares | Oct. 29, 2017USD ($)shares | Oct. 30, 2016USD ($)shares | Feb. 28, 2018USD ($) | Sep. 30, 2017USD ($) | |
Equity [Line Items] | |||||||||||||||||
Tax effects on net income of amounts reclassified from AOCI | $ | $ 22,000,000 | ||||||||||||||||
Stock Repurchase Program | |||||||||||||||||
Authorized amount | $ | $ 6,000,000,000 | $ 3,000,000,000 | |||||||||||||||
Remaining authorized repurchase amount | $ | $ 4,300,000,000 | $ 4,300,000,000 | |||||||||||||||
Dividends | |||||||||||||||||
Quarterly cash dividend declared (usd per share) | $ / shares | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | |||||
Payments of dividends | $ | $ 605,000,000 | $ 430,000,000 | $ 444,000,000 | ||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 2 | ||||||||||||||||
Employee Stock Purchase Plans | |||||||||||||||||
Purchase period | 6 months | ||||||||||||||||
Number of shares issued under the ESPP (in shares) | shares | 3,000,000 | 3,000,000 | 6,000,000 | ||||||||||||||
Employee Stock | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Total unrecognized compensation expense | $ | $ 368,000,000 | $ 368,000,000 | |||||||||||||||
Weighted average period for unrecognized compensation expense to be recognized | 2 years 4 months 25 days | ||||||||||||||||
Employee Stock | Employee Stock Purchase Plan | |||||||||||||||||
Employee Stock Purchase Plans | |||||||||||||||||
Purchase price of common stock, percent | 85.00% | ||||||||||||||||
Stock Options | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Stock options scheduled to expire | 7 years | ||||||||||||||||
Options granted (in shares) | shares | 0 | 0 | 0 | ||||||||||||||
Stock Options | Employee Stock Incentive Plan | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Number of shares available for grant | shares | 81,000,000 | 81,000,000 | |||||||||||||||
Stock Options | Employee Stock Purchase Plan | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Number of shares available for grant | shares | 17,000,000 | 17,000,000 | |||||||||||||||
Stock Options | Minimum | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Stock options scheduled to be vested | 3 years | ||||||||||||||||
Stock Options | Maximum | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Stock options scheduled to be vested | 4 years | ||||||||||||||||
Performance Shares/Performance Units | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Award measurement period | 3 years | ||||||||||||||||
Additional performance-based awards to be earned upon certain levels of achievement (in shares) | shares | 1,000,000 | 1,000,000 | |||||||||||||||
Performance Shares/Performance Units | Minimum | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Award vesting rights as percentage of target amount | 0.00% | ||||||||||||||||
Performance Shares/Performance Units | Maximum | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Award vesting rights as percentage of target amount | 200.00% | ||||||||||||||||
Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Stock options scheduled to be vested | 4 years | ||||||||||||||||
Officer | Performance Shares/Performance Units | |||||||||||||||||
Stock Options, Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units | |||||||||||||||||
Award measurement period | 2 years | ||||||||||||||||
United States | Employee Stock Purchase Plan | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 1 | ||||||||||||||||
International | Employee Stock Purchase Plan | |||||||||||||||||
Share-based Compensation | |||||||||||||||||
Number of employee stock purchase plans | employee_stock_purchase_plan | 1 |
Stockholders' Equity, Compreh_5
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Stock Repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Equity [Abstract] | |||
Shares of common stock repurchased (in shares) | 102 | 28 | 96 |
Cost of stock repurchased | $ 5,283 | $ 1,172 | $ 1,892 |
Average price paid per share (in dollars per share) | $ 51.55 | $ 42.08 | $ 19.82 |
Stockholders' Equity, Compreh_6
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Total share-based compensation and related tax benefits | |||
Share-based compensation | $ 258 | $ 220 | $ 201 |
Tax benefit recognized | $ 45 | $ 60 | $ 63 |
Stockholders' Equity, Compreh_7
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Effect of Share-based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 258 | $ 220 | $ 201 |
Cost of products sold | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 87 | 69 | 62 |
Research, development, and engineering | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 96 | 83 | 76 |
Marketing and selling | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | 31 | 28 | 26 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation | $ 44 | $ 40 | $ 37 |
Stockholders' Equity, Compreh_8
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units (Details) - Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 | |
Shares | ||||
Beginning Balance (shares) | 22 | 25 | 27 | |
Granted (shares) | 6 | 8 | 11 | |
Vested (shares) | (9) | (10) | (11) | |
Canceled (shares) | (1) | (1) | (2) | |
Ending Balance (shares) | 18 | 22 | 25 | 27 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in shares) | 16 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning of Period (in dollars per share) | $ 23.96 | $ 18.28 | $ 16.41 | |
Granted (in dollars per share) | 50.62 | 31.79 | 18.54 | |
Vested (in dollars per share) | 22.15 | 16.50 | 14.25 | |
Canceled (in dollars per share) | 30.19 | 21.25 | 17.57 | |
Ending Balance (in dollars per share) | 32.64 | $ 23.96 | $ 18.28 | $ 16.41 |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest (in dollars per share) | $ 31.11 | |||
Weighted Average Remaining Contractual Term | ||||
Weighted average remaining contractual term | 2 years 5 days | 2 years 2 months 18 days | 2 years 3 months 18 days | 2 years 2 months 18 days |
Non-vested restricted stock units, restricted stock, performance shares and performance units expected to vest, Weighted Average Remaining Contractual Term | 1 year 10 months 15 days | |||
Aggregate Intrinsic Value | ||||
Aggregate Intrinsic Value | $ 600 | $ 1,239 | $ 718 | $ 440 |
Expected to vest, Aggregate Intrinsic Value | $ 523 |
Stockholders' Equity, Compreh_9
Stockholders' Equity, Comprehensive Income and Share-Based Compensation (ESPP Fair Value Assumptions) (Details) - Employee Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Weighted Average Assumptions Used for ESPP Granted | |||
Dividend yield | 1.68% | 0.99% | 1.76% |
Expected volatility | 34.40% | 26.30% | 29.30% |
Risk-free interest rate | 2.09% | 0.92% | 0.47% |
Expected life (in years) | 6 months | 6 months | 6 months |
Weighted average estimated fair value (in dollars per share) | $ 12.02 | $ 9.14 | $ 5.48 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018USD ($)Plan | Oct. 29, 2017USD ($) | Oct. 30, 2016USD ($) | |
Employee Bonus Plans | |||
Charges to expense under Employee bonus plans | $ 382 | $ 449 | $ 312 |
Defined Benefit Pension Plans of Foreign Subsidiaries and Other Post-Retirement Benefits | |||
Company contributions expected for next fiscal year | $ 15 | ||
Executive Deferred Compensation Plans | |||
Number of unfunded plans | Plan | 2 | ||
Executive Deferred Compensation Plans | |||
Executive Deferred Compensation Plans | |||
Amounts payable under EDCP | $ 92 | 63 | |
Savings and Retirement Plan | |||
Employee Savings and Retirement Plan | |||
Employer matching contribution, percent of match | 100.00% | ||
Employer matching contribution, percent of employees' gross pay | 3.00% | ||
Employer matching contribution, percent of match, second tier | 50.00% | ||
Percentage vested in matching contribution account | 100.00% | ||
401(K) Matching contributions | $ 45 | $ 38 | $ 38 |
Savings and Retirement Plan | Minimum | |||
Employee Savings and Retirement Plan | |||
Employer matching contribution, percent of employees' gross pay, second tier | 4.00% | ||
Savings and Retirement Plan | Maximum | |||
Employee Savings and Retirement Plan | |||
Employer matching contribution, percent of employees' gross pay, second tier | 6.00% |
Employee Benefit Plans (Benefit
Employee Benefit Plans (Benefit Obligations and Plan Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Change in projected benefit obligation | |||
Beginning projected benefit obligation | $ 506 | $ 495 | $ 471 |
Service cost | 12 | 13 | 13 |
Interest cost | 11 | 10 | 13 |
Plan participants’ contributions | 1 | 2 | 1 |
Actuarial (gain) loss | 24 | (35) | 77 |
Curtailments, settlements and special termination benefits | (1) | (1) | (6) |
Foreign currency exchange rate changes | (16) | 34 | (42) |
Benefits paid | (12) | (12) | (10) |
Plan amendments and business combinations | (1) | 0 | (22) |
Ending projected benefit obligation | 524 | 506 | 495 |
Ending accumulated benefit obligation | 490 | 472 | 460 |
Change in plan assets | |||
Beginning fair value of plan assets | 361 | 310 | 281 |
Return on plan assets | 17 | 18 | 37 |
Employer contributions | 11 | 16 | 50 |
Plan participants’ contributions | 1 | 2 | 1 |
Foreign currency exchange rate changes | (12) | 28 | (45) |
Divestitures, settlements and business combinations | (1) | (1) | (4) |
Benefits paid | (12) | (12) | (10) |
Ending fair value of plan assets | 365 | 361 | 310 |
Funded status | (159) | (145) | (185) |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 19 | 17 | 11 |
Current liability | (1) | (1) | (2) |
Noncurrent liability | (177) | (161) | (194) |
Total | (159) | (145) | (185) |
Estimated amortization from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal period | |||
Actuarial loss | 8 | 6 | 6 |
Prior service credit | (1) | (4) | (16) |
Total | 7 | 2 | (10) |
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 161 | 141 | 186 |
Prior service credit | (2) | (4) | (21) |
Total | 159 | 137 | 165 |
Plans with projected benefit obligations in excess of plan assets | |||
Projected benefit obligation | 365 | 326 | 341 |
Fair value of plan assets | 186 | 142 | 145 |
Plans with accumulated benefit obligations in excess of plan assets | |||
Accumulated benefit obligation | 331 | 293 | 307 |
Fair value of plan assets | $ 186 | $ 142 | $ 145 |
Minimum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 0.60% | 0.50% | 0.50% |
Rate of compensation increase | 2.40% | 2.20% | 1.60% |
Maximum | |||
Range of assumptions to determine benefit obligations | |||
Discount rate | 3.10% | 3.40% | 3.10% |
Rate of compensation increase | 3.50% | 3.50% | 3.60% |
Employee Benefit Plans (Plan As
Employee Benefit Plans (Plan Assets Allocation) (Details) | Oct. 28, 2018 | Oct. 29, 2017 |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 47.00% | 47.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 32.00% | 39.00% |
Insurance contracts | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 10.00% | 11.00% |
Other investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 10.00% | 3.00% |
Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets — allocation | 1.00% | 0.00% |
Employee Benefit Plans (Fair Va
Employee Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | Oct. 25, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | $ 365 | $ 361 | $ 310 | $ 281 |
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 107 | 101 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 14 | 13 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 36 | 38 | $ 38 | |
Assets measured at net asset value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 208 | 209 | ||
Total assets at fair value | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 157 | 152 | ||
Equity securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 86 | 83 | ||
Equity securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 86 | 83 | ||
Equity securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Equity securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Debt securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 19 | 16 | ||
Debt securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 19 | 16 | ||
Debt securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Debt securities | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 36 | 38 | ||
Insurance contracts | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Insurance contracts | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 36 | 38 | ||
Other investments | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 14 | 13 | ||
Other investments | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Other investments | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 14 | 13 | ||
Other investments | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Cash | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 2 | ||
Cash | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 2 | 2 | ||
Cash | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | 0 | 0 | ||
Cash | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan of assets | $ 0 | $ 0 |
Employee Benefit Plans (Level 3
Employee Benefit Plans (Level 3 Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Change in plan assets | |||
Beginning fair value of plan assets | $ 361 | $ 310 | $ 281 |
Actual return on plan assets: | |||
Currency impact | (12) | 28 | (45) |
Ending fair value of plan assets | 365 | 361 | 310 |
Level 3 | |||
Change in plan assets | |||
Beginning fair value of plan assets | 38 | 38 | |
Actual return on plan assets: | |||
Relating to assets still held at reporting date | (1) | (3) | |
Purchases, sales, settlements, net | 0 | 1 | |
Currency impact | (1) | 2 | |
Ending fair value of plan assets | $ 36 | $ 38 | $ 38 |
Employee Benefit Plans (Net Per
Employee Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Components of net periodic benefit cost | |||
Service cost | $ 12 | $ 13 | $ 13 |
Interest cost | 11 | 10 | 13 |
Expected return on plan assets | (20) | (18) | (14) |
Amortization of actuarial loss and prior service credit | 3 | (10) | 3 |
Settlement and curtailment loss | 0 | 0 | (5) |
Net periodic benefit cost (income) | $ 6 | $ (5) | $ 10 |
Weighted average assumptions | |||
Discount rate | 2.16% | 1.88% | 2.82% |
Expected long-term return on assets | 5.41% | 5.38% | 5.38% |
Rate of compensation increase | 2.66% | 2.69% | 2.71% |
Employee Benefit Plans (Future
Employee Benefit Plans (Future Expected Benefit Payments) (Details) $ in Millions | Oct. 28, 2018USD ($) |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |
2,019 | $ 12 |
2,020 | 12 |
2,021 | 13 |
2,022 | 13 |
2,023 | 12 |
2024-2028 | 77 |
Total | $ 139 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Components of income from operations before income taxes | |||
U.S. | $ 439 | $ 514 | $ 199 |
Foreign | 4,255 | 3,217 | 1,814 |
Income before income taxes | 4,694 | 3,731 | 2,013 |
Current: | |||
U.S. | 1,035 | 67 | (36) |
Foreign | 126 | 233 | 351 |
State | 22 | 9 | (2) |
Total current provision for income taxes | 1,183 | 309 | 313 |
Deferred: | |||
U.S. | 151 | (11) | 55 |
Foreign | 57 | (7) | (89) |
State | (10) | 6 | 13 |
Total deferred provision (benefit) for income taxes | 198 | (12) | (21) |
Provision for income taxes | $ 1,381 | $ 297 | $ 292 |
Reconciliation between the statutory U.S.federal income tax rate to actual effective income tax rate | |||
Tax provision at U.S. statutory rate | 23.40% | 35.00% | 35.00% |
Changes in U.S. tax law | 23.70% | 0.00% | 0.00% |
Resolutions of prior years’ income tax filings | (0.70%) | (1.90%) | 3.90% |
Effect of foreign operations taxed at various rates | (15.60%) | (24.90%) | (24.10%) |
State income taxes, net of federal benefit | 0.20% | 0.30% | 0.60% |
Research and other tax credits | (0.70%) | (0.70%) | (1.30%) |
U.S. domestic production deduction | (0.10%) | (0.20%) | (0.20%) |
Share-based compensation | (0.70%) | 0.40% | 0.40% |
Other | (0.10%) | 0.00% | 0.20% |
Effective income tax rate | 29.40% | 8.00% | 14.50% |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 8 | $ 13 | |
Inventory reserves and basis difference | 117 | 156 | |
Installation and warranty reserves | 7 | 1 | |
Accrued liabilities | 20 | 31 | |
Deferred revenue | 9 | 15 | |
Tax credits | 236 | 317 | |
Deferred compensation | 79 | 81 | |
Share-based compensation | 37 | 53 | |
Other | 48 | 67 | |
Gross deferred tax assets | 561 | 734 | |
Valuation allowance | (230) | (227) | |
Total deferred tax assets | 331 | 507 | |
Deferred tax liabilities: | |||
Fixed assets | (48) | (36) | |
Intangible assets | (38) | (76) | |
Undistributed foreign earnings | (32) | (11) | |
Foreign exchange | (3) | (4) | |
Total gross deferred tax liabilities | (121) | (127) | |
Net deferred tax assets | 210 | 380 | |
Breakdown between current and non-current net deferred tax assets and liabilities | |||
Non-current deferred tax asset | 222 | 385 | |
Non-current deferred tax liability | (12) | (5) | |
Net deferred tax assets | 210 | 380 | |
Reconciliation of gross unrecognized tax benefits | |||
Beginning balance of gross unrecognized tax benefits | 391 | 320 | $ 177 |
Settlements with tax authorities | (152) | (42) | (25) |
Lapses of statutes of limitation | (37) | (15) | (2) |
Increases in tax positions for current year | 91 | 95 | 62 |
Increases in tax positions for prior years | 83 | 33 | 109 |
Decreases in tax positions for prior years | (2) | 0 | (1) |
Ending balance of gross unrecognized tax benefits | $ 374 | $ 391 | $ 320 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Income Tax Examination [Line Items] | |||
Tax provision at U.S. statutory rate | 23.40% | 35.00% | 35.00% |
Tax expense for transition tax and remeasurement of deferred tax assets | $ 1,100 | ||
Tax holiday benefit | $ 272 | ||
Tax holiday benefit per diluted share (in dollars per share) | $ 0.28 | ||
Income tax penalties and interest expense (benefit) | $ 12 | $ 17 | $ 24 |
Unrecognized tax benefits that would impact effective tax rate | 294 | 284 | 302 |
Noncurrent Liabilities | |||
Income Tax Examination [Line Items] | |||
Interest and penalties related to uncertain tax positions | 26 | 46 | 33 |
Research Tax Credit Carryforward | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 236 | ||
Research, carried over until exhausted | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | 227 | ||
Research, carried over the next fifteen years | State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Tax credit carryforwards | $ 9 | ||
Tax credit carryforward, term | 15 years | ||
SINGAPORE | |||
Income Tax Examination [Line Items] | |||
Foreign statutory income tax rate | 17.00% | ||
ISRAEL | Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax paid or accrued | $ 158 | ||
Income tax expense (benefit) from settlement with tax authorities | $ (6) | ||
ITALY | Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax paid or accrued | 29 | ||
Income tax expense (benefit) from settlement with tax authorities | $ 6 | ||
SWITZERLAND | Foreign Tax Authority | |||
Income Tax Examination [Line Items] | |||
Income tax paid or accrued | 25 | ||
Income tax expense (benefit) from settlement with tax authorities | $ 19 |
Income Taxes (Valuation Allowan
Income Taxes (Valuation Allowance) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Increases | $ 0 | $ 0 | $ 3 |
Decreases | (1) | (17) | (1) |
Valuation Allowance of Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | 227 | 207 | 207 |
Increases | 8 | 20 | 27 |
Decreases | (5) | 0 | (27) |
Ending balance | $ 230 | $ 227 | $ 207 |
Warranty, Guarantees, Commitm_3
Warranty, Guarantees, Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Total rent expense | $ 50 | $ 34 | $ 38 |
Products warranty period | 12 months | ||
Maximum potential amount of future payments for letters of credit or other guarantee instruments | $ 58 | ||
Parent guarantees to banks | $ 149 |
Warranty, Guarantees, Commitm_4
Warranty, Guarantees, Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Millions | Oct. 28, 2018USD ($) |
Future minimum lease payments | |
2,019 | $ 50 |
2,020 | 40 |
2,021 | 28 |
2,022 | 20 |
2,023 | 13 |
Thereafter | 22 |
Total | $ 173 |
Warranty, Guarantees, Commitm_5
Warranty, Guarantees, Commitments and Contingencies (Warranty Reserves) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Changes in the warranty reserves | |||
Beginning balance | $ 199 | $ 153 | $ 126 |
Provisions for warranty | 183 | 166 | 135 |
Changes in reserves related to preexisting warranty | 3 | 1 | (12) |
Consumption of reserves | (176) | (121) | (96) |
Ending balance | $ 209 | $ 199 | $ 153 |
Industry Segment Operations (Na
Industry Segment Operations (Narrative) (Details) | 12 Months Ended |
Oct. 28, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Industry Segment Operations (Re
Industry Segment Operations (Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Information for each reportable segment | |||||||||||
Net Sales | $ 4,014 | $ 4,468 | $ 4,567 | $ 4,204 | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 17,253 | $ 14,537 | $ 10,825 |
Operating Income (Loss) | 4,796 | 3,868 | 2,152 | ||||||||
Depreciation/ Amortization | 457 | 407 | 389 | ||||||||
Capital Expenditures | 622 | 345 | 253 | ||||||||
Accounts Receivable | 2,565 | 2,338 | 2,565 | 2,338 | 2,279 | ||||||
Inventories | 3,722 | 2,930 | 3,722 | 2,930 | 2,050 | ||||||
Operating Segments | Semiconductor Systems | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 10,903 | 9,517 | 6,873 | ||||||||
Operating Income (Loss) | 3,634 | 3,173 | 1,807 | ||||||||
Depreciation/ Amortization | 303 | 286 | 277 | ||||||||
Capital Expenditures | 168 | 150 | 114 | ||||||||
Accounts Receivable | 1,755 | 1,626 | 1,755 | 1,626 | 1,524 | ||||||
Inventories | 2,213 | 1,760 | 2,213 | 1,760 | 1,188 | ||||||
Operating Segments | Applied Global Services | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 3,754 | 3,017 | 2,589 | ||||||||
Operating Income (Loss) | 1,102 | 817 | 682 | ||||||||
Depreciation/ Amortization | 21 | 15 | 12 | ||||||||
Capital Expenditures | 33 | 21 | 14 | ||||||||
Accounts Receivable | 610 | 564 | 610 | 564 | 559 | ||||||
Inventories | 1,243 | 762 | 1,243 | 762 | 594 | ||||||
Operating Segments | Display and Adjacent Markets | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 2,498 | 1,900 | 1,206 | ||||||||
Operating Income (Loss) | 679 | 502 | 245 | ||||||||
Depreciation/ Amortization | 20 | 12 | 5 | ||||||||
Capital Expenditures | 39 | 17 | 6 | ||||||||
Accounts Receivable | 248 | 190 | 248 | 190 | 238 | ||||||
Inventories | 249 | 367 | 249 | 367 | 215 | ||||||
Corporate and Other | |||||||||||
Information for each reportable segment | |||||||||||
Net Sales | 98 | 103 | 157 | ||||||||
Operating Income (Loss) | (619) | (624) | (582) | ||||||||
Depreciation/ Amortization | 113 | 94 | 95 | ||||||||
Capital Expenditures | 382 | 157 | 119 | ||||||||
Accounts Receivable | (48) | (42) | (48) | (42) | (42) | ||||||
Inventories | $ 17 | $ 41 | $ 17 | $ 41 | $ 53 |
Industry Segment Operations (Se
Industry Segment Operations (Segment Reconciling Items) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Unallocated net sales | $ 4,014 | $ 4,468 | $ 4,567 | $ 4,204 | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 17,253 | $ 14,537 | $ 10,825 |
Share-based compensation | (258) | (220) | (201) | ||||||||
Unallocated Total | 4,796 | 3,868 | 2,152 | ||||||||
Corporate and Other | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Unallocated net sales | 98 | 103 | 157 | ||||||||
Unallocated cost of products sold and expenses | (459) | (507) | (538) | ||||||||
Share-based compensation | (258) | (220) | (201) | ||||||||
Unallocated Total | $ (619) | $ (624) | $ (582) |
Industry Segment Operations (Ne
Industry Segment Operations (Net Sales and Long-lived Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | $ 4,014 | $ 4,468 | $ 4,567 | $ 4,204 | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 17,253 | $ 14,537 | $ 10,825 |
Long-lived assets | 1,561 | 1,186 | 1,561 | 1,186 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,532 | 1,474 | 1,143 | ||||||||
Long-lived assets | 1,414 | 915 | 1,414 | 915 | |||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 5,113 | 2,746 | 2,259 | ||||||||
Long-lived assets | 13 | 47 | 13 | 47 | |||||||
Korea | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 3,603 | 4,052 | 1,883 | ||||||||
Long-lived assets | 21 | 21 | 21 | 21 | |||||||
Taiwan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 2,732 | 3,291 | 2,843 | ||||||||
Long-lived assets | 29 | 50 | 29 | 50 | |||||||
Japan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 2,405 | 1,518 | 1,279 | ||||||||
Long-lived assets | 9 | 8 | 9 | 8 | |||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 1,066 | 816 | 615 | ||||||||
Long-lived assets | 50 | 47 | 50 | 47 | |||||||
Southeast Asia | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 802 | 640 | 803 | ||||||||
Long-lived assets | 25 | 98 | 25 | 98 | |||||||
Total outside United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 15,721 | 13,063 | $ 9,682 | ||||||||
Long-lived assets | $ 147 | $ 271 | $ 147 | $ 271 |
Industry Segment Operations (Pe
Industry Segment Operations (Percentage by Customer) (Details) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Samsung Electronics Co., Ltd. | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 13.00% | 23.00% | 13.00% |
Taiwan Semiconductor Manufacturing Company Limited | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | 15.00% | 16.00% |
Intel Corporation | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | 11.00% | |
Micron Technology, Inc. | |||
Entity-Wide Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% |
Unaudited Quarterly Consolida_3
Unaudited Quarterly Consolidated Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 28, 2018 | Jul. 29, 2018 | Apr. 29, 2018 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 28, 2018 | Oct. 29, 2017 | Oct. 30, 2016 | |
Unaudited Quarterly Consolidated Financial Data | |||||||||||
Net Sales | $ 4,014 | $ 4,468 | $ 4,567 | $ 4,204 | $ 3,969 | $ 3,744 | $ 3,546 | $ 3,278 | $ 17,253 | $ 14,537 | $ 10,825 |
Gross profit | 1,780 | 2,027 | 2,090 | 1,920 | 1,787 | 1,700 | 1,600 | 1,445 | 7,817 | 6,532 | 4,511 |
Net income | $ 876 | $ 1,173 | $ 1,129 | $ 135 | $ 982 | $ 925 | $ 824 | $ 703 | $ 3,313 | $ 3,434 | $ 1,721 |
Diluted earnings per share (in dollars per share) | $ 0.89 | $ 1.17 | $ 1.09 | $ 0.13 | $ 0.91 | $ 0.85 | $ 0.76 | $ 0.65 | $ 3.23 | $ 3.17 | $ 1.54 |