Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables)

9 Months Ended

Jul. 30, 2017

Components of accumulated other comprehensive loss, after-tax basis

Changes in the components of AOCI, net of tax, were as follows:



	Unrealized Gain on Investments, Net		Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges			Defined and Postretirement Benefit Plans			Cumulative Translation Adjustments		Total

	(in millions)
Balance at October 30, 2016	$	30	$	(18	)	$	(141	)	$	14	$	(115	)
Other comprehensive income (loss) before reclassifications	23		6			—			—		29
Amounts reclassified out of AOCI	2		(5		)	(12		)	—		(15		)
Other comprehensive income (loss), net of tax	25		1			(12		)	—		14
Balance at July 30, 2017	$	55	$	(17	)	$	(153	)	$	14	$	(101	)



	Unrealized Gain 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	21		(31		)	—			—		(10		)
Amounts reclassified out of AOCI	—		15			—			—		15
Other comprehensive income (loss), net of tax	21		(16		)	—			—		5
Balance at July 31, 2016	$	35	$	(31	)	$	(105	)	$	14	$	(87	)

Summary of stock repurchases

The following table summarizes Applied’s stock repurchases for the three and nine months ended July 30, 2017 and July 31, 2016:



	Three Months Ended				Nine Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016

	(in millions, except per share amount)
Shares of common stock repurchased	9		9		20		90
Cost of stock repurchased	$	375	$	196	$	787	$	1,721
Average price paid per share	$	44.34	$	21.88	$	39.48	$	19.22

Effect of share-based compensation on the results of operations

The effect of share-based compensation on the results of operations was as follows:



	Three Months Ended				Nine Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016

	(In millions)
Cost of products sold	$	18	$	14	$	51	$	46
Research, development, and engineering	20		18		61		56
Marketing and selling	7		7		21		20
General and administrative	10		9		29		28
Total share-based compensation	$	55	$	48	$	162	$	150

Restricted stock units and restricted stock activity

A summary of the changes in restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during the nine months ended July 30, 2017 is presented below:



	Shares		Weighted Average Grant Date Fair Value

	(In millions, except per share amounts)
Outstanding at October 30, 2016	25		$	18.28
Granted	8		$	31.28
Vested	(10	)	$	16.39
Canceled	(1	)	$	20.63
Outstanding at July 30, 2017	22		$	23.59

Employee stock purchase plan valuation assumptions

Underlying assumptions used in the model are outlined in the following table:




	Nine Months Ended
	July 30, 2017	July 31, 2016
ESPP:
Dividend yield	1.09%	2.07%
Expected volatility	24.9%	29.8%
Risk-free interest rate	0.78%	0.49%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$8.08	$4.47