(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
Item 1: | ||||||||
Item 2: | ||||||||
Item 3: | ||||||||
Item 4: | ||||||||
PART II. OTHER INFORMATION | ||||||||
Item 1: | ||||||||
Item 1A: | ||||||||
Item 2: | ||||||||
Item 3: | ||||||||
Item 4: | ||||||||
Item 5: | ||||||||
Item 6: | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | |||||||||||||||||||||||
Marketing and selling | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Severance and related charges | |||||||||||||||||||||||
Deal termination fee | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Interest and other income, net | ( | ||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Change in unrealized gain (loss) on available-for-sale investments | ( | ( | |||||||||||||||||||||
Change in unrealized net loss on derivative instruments | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Long-term investments | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Purchased technology and other intangible assets, net | |||||||||||
Deferred income taxes and other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Contract liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Income taxes payable | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Three Months Ended August 1, 2021 | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of May 2, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance under stock plans | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Common stock repurchases | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
Balance as of August 1, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended August 1, 2021 | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 25, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance under stock plans | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
Balance as of August 1, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Three Months Ended July 26, 2020 | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of April 26, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance under stock plans | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Common stock repurchases | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
Balance as of July 26, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended July 26, 2020 | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 27, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance under stock plans | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Common stock repurchases | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
Balance as of July 26, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended | |||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||
(Unaudited) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments required to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Severance and related charges | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Other current and non-current assets | ( | ( | |||||||||
Accounts payable and accrued expenses | |||||||||||
Contract liabilities | |||||||||||
Income taxes payable | ( | ( | |||||||||
Other liabilities | |||||||||||
Cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
Proceeds from sales and maturities of investments | |||||||||||
Purchases of investments | ( | ( | |||||||||
Cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Debt borrowings, net of issuance costs | |||||||||||
Debt repayments | ( | ||||||||||
Proceeds from common stock issuances | |||||||||||
Common stock repurchases | ( | ( | |||||||||
Tax withholding payments for vested equity awards | ( | ( | |||||||||
Payments of dividends to stockholders | ( | ( | |||||||||
Cash used in financing activities | ( | ( | |||||||||
Increase in cash, cash equivalents and restricted cash equivalents | |||||||||||
Cash, cash equivalents and restricted cash equivalents — beginning of period | |||||||||||
Cash, cash equivalents and restricted cash equivalents — end of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted cash equivalents | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash equivalents included in deferred income taxes and other assets | |||||||||||
Total cash, cash equivalents, and restricted cash equivalents | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Cash payments for income taxes | $ | $ | |||||||||
Cash refunds from income taxes | $ | $ | |||||||||
Cash payments for interest | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Effect of weighted dilutive restricted stock units and employee stock purchase plan shares | |||||||||||||||||||||||
Denominator for diluted earnings per share | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Potentially weighted dilutive securities |
August 1, 2021 | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
U.S. Treasury and agency securities | — | — | |||||||||||||||||||||
Municipal securities | — | — | |||||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | — | — | |||||||||||||||||||||
Total Cash equivalents | — | — | |||||||||||||||||||||
Total Cash and Cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
Short-term and long-term investments: | |||||||||||||||||||||||
U.S. Treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Non-U.S. government securities* | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | |||||||||||||||||||||||
Asset-backed and mortgage-backed securities | |||||||||||||||||||||||
Total fixed income securities | |||||||||||||||||||||||
Publicly traded equity securities | |||||||||||||||||||||||
Equity investments in privately-held companies | |||||||||||||||||||||||
Total equity investments | |||||||||||||||||||||||
Total short-term and long-term investments | $ | $ | $ | $ | |||||||||||||||||||
Total Cash, Cash equivalents and Investments | $ | $ | $ | $ |
October 25, 2020 | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
Municipal securities | — | — | |||||||||||||||||||||
Total Cash equivalents | — | — | |||||||||||||||||||||
Total Cash and Cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
Short-term and long-term investments: | |||||||||||||||||||||||
U.S. Treasury and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | |||||||||||||||||||||||
Asset-backed and mortgage-backed securities | |||||||||||||||||||||||
Total fixed income securities | |||||||||||||||||||||||
Publicly traded equity securities | |||||||||||||||||||||||
Equity investments in privately-held companies | |||||||||||||||||||||||
Total equity investments | |||||||||||||||||||||||
Total short-term and long-term investments | $ | $ | $ | $ | |||||||||||||||||||
Total Cash, Cash equivalents and Investments | $ | $ | $ | $ |
Cost | Estimated Fair Value | ||||||||||
(In millions) | |||||||||||
Due in one year or less | $ | $ | |||||||||
Due after one through five years | |||||||||||
No single maturity date** | |||||||||||
Total | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Publicly traded equity securities | |||||||||||||||||||||||
Unrealized gain | $ | $ | $ | $ | |||||||||||||||||||
Unrealized loss | ( | ( | ( | ||||||||||||||||||||
Realized gain on sales | |||||||||||||||||||||||
Equity investments in privately-held companies | |||||||||||||||||||||||
Unrealized gain | |||||||||||||||||||||||
Unrealized loss | ( | ( | ( | ( | |||||||||||||||||||
Realized gain on sales | |||||||||||||||||||||||
Realized loss on sales or impairment | ( | ( | |||||||||||||||||||||
Total gain (loss) on equity investments, net | $ | $ | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Available-for-sale debt security investments | |||||||||||||||||||||||||||||||||||
Money market funds* | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
U.S. Treasury and agency securities | |||||||||||||||||||||||||||||||||||
Non-U.S. government securities | |||||||||||||||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||||||||||||
Commercial paper, corporate bonds and medium-term notes | |||||||||||||||||||||||||||||||||||
Asset-backed and mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Total available-for-sale debt security investments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Equity investments with readily determinable values | |||||||||||||||||||||||||||||||||||
Publicly traded equity securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total equity investments with readily determinable values | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships: | |||||||||||||||||||||||
Foreign exchange contracts | $ | $ | $ | $ | |||||||||||||||||||
Interest rate contracts | ( | ||||||||||||||||||||||
Total | $ | $ | $ | $ | ( |
Three Months Ended | |||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||||||||||
Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded | Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded | Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Foreign Exchange Contracts: | |||||||||||||||||||||||||||||||||||
Net Sales | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Cost of products sold | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
Research, development and engineering | $ | $ | |||||||||||||||||||||||||||||||||
General and administrative | $ | $ | |||||||||||||||||||||||||||||||||
Interest Rate Contracts: | |||||||||||||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ |
Nine Months Ended | |||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||||||||||||||||||||
Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded | Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | Total Amount Presented in the Consolidated Condensed Statement of Operations in which the Effects of Cash Flow Hedges are Recorded | Amount of Gain or (Loss) Reclassified from AOCI into Consolidated Condensed Statement of Operations | Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Consolidated Condensed Statement of Operations | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Foreign Exchange Contracts: | |||||||||||||||||||||||||||||||||||
Net Sales | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Cost of products sold | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
Research, development and engineering | $ | $ | |||||||||||||||||||||||||||||||||
General and administrative | $ | $ | |||||||||||||||||||||||||||||||||
Interest Rate Contracts: | |||||||||||||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
$ | ( | $ | ( | $ | $ |
Amount of Gain or (Loss) Recognized in Consolidated Condensed Statement of Operations | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
Location of Gain or (Loss) Recognized in Consolidated Condensed Statement of Operations | August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||||||||||||||||
Foreign exchange contracts | Interest and other income, net | $ | $ | $ | $ | ||||||||||||||||||||||||
Total return swaps - deferred compensation | Cost of products sold | ||||||||||||||||||||||||||||
Total return swaps - deferred compensation | Operating expenses | ||||||||||||||||||||||||||||
Total return swaps - deferred compensation | Interest and other income, net | ( | ( | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Contract assets | $ | $ | |||||||||
Contract liabilities | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Inventories | |||||||||||
Customer service spares | $ | $ | |||||||||
Raw materials | |||||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
$ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Other Current Assets | |||||||||||
Prepaid income taxes and income taxes receivable | $ | $ | |||||||||
Prepaid expenses and other | |||||||||||
$ | $ |
Useful Life | August 1, 2021 | October 25, 2020 | |||||||||||||||
(In years) | (In millions) | ||||||||||||||||
Property, Plant and Equipment, Net | |||||||||||||||||
Land and improvements | $ | $ | |||||||||||||||
Buildings and improvements | |||||||||||||||||
Demonstration and manufacturing equipment | |||||||||||||||||
Furniture, fixtures and other equipment | |||||||||||||||||
Construction in progress | |||||||||||||||||
Gross property, plant and equipment | |||||||||||||||||
Accumulated depreciation | ( | ( | |||||||||||||||
$ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Deferred Income Taxes and Other Assets | |||||||||||
Non-current deferred income taxes | $ | $ | |||||||||
Operating lease right-of-use assets | |||||||||||
Income tax receivables and other assets | |||||||||||
$ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Accounts Payable and Accrued Expenses | |||||||||||
Accounts payable | $ | $ | |||||||||
Compensation and employee benefits | |||||||||||
Warranty | |||||||||||
Dividends payable | |||||||||||
Income taxes payable | |||||||||||
Other accrued taxes | |||||||||||
Interest payable | |||||||||||
Operating lease liabilities, current | |||||||||||
Other | |||||||||||
$ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Other Liabilities | |||||||||||
Defined and postretirement benefit plans | $ | $ | |||||||||
Operating lease liabilities, non-current | |||||||||||
Other | |||||||||||
$ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Semiconductor Systems | $ | $ | |||||||||
Applied Global Services | |||||||||||
Display and Adjacent Markets | |||||||||||
Corporate and Other | |||||||||||
Carrying amount | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Purchased technology, net | $ | $ | |||||||||
Intangible assets - finite-lived, net | |||||||||||
Total | $ | $ |
August 1, 2021 | October 25, 2020 | ||||||||||||||||||||||||||||||||||
Purchased Technology | Other Intangible Assets | Total | Purchased Technology | Other Intangible Assets | Total | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Gross carrying amount: | |||||||||||||||||||||||||||||||||||
Semiconductor Systems | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Applied Global Services | |||||||||||||||||||||||||||||||||||
Display and Adjacent Markets | |||||||||||||||||||||||||||||||||||
Corporate and Other | |||||||||||||||||||||||||||||||||||
Gross carrying amount | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Accumulated amortization: | |||||||||||||||||||||||||||||||||||
Semiconductor Systems | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Applied Global Services | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Display and Adjacent Markets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Corporate and Other | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Accumulated amortization | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Carrying amount | $ | $ | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Semiconductor Systems | $ | $ | $ | $ | |||||||||||||||||||
Applied Global Services | |||||||||||||||||||||||
Display and Adjacent Markets | |||||||||||||||||||||||
Corporate & Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Cost of products sold | $ | $ | $ | $ | |||||||||||||||||||
Research, development and engineering | |||||||||||||||||||||||
Marketing and selling | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Amortization Expense | |||||
(In millions) | |||||
2021 (remaining 3 months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
Principal Amount | |||||||||||||||||||||||
August 1, 2021 | October 25, 2020 | Effective Interest Rate | Interest Pay Dates | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
$ | $ | April 1, October 1 | |||||||||||||||||||||
April 1, October 1 | |||||||||||||||||||||||
June 1, December 1 | |||||||||||||||||||||||
April 1, October 1 | |||||||||||||||||||||||
June 15, December 15 | |||||||||||||||||||||||
April 1, October 1 | |||||||||||||||||||||||
June 1, December 1 | |||||||||||||||||||||||
Total unamortized discount | ( | ( | |||||||||||||||||||||
Total unamortized debt issuance costs | ( | ( | |||||||||||||||||||||
Total long-term debt | $ | $ | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average remaining lease term (in years) | |||||||||||||||||||||||
Weighted-average discount rate |
Nine Months Ended | |||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||
(In millions) | |||||||||||
Operating cash flows paid for operating leases | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ |
Operating Leases | |||||
Fiscal | (In millions) | ||||
2021 (remaining 3 months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less imputed interest | ( | ||||
Total | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Display and Adjacent Markets | $ | $ | $ | $ | |||||||||||||||||||
Corporate and Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Severance and Related Charges Reserves | |||||
(In millions) | |||||
Balance as of October 25, 2020 | $ | ||||
Provision for severance | |||||
Consumption of reserves | ( | ||||
Balance as of January 31, 2021 | |||||
Provision for severance | |||||
Consumption of reserves | ( | ||||
Balance as of May 2, 2021 | |||||
Consumption of reserves | ( | ||||
Balance as of August 1, 2021 | $ |
Unrealized Gain (Loss) on Investments, Net | Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | Defined and Postretirement Benefit Plans | Cumulative Translation Adjustments | Total | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Balance as of October 25, 2020 | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||||||||
Amounts reclassified out of AOCI | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ||||||||||||||||||||||||||||
Balance as of August 1, 2021 | $ | $ | ( | $ | ( | $ | $ | ( |
Unrealized Gain (Loss) on Investments, Net | Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges | Defined and Postretirement Benefit Plans | Cumulative Translation Adjustments | Total | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Balance as of October 27, 2019 | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||||||||
Amounts reclassified out of AOCI | ( | ( | ( | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||||||||
Balance as of July 26, 2020 | $ | $ | ( | $ | ( | $ | $ | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(in millions, except per share amount) | |||||||||||||||||||||||
Shares of common stock repurchased | |||||||||||||||||||||||
Cost of stock repurchased | $ | $ | $ | $ | |||||||||||||||||||
Average price paid per share | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Cost of products sold | $ | $ | $ | $ | |||||||||||||||||||
Research, development and engineering | |||||||||||||||||||||||
Marketing and selling | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total share-based compensation | $ | $ | $ | $ |
Shares | Weighted Average Grant Date Fair Value | ||||||||||
(In millions, except per share amounts) | |||||||||||
Outstanding as of October 25, 2020 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Canceled | ( | $ | |||||||||
Outstanding as of August 1, 2021 | $ |
Nine Months Ended | |||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||
Dividend yield | |||||||||||
Expected volatility | |||||||||||
Risk-free interest rate | |||||||||||
Expected life (in years) | |||||||||||
Weighted average estimated fair value | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Warranties issued | |||||||||||||||||||||||
Change in reserves related to preexisting warranty | |||||||||||||||||||||||
Consumption of reserves | ( | ( | ( | ( | |||||||||||||||||||
Ending balance | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Net Sales | Operating Income (Loss) | Net Sales | Operating Income (Loss) | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
August 1, 2021: | |||||||||||||||||||||||
Semiconductor Systems | $ | $ | $ | $ | |||||||||||||||||||
Applied Global Services | |||||||||||||||||||||||
Display and Adjacent Markets | |||||||||||||||||||||||
Corporate and Other | ( | ( | |||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
July 26, 2020: | |||||||||||||||||||||||
Semiconductor Systems | $ | $ | $ | $ | |||||||||||||||||||
Applied Global Services | |||||||||||||||||||||||
Display and Adjacent Markets | |||||||||||||||||||||||
Corporate and Other | ( | ( | |||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
China | $ | % | $ | % | % | $ | % | $ | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Korea | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Taiwan | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Japan | % | % | ( | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Southeast Asia | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
United States | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | % | $ | % | % | $ | % | $ | % | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
Foundry, logic and other | % | % | % | % | |||||||||||||||||||
Dynamic random-access memory (DRAM) | % | % | % | % | |||||||||||||||||||
Flash memory | % | % | % | % | |||||||||||||||||||
% | % | % | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Unallocated net sales | $ | $ | $ | $ | |||||||||||||||||||
Unallocated cost of products sold and expenses | ( | ( | ( | ( | |||||||||||||||||||
Share-based compensation | ( | ( | ( | ( | |||||||||||||||||||
Severance and related charges | ( | ||||||||||||||||||||||
Deal termination fee | ( | ||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
Percentage of Net Sales | |||||
Taiwan Semiconductor Manufacturing Company Limited | % | ||||
Samsung Electronics Co., Ltd. | % | ||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions, except per share amounts and percentages) | |||||||||||||||||||||||||||||||||||
Net sales | $ | 6,196 | $ | 4,395 | $ | 1,801 | $ | 16,940 | $ | 12,514 | $ | 4,426 | |||||||||||||||||||||||
Gross margin | 47.9 | % | 44.5 | % | 3.4 points | 47.0 | % | 44.4 | % | 2.6 points | |||||||||||||||||||||||||
Operating income | $ | 2,013 | $ | 1,108 | $ | 905 | $ | 4,875 | $ | 3,082 | $ | 1,793 | |||||||||||||||||||||||
Operating margin | 32.5 | % | 25.2 | % | 7.3 points | 28.8 | % | 24.6 | % | 4.2 points | |||||||||||||||||||||||||
Net income | $ | 1,716 | $ | 841 | $ | 875 | $ | 4,176 | $ | 2,488 | $ | 1,688 | |||||||||||||||||||||||
Earnings per diluted share | $ | 1.87 | $ | 0.91 | $ | 0.96 | $ | 4.52 | $ | 2.69 | $ | 1.83 | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Semiconductor Systems | $ | 4,454 | 72 | % | $ | 2,916 | 66 | % | 53 | % | $ | 11,979 | 71 | % | $ | 8,297 | 66 | % | 44 | % | |||||||||||||||||||||||||||||||||||||||
Applied Global Services | 1,286 | 21 | % | 1,034 | 24 | % | 24 | % | 3,644 | 21 | % | 3,049 | 24 | % | 20 | % | |||||||||||||||||||||||||||||||||||||||||||
Display and Adjacent Markets | 431 | 7 | % | 425 | 10 | % | 1 | % | 1,217 | 7 | % | 1,122 | 9 | % | 8 | % | |||||||||||||||||||||||||||||||||||||||||||
Corporate and Other | 25 | — | % | 20 | — | % | 25 | % | 100 | 1 | % | 46 | 1 | % | 117 | % | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,196 | 100 | % | $ | 4,395 | 100 | % | 41 | % | $ | 16,940 | 100 | % | $ | 12,514 | 100 | % | 35 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
China | $ | 2,251 | 36 | % | $ | 1,470 | 33 | % | 53 | % | $ | 5,478 | 32 | % | $ | 3,880 | 31 | % | 41 | % | |||||||||||||||||||||||||||||||||||||||
Korea | 1,291 | 21 | % | 1,051 | 24 | % | 23 | % | 4,008 | 23 | % | 2,312 | 18 | % | 73 | % | |||||||||||||||||||||||||||||||||||||||||||
Taiwan | 1,261 | 20 | % | 687 | 16 | % | 84 | % | 3,502 | 21 | % | 3,081 | 25 | % | 14 | % | |||||||||||||||||||||||||||||||||||||||||||
Japan | 449 | 7 | % | 472 | 11 | % | (5) | % | 1,349 | 8 | % | 1,290 | 10 | % | 5 | % | |||||||||||||||||||||||||||||||||||||||||||
Southeast Asia | 173 | 3 | % | 120 | 2 | % | 44 | % | 472 | 3 | % | 250 | 2 | % | 89 | % | |||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | 5,425 | 87 | % | 3,800 | 86 | % | 43 | % | 14,809 | 87 | % | 10,813 | 86 | % | 37 | % | |||||||||||||||||||||||||||||||||||||||||||
United States | 533 | 9 | % | 399 | 9 | % | 34 | % | 1,365 | 8 | % | 1,171 | 10 | % | 17 | % | |||||||||||||||||||||||||||||||||||||||||||
Europe | 238 | 4 | % | 196 | 5 | % | 21 | % | 766 | 5 | % | 530 | 4 | % | 45 | % | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,196 | 100 | % | $ | 4,395 | 100 | % | 41 | % | $ | 16,940 | 100 | % | $ | 12,514 | 100 | % | 35 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
Gross margin | 47.9 | % | 44.5 | % | 3.4 points | 47.0 | % | 44.4 | % | 2.6 points | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Research, development and engineering | $ | 640 | $ | 572 | $ | 68 | $ | 1,863 | $ | 1,674 | $ | 189 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Marketing and selling | $ | 159 | $ | 130 | $ | 29 | $ | 454 | $ | 395 | $ | 59 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
General and administrative | $ | 155 | $ | 145 | $ | 10 | $ | 465 | $ | 411 | $ | 54 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Severance and related charges | $ | — | $ | — | $ | — | $ | 158 | $ | — | $ | 158 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Deal termination fee | $ | — | $ | — | $ | — | $ | 154 | $ | — | $ | 154 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Interest expense | $ | 57 | $ | 61 | $ | (4) | $ | 179 | $ | 181 | $ | (2) | |||||||||||||||||||||||
Interest and other income (loss), net | $ | 24 | $ | (7) | $ | 31 | $ | 69 | $ | 22 | $ | 47 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||
Provision for income taxes | $ | 264 | $ | 199 | $ | 65 | $ | 589 | $ | 435 | $ | 154 | |||||||||||||||||||||||
Effective tax rate | 13.3 | % | 19.1 | % | (5.8) points | 12.4 | % | 14.9 | % | (2.5) points |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages and ratios) | |||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 4,454 | $ | 2,916 | $ | 1,538 | 53 | % | $ | 11,979 | $ | 8,297 | $ | 3,682 | 44 | % | |||||||||||||||||||||||||||||||
Operating income | $ | 1,785 | $ | 958 | $ | 827 | 86 | % | $ | 4,588 | $ | 2,655 | $ | 1,933 | 73 | % | |||||||||||||||||||||||||||||||
Operating margin | 40.1 | % | 32.9 | % | 7.2 points | 38.3 | % | 32.0 | % | 6.3 points | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||
Foundry, logic and other | 63 | % | 55 | % | 59 | % | 60 | % | |||||||||||||||
Dynamic random-access memory (DRAM) | 20 | % | 22 | % | 17 | % | 19 | % | |||||||||||||||
Flash memory | 17 | % | 23 | % | 24 | % | 21 | % | |||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Korea | $ | 1,094 | 25% | $ | 934 | 32% | 17 | % | $ | 3,457 | 29% | $ | 1,922 | 23% | 80 | % | |||||||||||||||||||||||||||||||||||||||||||
China | $ | 1,542 | 35% | $ | 794 | 27% | 94 | % | $ | 3,467 | 29% | $ | 2,097 | 25% | 65 | % | |||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages and ratios) | |||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,286 | $ | 1,034 | $ | 252 | 24 | % | $ | 3,644 | $ | 3,049 | $ | 595 | 20 | % | |||||||||||||||||||||||||||||||
Operating income | $ | 393 | $ | 273 | $ | 120 | 44 | % | $ | 1,083 | $ | 807 | $ | 276 | 34 | % | |||||||||||||||||||||||||||||||
Operating margin | 30.6 | % | 26.4 | % | 4.2 points | 29.7 | % | 26.5 | % | 3.2 points | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages and ratios) | |||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 431 | $ | 425 | $ | 6 | 1 | % | $ | 1,217 | $ | 1,122 | $ | 95 | 8 | % | |||||||||||||||||||||||||||||||
Operating income | $ | 99 | $ | 83 | $ | 16 | 19 | % | $ | 229 | $ | 196 | $ | 33 | 17 | % | |||||||||||||||||||||||||||||||
Operating margin | 23.0 | % | 19.5 | % | 3.5 points | 18.8 | % | 17.5 | % | 1.3 points | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | July 26, 2020 | Change | August 1, 2021 | July 26, 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
China | $ | 373 | 87% | $ | 419 | 99% | (11)% | $ | 1,026 | 84% | $ | 1,035 | 92% | (1)% | |||||||||||||||||||||||||||||||||||||||||||||
August 1, 2021 | October 25, 2020 | ||||||||||
(In millions) | |||||||||||
Cash and cash equivalents | $ | 6,066 | $ | 5,351 | |||||||
Short-term investments | 444 | 387 | |||||||||
Long-term investments | 1,658 | 1,538 | |||||||||
Total cash, cash-equivalents and investments | $ | 8,168 | $ | 7,276 |
Nine Months Ended | |||||||||||
August 1, 2021 | July 26, 2020 | ||||||||||
(In millions) | |||||||||||
Cash provided by operating activities | $ | 4,294 | $ | 2,489 | |||||||
Cash provided by (used in) investing activities | $ | (629) | $ | 11 | |||||||
Cash used in financing activities | $ | (2,957) | $ | (1,164) |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(In millions, except percentages) | August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||||
Non-GAAP Adjusted Gross Profit | ||||||||||||||||||||||||||
Reported gross profit - GAAP basis | $ | 2,967 | $ | 1,955 | $ | 7,969 | $ | 5,562 | ||||||||||||||||||
Certain items associated with acquisitions1 | 6 | 8 | 21 | 25 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 15 | 12 | 23 | ||||||||||||||||||||||
Other charges | — | — | 2 | — | ||||||||||||||||||||||
Non-GAAP adjusted gross profit | $ | 2,973 | $ | 1,978 | $ | 8,004 | $ | 5,610 | ||||||||||||||||||
Non-GAAP adjusted gross margin | 48.0 | % | 45.0 | % | 47.2 | % | 44.8 | % | ||||||||||||||||||
Non-GAAP Adjusted Operating Income | ||||||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 2,013 | $ | 1,108 | $ | 4,875 | $ | 3,082 | ||||||||||||||||||
Certain items associated with acquisitions1 | 11 | 12 | 36 | 38 | ||||||||||||||||||||||
Acquisition integration and deal costs | 5 | 20 | 40 | 54 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 20 | 24 | 30 | ||||||||||||||||||||||
Severance and related charges3 | — | — | 158 | — | ||||||||||||||||||||||
Deal termination fee | — | — | 154 | — | ||||||||||||||||||||||
Other charges | — | — | 6 | — | ||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 2,029 | $ | 1,160 | $ | 5,293 | $ | 3,204 | ||||||||||||||||||
Non-GAAP adjusted operating margin | 32.7 | % | 26.4 | % | 31.2 | % | 25.6 | % | ||||||||||||||||||
Non-GAAP Adjusted Net Income | ||||||||||||||||||||||||||
Reported net income - GAAP basis | $ | 1,716 | $ | 841 | $ | 4,176 | $ | 2,488 | ||||||||||||||||||
Certain items associated with acquisitions1 | 11 | 12 | 36 | 38 | ||||||||||||||||||||||
Acquisition integration and deal costs | 5 | 20 | 41 | 54 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 20 | 24 | 30 | ||||||||||||||||||||||
Severance and related charges3 | — | — | 158 | — | ||||||||||||||||||||||
Deal termination fee | — | — | 154 | — | ||||||||||||||||||||||
Realized loss (gain) on strategic investments, net | (6) | (8) | (2) | (1) | ||||||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (13) | (5) | (45) | (1) | ||||||||||||||||||||||
Loss on early extinguishment of debt | — | 33 | — | 33 | ||||||||||||||||||||||
Other charges | — | — | 6 | — | ||||||||||||||||||||||
Income tax effect of share-based compensation4 | 11 | 12 | (12) | (13) | ||||||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | 23 | 67 | 60 | 104 | ||||||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | (9) | (1) | (22) | (5) | ||||||||||||||||||||||
Income tax effect of non-GAAP adjustments5 | 2 | (15) | (43) | (30) | ||||||||||||||||||||||
Non-GAAP adjusted net income | $ | 1,740 | $ | 976 | $ | 4,531 | $ | 2,697 |
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
3 | The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. | ||||
4 | GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. | ||||
5 | Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(In millions, except per share amounts) | August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share | ||||||||||||||||||||||||||
Reported earnings per diluted share - GAAP basis | $ | 1.87 | $ | 0.91 | $ | 4.52 | $ | 2.69 | ||||||||||||||||||
Certain items associated with acquisitions | 0.01 | 0.01 | 0.03 | 0.04 | ||||||||||||||||||||||
Acquisition integration and deal costs | 0.01 | 0.02 | 0.04 | 0.05 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-19 | — | 0.02 | 0.02 | 0.03 | ||||||||||||||||||||||
Loss on early extinguishment of debt | — | 0.03 | — | 0.03 | ||||||||||||||||||||||
Severance and related charges | — | — | 0.13 | — | ||||||||||||||||||||||
Deal termination fee | — | — | 0.17 | — | ||||||||||||||||||||||
Realized loss (gain) on strategic investments, net | (0.01) | (0.01) | 0.01 | — | ||||||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (0.01) | — | (0.05) | — | ||||||||||||||||||||||
Other charges | — | — | 0.01 | — | ||||||||||||||||||||||
Income tax effect of share-based compensation | 0.01 | 0.01 | (0.01) | (0.02) | ||||||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | 0.03 | 0.07 | 0.06 | 0.11 | ||||||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | (0.01) | — | (0.02) | (0.01) | ||||||||||||||||||||||
Non-GAAP adjusted earnings per diluted share | $ | 1.90 | $ | 1.06 | $ | 4.91 | $ | 2.92 | ||||||||||||||||||
Weighted average number of diluted shares | 918 | 922 | 923 | 924 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(In millions, except percentages) | August 1, 2021 | July 26, 2020 | August 1, 2021 | July 26, 2020 | ||||||||||||||||||||||
Semiconductor Systems Non-GAAP Adjusted Operating Income | ||||||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,785 | $ | 958 | $ | 4,588 | $ | 2,655 | ||||||||||||||||||
Certain items associated with acquisitions1 | 9 | 9 | 29 | 29 | ||||||||||||||||||||||
Acquisition integration costs | — | 1 | (2) | 1 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 14 | 12 | 20 | ||||||||||||||||||||||
Other charges | — | — | 3 | — | ||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,794 | $ | 982 | $ | 4,630 | $ | 2,705 | ||||||||||||||||||
Non-GAAP adjusted operating margin | 40.3 | % | 33.7 | % | 38.7 | % | 32.6 | % | ||||||||||||||||||
AGS Non-GAAP Adjusted Operating Income | ||||||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 393 | $ | 273 | $ | 1,083 | $ | 807 | ||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 4 | 8 | 8 | ||||||||||||||||||||||
Other charges | — | — | 1 | — | ||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 393 | $ | 277 | $ | 1,092 | $ | 815 | ||||||||||||||||||
Non-GAAP adjusted operating margin | 30.6 | % | 26.8 | % | 30.0 | % | 26.7 | % | ||||||||||||||||||
Display and Adjacent Markets Non-GAAP Adjusted Operating Income | ||||||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 99 | $ | 83 | $ | 229 | $ | 196 | ||||||||||||||||||
Certain items associated with acquisitions1 | 1 | 3 | 3 | 9 | ||||||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | 1 | 1 | 1 | ||||||||||||||||||||||
Severance and related charges3 | — | — | 8 | — | ||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 100 | $ | 87 | $ | 241 | $ | 206 | ||||||||||||||||||
Non-GAAP adjusted operating margin | 23.2 | % | 20.5 | % | 19.8 | % | 18.4 | % | ||||||||||||||||||
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
3 | The severance and related charges related to workforce reduction actions globally across the Display and Adjacent Markets business. | ||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Aggregate Price Paid | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Dollar Value of Shares That May Yet be Purchased Under the Program | ||||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||||||||
Month #1 | |||||||||||||||||||||||||||||
(May 3, 2021 to May 30, 2021) | 3.9 | $ | 127.89 | $ | 504 | 3.9 | $ | 7,521 | |||||||||||||||||||||
Month #2 | |||||||||||||||||||||||||||||
(May 31, 2021 to June 27, 2021) | 3.2 | $ | 136.81 | 441 | 3.2 | $ | 7,080 | ||||||||||||||||||||||
Month #3 | |||||||||||||||||||||||||||||
(June 28, 2021 to August 1, 2021) | 4.1 | $ | 136.02 | 555 | 4.1 | $ | 6,525 | ||||||||||||||||||||||
Total | 11.2 | $ | 133.40 | $ | 1,500 | 11.2 |
Incorporated by Reference | |||||||||||||||||||||||||||||
Exhibit No. | Description | Form | File No. | Exhibit No. | Filing Date | ||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document‡ | ||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document‡ | ||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document‡ | ||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document‡ | ||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document‡ | ||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
APPLIED MATERIALS, INC. | |||||
By: | /s/ DANIEL J. DURN | ||||
Daniel J. Durn Senior Vice President, Chief Financial Officer (Principal Financial Officer) |
By: | /s/ CHARLES W. READ | ||||
Charles W. Read Corporate Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) |
/s/ GARY E. DICKERSON | ||
Gary E. Dickerson | ||
President, Chief Executive Officer |
/s/ DANIEL J. DURN | ||
Daniel J. Durn | ||
Senior Vice President, Chief Financial Officer |
/s/ GARY E. DICKERSON | ||
Gary E. Dickerson | ||
President, Chief Executive Officer |
/s/ DANIEL J. DURN | ||
Daniel J. Durn | ||
Senior Vice President, Chief Financial Officer |
Consolidated Condensed Statements of Operations - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Income Statement [Abstract] | ||||
Net sales | $ 6,196 | $ 4,395 | $ 16,940 | $ 12,514 |
Cost of products sold | 3,229 | 2,440 | 8,971 | 6,952 |
Gross profit | 2,967 | 1,955 | 7,969 | 5,562 |
Operating expenses: | ||||
Research, development and engineering | 640 | 572 | 1,863 | 1,674 |
Marketing and selling | 159 | 130 | 454 | 395 |
General and administrative | 155 | 145 | 465 | 411 |
Severance and related charges | 0 | 0 | 158 | 0 |
Deal termination fee | 0 | 0 | 154 | 0 |
Total operating expenses | 954 | 847 | 3,094 | 2,480 |
Income from operations | 2,013 | 1,108 | 4,875 | 3,082 |
Interest expense | 57 | 61 | 179 | 181 |
Interest and other income, net | 24 | (7) | 69 | 22 |
Income before income taxes | 1,980 | 1,040 | 4,765 | 2,923 |
Provision for income taxes | 264 | 199 | 589 | 435 |
Net income | $ 1,716 | $ 841 | $ 4,176 | $ 2,488 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.89 | $ 0.92 | $ 4.57 | $ 2.71 |
Diluted (in dollars per share) | $ 1.87 | $ 0.91 | $ 4.52 | $ 2.69 |
Weighted average number of shares: | ||||
Basic (in shares) | 908 | 915 | 914 | 916 |
Diluted (in shares) | 918 | 922 | 923 | 924 |
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,716 | $ 841 | $ 4,176 | $ 2,488 |
Other comprehensive income (loss), net of tax: | ||||
Change in unrealized gain (loss) on available-for-sale investments | (1) | 12 | (11) | 13 |
Change in unrealized net loss on derivative instruments | (1) | 26 | 18 | (110) |
Other comprehensive income (loss), net of tax | (2) | 38 | 7 | (97) |
Comprehensive income | $ 1,714 | $ 879 | $ 4,183 | $ 2,391 |
Consolidated Condensed Statements of Stockholders' Equity (Parenthetical) - $ / shares |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Statement of Stockholders' Equity [Abstract] | |||||||
Dividends declared per share (in dollars per share) | $ 0.24 | $ 0.24 | $ 0.22 | $ 0.24 | $ 0.22 | $ 0.70 | $ 0.65 |
Basis of Presentation |
9 Months Ended |
---|---|
Aug. 01, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation In the opinion of management, the unaudited interim consolidated condensed financial statements of Applied Materials, Inc. and its subsidiaries (Applied or the Company) included herein have been prepared on a basis consistent with the October 25, 2020 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Applied’s Annual Report on Form 10-K for the fiscal year ended October 25, 2020 (2020 Form 10-K). Applied’s results of operations for the three and nine months ended August 1, 2021 are not necessarily indicative of future operating results. Applied’s fiscal year ends on the last Sunday in October of each year. Fiscal 2021 and 2020 contain 53 weeks and 52 weeks, respectively, and the first nine months of fiscal 2021 and 2020 contained 40 and 39 weeks, respectively. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to standalone selling price (SSP) related to revenue recognition, accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. As of August 1, 2021, the COVID-19 pandemic and worldwide response remains fluid. As a result, many of Applied’s estimates and assumptions are subject to increased judgment and volatility. These estimates may differ materially in future periods as the pandemic continues to evolve and additional information becomes available. Revenue Recognition from Contracts with Customers Applied recognizes revenue when promised goods or services are transferred to a customer in an amount that reflects the consideration to which Applied expects to be entitled in exchange for those goods or services. Applied determines revenue recognition through the following five steps; (1) identification of the contract(s) with customers, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when, or as, a performance obligation is satisfied. Identifying the contract(s) with customers. Applied sells manufacturing equipment, services, and spare parts directly to its customers in the semiconductor, display, and related industries. The Company generally considers written documentation including, but not limited to, signed purchase orders, master agreements, and sales orders as contracts provided that collection is probable. Collectability is assessed based on the customer’s creditworthiness determined by reviewing the customer’s published credit and financial information, historical payment experience, as well as other relevant factors. Identifying the performance obligations. Applied’s performance obligations include delivery of manufacturing equipment, service agreements, spare parts, installation, extended warranty and training. Applied’s service agreements are considered one performance obligation and may include multiple goods and services that Applied provides to the customer to deliver against a performance metric. Judgment is used to determine whether multiple promised goods or services in a contract should be accounted for separately or as a group. Determine the transaction price. The transaction price for Applied’s contracts with customers may include fixed and variable consideration. Applied includes variable consideration in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Allocate the transaction price to the performance obligations. A contract’s transaction price is allocated to each distinct performance obligation identified within the contract. Applied generally estimates the standalone selling price of a distinct performance obligation based on historical cost plus an appropriate margin. For contracts with multiple performance obligations, Applied allocates the contract’s transaction price to each performance obligation using the relative standalone selling price of each distinct good or service in the contract. Recognizing the revenue as performance obligations are satisfied. Applied recognizes revenue from equipment and spares parts at a point in time when Applied has satisfied its performance obligation by transferring control of the goods to the customer which typically occurs at shipment or delivery. Revenue from service agreements is recognized over time, typically within 12 months, as customers receive the benefits of services. The incremental costs to obtain a contract are not material. Payment Terms. Payment terms vary by contract. Generally, the majority of payments are due within a certain number of days from shipment of goods or performance of service. The remainder is typically due upon customer technical acceptance. Applied typically receives deposits on future deliverables from customers in the Display and Adjacent Markets segment and, in certain instances, may also receive deposits from customers in the Applied Global Services segment. Applied’s payment terms do not generally contain a significant financing component. Recent Accounting Pronouncements Accounting Standards Adopted Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the Financial Accounting Standard Board (FASB) issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. Applied adopted this guidance in the first quarter of fiscal 2021 under the retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s defined benefit and other postretirement disclosures. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. Applied adopted this guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. Applied adopted this guidance in the first quarter of fiscal 2021 under the modified retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes: In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes (Topic 740). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in Topic 740. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2022, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements.
|
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of restricted stock units and employee stock purchase plan shares) outstanding during the period. Applied’s net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to the Company’s non-complex capital structure.
Potentially weighted dilutive securities attributable to outstanding restricted stock units are excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value are greater than the average market price of Applied common stock, and therefore their inclusion would be anti-dilutive.
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Cash, Cash Equivalents and Investments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments Summary of Cash, Cash Equivalents and Investments The following tables summarize Applied’s cash, cash equivalents and investments by security type:
_________________________ *Includes Canadian provincial government debt
Maturities of Investments The following table summarizes the contractual maturities of Applied’s investments as of August 1, 2021:
_________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities and asset-backed and mortgage-backed securities. Gains and Losses on Investments During the three and nine months ended August 1, 2021 and July 26, 2020 gross realized gains and losses on investments were not material. As of August 1, 2021, and October 25, 2020, gross unrealized losses related to Applied’s debt investment portfolio were not material. Applied regularly reviews its debt investment portfolio to identify and evaluate investments that have indications of possible impairment from credit losses or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the significance of the decline in value compared to the cost basis; the financial condition; credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Credit losses related to available-for-sale debt securities are recorded as an allowance for credit losses through interest and other income, net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other comprehensive income. During the three and nine months ended August 1, 2021, with the adoption of credit losses authoritative guidance, Applied did not recognize significant credit losses and the ending allowance for credit losses was not material. Applied determined that the gross unrealized losses on its marketable fixed-income securities as of July 26, 2020 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three and nine months ended July 26, 2020. Impairment charges on equity investments in privately-held companies during the three and nine months ended August 1, 2021 and July 26, 2020 were not material. These impairment charges are included in interest and other income, net in the Consolidated Condensed Statement of Operations. The components of gain (loss) on equity investments for the three and nine months ended August 1, 2021 and July 26, 2020 were as follows:
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Fair Value Measurements |
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Applied’s financial assets are measured and recorded at fair value on a recurring basis, except for equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Fair Value Hierarchy Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: •Level 1 — Quoted prices in active markets for identical assets or liabilities; •Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. As of August 1, 2021, substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market and the changes in fair value of these equity investments are recognized in the consolidated statements of operations. Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments. Assets Measured at Fair Value on a Recurring Basis Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below:
_________________________ * Amounts as of August 1, 2021 and October 25, 2020, include $108 million and $115 million invested in money market funds related to deferred compensation plans, respectively. Due to restrictions on the distribution of these funds, they are classified as restricted cash equivalents and are included in deferred income taxes and other assets in the Consolidated Condensed Balance Sheets. Applied did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of August 1, 2021 or October 25, 2020. Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis Applied’s equity investments without readily determinable values consist of equity investments in privately-held companies. Applied elected the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes on a prospective basis for certain equity investments without readily determinable fair values and is required to account for any subsequent observable changes in fair value within the statements of operations. These investments are periodically assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. Impairment charges on equity investments in privately-held companies during the three and nine months ended August 1, 2021 and July 26, 2020 were not material. Other The carrying amounts of Applied’s financial instruments, including cash and cash equivalents, restricted cash equivalents, accounts receivable, notes payable - short term, and accounts payable and accrued expenses, approximate fair value due to their short maturities. As of August 1, 2021, the aggregate principal amount of long-term senior notes was $5.5 billion and the estimated fair value was $6.5 billion. As of October 25, 2020, the aggregate principal amount of long-term senior notes was $5.5 billion and the estimated fair value was $6.6 billion. The estimated fair value of long-term senior unsecured notes is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 11 of the Notes to the Consolidated Condensed Financial Statements for further detail of existing debt.
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Derivative Instruments and Hedging Activities |
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivative Financial Instruments Applied conducts business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, Israeli shekel, euro and Taiwanese dollar. Applied uses derivative financial instruments, such as forward exchange contracts and currency option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months. The purpose of Applied’s foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged. Applied does not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign currency exchange and interest rate contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge treatment are recognized currently in earnings. All of Applied’s derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued expenses. Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and foreign exchange derivatives are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of AOCI in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to foreign exchange derivative instruments included in AOCI as of August 1, 2021 is expected to be reclassified into earnings within 12 months. Changes in the fair value of option contracts due to changes in time value are excluded from the assessment of effectiveness. The initial value of this excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in the financial statement line item to which the hedge relates. If the transaction being hedged is no longer probable to occur, Applied promptly recognizes the gain or loss on the associated financial instrument in the consolidated condensed statement of operations. The amount recognized due to discontinuance of cash flow hedges that were no longer probable of occurring by the end of the originally specified time period were not significant for the three and nine months ended August 1, 2021 and July 26, 2020. 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 as of August 1, 2021 and October 25, 2020 were not material. Applied is also exposed to interest rate risk associated with its potential future borrowings. During the nine months ended July 26, 2020, Applied entered into a series of interest rate contracts to hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. These instruments were designated as cash flow hedges at inception and were settled in conjunction with the issuance of debt in May 2020. The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as hedging instruments for the indicated periods were as follows:
The effects of derivative instruments and hedging activities on the Consolidated Condensed Statements of Operations were as follows:
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 August 1, 2021. 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.
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Accounts Receivable, Net |
9 Months Ended |
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Aug. 01, 2021 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Applied has agreements with various financial institutions to sell accounts receivable and discount promissory notes from selected customers. Applied sells its accounts receivable generally without recourse. Applied, from time to time, also discounts letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Applied sold $309 million and $980 million of account receivables during the three and nine months ended August 1, 2021, respectively. Applied sold $326 million and $690 million of account receivables during the three and nine months ended July 26, 2020, respectively. Applied did not discount letters of credit issued by customers or discount promissory notes during the three and nine months ended August 1, 2021 and July 26, 2020. Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Condensed Statements of Operations and were not material for all periods presented. Accounts receivable are presented net of allowance for credit losses of $29 million as of August 1, 2021 and $30 million as of October 25, 2020. Applied sells its products principally to manufacturers within the semiconductor and display industries. While Applied believes that its allowance for credit losses is adequate and represents its best estimate as of August 1, 2021, it continues to closely monitor customer liquidity and industry and economic conditions, which may result in changes to Applied’s estimates.
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Contract Balances |
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Balances | Contract Balances Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Applied’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Condensed Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized. Contract balances at the end of each reporting period were as follows:
The increase in contract assets during the nine months ended August 1, 2021, was primarily due to goods transferred to customers where payment was conditional upon technical sign off, offset by the reclassification of contract assets to net accounts receivable upon meeting conditions to the right to payment. During the nine months ended August 1, 2021, Applied recognized revenue of approximately $968 million related to contract liabilities at October 25, 2020. This reduction in contract liabilities was offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of August 1, 2021. There were no credit losses recognized on Applied’s accounts receivables and contract assets during both the three and nine months ended August 1, 2021 and July 26, 2020. As of August 1, 2021, the amount of remaining unsatisfied performance obligations on contracts with an original estimated duration of one year or more was approximately $681 million, of which approximately 50% is expected to be recognized within 12 months and the remainder is expected to recognized within the following 24 months thereafter. Applied has elected the available practical expedient to exclude the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.
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Balance Sheet Detail |
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Balance Sheet Detail [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Detail | Balance Sheet Detail
Included in finished goods inventory are $18 million as of August 1, 2021, and $16 million as of October 25, 2020, of newly-introduced systems at customer locations where the sales transaction did not meet Applied’s revenue recognition criteria as set forth in Note 1. Finished goods inventory includes $395 million and $416 million of evaluation inventory as of August 1, 2021 and October 25, 2020, respectively.
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Business Combination |
9 Months Ended |
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Aug. 01, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business CombinationKokusai Electric CorporationOn June 30, 2019, Applied entered into a Share Purchase Agreement (SPA) with Kokusai Electric Corporation (Kokusai Electric) and KKR HKE Investment L.P. (KKR) providing for Applied’s acquisition of all outstanding shares of Kokusai Electric. The SPA, as subsequently amended, terminated as of March 19, 2021. Applied paid KKR a termination fee of $154 million during the second quarter of fiscal 2021 |
Goodwill, Purchased Technology and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Purchased Technology and Other Intangible Assets | Goodwill, Purchased Technology and Other Intangible Assets Goodwill and Purchased Intangible Assets Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. When reviewing goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In performing a qualitative assessment, Applied considers business conditions and other factors including, but not limited to (i) adverse industry or economic trends, (ii) restructuring actions and lower projections that may impact future operating results, (iii) sustained decline in share price, and (iv) overall financial performance and other events affecting the reporting units. If Applied concludes that is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed by estimating the fair value of the reporting unit and comparing it to its carrying value. If the carrying value of a reporting unit exceeds its fair value, Applied would record an impairment charge equal to the excess of the carrying value of the reporting unit’s goodwill over its fair value. As of August 1, 2021, Applied’s reporting units include Semiconductor Products Group and Imaging and Process Control Group, which combine to form the Semiconductor Systems reporting segment, Applied Global Services, Display and Adjacent Markets and other reporting units recorded under Corporate and Other. Details of goodwill as of August 1, 2021 and October 25, 2020 were as follows:
From time to time, Applied makes acquisitions of companies related to existing or new markets for Applied. During the first nine months of fiscal 2021, goodwill increased by $13 million primarily due to the preliminary purchase accounting for an acquisition during the first quarter of fiscal 2021, which was not material to Applied’s results of operations. A summary of Applied’s purchased technology and intangible assets is set forth below:
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:
Details of amortization expense by segment were as follows:
Amortization expense was charged to the following categories:
As of August 1, 2021, future estimated amortization expense is expected to be as follows:
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Borrowing Facilities and Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowing Facilities and Debt | Borrowing Facilities and Debt Revolving Credit Facilities In February 2020, Applied entered into a five-year $1.5 billion committed unsecured revolving credit agreement (Revolving Credit Agreement) with a group of banks. The Revolving Credit Agreement includes a provision under which Applied may request an increase in the amount of the facility of up to $500 million for a total commitment of no more than $2.0 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The Revolving Credit Agreement is scheduled to expire in February 2025, unless extended as permitted under the Revolving Credit Agreement. The Revolving Credit Agreement provides for borrowings that bear interest for each advance at one of two rates selected by Applied, plus an applicable margin, which varies according to Applied’s public debt credit ratings. No amounts were outstanding under the Revolving Credit Agreement as of August 1, 2021 and October 25, 2020. In addition, Applied has revolving credit facilities with Japanese banks pursuant to which it may borrow up to approximately $73 million in aggregate at any time. Applied’s ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. As of August 1, 2021 and October 25, 2020, no amounts were outstanding under these revolving credit facilities. Term Loan and Short-term Commercial Paper In August 2019, Applied entered into a term loan credit agreement (Term Loan Credit Agreement) with a group of lenders under which the lenders committed to make an unsecured term loan to Applied of up to $2.0 billion to finance in part Applied’s planned acquisition of all outstanding shares of Kokusai Electric, to pay related transaction fees and expenses and for general corporate purposes. In March 2021, the Term Loan Credit Agreement, as subsequently amended, terminated automatically in accordance with its terms upon the termination of the SPA. No amounts were borrowed under the Term Loan Credit Agreement at both August 1, 2021 and October 25, 2020. Applied has a short-term commercial paper program under which Applied may issue unsecured commercial paper notes of up to a total amount of $1.5 billion. At August 1, 2021 and October 25, 2020, Applied did not have any commercial paper outstanding. Senior Unsecured Notes In May 2020, Applied issued $750 million aggregate principal amount of 1.750% senior unsecured notes due 2030 and $750 million aggregate principal amount of 2.750% senior unsecured notes due 2050, in a registered public offering. In June 2020, Applied used a portion of the net proceeds from the offering to redeem the outstanding $600 million in aggregate principal amount of its 2.625% senior unsecured notes due October 1, 2020 and $750 million in aggregate principal amount of its 4.300% senior unsecured notes due June 15, 2021, at a total aggregate redemption price of $1.4 billion. As a result, Applied recognized a $33 million loss on early extinguishment of these senior unsecured notes during the third quarter of fiscal 2020. Debt outstanding as of August 1, 2021 and October 25, 2020 was as follows:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases A contract contains a lease when Applied has the right to control the use of an identified asset for a period of time in exchange for consideration. Applied leases certain facilities, vehicles and equipment under non-cancelable operating leases, many of which include options to renew. Options that are reasonably certain to be exercised are included in the calculation of the right-of-use asset and lease liability. Applied’s leases do not contain residual value guarantees or significant restrictions that impact the accounting for leases. As implicit rates are not available for the leases, Applied uses the incremental borrowing rate as of the lease commencement date in order to measure the right-of-use asset and liability. Operating lease expense is generally recognized on a straight-line basis over the lease term. Applied elected the practical expedient to account for lease and non-lease components as a single lease component for all leases. For leases with a term of one year or less, Applied elected not to record a right-of-use asset or lease liability and to account for the associated lease payments as they become due. The components of lease expense and supplemental information were as follows:
Supplemental cash flow information related to leases are as follows:
As of August 1, 2021, the maturities of lease liabilities are as follows:
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Severance and Related Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance and Related Charges | Severance and Related Charges Fiscal 2021 Severance Plan In the first quarter of fiscal 2021, Applied enacted a severance plan to realign its workforce. Under this plan, Applied implemented a one-time voluntary retirement program and other workforce reduction actions. The voluntary retirement program was available to certain U.S. employees who met minimum age and length of service requirements, as well as other business-specific criteria. The payments under this plan are paid at the time of termination and the related costs were not allocated to the segments. In addition, Applied implemented other workforce reduction actions globally across the Display and Adjacent Markets business. These costs were recorded under the Display and Adjacent Markets segment. During the nine months ended August 1, 2021, Applied recognized $158 million of severance and related charges in connection with the Fiscal 2021 Severance Plan, of which $23 million remains outstanding as of August 1, 2021. Severance and related charges by segment were as follows:
Changes in severance and related charges reserves related to the Fiscal 2021 Severance Plan described above for the nine months ended August 1, 2021 were as follows:
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Stockholders' Equity, Comprehensive Income and Share-Based Compensation |
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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:
The tax effects on the unrealized loss on derivative instruments qualifying as cash flow hedges for the nine months ended August 1, 2021 was not material and was $32 million for the nine months ended July 26, 2020. The tax effects on net income of amounts reclassified from AOCI for the three and nine months ended August 1, 2021 and July 26, 2020 were not material. Stock Repurchase Program In March 2021, Applied’s Board of Directors approved a common stock repurchase program authorizing $7.5 billion in repurchases, which supplemented the previously existing $6.0 billion authorization approved in February 2018. As of August 1, 2021, approximately $6.5 billion remained available for future stock repurchases under the repurchase program. The following table summarizes Applied’s stock repurchases for the three and nine months ended August 1, 2021 and July 26, 2020:
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 In June 2021, March 2021 and December 2020, Applied’s Board of Directors declared quarterly cash dividends, in the amount of $0.24, $0.24 and $0.22 per share, respectively. The dividend declared in June 2021 is payable in September 2021. Dividends paid during the nine months ended August 1, 2021 and July 26, 2020 totaled $622 million and $587 million, respectively. Applied currently anticipates that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on Applied’s financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of Applied’s stockholders. Share-Based Compensation Applied has a stockholder-approved equity plan, the Employee Stock Incentive Plan (ESIP), which permits grants to employees of share-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units and performance units. In addition, the plan provides for the automatic grant of restricted stock units to non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based awards made under the plan may be subject to accelerated vesting under certain circumstances in the event of a change in control of Applied. On March 11, 2021, Applied’s shareholders approved an amendment and restatement of the ESIP to, among other changes, add 10 million shares to the number of shares of Applied common stock authorized for issuance. In addition, Applied currently has two Employee Stock Purchase Plans, one generally for United States employees (U.S. ESPP) and a second for employees of international subsidiaries (Offshore ESPP, and together with the U.S. ESPP, the Existing ESPP), which enable eligible employees to purchase Applied common stock. On March 11, 2021, Applied’s shareholders approved an amendment and restatement of the U.S. ESPP (as amended, the Omnibus ESPP). The Omnibus ESPP will become effective on September 1, 2021 (the Effective Date) in accordance with its terms, and amends the U.S. ESPP to, among other changes, (i) incorporate the Offshore ESPP as a sub-plan, and (ii) add 11.3 million shares to the number of shares of Applied common stock authorized for issuance. The Offshore ESPP will terminate as an independent plan on the Effective Date. During the three and nine months ended August 1, 2021 and July 26, 2020, Applied recognized share-based compensation expense related to equity awards and Existing ESPP shares. The effect of share-based compensation on the results of operations was as follows:
The cost associated with share-based awards that are subject solely to time-based vesting requirements, less expected forfeitures, is recognized over the awards’ service period for the entire award on a straight-line basis. Share-based awards granted to certain executive officers allow partial accelerated vesting in the event of a qualifying retirement based on age and years of service. The cost associated with performance-based equity awards, which include both performance and market goals, is recognized for each tranche over the service period. The cost of equity awards related to performance goals is based on an assessment of the likelihood that the applicable performance goals will be achieved. For the equity awards based on market goals, the cost is recognized based upon the assumption of 100% achievement of the goal. As of August 1, 2021, Applied had $547 million in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards and shares issued under Applied’s Existing ESPP, which will be recognized over a weighted average period of 2.7 years. As of August 1, 2021, there were 35 million shares available for grants of share-based awards under the ESIP, and an additional 8 million shares available for issuance under the Existing ESPP, which excludes the 11.3 million shares approved by shareholders in March 2021 to be added to the Omnibus ESPP, which will be effective on September 1, 2021. Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units A summary of the changes in any restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during the nine months ended August 1, 2021 is presented below:
As of August 1, 2021, 1.3 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance goals. During the first quarter of fiscal 2021, certain executive officers were granted awards that are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Index. Each metric will be weighted 50% and will be measured over a three-year period. The awards become eligible to vest only if performance goals are achieved and will vest only if the grantee remains employed by Applied through each applicable vesting date, subject to a qualifying retirement described below. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. The awards provide for a partial payout based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement based on age and years of service. During the first quarter of fiscal 2021, certain executive officers were also granted non-recurring long-term performance-based awards that are subject to the achievement of targeted levels of Applied’s absolute TSR. The awards become eligible to vest only if targeted levels of TSR are achieved during the five-year performance period and will vest only if the grantee remains employed by Applied through the vesting date in October 2025, except in the event of involuntary termination of employment without cause, death or following a change of control. The number of shares that may vest in full after five years ranges from 0% to 200% of the target amount. The fair value of the portion of the awards subject to targeted levels of adjusted operating margin is estimated on the date of grant. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized, and any previously recognized compensation expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the service period and reduced for estimated forfeitures. The fair value of the portion of the awards subject to targeted levels of relative TSR or absolute TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is reflected over the service period and reduced for estimated forfeitures. Employee Stock Purchase Plans Under the Existing 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 a total of 2 million shares in each of the nine months ended August 1, 2021 and July 26, 2020. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.
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Income Taxes |
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Aug. 01, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Applied’s provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that are not consistent from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings. Applied’s effective tax rates for the third quarter of fiscal 2021 and 2020 were 13.3 percent and 19.1 percent, respectively. The effective tax rate for the third quarter of fiscal 2021 was lower than the same period in the prior fiscal year primarily due to the settlement of certain unrecognized tax benefits that resulted in an additional income tax expense of $44 million in the third quarter of fiscal 2020. Applied’s effective tax rates for the first nine months of fiscal 2021 and 2020 were 12.4 percent and 14.9 percent, respectively. The effective tax rate for the first nine months of fiscal 2021 was lower than the same period in the prior fiscal year primarily due to a tax benefit related to severance and related charges recorded in the first quarter of fiscal 2021, and the settlement of certain unrecognized tax benefits that resulted in an additional income tax expense in the third quarter of fiscal 2020 noted above.
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Warranty, Guarantees, Commitments and Contingencies |
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Warranty, Guarantees, Commitments and Contingencies | Warranty, Guarantees, Commitments and Contingencies Warranty Changes in the warranty reserves are presented below:
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 August 1, 2021, the maximum potential amount of future payments that Applied could be required to make under these guarantee agreements was approximately $338 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 August 1, 2021, Applied has provided parent guarantees to banks for approximately $145 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.
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Industry Segment Operations |
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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 August 1, 2021 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to Applied’s reportable segments. The Semiconductor Systems reportable segment includes semiconductor capital equipment for etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity, including spares, upgrades, services, certain remanufactured earlier generation equipment and factory automation software for semiconductor, display and other products. The Display and Adjacent Markets segment includes products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), equipment upgrades and flexible coating systems and other display technologies for TVs, monitors, laptops, personal computers, smart phones, and other consumer-oriented devices. Each operating segment is separately managed and has separate financial results that are reviewed by Applied’s chief operating decision-maker. Each reportable segment contains closely related products that are unique to the particular segment. Segment operating income is determined based upon internal performance measures used by Applied’s chief operating decision-maker. The chief operating decision-maker does not evaluate operating segments using total asset information. Applied derives the segment results directly from its internal management reporting system. The accounting policies Applied uses to derive reportable segment results are substantially the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics including orders, net sales and operating income. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. The Corporate and Other category includes revenues from products, as well as costs of products sold, for fabricating solar photovoltaic cells and modules, and certain operating expenses that are not allocated to its reportable segments and are managed separately at the corporate level. These operating expenses include costs related to share-based compensation; certain management, finance, legal, human resources, and research, development and engineering functions provided at the corporate level; and unabsorbed information technology and occupancy. In addition, Applied does not allocate to its reportable segments restructuring, severance and asset impairment charges and any associated adjustments related to restructuring actions, unless these actions pertain to a specific reportable segment. Segment operating income also excludes interest income/expense and other financial charges and income taxes. Management does not consider the unallocated costs in measuring the performance of the reportable segments. Net sales and operating income (loss) for each reportable segment were as follows:
Semiconductor Systems and Display and Adjacent Markets revenues are recognized at a point in time. Applied Global Services revenue is recognized at a point in time for tangible goods such as spare parts and equipment, and over time for service agreements. The majority of revenue recognized over time is recognized within 12 months of the contract inception. Operating income (loss) for the nine months ended August 1, 2021 included severance and related charges as discussed in Note 13, Severance and Related Charges and a deal termination fee as discussed in Note 9, Business Combination. Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows:
Net sales for Semiconductor Systems by end use application for the periods indicated were as follows:
The reconciling items included in Corporate and Other were as follows:
The following customers accounted for at least 10 percent of Applied’s net sales for the nine months ended August 1, 2021, and sales to these customers included products and services from multiple reportable segments.
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Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | In the opinion of management, the unaudited interim consolidated condensed financial statements of Applied Materials, Inc. and its subsidiaries (Applied or the Company) included herein have been prepared on a basis consistent with the October 25, 2020 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly present the information set forth therein. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Applied’s Annual Report on Form 10-K for the fiscal year ended October 25, 2020 (2020 Form 10-K). Applied’s results of operations for the three and nine months ended August 1, 2021 are not necessarily indicative of future operating results. Applied’s fiscal year ends on the last Sunday in October of each year. Fiscal 2021 and 2020 contain 53 weeks and 52 weeks, respectively, and the first nine months of fiscal 2021 and 2020 contained 40 and 39 weeks, respectively. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, Applied evaluates its estimates, including those related to standalone selling price (SSP) related to revenue recognition, accounts receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of share-based awards, and income taxes, among others. Applied bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. As of August 1, 2021, the COVID-19 pandemic and worldwide response remains fluid. As a result, many of Applied’s estimates and assumptions are subject to increased judgment and volatility. These estimates may differ materially in future periods as the pandemic continues to evolve and additional information becomes available.
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Revenue Recognition from Contracts with Customers | Applied recognizes revenue when promised goods or services are transferred to a customer in an amount that reflects the consideration to which Applied expects to be entitled in exchange for those goods or services. Applied determines revenue recognition through the following five steps; (1) identification of the contract(s) with customers, (2) identification of the performance obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations in the contract, and (5) recognition of revenue when, or as, a performance obligation is satisfied. Identifying the contract(s) with customers. Applied sells manufacturing equipment, services, and spare parts directly to its customers in the semiconductor, display, and related industries. The Company generally considers written documentation including, but not limited to, signed purchase orders, master agreements, and sales orders as contracts provided that collection is probable. Collectability is assessed based on the customer’s creditworthiness determined by reviewing the customer’s published credit and financial information, historical payment experience, as well as other relevant factors. Identifying the performance obligations. Applied’s performance obligations include delivery of manufacturing equipment, service agreements, spare parts, installation, extended warranty and training. Applied’s service agreements are considered one performance obligation and may include multiple goods and services that Applied provides to the customer to deliver against a performance metric. Judgment is used to determine whether multiple promised goods or services in a contract should be accounted for separately or as a group. Determine the transaction price. The transaction price for Applied’s contracts with customers may include fixed and variable consideration. Applied includes variable consideration in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Allocate the transaction price to the performance obligations. A contract’s transaction price is allocated to each distinct performance obligation identified within the contract. Applied generally estimates the standalone selling price of a distinct performance obligation based on historical cost plus an appropriate margin. For contracts with multiple performance obligations, Applied allocates the contract’s transaction price to each performance obligation using the relative standalone selling price of each distinct good or service in the contract. Recognizing the revenue as performance obligations are satisfied. Applied recognizes revenue from equipment and spares parts at a point in time when Applied has satisfied its performance obligation by transferring control of the goods to the customer which typically occurs at shipment or delivery. Revenue from service agreements is recognized over time, typically within 12 months, as customers receive the benefits of services. The incremental costs to obtain a contract are not material. Payment Terms. Payment terms vary by contract. Generally, the majority of payments are due within a certain number of days from shipment of goods or performance of service. The remainder is typically due upon customer technical acceptance. Applied typically receives deposits on future deliverables from customers in the Display and Adjacent Markets segment and, in certain instances, may also receive deposits from customers in the Applied Global Services segment. Applied’s payment terms do not generally contain a significant financing component. Contract BalancesContract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Applied’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Condensed Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized.
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Recent Accounting Pronouncements | Accounting Standards Adopted Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit and other Postretirement Plans. In August 2018, the Financial Accounting Standard Board (FASB) issued authoritative guidance that adds, removes, and clarifies disclosure requirements for defined benefit and other postretirement plans. Applied adopted this guidance in the first quarter of fiscal 2021 under the retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s defined benefit and other postretirement disclosures. Goodwill Impairment. In January 2017, the FASB issued authoritative guidance that simplifies the process required to test goodwill for impairment. Applied adopted this guidance in the first quarter of fiscal 2021. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Financial Instruments: Credit Losses. In June 2016, the FASB issued authoritative guidance that modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will result in more timely recognition of credit losses. Applied adopted this guidance in the first quarter of fiscal 2021 under the modified retrospective basis. The adoption of this guidance did not have a significant impact on Applied’s consolidated condensed financial statements. Accounting Standards Not Yet Adopted Simplifying the Accounting for Income Taxes: In December 2019, the FASB issued an accounting standard update to simplify the accounting for income taxes (Topic 740). This amendment removes certain exceptions and improves consistent application of accounting principles for certain areas in Topic 740. This authoritative guidance will be effective for Applied in the first quarter of fiscal 2022, with early adoption permitted. Applied is currently evaluating the effect of this new guidance on Applied’s consolidated financial statements.
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Fair Value Measurement | Applied’s financial assets are measured and recorded at fair value on a recurring basis, except for equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred. Applied’s nonfinancial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Fair Value Hierarchy Applied uses the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: •Level 1 — Quoted prices in active markets for identical assets or liabilities; •Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and •Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Applied’s investments consist primarily of debt securities that are classified as available-for-sale and recorded at their fair values. In determining the fair value of investments, Applied uses pricing information from pricing services that value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value estimate is unavailable from a pricing service, Applied generally obtains non-binding price quotes from brokers. Applied then reviews the information provided by the pricing services or brokers to determine the fair value of its short-term and long-term investments. In addition, to validate pricing information obtained from pricing services, Applied periodically performs supplemental analysis on a sample of securities. Applied reviews any significant unanticipated differences identified through this analysis to determine the appropriate fair value. As of August 1, 2021, substantially all of Applied’s available-for-sale, short-term and long-term investments were recognized at fair value that was determined based upon observable inputs. Applied’s equity investments with readily determinable values consist of publicly traded equity securities. These investments are measured at fair value using quoted prices for identical assets in an active market and the changes in fair value of these equity investments are recognized in the consolidated statements of operations. Investments with remaining effective maturities of 12 months or less from the balance sheet date are classified as short-term investments. Investments with remaining effective maturities of more than 12 months from the balance sheet date are classified as long-term investments.
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Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis | Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis Applied’s equity investments without readily determinable values consist of equity investments in privately-held companies. Applied elected the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes on a prospective basis for certain equity investments without readily determinable fair values and is required to account for any subsequent observable changes in fair value within the statements of operations. These investments are periodically assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. Impairment charges on equity investments in privately-held companies during the three and nine months ended August 1, 2021 and July 26, 2020 were not material.
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Derivatives | 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 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 as of August 1, 2021 is expected to be reclassified into earnings within 12 months. Changes in the fair value of option contracts due to changes in time value are excluded from the assessment of effectiveness. The initial value of this excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in the financial statement line item to which the hedge relates. If the transaction being hedged is no longer probable to occur, Applied promptly recognizes the gain or loss on the associated financial instrument in the consolidated condensed statement of operations. 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. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets Applied’s methodology for allocating the purchase price relating to purchase acquisitions is determined through established and generally accepted valuation techniques. Goodwill is measured as the excess of the purchase price over the sum of the amounts assigned to tangible and identifiable intangible assets acquired less liabilities assumed. Applied assigns assets acquired (including goodwill) and liabilities assumed to one or more reporting units as of the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is distributed to the respective reporting units as part of the purchase price allocation process. Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment, especially in emerging markets. When reviewing goodwill for impairment, Applied first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In performing a qualitative assessment, Applied considers business conditions and other factors including, but not limited to (i) adverse industry or economic trends, (ii) restructuring actions and lower projections that may impact future operating results, (iii) sustained decline in share price, and (iv) overall financial performance and other events affecting the reporting units. If Applied concludes that is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed by estimating the fair value of the reporting unit and comparing it to its carrying value. If the carrying value of a reporting unit exceeds its fair value, Applied would record an impairment charge equal to the excess of the carrying value of the reporting unit’s goodwill over its fair value.
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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.
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Treasury Stock | Applied records treasury stock purchases under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If Applied reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings. |
Share-based Compensation | The cost associated with share-based awards that are subject solely to time-based vesting requirements, less expected forfeitures, is recognized over the awards’ service period for the entire award on a straight-line basis. Share-based awards granted to certain executive officers allow partial accelerated vesting in the event of a qualifying retirement based on age and years of service. The cost associated with performance-based equity awards, which include both performance and market goals, is recognized for each tranche over the service period. The cost of equity awards related to performance goals is based on an assessment of the likelihood that the applicable performance goals will be achieved. For the equity awards based on market goals, the cost is recognized based upon the assumption of 100% achievement of the goal.Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. |
Performance Based Awards | During the first quarter of fiscal 2021, certain executive officers were granted awards that are subject to the achievement of targeted levels of adjusted operating margin and targeted levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Index. Each metric will be weighted 50% and will be measured over a three-year period. The awards become eligible to vest only if performance goals are achieved and will vest only if the grantee remains employed by Applied through each applicable vesting date, subject to a qualifying retirement described below. The number of shares that may vest in full after three years ranges from 0% to 200% of the target amount. The awards provide for a partial payout based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement based on age and years of service. During the first quarter of fiscal 2021, certain executive officers were also granted non-recurring long-term performance-based awards that are subject to the achievement of targeted levels of Applied’s absolute TSR. The awards become eligible to vest only if targeted levels of TSR are achieved during the five-year performance period and will vest only if the grantee remains employed by Applied through the vesting date in October 2025, except in the event of involuntary termination of employment without cause, death or following a change of control. The number of shares that may vest in full after five years ranges from 0% to 200% of the target amount. The fair value of the portion of the awards subject to targeted levels of adjusted operating margin is estimated on the date of grant. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized, and any previously recognized compensation expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the service period and reduced for estimated forfeitures. The fair value of the portion of the awards subject to targeted levels of relative TSR or absolute TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is reflected over the service period and reduced for estimated forfeitures.
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Warranty | Applied products are generally sold with a warranty for a 12-month period following installation. The provision for the estimated cost of warranty is recorded when revenue is recognized. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical experience by product, configuration and geographic region. Quarterly warranty consumption is generally associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to the current quarter’s sales. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share |
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Cash, Cash Equivalents and Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of cash, cash equivalents and investments | The following tables summarize Applied’s cash, cash equivalents and investments by security type:
_________________________ *Includes Canadian provincial government debt
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Contractual maturities of investments | The following table summarizes the contractual maturities of Applied’s investments as of August 1, 2021:
_________________________ ** Securities with no single maturity date include publicly-traded and privately-held equity securities and asset-backed and mortgage-backed securities.
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Components of gain (loss) on equity investment | The components of gain (loss) on equity investments for the three and nine months ended August 1, 2021 and July 26, 2020 were as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | Financial assets (excluding cash balances) measured at fair value on a recurring basis are summarized below:
_________________________ * Amounts as of August 1, 2021 and October 25, 2020, include $108 million and $115 million invested in money market funds related to deferred compensation plans, respectively. Due to restrictions on the distribution of these funds, they are classified as restricted cash equivalents and are included in deferred income taxes and other assets in the Consolidated Condensed Balance Sheets.
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Derivative Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as hedging instruments for the indicated periods were as follows:
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Effect of derivative instruments on the consolidated statement of operations | The effects of derivative instruments and hedging activities on the Consolidated Condensed Statements of Operations were as follows:
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Derivatives not designated as hedging instruments in statement of operations |
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Contract Balances (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of contract balances | Contract balances at the end of each reporting period were as follows:
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Balance Sheet Detail (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Detail [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Other current assets |
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Property, plant and equipment, net |
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Deferred Income Taxes and Other Assets |
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Accounts Payable and Accrued Expenses |
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Other liabilities |
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Goodwill, Purchased Technology and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Details of goodwill as of August 1, 2021 and October 25, 2020 were as follows:
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Summary of purchased technology and intangible assets | A summary of Applied’s purchased technology and intangible assets is set forth below:
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Finite-lived intangible assets | Details of finite-lived intangible assets were as follows:
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Summary of amortization expense | Details of amortization expense by segment were as follows:
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Schedule of categories amortization expense was charged to | Amortization expense was charged to the following categories:
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Future estimated amortization expense | As of August 1, 2021, future estimated amortization expense is expected to be as follows:
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Borrowing Facilities and Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Outstanding | Debt outstanding as of August 1, 2021 and October 25, 2020 was as follows:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The components of lease expense and supplemental information were as follows:
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Operating Lease, Liability, Maturity | As of August 1, 2021, the maturities of lease liabilities are as follows:
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Severance and Related Charges (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Severance and Related Charges by Segment | Severance and related charges by segment were as follows:
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Schedule of Changes in Severance and Related Charges Reserves | Changes in severance and related charges reserves related to the Fiscal 2021 Severance Plan described above for the nine months ended August 1, 2021 were as follows:
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Stockholders' Equity, Comprehensive Income and Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accumulated other comprehensive loss, after-tax basis | Changes in the components of accumulated other comprehensive income (AOCI), net of tax, were as follows:
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Summary of stock repurchases | The following table summarizes Applied’s stock repurchases for the three and nine months ended August 1, 2021 and July 26, 2020:
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Effect of share-based compensation on the results of operations | The effect of share-based compensation on the results of operations was as follows:
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Restricted stock units and restricted stock activity | A summary of the changes in any restricted stock units, restricted stock, performance shares and performance units outstanding under Applied’s equity compensation plans during the nine months ended August 1, 2021 is presented below:
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Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.
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Warranty, Guarantees, Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the warranty reserves | Changes in the warranty reserves are presented below:
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Industry Segment Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales and operating income (loss) for each reportable segment | Net sales and operating income (loss) for each reportable segment were as follows:
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Revenue from external customers by geographic areas | Net sales by geographic region, determined by the location of customers’ facilities to which products were shipped to, were as follows:
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Disaggregation of Revenue | Net sales for Semiconductor Systems by end use application for the periods indicated were as follows:
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Reconciliations of total segment operating income to consolidated operating income (loss) | The reconciling items included in Corporate and Other were as follows:
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Companies accounted for at least 10 percent of net sales | The following customers accounted for at least 10 percent of Applied’s net sales for the nine months ended August 1, 2021, and sales to these customers included products and services from multiple reportable segments.
|
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Numerator: | ||||
Net income | $ 1,716 | $ 841 | $ 4,176 | $ 2,488 |
Denominator: | ||||
Weighted average common shares outstanding (in shares) | 908 | 915 | 914 | 916 |
Effect of dilutive restricted stock units and employee stock purchase plan shares (in shares) | 10 | 7 | 9 | 8 |
Denominator for diluted earnings per share (in shares) | 918 | 922 | 923 | 924 |
Basic earnings per share (in dollars per share) | $ 1.89 | $ 0.92 | $ 4.57 | $ 2.71 |
Diluted earnings per share (in dollars per share) | $ 1.87 | $ 0.91 | $ 4.52 | $ 2.69 |
Potentially dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Cash, Cash Equivalents and Investments - Summary of Contractual Maturity (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Contractual maturities of investments | ||
Due in one year or less, Cost | $ 394 | |
Due after one through five years, Cost | 891 | |
No single maturity date, Cost | 704 | |
Total short-term and long-term investments cost | 1,989 | $ 1,847 |
Due in one year or less, Estimated Fair Value | 395 | |
Due after one through five years, Estimated Fair Value | 899 | |
No single maturity date, Estimated Fair Value | 808 | |
Estimated fair value of short-term and long-term investments | $ 2,102 |
Cash, Cash Equivalents and Investments - Gain (Loss) on Equity Investments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Gain (Loss) on Securities [Line Items] | ||||
Total gain (loss) on equity investments, net | $ 19 | $ 13 | $ 47 | $ 2 |
Publicly traded equity securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Unrealized gain | 1 | 6 | 12 | 11 |
Unrealized loss | (4) | 0 | (6) | (15) |
Realized gain on sales | 0 | 1 | 0 | 1 |
Equity investments in privately-held companies | ||||
Gain (Loss) on Securities [Line Items] | ||||
Unrealized gain | 19 | 1 | 50 | 10 |
Unrealized loss | (3) | (2) | (11) | (5) |
Realized gain on sales | 6 | 7 | 9 | 8 |
Realized loss on sales or impairment | $ 0 | $ 0 | $ (7) | $ (8) |
Fair Value Measurements - Narrative (Details) - Senior Notes - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, principal amount | $ 5,500 | $ 5,500 |
Estimated fair value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt fair value | $ 6,500 | $ 6,600 |
Derivative Instruments and Hedging Activities - Additional Information (Details) |
9 Months Ended |
---|---|
Aug. 01, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Time period for hedging of foreign currency transaction | 24 months |
Time period over which majority of after tax gain loss related to derivatives to be reclassified into earnings | 12 months |
Derivative Instruments and Hedging Activities - Gain (Loss) on Derivatives in AOCI (Details) - Cash Flow Hedging - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective portion - gain (loss) recognized in AOCI | $ 3 | $ 35 | $ 18 | $ (141) |
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective portion - gain (loss) recognized in AOCI | 3 | 6 | 18 | 10 |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Effective portion - gain (loss) recognized in AOCI | $ 0 | $ 29 | $ 0 | $ (151) |
Accounts Receivable, Net (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
Oct. 25, 2020 |
|
Receivables [Abstract] | |||||
Factored accounts receivable | $ 309,000,000 | $ 326,000,000 | $ 980,000,000 | $ 690,000,000 | |
Discounted letters of credit | 0 | 0 | 0 | 0 | |
Discounted promissory notes | 0 | $ 0 | 0 | $ 0 | |
Allowance for credit losses | $ 29,000,000 | $ 29,000,000 | $ 30,000,000 |
Contract Balances - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 170 | $ 148 |
Contract liabilities | $ 1,688 | $ 1,321 |
Contract Balances - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized | $ 968,000,000 | |||
Accounts receivable, credit losses | $ 0 | $ 0 | 0 | $ 0 |
Contract assets, credit losses | 0 | $ 0 | 0 | $ 0 |
Long-term Contract with Customer | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Remaining performance obligation | $ 681,000,000 | $ 681,000,000 |
Balance Sheet Detail - Inventories (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Inventories | ||
Customer service spares | $ 1,260 | $ 1,270 |
Raw materials | 956 | 870 |
Work-in-process | 846 | 624 |
Finished goods | 1,055 | 1,140 |
Inventories | 4,117 | 3,904 |
Inventory at customer locations included in finished goods | 18 | 16 |
Inventory, finished goods, evaluation inventory, net of reserves | $ 395 | $ 416 |
Balance Sheet Detail - Other Current Assets (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Other Current Assets [Abstract] | ||
Prepaid income taxes and income taxes receivable | $ 161 | $ 162 |
Prepaid expenses and other | 638 | 602 |
Other Current Assets | $ 799 | $ 764 |
Balance Sheet Detail - Deferred Income Taxes and Other Assets (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Balance Sheet Detail [Abstract] | ||
Non-current deferred income taxes | $ 1,654 | $ 1,711 |
Operating lease right-of-use assets | 262 | 252 |
Income tax receivables and other assets | 248 | 260 |
Deferred Income Taxes and Other Assets | $ 2,164 | $ 2,223 |
Balance Sheet Detail - Accounts Payable and Accrued Expense (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 1,352 | $ 1,124 |
Compensation and employee benefits | 781 | 800 |
Warranty | 232 | 201 |
Dividends payable | 217 | 201 |
Income taxes payable | 212 | 222 |
Other accrued taxes | 15 | 33 |
Interest payable | 56 | 36 |
Operating lease liabilities, current | 69 | 64 |
Other | 503 | 457 |
Accounts Payable and Accrued Expenses | $ 3,437 | $ 3,138 |
Balance Sheet Detail - Other Liabilities (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Other Liabilities | ||
Defined and postretirement benefit plans | $ 245 | $ 241 |
Operating lease liabilities, non-current | 199 | 195 |
Other | 255 | 226 |
Other Liabilities | $ 699 | $ 662 |
Business Combination (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 01, 2021 |
May 02, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Business Acquisition [Line Items] | |||||
Deal termination fee | $ 0 | $ 0 | $ 154 | $ 0 | |
Kokusai Electric | |||||
Business Acquisition [Line Items] | |||||
Deal termination fee | $ 154 |
Goodwill, Purchased Technology and Other Intangible Assets - Schedule of Goodwill and Other Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 3,479 | $ 3,466 |
Corporate and Other | ||
Goodwill [Line Items] | ||
Goodwill | 41 | 41 |
Semiconductor Systems | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 2,207 | 2,208 |
Applied Global Services | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | 1,032 | 1,018 |
Display and Adjacent Markets | Operating Segments | ||
Goodwill [Line Items] | ||
Goodwill | $ 199 | $ 199 |
Goodwill, Purchased Technology and Other Intangible Assets - Schedule of Purchased Technology and Intangible Assets (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Finite lived assets | $ 116 | $ 153 |
Purchased technology, net | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Finite lived assets | 53 | 75 |
Other Intangible Assets | ||
Summary of Purchased Technology and Intangible Assets [Line Items] | ||
Finite lived assets | $ 63 | $ 78 |
Goodwill, Purchased Technology and Other Intangible Assets - Additional Information (Details) $ in Millions |
9 Months Ended |
---|---|
Aug. 01, 2021
USD ($)
| |
Finite-Lived Intangible Assets [Line Items] | |
Goodwill, period increase | $ 13 |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful life | 1 year |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful life | 15 years |
Goodwill, Purchased Technology and Other Intangible Assets - Amortization Expense by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 11 | $ 14 | $ 37 | $ 40 |
Corporate and Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 0 | 0 | 1 | 0 |
Semiconductor Systems | Operating Segments | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 9 | 10 | 31 | 29 |
Applied Global Services | Operating Segments | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 1 | 0 | 1 | 0 |
Display and Adjacent Markets | Operating Segments | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1 | $ 4 | $ 4 | $ 11 |
Goodwill, Purchased Technology and Other Intangible Assets - Amortization Expense by Income Statement Location (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 11 | $ 14 | $ 37 | $ 40 |
Cost of products sold | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 7 | 10 | 22 | 27 |
Research, development and engineering | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 0 | 0 | 1 | 0 |
Marketing and selling | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 4 | $ 4 | $ 14 | $ 13 |
Goodwill, Purchased Technology and Other Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Millions |
Aug. 01, 2021 |
Oct. 25, 2020 |
---|---|---|
Future estimated amortization expense | ||
2021 (remaining 3 months) | $ 12 | |
2022 | 33 | |
2023 | 20 | |
2024 | 17 | |
2025 | 15 | |
Thereafter | 19 | |
Total | $ 116 | $ 153 |
Leases - Lease Expense and Supplemental Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 20 | $ 17 | $ 58 | $ 51 |
Weighted-average remaining lease term (in years) | 4 years 8 months 12 days | 5 years 3 months 18 days | 4 years 8 months 12 days | 5 years 3 months 18 days |
Weighted-average discount rate | 1.60% | 1.90% | 1.60% | 1.90% |
Operating cash flows paid for operating leases | $ 58 | $ 51 | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 48 | $ 142 |
Leases - Lease Maturities (Details) $ in Millions |
Aug. 01, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2021 (remaining 3 months) | $ 19 |
2022 | 70 |
2023 | 63 |
2024 | 54 |
2025 | 42 |
Thereafter | 31 |
Total lease payments | 279 |
Less imputed interest | (11) |
Total | $ 268 |
Severance and Related Charges - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Aug. 01, 2021 |
May 02, 2021 |
Jan. 31, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
Oct. 25, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||||||
Provision for severance | $ 0 | $ 0 | $ 158 | $ 0 | |||
Employee Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Provision for severance | $ 6 | $ 152 | |||||
Restructuring reserve | $ 23 | $ 36 | $ 147 | $ 23 | $ 0 |
Severance and Related Charges - Schedule of Severance Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Provision for severance | $ 0 | $ 0 | $ 158 | $ 0 |
Display and Adjacent Markets | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Provision for severance | 0 | 0 | 8 | 0 |
Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Provision for severance | $ 0 | $ 0 | $ 150 | $ 0 |
Severance and Related Charges - Schedule of changes in severance and related charges reserves (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 01, 2021 |
May 02, 2021 |
Jan. 31, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Restructuring Reserve [Roll Forward] | ||||||
Provision for severance | $ 0 | $ 0 | $ 158 | $ 0 | ||
Employee Severance | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring reserve, beginning balance | 36 | $ 147 | $ 0 | 0 | ||
Provision for severance | 6 | 152 | ||||
Consumption of reserves | (13) | (117) | (5) | |||
Restructuring reserve, ending balance | $ 23 | $ 36 | $ 147 | $ 23 |
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Equity [Abstract] | ||||
Common stock repurchases (in shares) | 11 | 4 | 17 | 11 |
Cost of stock repurchased | $ 1,500 | $ 200 | $ 2,250 | $ 599 |
Average price paid per share (in dollars per share) | $ 133.40 | $ 59.41 | $ 134.03 | $ 55.74 |
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units (Details) - Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units shares in Millions |
9 Months Ended |
---|---|
Aug. 01, 2021
$ / shares
shares
| |
Restricted stock units, restricted stock, performance shares and performance units | |
Beginning balance (in shares) | shares | 15 |
Granted (in shares) | shares | 5 |
Vested (in shares) | shares | (6) |
Canceled (in shares) | shares | (1) |
Ending balance (in shares) | shares | 13 |
Weighted Average Grant Date Fair Value | |
Beginning of period (in dollars per share) | $ / shares | $ 45.36 |
Granted (in dollars per share) | $ / shares | 90.64 |
Vested (in dollars per share) | $ / shares | 43.02 |
Canceled (in dollars per share) | $ / shares | 56.53 |
Ending balance (in dollars per share) | $ / shares | $ 62.28 |
Stockholders' Equity, Comprehensive Income and Share-Based Compensation - Employee Stock Purchase Plan, Valuation Assumptions (Details) - Employee Stock Purchase Plan - $ / shares |
9 Months Ended | |
---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.72% | 1.40% |
Expected volatility | 44.60% | 37.20% |
Risk-free interest rate | 0.05% | 1.05% |
Expected life (in years) | 6 months | 6 months |
Weighted average estimated fair value (in dollars per share) | $ 18.34 | $ 15.24 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate provision (as percent) | 13.30% | 19.10% | 12.40% | 14.90% |
Valuation allowance | $ 44 | $ 44 |
Warranty, Guarantees, Commitments and Contingencies - Rollforward (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 216 | $ 199 | $ 201 | $ 196 |
Warranties issued | 61 | 43 | 162 | 119 |
Change in reserves related to preexisting warranty | 4 | 0 | 9 | 2 |
Consumption of reserves | (49) | (43) | (140) | (118) |
Ending balance | $ 232 | $ 199 | $ 232 | $ 199 |
Warranty, Guarantees, Commitments and Contingencies - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Aug. 01, 2021
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Standard product warranty period | 12 months |
Maximum potential amount of future payments for letters of credit or other guarantee instruments | $ 338 |
Parent guarantees to banks | $ 145 |
Industry Segment Operations - Additional Information (Details) |
9 Months Ended |
---|---|
Aug. 01, 2021
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Industry Segment Operations - Reconciliations of Total Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2021 |
Jul. 26, 2020 |
Aug. 01, 2021 |
Jul. 26, 2020 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net Sales | $ 6,196 | $ 4,395 | $ 16,940 | $ 12,514 |
Share-based compensation | (81) | (70) | (272) | (234) |
Severance and related charges | 0 | 0 | (158) | 0 |
Deal termination fee | 0 | 0 | (154) | 0 |
Income from operations | 2,013 | 1,108 | 4,875 | 3,082 |
Corporate and Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Net Sales | 25 | 20 | 100 | 46 |
Unallocated cost of products sold and expenses | (208) | (156) | (549) | (388) |
Share-based compensation | (81) | (70) | (272) | (234) |
Severance and related charges | 0 | 0 | (150) | 0 |
Deal termination fee | 0 | 0 | (154) | 0 |
Income from operations | $ (264) | $ (206) | $ (1,025) | $ (576) |
Industry Segment Operations - Percentage by Customer (Details) - Customer Concentration Risk - Sales Revenue |
9 Months Ended |
---|---|
Aug. 01, 2021 | |
Taiwan Semiconductor Manufacturing Company Limited | |
Entity-Wide Revenue, Major Customer [Line Items] | |
Percentage of net sales | 16.00% |
Samsung Electronics Co., Ltd. | |
Entity-Wide Revenue, Major Customer [Line Items] | |
Percentage of net sales | 23.00% |
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