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

9 Months Ended

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:

 

	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	$	20	$	(133)	$	(199)	$	13	$	(299)
Other comprehensive income (loss) before reclassifications	(7)		14		—		—		7
Amounts reclassified out of AOCI	(4)		4		—		—		—
Other comprehensive income (loss), net of tax	(11)		18		—		—		7
Balance as of August 1, 2021	$	9	$	(115)	$	(199)	$	13	$	(292)

	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	$	11	$	(16)	$	(188)	$	13	$	(180)
Other comprehensive income (loss) before reclassifications	19		(109)		—		—		(90)
Amounts reclassified out of AOCI	(6)		(1)		—		—		(7)
Other comprehensive income (loss), net of tax	13		(110)		—		—		(97)
Balance as of July 26, 2020	$	24	$	(126)	$	(188)	$	13	$	(277)

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:

	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	11		4		17		11
Cost of stock repurchased	$	1,500	$	200	$	2,250	$	599
Average price paid per share	$	133.40	$	59.41	$	134.03	$	55.74

Effect of share-based compensation on the results of operations

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

	Three Months Ended				Nine Months Ended
	August 1, 2021		July 26, 2020		August 1, 2021		July 26, 2020
	(In millions)
Cost of products sold	$	28	$	24	$	93	$	79
Research, development and engineering	30		27		101		89
Marketing and selling	11		8		34		27
General and administrative	12		11		44		39
Total share-based compensation	$	81	$	70	$	272	$	234

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:

	Shares	Weighted Average Grant Date Fair Value
	(In millions, except per share amounts)
Outstanding as of October 25, 2020	15	$	45.36
Granted	5	$	90.64
Vested	(6)	$	43.02
Canceled	(1)	$	56.53
Outstanding as of August 1, 2021	13	$	62.28

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.

	Nine Months Ended
	August 1, 2021	July 26, 2020
Dividend yield	0.72%	1.40%
Expected volatility	44.6%	37.2%
Risk-free interest rate	0.05%	1.05%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$18.34	$15.24