Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2015 | Aug. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AGILENT TECHNOLOGIES INC. | |
Entity Central Index Key | 1,090,872 | |
Current Fiscal Year End Date | --10-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 331,403,231 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2015 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Net revenue | ||||
Products | $ 798 | $ 795 | $ 2,372 | $ 2,376 |
Services and other | 216 | 214 | 631 | 629 |
Total net revenue | 1,014 | 1,009 | 3,003 | 3,005 |
Costs and expenses: | ||||
Cost of products | 380 | 384 | 1,140 | 1,147 |
Cost of services and other | 121 | 123 | 357 | 361 |
Total costs | 501 | 507 | 1,497 | 1,508 |
Research and development | 79 | 86 | 248 | 261 |
Selling, general and administrative | 290 | 285 | 892 | 887 |
Total costs and expenses | 870 | 878 | 2,637 | 2,656 |
Income from operations | 144 | 131 | 366 | 349 |
Interest income | 2 | 3 | 6 | 7 |
Interest expense | (17) | (28) | (50) | (87) |
Other income (expense), net | (1) | (21) | 15 | (18) |
Income from continuing operations before taxes | 128 | 85 | 337 | 251 |
Provision for income taxes | 23 | 22 | 42 | 27 |
Income from continuing operations | 105 | 63 | 295 | 224 |
Income (loss) from discontinued operations, net of tax expense (benefit) of $0, $15, $(2) and $53 | (2) | 84 | (37) | 257 |
Net income | $ 103 | $ 147 | $ 258 | $ 481 |
Net income per share - basic | ||||
Income from continuing operations | $ 0.32 | $ 0.19 | $ 0.88 | $ 0.67 |
Income (loss) from discontinued operations | (0.01) | 0.25 | (0.11) | 0.77 |
Net income per share - basic | 0.31 | 0.44 | 0.77 | 1.44 |
Net income per share - diluted | ||||
Income from continuing operations | 0.31 | 0.19 | 0.88 | 0.66 |
Income (loss) from discontinued operations | 0 | 0.24 | (0.11) | 0.76 |
Net income per share - diluted | $ 0.31 | $ 0.43 | $ 0.77 | $ 1.42 |
Weighted average shares used in computing net income per share: | ||||
Basic (in shares) | 332 | 334 | 334 | 333 |
Diluted (in shares) | 334 | 338 | 336 | 338 |
Cash dividends declared per common share | $ 0.10 | $ 0.132 | $ 0.30 | $ 0.396 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Income tax expense (benefit) from discontinued operations | $ 0 | $ 15 | $ (2) | $ 53 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 103 | $ 147 | $ 258 | $ 481 |
Other comprehensive income (loss): | ||||
Unrealized gain on investments, net of tax benefit of $0, $(2), $0 and $(1) | 0 | 8 | 0 | 8 |
Amounts reclassified into earnings related to investments, net of tax of $0, $0, $0 and $0 | 0 | (1) | 0 | (1) |
Unrealized gain on derivative instruments, net of tax expense of $(2), $(1), $(4) and $0 | 1 | 2 | 7 | 1 |
Amounts reclassified into earnings related to derivative instruments, net of tax (expense) benefit of $2, $0, $5 and $(1) | (1) | 1 | (9) | 1 |
Foreign currency translation, net of tax expense (benefit) of $1, $(1), $8 and $(1) | (66) | (92) | (337) | (59) |
Net defined benefit pension cost and post retirement plan costs: | ||||
Change in actuarial net loss, net of tax expense of $(2), $(4), $(6) and $(10) | 7 | 11 | 17 | 36 |
Change in net prior service benefit, net of tax benefit of $1, $4, $4 and $12 | (3) | (8) | (8) | (24) |
Other comprehensive loss | (62) | (79) | (330) | (38) |
Total comprehensive income (loss) | $ 41 | $ 68 | $ (72) | $ 443 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Other comprehensive income (loss), tax, parenthetical disclosures | ||||
Unrealized gain on investments,tax | $ 0 | $ (2) | $ 0 | $ (1) |
Amounts reclassified into earnings related to investments, Tax | 0 | 0 | 0 | 0 |
Unrealized gain on derivative instruments, tax | (2) | (1) | (4) | 0 |
Amounts reclassified into earnings related to derivative instruments, tax | 2 | 0 | 5 | (1) |
Foreign currency translation, tax | 1 | (1) | 8 | (1) |
Net defined benefit pension cost and post retirement plan costs, tax | ||||
Change in actuarial net loss, tax | (2) | (4) | (6) | (10) |
Change in net prior service benefit, tax | $ 1 | $ 4 | $ 4 | $ 12 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 2,075 | $ 2,218 |
Accounts receivable, net | 584 | 626 |
Inventory | 545 | 574 |
Other current assets | 274 | 261 |
Current assets of discontinued operations | 0 | 1,821 |
Total current assets | 3,478 | 5,500 |
Property, plant and equipment, net | 587 | 631 |
Goodwill | 2,366 | 2,507 |
Other intangible assets, net | 484 | 649 |
Long-term investments | 88 | 96 |
Other assets | 248 | 283 |
Non-current assets of discontinued operations | 0 | 1,165 |
Total assets | 7,251 | 10,831 |
Current liabilities: | ||
Accounts payable | 248 | 302 |
Employee compensation and benefits | 186 | 228 |
Deferred revenue | 265 | 260 |
Other accrued liabilities | 154 | 289 |
Current liabilities of discontinued operations | 0 | 623 |
Total current liabilities | 853 | 1,702 |
Long-term debt | 1,655 | 1,663 |
Retirement and post-retirement benefits | 168 | 209 |
Other long-term liabilities | 469 | 522 |
Long-term liabilities of discontinued operations | 0 | 1,434 |
Total liabilities | $ 3,145 | $ 5,530 |
Commitments and Contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding | $ 0 | $ 0 |
Common stock; $0.01 par value; 2 billion shares authorized; 611 million shares at July 31, 2015 and 608 million shares at October 31, 2014, issued | 6 | 6 |
Treasury stock at cost; 279 million shares at July 31, 2015 and 273 million shares at October 31, 2014 | (10,074) | (9,807) |
Additional paid-in-capital | 9,029 | 8,967 |
Retained earnings | 5,474 | 6,466 |
Accumulated other comprehensive loss | (332) | (334) |
Total stockholder's equity | 4,103 | 5,298 |
Non-controlling interest | 3 | 3 |
Total equity | 4,106 | 5,301 |
Total liabilities and equity | $ 7,251 | $ 10,831 |
CONDENSED CONSOLIDATED BALANCE7
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2015 | Oct. 31, 2014 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Preferred stock, issued and outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued and outstanding (in shares) | 611,000,000 | 608,000,000 |
Treasury stock at cost, shares (in shares) | 279,000,000 | 273,000,000 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 258 | $ 481 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 193 | 291 |
Accelerated amortization of interest rate swap gain (due to early redemption of debt) | 0 | (8) |
Share-based compensation | 43 | 77 |
Excess tax benefit from share-based plans | (5) | (3) |
Deferred taxes | (15) | 18 |
Excess and obsolete inventory related charges | 20 | 39 |
Other non-cash (income) expense, net | 13 | (6) |
Changes in assets and liabilities: | ||
Accounts receivable | 1 | 0 |
Inventory | (18) | (73) |
Accounts payable | (47) | (29) |
Employee compensation and benefits | (27) | (32) |
Other assets and liabilities | (162) | (208) |
Net cash provided by operating activities | 254 | 547 |
Cash flows from investing activities: | ||
Investments in property, plant and equipment | (71) | (162) |
Proceeds from sale of property, plant, and equipment | 11 | 14 |
Payments to acquire equity method investments | (1) | (25) |
Payment in exchange for convertible note | (2) | 0 |
Change in restricted cash and cash equivalents, net | 1 | 1 |
Proceeds from sale of investments | 0 | 1 |
Proceeds from divestitures | 3 | 2 |
Acquisitions of businesses and intangible assets, net of cash acquired | (66) | (3) |
Net cash used in investing activities | (125) | (172) |
Cash flows from financing activities: | ||
Issuance of common stock under employee stock plans | 57 | 136 |
Payment of dividends | (100) | (132) |
Excess tax benefit from share-based plans | 5 | 3 |
Net transfer of cash and cash equivalents to Keysight | (734) | 0 |
Proceeds from short-term borrowings | 0 | 35 |
Proceeds from revolving credit facility | 0 | 50 |
Repayments of revolving credit facility | 0 | (50) |
Repayments of senior notes | 0 | (500) |
Treasury stock repurchases | (267) | (200) |
Net cash used in financing activities | (1,039) | (658) |
Effect of exchange rate movements | (43) | (1) |
Net decrease in cash and cash equivalents | (953) | (284) |
Change in cash and cash equivalents within current assets of discontinued operations | 810 | 0 |
Cash and cash equivalents at beginning of period | 2,218 | 2,675 |
Cash and cash equivalents at end of period | $ 2,075 | $ 2,391 |
OVERVIEW, BASIS OF PRESENTATION
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview. Agilent Technologies Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that includes instruments, software, services and consumables for the entire laboratory workflow. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters. Keysight Separation. On November 1, 2014, we completed the distribution of 100% of the outstanding common shares of Keysight Technologies, Inc. ("Keysight") to Agilent stockholders who received one share of Keysight common stock for every two shares of Agilent held as of the close of business on the record date, October 22, 2014. The historical results of operations and the financial position of Keysight are included in the consolidated financial statements of Agilent and are reported as discontinued operations within this Form 10-Q. See "Basis of Presentation". New Segment Structure. In November 2014, we announced a change in organizational structure designed to better serve our customers. Our life sciences business, excluding the nucleic acid solutions division, together with the chemical analysis business combined to form a new segment called life sciences and applied markets business. Our diagnostics and genomics businesses combined with the nucleic acid solutions division from our life sciences business and became the diagnostics and genomics segment. Finally, the Agilent CrossLab segment was formed from the services and consumables businesses previously part of the life sciences and chemicals analysis businesses. Financial reporting under this new structure is included within this report on Form 10-Q and historical financial segment information has been recast to conform to this new presentation within our financial statements. Basis of Presentation . We have prepared the accompanying financial data for the three and nine months ended July 31, 2015 and 2014 pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair statement of our condensed consolidated balance sheet as of July 31, 2015 and October 31, 2014, condensed consolidated statement of comprehensive income (loss) for the three and nine months ended July 31, 2015 and 2014, condensed consolidated statement of operations for the three and nine months ended July 31, 2015 and 2014, and condensed consolidated statement of cash flows for the nine months ended July 31, 2015 and 2014. The prior year results of operations and the prior year end financial position of Keysight are included in the consolidated financial statements of Agilent and reported as discontinued operations. The prior year statement of comprehensive income and prior year statement of cash flows have not been adjusted to reflect the effect of the separation of Keysight. Unless indicated otherwise, the information in the Notes to the condensed consolidated financial statements relates to our continuing operations. Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, valuation of goodwill and purchased intangible assets, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, restructuring and accounting for income taxes. Update to Significant Accounting Policies. For the stock option and long term performance plan grants in 2015 we are now using a volatility measure derived from a selection of our peer companies. In prior periods, we used Agilent stock historical volatility. We now consider this method to not be reflective of our future volatility due to the separation of Keysight. See Note 4, "Share-based compensation" for additional information. There have been no other material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2014. Fair Value of Financial Instruments. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments is determined using quoted market prices for those securities when available. For those long-term equity investments accounted for under the cost or equity method, their carrying value approximates their estimated fair value. Equity method investments are reported at the amount of the company’s initial investment and adjusted each period for the company’s share of the investee’s income or loss and dividend paid. The fair value of our long-term debt, calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately $43 million and $53 million as of July 31, 2015 and October 31, 2014 , respectively. The fair value of foreign currency contracts used for hedging purposes is estimated internally by using inputs tied to active markets. These inputs, for example, interest rate yield curves, foreign exchange rates, and forward and spot prices for currencies are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. See also Note 9, "Fair Value Measurements" for additional information on the fair value of financial instruments. Goodwill and Purchased Intangible Assets. Under the authoritative guidance we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The accounting standard gives an entity the option to first assess qualitative factors to determine whether performing the two-step test is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. The guidance includes examples of events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. These include macro-economic conditions such as deterioration in the entity's operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the provisions of authoritative guidance require that we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of each reporting unit to its carrying value. The second step (if necessary) measures the amount of impairment by applying fair-value-based tests to the individual assets and liabilities within each reporting unit. As defined in the authoritative guidance, a reporting unit is an operating segment, or one level below an operating segment. We aggregate components of an operating segment that have similar economic characteristics into our reporting units. In fiscal year 2014, we assessed goodwill impairment for three reporting units under our previous reporting structure. The chemical analysis segment contained one reporting unit and there were two reporting units under the life sciences and diagnostics segment. Within the life sciences and diagnostic business the first reporting unit related to our life sciences business and the second related to our diagnostics business. We performed a qualitative test for goodwill impairment of our previous three reporting units as of September 30, 2014. Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these reporting units are greater than their respective carrying values. Each quarter we review the events and circumstances to determine if goodwill impairment is indicated. In connection with our goodwill impairment testing in 2015, we assess for potential impairment of goodwill within our three new reporting units resulting from our reorganization. In the three and nine months ended July 31, 2015 and 2014, there was no triggering event that would indicate that there was an impairment of goodwill and therefore there was no impairment of goodwill during the three and nine months ended July 31, 2015 and 2014. Purchased intangible assets consist primarily of acquired developed technologies, proprietary know-how, trademarks, and customer relationships and are amortized using the best estimate of the asset's useful life that reflect the pattern in which the economic benefits are consumed or used up or a straight-line method ranging from 6 months to 15 years. In-process research and development ("IPR&D") is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, Agilent will record a charge for the value of the related intangible asset to Agilent's condensed consolidated statement of operations in the period it is abandoned. Agilent's indefinite-lived intangible assets are IPR&D intangible assets. The accounting guidance allows a qualitative approach for testing indefinite-lived intangible assets for impairment, similar to the issued impairment testing guidance for goodwill and allows the option to first assess qualitative factors (events and circumstances) that could have affected the significant inputs used in determining the fair value of the indefinite-lived intangible asset to determine whether it is more-likely-than-not (i.e. greater than 50% chance) that the indefinite-lived intangible asset is impaired. An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value. We performed a qualitative test for impairment of indefinite-lived intangible assets as of September 30, 2014. Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these indefinite-lived intangible assets is greater than their respective carrying values. Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible asset is indicated. There was no impairment of indefinite-lived intangible asset during the three and nine months ended July 31, 2015 and 2014 . |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Jul. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 2. NEW ACCOUNTING PRONOUNCEMENTS There were no changes to the new accounting pronouncements as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2014 except for the following: In April 2014, FASB issued amendments to the guidance on discontinued operations. The guidance changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, expenses of discontinued operations and of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The new guidance is effective for Agilent prospectively for all disposals (or classifications as held for sale) of components of an entity that occur after November 1, 2016. The disposal of Keysight meets the definition of a discontinued operation under both the existing and amended accounting guidance. In January 2015, FASB issued guidance on simplifying income statement presentation by eliminating the concept of extraordinary items from U.S. GAAP. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively and retrospectively to all periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We have evaluated the accounting guidance and determined that there is no impact of this update to our consolidated financial statements. In February 2015, FASB issued an amendment to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The amendments in this update are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. We do not expect to have an impact to our consolidated financial statements by adopting this amended guidance. In April 2015, FASB issued an amendment to simplify the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs remain unchanged. The amendments in this update are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Earlier adoption is permitted and we are currently evaluating when we will implement the guidance. We do not expect the impact of adopting this guidance to be material to our consolidated financial statements. In July 2015, FASB issued guidance to simplify the accounting for inventory and to more closely align their guidance with international accounting standards. The amendments in this update apply to companies which use inventory valuation methods other than last in, first-out and the retail inventory method to change the way that they subsequently measure the value of inventory on their balance sheet. Under the new guidance, inventory should be valued at the lower of cost and net realizable value rather than the lower of cost and market. The amendments in this update are effective for fiscal years beginning after December 15, 2016, and for interim periods beginning after December 15, 2017. We do not expect to have an impact to our consolidated financial statements by adopting this amended guidance, as the new guidance aligns with our current practice of using net realizable value as our estimate of market value. In July 2015, FASB announced that the implementation date of Topic 606, Revenue from Contracts with Customers, would be delayed by one year. It will now be effective for annual and interim periods beginning after December 15, 2017. Early adoption is now permitted for fiscal years beginning after December 15, 2016. We are evaluating the impact of adopting this guidance to our consolidated financial statements. Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Jul. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations Disclosure | 3. DISCONTINUED OPERATIONS On September 19, 2013, Agilent announced its intention to separate its electronic measurement business, Keysight, which was previously a separate reportable segment, into a stand-alone publicly traded company. Keysight was incorporated in Delaware as a wholly-owned subsidiary of Agilent on December 6, 2013. On November 1, 2014, we completed the distribution of 100% of the outstanding common stock of Keysight to Agilent stockholders, who received one share of Keysight common stock for every two shares of Agilent common stock held as of the close of business on the record date, October 22, 2014. The separation agreement ensured that Keysight had approximately $700 million of total cash immediately following distribution. The historical results of operations and statement of financial position of Keysight have been presented as discontinued operations in the condensed consolidated financial statements and prior periods have been restated. Discontinued operations include results of Keysight's business except for certain allocated corporate overhead costs and certain costs associated with transition services provided by Agilent to Keysight. Discontinued operations also includes other costs incurred by Agilent to separate Keysight. These costs include transaction charges, advisory and consulting fees and information system expenses. The following table summarizes results from discontinued operations of Keysight included in the condensed consolidated statement of operations: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Net revenue $ — $ 757 $ — $ 2,171 Costs and expenses 2 659 39 1,863 Operating income (loss) (2 ) 98 (39 ) 308 Other income (expense), net — 1 — 2 Income (loss) from discontinued operations before tax (2 ) 99 (39 ) 310 Provision (benefit) for income taxes — 15 (2 ) 53 Net income (loss) from discontinued operations $ (2 ) $ 84 $ (37 ) $ 257 Net income (loss) from discontinued operations includes transaction, information systems and other costs to effect the separation of $2 million and $39 million for the three and nine months ended July 31, 2015, respectively. Net income (loss) from discontinued operations includes transaction, information systems and other costs to effect the separation of $58 million and $115 million for the three and nine months ended July 31, 2014, respectively. In the three and nine months ended July 31, 2015 only those costs incurred to effect the separation have been included. No income or expense has been recorded for the Keysight business after separation from Agilent on November 1, 2014. The following table presents Agilent's electronic measurement business assets and liabilities removed from the condensed consolidated balance sheet as of November 1, 2014 and presented as discontinued operations as of October 31, 2014: October 31, 2014 (in millions) Assets: Cash and cash equivalents $ 810 Accounts receivable, net 357 Inventory 498 Other current assets 156 Current assets of discontinued operations 1,821 Property, plant and equipment, net 470 Goodwill 392 Other intangible assets, net 18 Long-term investments 63 Other assets 222 Non-current assets of discontinued operations 1,165 Total assets of discontinued operations $ 2,986 Liabilities: Accounts payable $ 173 Employee compensation and benefits 167 Deferred revenue 175 Other accrued liabilities 108 Current liabilities of discontinued operations 623 Long-term debt 1,099 Retirement and post-retirement benefits 213 Other long-term liabilities 122 Long-term liabilities of discontinued operations 1,434 Total liabilities of discontinued operations $ 2,057 In addition, $332 million of accumulated other comprehensive loss, net of income taxes, primarily related to pension and other post retirement benefits plans and currency translation was also transferred to Keysight together with $28 million of additional paid in capital related to share based compensation windfall tax benefits. The removal of Keysight net assets and equity related adjustments is presented as a reduction in Agilent's retained earnings and represents a non cash financing activity excluding cash transferred. See Note 5 “Income Taxes” for tax implications and adjustments due to the distribution and Note 4 “Share Based Compensation” for changes to share based compensation awards as a result of the distribution of Keysight. In order to effect the separation and govern our relationship with Keysight after the separation, we entered into a Separation and Distribution Agreement and other agreements including a Tax Matters Agreement, an Employee Matters Agreement and a Transition Services Agreement. The Separation and Distribution Agreement governs the separation of the electronic measurement business, the transfer of assets and other matters related to our relationship with Keysight. The Tax Matters Agreement governs the respective rights, responsibilities and obligations of Keysight and Agilent with respect to taxes, tax attributes, tax returns, tax proceedings and certain other tax matters. The Employee Matters Agreement governs the compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of Keysight and Agilent, and generally allocates liabilities and responsibilities relating to employee compensation, benefit plans and programs. The Employee Matters Agreement provides that employees of Keysight will no longer participate in benefit plans sponsored or maintained by Agilent. In addition, the Employee Matters Agreement provides that each of the parties will be responsible for their respective former and current employees and compensation plans for such current employees. Under the terms of the Transition Services Agreement, we agreed to provide administrative, site services, information technology systems and various other corporate and support services to Keysight over the period of 12-18 months after the separation on a cost or cost-plus basis. The most significant component of the service income is the provision of IT services that was completed by the end of the second quarter of 2015. In total we have recorded income for all services provided to Keysight of approximately $12 million . In addition, Agilent expects to receive lease income from Keysight over the next 4-5 years of approximately $13 million per year. In the three and nine months ended July 31, 2015 other income (expense), net includes $3 million and $21 million , respectively, of income in respect of the provision of services to, and lease income from Keysight. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Jul. 31, 2015 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | 4. SHARE-BASED COMPENSATION Agilent accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors including employee stock option awards, restricted stock units, employee stock purchases made under our employee stock purchase plan (“ESPP”) and performance share awards granted to selected members of our senior management under the long-term performance plan (“LTPP”) based on estimated fair values. The impact on our results for share-based compensation was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Cost of products and services $ 2 $ 2 $ 9 $ 11 Research and development 1 1 4 6 Selling, general and administrative 7 8 31 31 Share-based compensation expense in continuing operations $ 10 $ 11 $ 44 $ 48 Share-based compensation expense in discontinued operations — 9 — 31 Total share-based compensation expense $ 10 $ 20 $ 44 $ 79 At July 31, 2015 and October 31, 2014 , there was no share-based compensation capitalized within inventory. For the three and nine months ended July 31, 2015 , the windfall tax benefit realized from exercised stock options and similar awards was $5 million and arose due the filing of the U.S. federal tax return for fiscal year 2014 and resulting from return to provision adjustments. For the three and nine months ended July 31, 2014 , the windfall tax benefit realized from exercised stock options and similar awards was zero and $3 million , respectively. During the three months ended July 31, 2014 an out of period adjustment was recorded to reverse previously recognized windfall tax benefits in the amount of $23 million . Approximately $11 million of the reversal was related to the favorable settlement of a tax authority examination in the three months ended January 31, 2014. The remainder resulted from the correction of the computation of cash tax benefit realized in prior years. The correction is not considered material to current or prior periods. The following assumptions were used to estimate the fair value of the options and LTPP grants. Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 Stock Option Plans: Weighted average risk-free interest rate — 1.7 % 1.7 % 1.7 % Dividend yield — 1 % 1 % 1 % Weighted average volatility — 38 % 28 % 39 % Expected life — 5.8yrs 5.5 yrs 5.8 yrs LTPP: Volatility of Agilent shares 25 % 36 % 25 % 36 % Volatility of selected peer-company shares 12%-57% 13%-57% 12%-57% 13%-57% Price-wise correlation with selected peers 37 % 47 % 37 % 47 % In connection with the separation of Keysight on November 1, 2014 and in accordance with the Employee Matters Agreement we made certain adjustments to the exercise price and number of our share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Exercisable and non-exercisable stock options converted to those of the entity where the employee is working post-separation. Restricted stock units awards and long-term performance plan grants were adjusted to provide holders restricted stock units and long-term performance plan grants in the company that employs such employee following the separation. These adjustments to our stock-based compensation awards did not have a material impact on compensation expense. The fair value of share-based awards for employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the LTPP were valued using a Monte Carlo simulation model. Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. Due to the separation of Keysight on November 1, 2014, expected volatility for grants of options in fiscal 2015 was based on a 5.5 year average historical stock price volatility of a group of our peer companies. For the volatility of our 2015 LTPP grants, we used the 3 year average historical stock price volatility of a group of our peer companies. We believe our historical volatility prior to the separation of Keysight is no longer relevant to use. For the grants of options and LTPP prior to November 1, 2014, the expected stock price volatility assumption was determined using the historical volatility of Agilent’s stock over the most recent historical period equivalent to the expected life of the stock options and LTPP. In developing our estimated life of our employees' stock options of 5.5 years, we considered the separation of Keysight and the historical option exercise behavior for our executive employees who were granted the majority of the options in the annual grants made which we believe is representative of future behavior. The estimated fair value of restricted stock unit awards is determined based on the market price of Agilent’s common stock on the date of grant adjusted for expected dividend yield. The ESPP allows eligible employees to purchase shares of our common stock at 85 percent of the purchase price and uses the purchase date to establish the fair market value. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 5. INCOME TAXES The company’s effective tax rate from continuing operations was 18.0 percent and 12.5 percent for the three and nine months ended July 31, 2015, respectively. The company's effective tax rate from continuing operations was 25.9 percent and 10.8 percent for the three and nine months ended July 31, 2014, respectively. The income tax expense from continuing operations was $23 million and $42 million for the three and nine months ended July 31, 2015, respectively. The income tax expense from continuing operations was $22 million and $27 million for the three and nine months ended July 31, 2014, respectively. The income tax provision from continuing operations for the three and nine months ended July 31, 2015 included net discrete tax expense of $1 million and net discrete tax benefit of $21 million , respectively. The net discrete tax expense for the three months ended July 31, 2015 included $1 million of tax expense related primarily to return to provision adjustments. In addition to the aforementioned, the net discrete tax benefit of the nine months ended July 31, 2015 included $16 million of tax benefit related to the de-registration of certain foreign branches, $6 million of tax benefit for the extension of the U.S. research and development tax credit attributable to the company's prior fiscal year and $5 million of other discrete tax expense primarily related to the accrual of interest expense associated with uncertain tax positions. Also included were out of period adjustments of $13 million of tax benefit related to a tax rate change in Denmark, $4 million of tax expense attributable to an error discovered on a prior year U.S. tax return and $4 million tax expense related to foreign deferred tax assets. The out of period adjustments are not considered to be material to current or prior periods. The income tax provision for the three and nine months ended July 31, 2014 included a net discrete benefit of $9 million and net discrete benefit of $40 million , respectively. The $9 million net discrete tax benefit for the three months ended July 31, 2014 included a $4 million tax benefit resulting from a deduction generated by the redemption of senior notes. In addition, we recorded out of period adjustments consisting of a $9 million tax benefit related to the correction of tax basis of land in the U.K, a $3 million tax benefit related to corrections to transfer pricing for tax years 2012 and 2013, a $4 million tax expense related primarily to the return to provision adjustments in the U.S. and a $3 million tax expense to correct tax related balance sheet accounts. In the nine months ended July 31, 2014, the $40 million net discrete tax benefit included a $4 million tax benefit resulting from a deduction generated by the redemption of senior notes and a $50 million tax benefit primarily due to the settlement of an Internal Revenue Service ("IRS") audit in the U.S. and the recognition of tax expense related to the repatriation of dividends to the U.S. The remaining $14 million of discrete tax expense for the nine months ended July 31, 2014 included $10 million tax expense related to corrections to transfer pricing for tax years 2012 and 2013, a $9 million tax benefit related to the correction of tax basis of land in the U.K., a $4 million tax expense related to international tax rate changes and return to provision adjustments, a $4 million tax expense related primarily to the return to provision adjustments in the U.S., a $3 million tax expense to correct tax related balance sheet accounts, and a $2 million tax expense related to a state tax reserve interest adjustment. None of the out of period adjustments are considered to be material to current or prior periods. On November 1, 2014, Agilent transferred deferred tax assets of $238 million , deferred tax liabilities of $37 million , current income tax payable of $40 million , and other long-term liabilities related to uncertain tax positions totaling $8 million to Keysight as part of its separation from Agilent. A current prepaid income tax asset of $19 million and long-term prepaid income tax asset of $3 million related to sales of intercompany assets was also transferred to Keysight upon separation from Agilent. In addition, in the three months ended July 31, 2015, a $6 million return to provision adjustment for Keysight associated with bonus depreciation was recognized through retained earnings. In the U.S., tax years remain open back to the year 2008 for federal income tax purposes and the year 2000 for significant states. On January 29, 2014 we reached an agreement with the IRS for the tax years 2006 through 2007. The settlement resulted in the recognition, within the continuing operations, of previously unrecognized tax benefits of $111 million , offset by a tax liability on foreign distributions of approximately $61 million principally related to the repatriation of foreign earnings. Agilent's U.S. federal income tax returns for 2008 through 2011 are currently under audit by the IRS. In connection with the settlement of the 2006-2007 IRS audit, we identified during the first quarter of fiscal year 2014 an overstatement of approximately $65 million in our long-term tax liabilities. The overstatement was recorded in 2008 as a cumulative effect of a change in accounting principle when we adopted Accounting Standard Codification 740-10, Income Taxes. Accordingly, we corrected the error by reducing long-term tax liabilities and increasing retained earnings by $65 million in the first quarter of fiscal 2014. The correction had no impact on net income or cash flows in any prior period and is not considered material to total liabilities or equity in any prior period. The IRS is expected to complete its examination of our U.S. income tax returns for tax years 2008 through 2011 during the fourth quarter of 2015. We expect to make a payment of approximately $12 million as part of closing the exam. In the third quarter of 2015 we reclassified $12 million of other long-term liabilities to other accrued liabilities related to uncertain tax positions of continuing operations that we expect to pay within the next twelve months. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2003. With these jurisdictions and the U.S., it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits. On July 27, 2015, the U.S. Tax Court invalidated a U.S. Treasury regulation requiring the inclusion of stock-based compensation in certain intercompany cost-sharing agreements. We are currently evaluating the impact of this decision on our current and historical tax filing positions. We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected tolling of the statutes of limitations in various jurisdictions. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | 6. NET INCOME PER SHARE The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Numerator: Income from continuing operations $ 105 $ 63 295 $ 224 Income (loss) from discontinued operations (2 ) 84 (37 ) 257 Net income $ 103 $ 147 $ 258 $ 481 Denominator: Basic weighted-average shares 332 334 334 333 Potential common shares— stock options and other employee stock plans 2 4 2 5 Diluted weighted-average shares 334 338 336 338 In connection with the separation of Keysight on November 1, 2014 and in accordance with the Employee Matters Agreement we made certain adjustments to the exercise price and number of our share-based compensation awards. These adjustments to our share-based awards did not have a material impact on our dilutive weighted average shares. The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense, the tax benefits or shortfalls recorded to additional paid-in capital and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense and tax benefits or shortfalls collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards. We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For the three and nine months ended July 31, 2015 , 1.2 million and 856,900 options to purchase shares were excluded from the calculation of diluted earnings per share, respectively. For the three and nine months ended July 31, 2014, no options to purchase shares were excluded from the calculation of diluted earnings per share for both periods. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTPP and restricted stock awards whose combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three and nine months ended July 31, 2015 , 80,900 and 487,100 additional shares were excluded from the calculation of diluted earnings per share. For the three and nine months ended July 31, 2014, 125,900 and 480,300 additional shares were excluded from the calculation of diluted earnings per share, respectively. |
INVENTORY
INVENTORY | 9 Months Ended |
Jul. 31, 2015 | |
Inventory, Net [Abstract] | |
INVENTORY | 7. INVENTORY July 31, October 31, (in millions) Finished goods $ 361 $ 366 Purchased parts and fabricated assemblies 184 208 Inventory $ 545 $ 574 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 8. GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents goodwill balances and the movements for each of our reportable segments during the nine months ended July 31, 2015 : Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Goodwill as of October 31, 2014 $ 668 $ 1,345 $ 494 $ 2,507 Foreign currency translation impact (16 ) (169 ) (11 ) (196 ) Goodwill arising from acquisitions — 55 — 55 Goodwill as of July 31, 2015 $ 652 $ 1,231 $ 483 $ 2,366 The components of other intangibles as of July 31, 2015 and October 31, 2014 are shown in the table below: Purchased Other Intangible Assets Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value (in millions) As of October 31, 2014: Purchased technology $ 880 $ 475 $ 405 Trademark/Tradename 167 52 115 Customer relationships 368 257 111 Total amortizable intangible assets 1,415 784 631 In-Process R&D 18 — 18 Total $ 1,433 $ 784 $ 649 As of July 31, 2015: Purchased technology 844 551 293 Trademark/Tradename 155 61 94 Customer relationships 363 291 72 Total amortizable intangible assets 1,362 903 459 In-Process R&D 25 — 25 Total $ 1,387 $ 903 $ 484 During the nine months ended July 31, 2015 , we recorded additions to goodwill of $55 million and to other intangible assets of $13 million related to the single acquisition of the company, Cartagenia, a leading provider of software and services for clinical genetics and molecular pathology laboratories for €60 million , which closed in May. During the nine months ended July 31, 2015 , other intangible assets decreased $59 million , due to the impact of foreign exchange translation. Amortization expense of intangible assets was $38 million and $119 million for the three and nine months ended July 31, 2015 , respectively. Amortization expense of intangible assets was $46 million and $144 million for the three and nine months ended July 31, 2014 , respectively. Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year 2015 and for each of the five succeeding fiscal years and thereafter is estimated below: Estimated future amortization expense: (in millions) Remainder of 2015 $ 37 2016 $ 131 2017 $ 92 2018 $ 61 2019 $ 46 2020 $ 36 Thereafter $ 56 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The guidance establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value: Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data. Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2015 were as follows: Fair Value Measurement at July 31, 2015 Using July 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Assets: Short-term Cash equivalents (money market funds) $ 1,465 $ 1,465 $ — $ — Derivative instruments (foreign exchange contracts) 10 — 10 — Long-term Trading securities 35 35 — — Total assets measured at fair value $ 1,510 $ 1,500 $ 10 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 8 $ — $ 8 $ — Long-term Deferred compensation liability 35 — 35 — Total liabilities measured at fair value $ 43 $ — $ 43 $ — Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2014 were as follows: Fair Value Measurement at October 31, 2014 Using October 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Assets: Short-term Cash equivalents (money market funds) $ 1,117 $ 1,117 $ — $ — Derivative instruments (foreign exchange contracts) 10 — 10 — Long-term Trading securities 35 35 — — Total assets measured at fair value $ 1,162 $ 1,152 $ 10 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 4 $ — $ 4 $ — Long-term Deferred compensation liability 35 — 35 — Total liabilities measured at fair value $ 39 $ — $ 39 $ — Our money market funds and trading securities investments are generally valued using quoted market prices and therefore are classified within level 1 of the fair value hierarchy. Our derivative financial instruments are classified within level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable. Trading securities and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income. Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in other comprehensive income. Impairment of Investments. There were no impairments for investments for the three and nine months ended July 31, 2015 and 2014 . Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis For the three and nine months ended July 31, 2015 and 2014, there were no impairments of long-lived assets held and used. For the three and nine months ended July 31, 2015 and 2014, there were no impairments of long-lived assets held for sale. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Jul. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | 10. DERIVATIVES We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of risk management strategy, we use derivative instruments, primarily forward contracts, purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. Fair Value Hedges We are exposed to interest rate risk due to the mismatch between the interest expense we pay on our loans at fixed rates and the variable rates of interest we receive from cash, cash equivalents and other short-term investments. We have issued long-term debt in U.S. dollars at fixed interest rates based on the market conditions at the time of financing. The fair value of our fixed rate debt changes when the underlying market rates of interest change, and, in the past, we have used interest rate swaps to change our fixed interest rate payments to U.S. dollar LIBOR-based variable interest expense to match the floating interest income from our cash, cash equivalents and other short term investments. As of July 31, 2015 , all interest rate swap contracts had either been terminated or had expired. On November 25, 2008, we terminated two interest rate swap contracts associated with our 2017 senior notes that represented the notional amount of $400 million . On October 20, 2014 we prepaid $500 million out of $600 million principal of our 2017 senior notes and fully amortized the associated proportionate deferred gain to other income (expense). The remaining gain to be amortized related to the $100 million of 2017 senior notes at July 31, 2015 was $2 million . On August 9, 2011, we terminated five interest rate swap contracts related to our 2020 senior notes that represented the notional amount of $500 million . The gain to be amortized at July 31, 2015 was $20 million . All deferred gains from terminated interest rate swaps are being amortized over the remaining life of the respective senior notes. Cash Flow Hedges We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. The changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income (loss). Amounts associated with cash flow hedges are reclassified to cost of sales in the condensed consolidated statement of operations when the forecasted transaction occurs. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income (loss) will be reclassified to other income (expense) in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense) in the condensed consolidated statement of operations in the current period. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in other income (expense) over the life of the option contract. Ineffectiveness in the three and nine months ended July 31, 2015 and 2014 was not significant. For the three and nine months ended July 31, 2015 and 2014 gains and losses recognized in other income (expense) due to de-designation of cash flow hedge contracts were not significant. In July 2012, Agilent executed treasury lock agreements for $400 million in connection with future interest payments to be made on our 2022 senior notes issued on September 10, 2012. We designated the treasury lock as a cash flow hedge. The treasury lock contracts were terminated on September 10, 2012 and we recognized a deferred gain in accumulated other comprehensive income which is being amortized to interest expense over the life of the 2022 senior notes. The remaining gain to be amortized related to the treasury lock agreements at July 31, 2015 was $2 million Other Hedges Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in value of the derivative are recognized in other income (expense) in the condensed consolidated statement of operations, in the current period, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities. Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions which are selected based on their credit ratings and other factors. We have established policies and procedures for mitigating credit risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties. A number of our derivative agreements contain threshold limits to the net liability position with counterparties and are dependent on our corporate credit rating determined by the major credit rating agencies. The counterparties to the derivative instruments may request collateralization, in accordance with derivative agreements, 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 as of July 31, 2015 , was $3 million . The credit-risk-related contingent features underlying these agreements had not been triggered as of July 31, 2015 . There were 58 foreign exchange forward contracts open as of July 31, 2015 and designated as cash flow hedges. There were 159 foreign exchange forward contracts open as of July 31, 2015 not designated as hedging instruments. The aggregated notional amounts by currency and designation as of July 31, 2015 were as follows: Derivatives Designated as Cash Flow Hedges Derivatives Not Designated as Hedging Instruments Forward Contracts USD Forward Contracts USD Forward Contracts DKK Currency Buy/(Sell) Buy/(Sell) Buy/(Sell) (in millions) Euro $ (36 ) $ 169 $ (59 ) British Pound (25 ) (6 ) (4 ) Canadian Dollar (29 ) — (2 ) Australian Dollar 6 14 (3 ) Malaysian Ringgit — (2 ) — Japanese Yen (69 ) 4 (1 ) American Dollar — — 31 Other — 4 3 Totals $ (153 ) $ 183 $ (35 ) Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet as of July 31, 2015 and October 31, 2014 were as follows: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet Location July 31, October 31, Balance Sheet Location July 31, October 31, (in millions) Derivatives designated as hedging instruments: Cash flow hedges Foreign exchange contracts Other current assets $ 7 $ 9 Other accrued liabilities $ 1 $ 1 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ 3 $ 1 Other accrued liabilities $ 7 $ 3 Total derivatives $ 10 $ 10 $ 8 $ 4 The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain recognized in accumulated other comprehensive income (loss) $ 3 $ 3 $ 11 $ 1 Gain (loss) reclassified from accumulated other comprehensive income (loss) into cost of sales $ 3 $ (1 ) $ 14 $ (2 ) Derivatives not designated as hedging instruments: Loss recognized in other income (expense) $ (3 ) $ (8 ) $ (20 ) $ (4 ) The estimated amount of existing net gain at July 31, 2015 that is expected to be reclassified from other comprehensive income to cost of sales within the next twelve months is $6 million . |
EXIT OF NMR BUSINESS
EXIT OF NMR BUSINESS | 9 Months Ended |
Jul. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Exit of NMR Business [Text Block] | 11. EXIT OF NMR BUSINESS During the fourth quarter of fiscal year 2014, we made the decision to cease the manufacture and sale of our NMR product line within our life sciences and applied markets segment. The exit of the NMR business was primarily due to the lack of growth and profitability of the product line. These actions involved severance and other personnel costs related to the workforce reduction of approximately 300 employees primarily located in the United Kingdom and California and non-cash charges related to intangible asset impairments and other asset write-downs including inventory. After including employee reductions due to attrition and the application to open positions and acceptance of employment within the company of some employees previously affected, we have approximately 60 employees that are pending termination under the above actions as of July 31, 2015 . We expect to complete these restructuring activities by early fiscal 2016. A summary of total “NMR” restructuring activity and other special charges is shown in the table below: Workforce Reduction Special Charges Related to Inventory and Others Total (in millions) Balance as of October 31, 2014 $ 14 $ 3 $ 17 Income statement expense (reversal) (2 ) 11 9 Inventory charges and other — (7 ) (7 ) Cash payments (9 ) (1 ) (10 ) Balance as of July 31, 2015 $ 3 $ 6 $ 9 The restructuring and other special accruals related to the NMR closure, which totaled $9 million at July 31, 2015 , are recorded in other accrued liabilities on the condensed consolidated balance sheet. These balances reflect estimated future cash outlays. |
RETIREMENT PLANS AND POST RETIR
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS | 9 Months Ended |
Jul. 31, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS | 12. RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS In connection with the separation of Keysight on November 1, 2014, Agilent transferred certain liabilities and assets of the U.S. and Non-U.S. defined benefit pension plans, and U.S. Post-Retirement Benefit Plans to similar plans created for Keysight employees as follows: U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plans (in millions) Fair value of plan assets transferred to Keysight $ 491 $ 1,318 $ 187 Benefit obligation transferred to Keysight $ 514 $ 1,429 $ 206 Plan Amendments. Effective November 1, 2014, Agilent’s U.S. defined benefit retirement plan closed to new entrants including new employees, new transfers to the U.S. payroll and rehires. These employees are instead eligible for an enhanced 6 percent employer match in the Agilent 401(k) plan. In addition, any new employee hired on or after November 1, 2014, is not eligible to participate in the retiree medical plans upon retiring. Current eligible employees will continue to participate in the U.S. defined benefit retirement plan and retiree medical programs in place today and will remain eligible for the 401(k) plan with the current 4 percent employer match. Retirees will maintain the retirement benefits and retiree medical benefits they are eligible for today. Components of net periodic costs. For the three and nine months ended July 31, 2015 and 2014 , our net pension and post retirement benefit costs were comprised of the following: Pensions U.S. Plans Non-U.S. Plans U.S. Post Retirement Benefit Plans Three Months Ended July 31, 2015 2014 2015 2014 2015 2014 (in millions) Service cost—benefits earned during the period $ 6 $ 12 $ 4 $ 9 $ 1 $ 1 Interest cost on benefit obligation 3 8 6 19 1 3 Expected return on plan assets (7 ) (16 ) (10 ) (30 ) (2 ) (6 ) Amortization: Actuarial losses 2 — 6 11 1 4 Prior service cost (1 ) (3 ) — — (3 ) (9 ) Total net plan costs $ 3 $ 1 $ 6 $ 9 $ (2 ) $ (7 ) Summary of net plan costs: Continuing operations 3 — 6 6 (2 ) (4 ) Discontinued operations — 1 — 3 — (3 ) Total net plan costs $ 3 $ 1 $ 6 $ 9 $ (2 ) $ (7 ) Pensions U.S. Plans Non-U.S. U.S. Post Retirement Nine Months Ended July 31, 2015 2014 2015 2014 2015 2014 (in millions) Service cost—benefits earned during the period $ 18 $ 36 $ 12 $ 27 $ 3 $ 3 Interest cost on benefit obligation 10 24 18 56 3 9 Expected return on plan assets (21 ) (48 ) (31 ) (88 ) (6 ) (17 ) Amortization: Actuarial losses 4 — 19 33 3 11 Prior service cost (3 ) (9 ) — — (9 ) (27 ) Total net plan costs $ 8 $ 3 $ 18 $ 28 $ (6 ) $ (21 ) Summary of net plan costs: Continuing operations 8 — 18 19 (6 ) (12 ) Discontinued operations — 3 — 9 — (9 ) Total net plan costs $ 8 $ 3 $ 18 $ 28 $ (6 ) $ (21 ) We contributed zero and $15 million to our U.S. defined benefit plans during the three and nine months ended July 31, 2015 , respectively. We contributed $9 million and $20 million to our non-U.S. defined benefit plans during the three and nine months ended July 31, 2015 , respectively. We contributed zero and $15 million to our U.S. defined benefit plans during the three and nine months ended July 31, 2014 , respectively. We contributed $7 million and $22 million to our non-U.S. defined benefit plans during the three and nine months ended July 31, 2014 , respectively. We do not expect to contribute to our U.S. defined benefit plans during the remainder of 2015 and we expect to contribute $6 million to our non-U.S. defined benefit plans during the remainder of 2015 . |
WARRANTIES AND CONTINGENCIES
WARRANTIES AND CONTINGENCIES | 9 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
WARRANTIES AND CONTINGENCIES | 13. WARRANTIES AND CONTINGENCIES Warranties We accrue for standard warranty costs based on historical trends in warranty charges as a percentage of net product shipments. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time products are sold. The standard warranty accrual balances are held in other accrued and other long-term liabilities on our condensed consolidated balance sheet. Our standard warranty terms typically extend to one year from the date of delivery, depending on the product. A summary of the standard warranty accrual activity is shown in the table below: Nine Months Ended July 31, 2015 2014 (in millions) Beginning balance as of November 1 $ 30 $ 31 Accruals for warranties including change in estimate 38 31 Settlements made during the period (39 ) (34 ) Ending balance as of July 31 $ 29 $ 28 Accruals for warranties due within one year $ 27 $ 25 Accruals for warranties due after one year 2 3 Ending balance as of July 31 $ 29 $ 28 Contingencies We are involved in lawsuits, claims, investigations and proceedings, including patent, commercial and environmental matters. There are no matters pending that we currently believe are probable of having a material impact to our business, consolidated financial condition, results of operations or cash flows. |
SHORT-TERM DEBT
SHORT-TERM DEBT | 9 Months Ended |
Jul. 31, 2015 | |
Short-term Debt [Abstract] | |
SHORT-TERM DEBT | 14. SHORT-TERM DEBT Credit Facilities On September 15, 2014 , Agilent entered into a credit agreement with a financial institution which provides for a $400 million five -year unsecured credit facility that will expire on September 15, 2019 . On June 9, 2015, the commitments under the existing credit facility were increased by $300 million so that the aggregate commitments under the facility now total $700 million . As of July 31, 2015 , the company had no borrowings outstanding under the facility. We were in compliance with the covenants for the credit facility during the three and nine months ended July 31, 2015 . We also have a credit facility in Danish Krone equivalent of $7 million with a Danish financial institution. No borrowings were outstanding under the facility as of July 31, 2015 . |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 15. LONG-TERM DEBT Senior Notes The following table summarizes the company’s long-term senior notes and the related interest rate swaps: July 31, 2015 October 31, 2014 Amortized Principal Swap Total Amortized Principal Swap Total (in millions) 2017 Senior Notes $ 100 $ 2 $ 102 $ 100 $ 3 $ 103 2020 Senior Notes 499 20 519 499 22 521 2022 Senior Notes 399 — 399 399 — 399 2023 Senior Notes 598 — 598 598 — 598 Total $ 1,596 $ 22 $ 1,618 $ 1,596 $ 25 $ 1,621 All outstanding notes listed above are unsecured and rank equally in right of payment with all of Agilent’s other senior unsecured indebtedness. There have been no changes to the principal, maturity, interest rates and interest payment terms of the Agilent senior notes, detailed in the table above, in the nine months ended July 31, 2015 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2014 . All swap contracts have been terminated and amounts to be amortized over the remaining life of the senior notes as of July 31, 2015 and October 31, 2014 are detailed above. Other Debt As of July 31, 2015 and October 31, 2014 , we have mortgage debt, secured on buildings in Denmark, in Danish Krone equivalent of $37 million and $42 million , respectively, aggregate principal outstanding with a Danish financial institution. The loans have a variable interest rate based on 3 months Copenhagen Interbank Rate ("Cibor") and will mature on September 30, 2027. Interest payments are made in March, June, September and December of each year. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Jul. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS EQUITY | 16. STOCKHOLDERS' EQUITY Stock Repurchase Program On November 22, 2013 we announced that our board of directors had authorized a share repurchase program effective in the first quarter of fiscal year 2014, upon the conclusion of the company's previous $1 billion repurchase program. The program is designed to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs to target maintaining a weighted average share count of approximately 335 million diluted shares. For the nine months ended July 31, 2015 , we repurchased 6 million shares for $267 million . For the nine months ended July 31, 2014 , 4 million shares were repurchased for $200 million . All such shares and related costs are held as treasury stock and accounted for using the cost method. On May 28, 2015 we announced that our board of directors had approved a new share repurchase program (the "2015 repurchase program"). The 2015 share repurchase program authorizes the purchase of up to $1.14 billion of our common stock through and including November 1, 2018. The 2015 share repurchase program will commence, at the option of the company, on either November 1, 2015, or the date on which we complete the purchase of the remaining $98 million for a total of $365 million of common stock in fiscal 2015 under the existing stock repurchase program. Upon commencement, the 2015 share repurchase program replaces our existing stock repurchase program, which authorized the repurchase of shares to reduce or eliminate share dilution from equity programs. The 2015 repurchase program does not require the company to acquire a specific number of shares and may be suspended or discontinued at any time. Cash Dividends on Shares of Common Stock During the nine months ended July 31, 2015 , we paid cash dividends of $0.300 per common share or $100 million on the company's common stock. During the nine months ended July 31, 2014 , we paid cash dividends of $0.396 per common share or $132 million on the company's common stock. The timing and amounts of any future dividends are subject to determination and approval by our board of directors. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component and related tax effects were as follows (in millions): Net defined benefit pension cost and post retirement plan costs Three Months Ended July 31, 2015 Unrealized gain on investments Foreign currency translation Prior service credits Actuarial Losses Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2015 $ — $ (124 ) $ 167 $ (317 ) $ 4 $ (270 ) Other comprehensive income (loss) before reclassifications — (67 ) — — 3 (64 ) Amounts reclassified out of accumulated other comprehensive income (loss) — — (4 ) 9 (3 ) 2 Tax (expense) benefit — 1 1 (2 ) — — Other comprehensive income (loss) — (66 ) (3 ) 7 — (62 ) As of July 31, 2015 $ — $ (190 ) $ 164 $ (310 ) $ 4 $ (332 ) Nine Months Ended July 31, 2015 As of October 31, 2014 $ 17 $ 156 $ 255 $ (771 ) $ 9 $ (334 ) Transfer to Keysight (17 ) (9 ) (83 ) 444 (3 ) 332 Balance after transfer to Keysight — 147 172 (327 ) 6 (2 ) Other comprehensive income (loss) before reclassifications — (345 ) — (3 ) 11 (337 ) Amounts reclassified out of accumulated other comprehensive income (loss) — — (12 ) 26 (14 ) — Tax (expense) benefit — 8 4 (6 ) 1 7 Other comprehensive income (loss) — (337 ) (8 ) 17 (2 ) (330 ) As of July 31, 2015 $ — $ (190 ) $ 164 $ (310 ) $ 4 $ (332 ) Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended July 31, 2015 and 2014 were as follows (in millions): Details about accumulated other Amounts Reclassified Affected line item in comprehensive income (loss) components from other comprehensive income (loss) statement of operations Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 Unrealized gain on investments $ — $ 1 $ — $ 1 Other income (expense), net — 1 — 1 Total before income tax — — — — Provision for income tax — 1 — 1 Total net of income tax Unrealized gains and (losses) on derivatives $ 3 $ (1 ) $ 14 $ (2 ) Cost of products 3 (1 ) 14 (2 ) Total before income tax (2 ) — (5 ) 1 (Provision)/benefit for income tax 1 (1 ) 9 (1 ) Total net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (9 ) (15 ) (26 ) (46 ) Prior service benefit 4 12 12 36 (5 ) (3 ) (14 ) (10 ) Total before income tax 1 — 2 — Benefit for income tax (4 ) (3 ) (12 ) (10 ) Total net of income tax Total reclassifications for the period $ (3 ) $ (3 ) $ (3 ) $ (10 ) Amounts in parentheses indicate reductions to income and increases to other comprehensive income (loss). Reclassifications of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost (see Note 12 "Retirement Plans and Post Retirement Pension Plans"). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 17. SEGMENT INFORMATION Description of segments. We are a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow. In the first fiscal quarter of 2015, we completed the separation of our electronic measurement business. See Note 3 "Discontinued Operations" for further information. In November 2014, we announced a change in organizational structure designed to better serve our customers. Our new structure reflects our strategy to focus our expertise on the market segments we serve and utilize our resources to offer product solutions to address our customer needs. The new operating structure ensures that we are able to respond to market demand while reducing costs through increased efficiencies. As a result, our life sciences business, excluding the nucleic acid solutions division, together with the chemical analysis business merged to form a new segment called life sciences and applied markets business. Our diagnostics and genomics businesses combined and includes the nucleic acid solutions division of our life sciences business and became the diagnostics and genomics segment. Finally, the Agilent CrossLab segment was formed from the services and consumables businesses. The historical financial segment information has been recast to conform to this new presentation. Following this reorganization, Agilent has three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business each of which comprises a reportable segment. The three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments. A description of our three reportable segments is as follows: Our life sciences and applied markets business provides application-focused solutions that include instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular level. Key product categories include: liquid chromatography ("LC") systems and components; liquid chromatography mass spectrometry ("LCMS") systems; gas chromatography ("GC") systems and components; gas chromatography mass spectrometry ("GCMS") systems; inductively coupled plasma mass spectrometry ("ICP-MS") instruments; atomic absorption ("AA") instruments; microwave plasma-atomic emission spectrometry (“MP-AES”) instruments; inductively coupled plasma optical emission spectrometry ("ICP-OES") instruments; laboratory software and informatics systems; laboratory automation and robotic systems; dissolution testing; vacuum pumps and measurement technologies. Our diagnostics and genomics business is comprised of three areas of activity providing solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our Pathology solutions business is focused on product offerings to cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry (“IHC”), In Situ Hybridization (“ISH”), Hematoxylin and Eosin (“H&E”) staining and special staining. We also collaborate with a number of major pharmaceutical companies to develop new potential pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Secondly our genomics business includes arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling, gene expression profiling, as well as Next Generation Sequencing ("NGS") target enrichment. Finally our nucleic acid solutions business provides equipment and expertise focused on production of synthesized oligonucleotides under pharmaceutical Good Manufacturing Practices ("GMP") conditions for use as Active Pharmaceutical Ingredients ("API") in an emerging class of drugs that utilize nucleic acid molecules for disease therapy. The Agilent CrossLab business spans the entire lab with its extensive consumables and services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning Agilent can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries and supplies to services and software helping to connect the entire lab. Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies. Services include startup, operational, training and compliance support, as well as asset management and consultative services that help increase customer productivity. Custom service and consumable bundles are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements. A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include legal, accounting, real estate, insurance services, information technology services, treasury, other corporate infrastructure expenses and costs of centralized research and development. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. Corporate charges previously allocated to our electronic measurement business, but not classified within discontinued operations, were not reallocated to our other segments. These charges are presented below as a component of the reconciliation between segments' income from operations and Agilent's income from continuing operations and are classified as unallocated corporate charges. In addition, we do not allocate amortization and impairment of acquisition-related intangible assets, restructuring and transformational expenses, acquisition and integration costs and certain other charges to the operating margin for each segment because management does not include this information in its measurement of the performance of the operating segments. The following tables reflect the results of our reportable segments under our management reporting system. The performance of each segment is measured based on several metrics, including segment income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments. The profitability of each of the segments is measured after excluding restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization and other items as noted in the reconciliations below. Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Three months ended July 31, 2015: Total net revenue $ 511 $ 167 $ 336 $ 1,014 Segment income from operations $ 95 $ 28 $ 76 $ 199 Three months ended July 31, 2014: Total net revenue $ 507 $ 166 $ 336 $ 1,009 Segment income from operations $ 84 $ 22 $ 84 $ 190 Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Nine months ended July 31, 2015: Total net revenue $ 1,531 $ 484 $ 988 $ 3,003 Segment income from operations $ 277 $ 54 $ 213 $ 544 Nine months ended July 31, 2014: Total net revenue $ 1,539 $ 491 $ 975 $ 3,005 Segment income from operations $ 260 $ 67 $ 223 $ 550 The following table reconciles reportable segments’ income from operations to Agilent’s total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Total reportable segments’ income from operations $ 199 $ 190 $ 544 $ 550 Acceleration of share-based compensation related to workforce reduction — — (2 ) — Transformational initiatives (12 ) (7 ) (41 ) (18 ) Amortization of intangibles (38 ) (46 ) (119 ) (144 ) Acquisition and integration costs (4 ) (2 ) (6 ) (10 ) Business exit and divestiture costs (primarily our NMR business) — — (11 ) — Pre-separation costs — (4 ) — (8 ) Other (1 ) 10 1 9 Interest income 2 3 6 7 Interest expense (17 ) (28 ) (50 ) (87 ) Other income (expense), net (1 ) (21 ) 15 (18 ) Unallocated corporate charges — (10 ) — (30 ) Income from continuing operations before taxes, as reported $ 128 $ 85 $ 337 $ 251 The following table reflects segment assets under our management reporting system. Segment assets include allocations of corporate assets, including deferred tax assets, goodwill, other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, the valuation allowance relating to deferred tax assets and other assets. During the second quarter of 2015 we changed the segment asset allocation methodology to more closely represent the use of assets by each segment following a review of operational metrics. Accordingly the segment assets presented as of October 31, 2014 have been restated to follow the new methodology. Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Assets: As of July 31, 2015 $ 1,531 $ 2,044 $ 991 $ 4,566 As of October 31, 2014 $ 1,663 $ 2,302 $ 1,001 $ 4,966 |
OVERVIEW, BASIS OF PRESENTATI26
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
Overview, Segment Structure and Basis of Presentation | Overview. Agilent Technologies Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that includes instruments, software, services and consumables for the entire laboratory workflow. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters. Keysight Separation. On November 1, 2014, we completed the distribution of 100% of the outstanding common shares of Keysight Technologies, Inc. ("Keysight") to Agilent stockholders who received one share of Keysight common stock for every two shares of Agilent held as of the close of business on the record date, October 22, 2014. The historical results of operations and the financial position of Keysight are included in the consolidated financial statements of Agilent and are reported as discontinued operations within this Form 10-Q. See "Basis of Presentation". New Segment Structure. In November 2014, we announced a change in organizational structure designed to better serve our customers. Our life sciences business, excluding the nucleic acid solutions division, together with the chemical analysis business combined to form a new segment called life sciences and applied markets business. Our diagnostics and genomics businesses combined with the nucleic acid solutions division from our life sciences business and became the diagnostics and genomics segment. Finally, the Agilent CrossLab segment was formed from the services and consumables businesses previously part of the life sciences and chemicals analysis businesses. Financial reporting under this new structure is included within this report on Form 10-Q and historical financial segment information has been recast to conform to this new presentation within our financial statements. Basis of Presentation . We have prepared the accompanying financial data for the three and nine months ended July 31, 2015 and 2014 pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair statement of our condensed consolidated balance sheet as of July 31, 2015 and October 31, 2014, condensed consolidated statement of comprehensive income (loss) for the three and nine months ended July 31, 2015 and 2014, condensed consolidated statement of operations for the three and nine months ended July 31, 2015 and 2014, and condensed consolidated statement of cash flows for the nine months ended July 31, 2015 and 2014. The prior year results of operations and the prior year end financial position of Keysight are included in the consolidated financial statements of Agilent and reported as discontinued operations. The prior year statement of comprehensive income and prior year statement of cash flows have not been adjusted to reflect the effect of the separation of Keysight. Unless indicated otherwise, the information in the Notes to the condensed consolidated financial statements relates to our continuing operations. |
Use of Estimates | Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, valuation of goodwill and purchased intangible assets, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, restructuring and accounting for income taxes. |
Update to Share-based Compensation Policy | Update to Significant Accounting Policies. For the stock option and long term performance plan grants in 2015 we are now using a volatility measure derived from a selection of our peer companies. In prior periods, we used Agilent stock historical volatility. We now consider this method to not be reflective of our future volatility due to the separation of Keysight. See Note 4, "Share-based compensation" for additional information. There have been no other material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2014. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments is determined using quoted market prices for those securities when available. For those long-term equity investments accounted for under the cost or equity method, their carrying value approximates their estimated fair value. Equity method investments are reported at the amount of the company’s initial investment and adjusted each period for the company’s share of the investee’s income or loss and dividend paid. The fair value of our long-term debt, calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately $43 million and $53 million as of July 31, 2015 and October 31, 2014 , respectively. The fair value of foreign currency contracts used for hedging purposes is estimated internally by using inputs tied to active markets. These inputs, for example, interest rate yield curves, foreign exchange rates, and forward and spot prices for currencies are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. See also Note 9, "Fair Value Measurements" for additional information on the fair value of financial instruments. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets. Under the authoritative guidance we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The accounting standard gives an entity the option to first assess qualitative factors to determine whether performing the two-step test is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. The guidance includes examples of events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. These include macro-economic conditions such as deterioration in the entity's operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the provisions of authoritative guidance require that we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of each reporting unit to its carrying value. The second step (if necessary) measures the amount of impairment by applying fair-value-based tests to the individual assets and liabilities within each reporting unit. As defined in the authoritative guidance, a reporting unit is an operating segment, or one level below an operating segment. We aggregate components of an operating segment that have similar economic characteristics into our reporting units. In fiscal year 2014, we assessed goodwill impairment for three reporting units under our previous reporting structure. The chemical analysis segment contained one reporting unit and there were two reporting units under the life sciences and diagnostics segment. Within the life sciences and diagnostic business the first reporting unit related to our life sciences business and the second related to our diagnostics business. We performed a qualitative test for goodwill impairment of our previous three reporting units as of September 30, 2014. Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these reporting units are greater than their respective carrying values. Each quarter we review the events and circumstances to determine if goodwill impairment is indicated. In connection with our goodwill impairment testing in 2015, we assess for potential impairment of goodwill within our three new reporting units resulting from our reorganization. In the three and nine months ended July 31, 2015 and 2014, there was no triggering event that would indicate that there was an impairment of goodwill and therefore there was no impairment of goodwill during the three and nine months ended July 31, 2015 and 2014. Purchased intangible assets consist primarily of acquired developed technologies, proprietary know-how, trademarks, and customer relationships and are amortized using the best estimate of the asset's useful life that reflect the pattern in which the economic benefits are consumed or used up or a straight-line method ranging from 6 months to 15 years. In-process research and development ("IPR&D") is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, Agilent will record a charge for the value of the related intangible asset to Agilent's condensed consolidated statement of operations in the period it is abandoned. Agilent's indefinite-lived intangible assets are IPR&D intangible assets. The accounting guidance allows a qualitative approach for testing indefinite-lived intangible assets for impairment, similar to the issued impairment testing guidance for goodwill and allows the option to first assess qualitative factors (events and circumstances) that could have affected the significant inputs used in determining the fair value of the indefinite-lived intangible asset to determine whether it is more-likely-than-not (i.e. greater than 50% chance) that the indefinite-lived intangible asset is impaired. An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value. We performed a qualitative test for impairment of indefinite-lived intangible assets as of September 30, 2014. Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these indefinite-lived intangible assets is greater than their respective carrying values. Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible asset is indicated. There was no impairment of indefinite-lived intangible asset during the three and nine months ended July 31, 2015 and 2014 . |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |
Schedule of income (loss) from discontinued operations | The following table summarizes results from discontinued operations of Keysight included in the condensed consolidated statement of operations: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Net revenue $ — $ 757 $ — $ 2,171 Costs and expenses 2 659 39 1,863 Operating income (loss) (2 ) 98 (39 ) 308 Other income (expense), net — 1 — 2 Income (loss) from discontinued operations before tax (2 ) 99 (39 ) 310 Provision (benefit) for income taxes — 15 (2 ) 53 Net income (loss) from discontinued operations $ (2 ) $ 84 $ (37 ) $ 257 |
Schedule of assets and liabilities of discontinued operations | The following table presents Agilent's electronic measurement business assets and liabilities removed from the condensed consolidated balance sheet as of November 1, 2014 and presented as discontinued operations as of October 31, 2014: October 31, 2014 (in millions) Assets: Cash and cash equivalents $ 810 Accounts receivable, net 357 Inventory 498 Other current assets 156 Current assets of discontinued operations 1,821 Property, plant and equipment, net 470 Goodwill 392 Other intangible assets, net 18 Long-term investments 63 Other assets 222 Non-current assets of discontinued operations 1,165 Total assets of discontinued operations $ 2,986 Liabilities: Accounts payable $ 173 Employee compensation and benefits 167 Deferred revenue 175 Other accrued liabilities 108 Current liabilities of discontinued operations 623 Long-term debt 1,099 Retirement and post-retirement benefits 213 Other long-term liabilities 122 Long-term liabilities of discontinued operations 1,434 Total liabilities of discontinued operations $ 2,057 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Share-based Compensation [Abstract] | |
Allocated Share-based compensation expense disclosure | The impact on our results for share-based compensation was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Cost of products and services $ 2 $ 2 $ 9 $ 11 Research and development 1 1 4 6 Selling, general and administrative 7 8 31 31 Share-based compensation expense in continuing operations $ 10 $ 11 $ 44 $ 48 Share-based compensation expense in discontinued operations — 9 — 31 Total share-based compensation expense $ 10 $ 20 $ 44 $ 79 |
Assumptions used to estimate fair value for stock options and LTPP | The following assumptions were used to estimate the fair value of the options and LTPP grants. Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 Stock Option Plans: Weighted average risk-free interest rate — 1.7 % 1.7 % 1.7 % Dividend yield — 1 % 1 % 1 % Weighted average volatility — 38 % 28 % 39 % Expected life — 5.8yrs 5.5 yrs 5.8 yrs LTPP: Volatility of Agilent shares 25 % 36 % 25 % 36 % Volatility of selected peer-company shares 12%-57% 13%-57% 12%-57% 13%-57% Price-wise correlation with selected peers 37 % 47 % 37 % 47 % |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of the numerators and denominators of the basic and diluted net income per share | The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Numerator: Income from continuing operations $ 105 $ 63 295 $ 224 Income (loss) from discontinued operations (2 ) 84 (37 ) 257 Net income $ 103 $ 147 $ 258 $ 481 Denominator: Basic weighted-average shares 332 334 334 333 Potential common shares— stock options and other employee stock plans 2 4 2 5 Diluted weighted-average shares 334 338 336 338 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Inventory, Net [Abstract] | |
INVENTORY | 7. INVENTORY July 31, October 31, (in millions) Finished goods $ 361 $ 366 Purchased parts and fabricated assemblies 184 208 Inventory $ 545 $ 574 |
GOODWILL AND OTHER INTANGIBLE31
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill balances and movements for each reportable segments during the period | The following table presents goodwill balances and the movements for each of our reportable segments during the nine months ended July 31, 2015 : Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Goodwill as of October 31, 2014 $ 668 $ 1,345 $ 494 $ 2,507 Foreign currency translation impact (16 ) (169 ) (11 ) (196 ) Goodwill arising from acquisitions — 55 — 55 Goodwill as of July 31, 2015 $ 652 $ 1,231 $ 483 $ 2,366 |
Components of other intangibles during the period | The components of other intangibles as of July 31, 2015 and October 31, 2014 are shown in the table below: Purchased Other Intangible Assets Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value (in millions) As of October 31, 2014: Purchased technology $ 880 $ 475 $ 405 Trademark/Tradename 167 52 115 Customer relationships 368 257 111 Total amortizable intangible assets 1,415 784 631 In-Process R&D 18 — 18 Total $ 1,433 $ 784 $ 649 As of July 31, 2015: Purchased technology 844 551 293 Trademark/Tradename 155 61 94 Customer relationships 363 291 72 Total amortizable intangible assets 1,362 903 459 In-Process R&D 25 — 25 Total $ 1,387 $ 903 $ 484 |
Schedule of estimated future amortization expense of finite-lived intangible assets | Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year 2015 and for each of the five succeeding fiscal years and thereafter is estimated below: Estimated future amortization expense: (in millions) Remainder of 2015 $ 37 2016 $ 131 2017 $ 92 2018 $ 61 2019 $ 46 2020 $ 36 Thereafter $ 56 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets And Liabilities Measured On Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2015 were as follows: Fair Value Measurement at July 31, 2015 Using July 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Assets: Short-term Cash equivalents (money market funds) $ 1,465 $ 1,465 $ — $ — Derivative instruments (foreign exchange contracts) 10 — 10 — Long-term Trading securities 35 35 — — Total assets measured at fair value $ 1,510 $ 1,500 $ 10 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 8 $ — $ 8 $ — Long-term Deferred compensation liability 35 — 35 — Total liabilities measured at fair value $ 43 $ — $ 43 $ — Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2014 were as follows: Fair Value Measurement at October 31, 2014 Using October 31, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Assets: Short-term Cash equivalents (money market funds) $ 1,117 $ 1,117 $ — $ — Derivative instruments (foreign exchange contracts) 10 — 10 — Long-term Trading securities 35 35 — — Total assets measured at fair value $ 1,162 $ 1,152 $ 10 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 4 $ — $ 4 $ — Long-term Deferred compensation liability 35 — 35 — Total liabilities measured at fair value $ 39 $ — $ 39 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Aggregated notional amounts by currency and designation | The aggregated notional amounts by currency and designation as of July 31, 2015 were as follows: Derivatives Designated as Cash Flow Hedges Derivatives Not Designated as Hedging Instruments Forward Contracts USD Forward Contracts USD Forward Contracts DKK Currency Buy/(Sell) Buy/(Sell) Buy/(Sell) (in millions) Euro $ (36 ) $ 169 $ (59 ) British Pound (25 ) (6 ) (4 ) Canadian Dollar (29 ) — (2 ) Australian Dollar 6 14 (3 ) Malaysian Ringgit — (2 ) — Japanese Yen (69 ) 4 (1 ) American Dollar — — 31 Other — 4 3 Totals $ (153 ) $ 183 $ (35 ) |
Gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet | Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet as of July 31, 2015 and October 31, 2014 were as follows: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet Location July 31, October 31, Balance Sheet Location July 31, October 31, (in millions) Derivatives designated as hedging instruments: Cash flow hedges Foreign exchange contracts Other current assets $ 7 $ 9 Other accrued liabilities $ 1 $ 1 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ 3 $ 1 Other accrued liabilities $ 7 $ 3 Total derivatives $ 10 $ 10 $ 8 $ 4 |
Effect of derivative instruments for foreign exchange contracts in the consolidated statement of operations | The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain recognized in accumulated other comprehensive income (loss) $ 3 $ 3 $ 11 $ 1 Gain (loss) reclassified from accumulated other comprehensive income (loss) into cost of sales $ 3 $ (1 ) $ 14 $ (2 ) Derivatives not designated as hedging instruments: Loss recognized in other income (expense) $ (3 ) $ (8 ) $ (20 ) $ (4 ) |
EXIT OF NMR BUSINESS (Tables)
EXIT OF NMR BUSINESS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Exit of NMR Business | A summary of total “NMR” restructuring activity and other special charges is shown in the table below: Workforce Reduction Special Charges Related to Inventory and Others Total (in millions) Balance as of October 31, 2014 $ 14 $ 3 $ 17 Income statement expense (reversal) (2 ) 11 9 Inventory charges and other — (7 ) (7 ) Cash payments (9 ) (1 ) (10 ) Balance as of July 31, 2015 $ 3 $ 6 $ 9 |
RETIREMENT PLANS AND POST RET35
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Fair value of plan assets and benefit obligation transferred to Keysight | In connection with the separation of Keysight on November 1, 2014, Agilent transferred certain liabilities and assets of the U.S. and Non-U.S. defined benefit pension plans, and U.S. Post-Retirement Benefit Plans to similar plans created for Keysight employees as follows: U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plans (in millions) Fair value of plan assets transferred to Keysight $ 491 $ 1,318 $ 187 Benefit obligation transferred to Keysight $ 514 $ 1,429 $ 206 |
Schedule of net pension and post-retirement benefit costs | Components of net periodic costs. For the three and nine months ended July 31, 2015 and 2014 , our net pension and post retirement benefit costs were comprised of the following: Pensions U.S. Plans Non-U.S. Plans U.S. Post Retirement Benefit Plans Three Months Ended July 31, 2015 2014 2015 2014 2015 2014 (in millions) Service cost—benefits earned during the period $ 6 $ 12 $ 4 $ 9 $ 1 $ 1 Interest cost on benefit obligation 3 8 6 19 1 3 Expected return on plan assets (7 ) (16 ) (10 ) (30 ) (2 ) (6 ) Amortization: Actuarial losses 2 — 6 11 1 4 Prior service cost (1 ) (3 ) — — (3 ) (9 ) Total net plan costs $ 3 $ 1 $ 6 $ 9 $ (2 ) $ (7 ) Summary of net plan costs: Continuing operations 3 — 6 6 (2 ) (4 ) Discontinued operations — 1 — 3 — (3 ) Total net plan costs $ 3 $ 1 $ 6 $ 9 $ (2 ) $ (7 ) Pensions U.S. Plans Non-U.S. U.S. Post Retirement Nine Months Ended July 31, 2015 2014 2015 2014 2015 2014 (in millions) Service cost—benefits earned during the period $ 18 $ 36 $ 12 $ 27 $ 3 $ 3 Interest cost on benefit obligation 10 24 18 56 3 9 Expected return on plan assets (21 ) (48 ) (31 ) (88 ) (6 ) (17 ) Amortization: Actuarial losses 4 — 19 33 3 11 Prior service cost (3 ) (9 ) — — (9 ) (27 ) Total net plan costs $ 8 $ 3 $ 18 $ 28 $ (6 ) $ (21 ) Summary of net plan costs: Continuing operations 8 — 18 19 (6 ) (12 ) Discontinued operations — 3 — 9 — (9 ) Total net plan costs $ 8 $ 3 $ 18 $ 28 $ (6 ) $ (21 ) |
WARRANTIES AND CONTINGENCIES (T
WARRANTIES AND CONTINGENCIES (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard warranty | A summary of the standard warranty accrual activity is shown in the table below: Nine Months Ended July 31, 2015 2014 (in millions) Beginning balance as of November 1 $ 30 $ 31 Accruals for warranties including change in estimate 38 31 Settlements made during the period (39 ) (34 ) Ending balance as of July 31 $ 29 $ 28 Accruals for warranties due within one year $ 27 $ 25 Accruals for warranties due after one year 2 3 Ending balance as of July 31 $ 29 $ 28 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Notes and Related Interest Rate Swaps | The following table summarizes the company’s long-term senior notes and the related interest rate swaps: July 31, 2015 October 31, 2014 Amortized Principal Swap Total Amortized Principal Swap Total (in millions) 2017 Senior Notes $ 100 $ 2 $ 102 $ 100 $ 3 $ 103 2020 Senior Notes 499 20 519 499 22 521 2022 Senior Notes 399 — 399 399 — 399 2023 Senior Notes 598 — 598 598 — 598 Total $ 1,596 $ 22 $ 1,618 $ 1,596 $ 25 $ 1,621 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) by component and related tax effects were as follows (in millions): Net defined benefit pension cost and post retirement plan costs Three Months Ended July 31, 2015 Unrealized gain on investments Foreign currency translation Prior service credits Actuarial Losses Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2015 $ — $ (124 ) $ 167 $ (317 ) $ 4 $ (270 ) Other comprehensive income (loss) before reclassifications — (67 ) — — 3 (64 ) Amounts reclassified out of accumulated other comprehensive income (loss) — — (4 ) 9 (3 ) 2 Tax (expense) benefit — 1 1 (2 ) — — Other comprehensive income (loss) — (66 ) (3 ) 7 — (62 ) As of July 31, 2015 $ — $ (190 ) $ 164 $ (310 ) $ 4 $ (332 ) Nine Months Ended July 31, 2015 As of October 31, 2014 $ 17 $ 156 $ 255 $ (771 ) $ 9 $ (334 ) Transfer to Keysight (17 ) (9 ) (83 ) 444 (3 ) 332 Balance after transfer to Keysight — 147 172 (327 ) 6 (2 ) Other comprehensive income (loss) before reclassifications — (345 ) — (3 ) 11 (337 ) Amounts reclassified out of accumulated other comprehensive income (loss) — — (12 ) 26 (14 ) — Tax (expense) benefit — 8 4 (6 ) 1 7 Other comprehensive income (loss) — (337 ) (8 ) 17 (2 ) (330 ) As of July 31, 2015 $ — $ (190 ) $ 164 $ (310 ) $ 4 $ (332 ) |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended July 31, 2015 and 2014 were as follows (in millions): Details about accumulated other Amounts Reclassified Affected line item in comprehensive income (loss) components from other comprehensive income (loss) statement of operations Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 Unrealized gain on investments $ — $ 1 $ — $ 1 Other income (expense), net — 1 — 1 Total before income tax — — — — Provision for income tax — 1 — 1 Total net of income tax Unrealized gains and (losses) on derivatives $ 3 $ (1 ) $ 14 $ (2 ) Cost of products 3 (1 ) 14 (2 ) Total before income tax (2 ) — (5 ) 1 (Provision)/benefit for income tax 1 (1 ) 9 (1 ) Total net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (9 ) (15 ) (26 ) (46 ) Prior service benefit 4 12 12 36 (5 ) (3 ) (14 ) (10 ) Total before income tax 1 — 2 — Benefit for income tax (4 ) (3 ) (12 ) (10 ) Total net of income tax Total reclassifications for the period $ (3 ) $ (3 ) $ (3 ) $ (10 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Profitability and Segment Assets | The profitability of each of the segments is measured after excluding restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization and other items as noted in the reconciliations below. Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Three months ended July 31, 2015: Total net revenue $ 511 $ 167 $ 336 $ 1,014 Segment income from operations $ 95 $ 28 $ 76 $ 199 Three months ended July 31, 2014: Total net revenue $ 507 $ 166 $ 336 $ 1,009 Segment income from operations $ 84 $ 22 $ 84 $ 190 Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Nine months ended July 31, 2015: Total net revenue $ 1,531 $ 484 $ 988 $ 3,003 Segment income from operations $ 277 $ 54 $ 213 $ 544 Nine months ended July 31, 2014: Total net revenue $ 1,539 $ 491 $ 975 $ 3,005 Segment income from operations $ 260 $ 67 $ 223 $ 550 The following table reflects segment assets under our management reporting system. Segment assets include allocations of corporate assets, including deferred tax assets, goodwill, other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, the valuation allowance relating to deferred tax assets and other assets. During the second quarter of 2015 we changed the segment asset allocation methodology to more closely represent the use of assets by each segment following a review of operational metrics. Accordingly the segment assets presented as of October 31, 2014 have been restated to follow the new methodology. Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Assets: As of July 31, 2015 $ 1,531 $ 2,044 $ 991 $ 4,566 As of October 31, 2014 $ 1,663 $ 2,302 $ 1,001 $ 4,966 |
Reconciliation of segment results to total enterprise results | The following table reconciles reportable segments’ income from operations to Agilent’s total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2015 2014 2015 2014 (in millions) Total reportable segments’ income from operations $ 199 $ 190 $ 544 $ 550 Acceleration of share-based compensation related to workforce reduction — — (2 ) — Transformational initiatives (12 ) (7 ) (41 ) (18 ) Amortization of intangibles (38 ) (46 ) (119 ) (144 ) Acquisition and integration costs (4 ) (2 ) (6 ) (10 ) Business exit and divestiture costs (primarily our NMR business) — — (11 ) — Pre-separation costs — (4 ) — (8 ) Other (1 ) 10 1 9 Interest income 2 3 6 7 Interest expense (17 ) (28 ) (50 ) (87 ) Other income (expense), net (1 ) (21 ) 15 (18 ) Unallocated corporate charges — (10 ) — (30 ) Income from continuing operations before taxes, as reported $ 128 $ 85 $ 337 $ 251 |
OVERVIEW, BASIS OF PRESENTATI40
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | Jul. 31, 2015USD ($)yrmo | Jul. 31, 2014USD ($) | Oct. 31, 2014USD ($) | |
Accounting Policies [Abstract] | |||||
Fair value of long term debt in excess of carrying value | $ 43 | $ 43 | $ 53 | ||
Goodwill and Purchased Intangible Assets | |||||
Purchased intangible assets useful life range minimum (in months) | mo | 6 | ||||
Purchased intangible assets useful life range maximum (in years) | yr | 15 | ||||
Impairment of goodwill | 0 | $ 0 | $ 0 | $ 0 | |
Impairment of intangible assets (IPR&D) | $ 0 | $ 0 | $ 0 | $ 0 |
DISCONTINUED OPERATIONS - State
DISCONTINUED OPERATIONS - Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Net revenue | $ 0 | $ 757 | $ 0 | $ 2,171 |
Costs and expenses | 2 | 659 | 39 | 1,863 |
Operating income (loss) | (2) | 98 | (39) | 308 |
Other income (expense),net | 0 | 1 | 0 | 2 |
Income (loss) from discontinued operations before tax | (2) | 99 | (39) | 310 |
Provision (benefit) for income taxes | 0 | 15 | (2) | 53 |
Net income (loss) from discontinued operations | $ (2) | $ 84 | $ (37) | $ 257 |
DISCONTINUED OPERATIONS - Asset
DISCONTINUED OPERATIONS - Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 810 | |
Accounts receivable, net | 357 | |
Inventory | 498 | |
Other current assets | 156 | |
Current assets of discontinued operations | $ 0 | 1,821 |
Property, plant and equipment, net | 470 | |
Goodwill | 392 | |
Other intangibles, net | 18 | |
Long-term investments | 63 | |
Other assets | 222 | |
Non-current assets of discontinued operations | 0 | 1,165 |
Total assets of discontinued operations | 2,986 | |
Liabilities | ||
Accounts payable | 173 | |
Employee compensation and benefits | 167 | |
Deferred revenue | 175 | |
Other accrued liabilities | 108 | |
Current liabilities of discontinued operations | 0 | 623 |
Long-term debt | 1,099 | |
Retirement and post-retirement benefits | 213 | |
Other long-term liabilities | 122 | |
Long-term liabilities of discontinued operations | $ 0 | 1,434 |
Total liabilities of discontinued operations | $ 2,057 |
DISCONTINUED OPERATIONS - Textu
DISCONTINUED OPERATIONS - Textuals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Nov. 01, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Separation transaction costs | $ 2 | $ 58 | $ 39 | $ 115 | |
Transferred to Keysight | |||||
Cash per separation agreement | $ 700 | ||||
Accumulated other comprehensive loss transferred to discontinued operations | 332 | ||||
Additional paid in capital transferred to discontinued operations | $ 28 | ||||
Transition Service Agreement | |||||
Future transition service income | 12 | ||||
Future yearly lease income | 13 | ||||
Transition service and lease income | $ 3 | $ 21 |
SHARE-BASED COMPENSATION Alloca
SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2015 | Jul. 31, 2014 | Jan. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Oct. 31, 2014 | |
Share-based Compensation [Abstract] | ||||||
Windfall tax benefit realized | $ 5 | $ 0 | $ 5 | $ 3 | ||
Share-based compensation capitalized within inventory | 0 | 0 | $ 0 | |||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | 10 | 20 | 44 | 79 | ||
Out of period windfall tax adjustment | 23 | |||||
Out of period windfall tax adjustment due to IRS settlement | $ 11 | |||||
Cost of Products and Services | ||||||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | 2 | 2 | 9 | 11 | ||
Research and Development Expense | ||||||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | 1 | 1 | 4 | 6 | ||
Selling, General and Administrative Expenses | ||||||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | 7 | 8 | 31 | 31 | ||
Continuing Operations | ||||||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | 10 | 11 | 44 | 48 | ||
Discontinued Operations | ||||||
Share-based Compensation, Allocation and Classification in Financial Statements | ||||||
Share-based compensation expense | $ 0 | $ 9 | $ 0 | $ 31 |
SHARE-BASED COMPENSATION Fair V
SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - yr | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
ESPP plan purchase price (in hundredths) | 85.00% | 85.00% | 85.00% | 85.00% |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Weighted average risk-free interest rate (in hundredths) | 0.00% | 1.70% | 1.70% | 1.70% |
Dividend yield | 0.00% | 1.00% | 1.00% | 1.00% |
Weighted average volatility (in hundredths) | 0.00% | 38.00% | 28.00% | 39.00% |
Expected life (in years) | 5 years 9 months | 5 years 6 months | 5 years 9 months | |
Number of years of peer groups historical stock price volatility used to determine volatility | 5.5 | |||
LTPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Volatility of Agilent shares (in hundredths) | 25.00% | 36.00% | 25.00% | 36.00% |
Volatility of selected peer-company shares minimum (in hundredths) | 12.00% | 13.00% | 12.00% | 13.00% |
Volatility of selected peer-company shares maximum (in hundredths) | 57.00% | 57.00% | 57.00% | 57.00% |
Price-wise correlation with selected peers (in hundredths) | 37.00% | 47.00% | 37.00% | 47.00% |
Number of years of peer groups historical stock price volatility used to determine volatility | 3 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Nov. 01, 2014 | |
Income Tax Disclosure | |||||
Effective Income Tax Rate, Percent | 18.00% | 25.90% | 12.50% | 10.80% | |
Income Tax Expense (Benefit) | $ 23 | $ 22 | $ 42 | $ 27 | |
Net Discrete Tax Expense (Benefit) | 1 | (9) | (21) | (40) | |
Discrete Tax Expense (Benefit) | 14 | ||||
Keysight Spin-off | |||||
Keysight Income Tax Disclosure | |||||
Deferred tax assets | $ 238 | ||||
Deferred tax liabilities | 37 | ||||
Total income tax payable, net of income tax receivable | 40 | ||||
Long-term liability for uncertain tax positions | 8 | ||||
Prepaid taxes, Current | 19 | ||||
Prepaid Taxes, Non Current | $ 3 | ||||
Return to provision adjustment associated with bonus depreciation | 6 | ||||
Internal Revenue Service (IRS) | |||||
Internal Revenue Service | |||||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 111 | ||||
Tax liability on foreign earnings distributions | 61 | ||||
Income Tax Effects Allocated Directly to Equity, Prior Period Adjustment | 65 | ||||
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority | 12 | 12 | |||
De-registration of Certain Foreign Branches | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (16) | ||||
U.S. Research & Development Tax Credit Extension | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (6) | ||||
Interest Expense Associated With Uncertain Tax Position | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | 5 | ||||
Error in Prior Year Tax Return | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | 4 | ||||
Foreign Deferred Tax Assets | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | 4 | ||||
Foreign Tax Rate Change | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (13) | 4 | |||
Return To Provision Adjustment | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | $ 1 | 4 | $ 1 | 4 | |
Transfer Pricing Correction | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (3) | 10 | |||
Redemption of Senior Notes Deduction | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (4) | (4) | |||
Tax Related Balance Sheet Accounts Correction | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | 3 | 3 | |||
Foreign Tax Basis Correction | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | $ (9) | (9) | |||
IRS Audit Settlement and Repatriation of Dividends | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | (50) | ||||
State Tax Reserve Interest Adjustment | |||||
Income Tax Disclosure | |||||
Discrete Tax Expense (Benefit) | $ 2 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Numerator: | ||||
Income from continuing operations | $ 105 | $ 63 | $ 295 | $ 224 |
Income (loss) from discontinued operations | (2) | 84 | (37) | 257 |
Net income | $ 103 | $ 147 | $ 258 | $ 481 |
Denominators: | ||||
Basic weighted-average shares (in shares) | 332,000,000 | 334,000,000 | 334,000,000 | 333,000,000 |
Potential common shares - stock options and other employee stock plans (in shares) | 2,000,000 | 4,000,000 | 2,000,000 | 5,000,000 |
Diluted weighted average shares (in shares) | 334,000,000 | 338,000,000 | 336,000,000 | 338,000,000 |
Options with exercise price greater than average market price | ||||
Antidilutive Securities Excluded from EPS Computation | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,200,000 | 0 | 856,900 | 0 |
Stock Options, LTPP and restricted stock combined exercise price, unamortized fair value, excess tax benefits or shortfalls greater than average market price | ||||
Antidilutive Securities Excluded from EPS Computation | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 80,900 | 125,900 | 487,100 | 480,300 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Inventory, Net [Abstract] | ||
Finished goods | $ 361 | $ 366 |
Purchased parts and fabricated assemblies | 184 | 208 |
Inventory | $ 545 | $ 574 |
GOODWILL AND OTHER INTANGIBLE49
GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2015USD ($) | |
Goodwill Roll Forward | |
Goodwill beginning balance | $ 2,507 |
Foreign currency translation impact | (196) |
Goodwill arising from acquisitions | 55 |
Goodwill ending balance | 2,366 |
Life Sciences and Applied Markets | |
Goodwill Roll Forward | |
Goodwill beginning balance | 668 |
Foreign currency translation impact | (16) |
Goodwill arising from acquisitions | 0 |
Goodwill ending balance | 652 |
Diagnostics and Genomics | |
Goodwill Roll Forward | |
Goodwill beginning balance | 1,345 |
Foreign currency translation impact | (169) |
Goodwill arising from acquisitions | 55 |
Goodwill ending balance | 1,231 |
Agilent CrossLab | |
Goodwill Roll Forward | |
Goodwill beginning balance | 494 |
Foreign currency translation impact | (11) |
Goodwill arising from acquisitions | 0 |
Goodwill ending balance | $ 483 |
GOODWILL AND OTHER INTANGIBLE50
GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | $ 1,387 | $ 1,433 |
Accumulated Amortization and Impairments | 903 | 784 |
Net Book Value | 484 | 649 |
Purchased Technology | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 844 | 880 |
Accumulated Amortization and Impairments | 551 | 475 |
Net Book Value | 293 | 405 |
Trademark/Tradenames | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 155 | 167 |
Accumulated Amortization and Impairments | 61 | 52 |
Net Book Value | 94 | 115 |
Customer Relationships | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 363 | 368 |
Accumulated Amortization and Impairments | 291 | 257 |
Net Book Value | 72 | 111 |
Total amortizable intangible assets | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 1,362 | 1,415 |
Accumulated Amortization and Impairments | 903 | 784 |
Net Book Value | 459 | 631 |
In-Process R&D | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ||
In-Process R&D | $ 25 | $ 18 |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - Segments [Domain] € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015EUR (€) | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | |
Finite-Lived Intangible Assets | |||||
Addition to other intangible assets | $ 13 | $ 0 | |||
Additions to goodwill | 55 | ||||
Purchase price of Cartagenia (in euros) | € | € 60 | ||||
Foreign exchange translation impact | 59 | ||||
Amortization of intangible assets during the period | $ 38 | $ 46 | $ 119 | $ 144 |
GOODWILL AND OTHER INTANGIBLE52
GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions | Jul. 31, 2015USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Future amortization expense for remainder of 2015 | $ 37 |
Future amortization expense for 2016 | 131 |
Future amortization expense for 2017 | 92 |
Future amortization expense for 2018 | 61 |
Future amortization expense for 2019 | 46 |
Future amortization expense for 2020 | 36 |
Future amortization expense thereafter | $ 56 |
FAIR VALUE MEASUREMENTS, Fair v
FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Assets Short - term | ||
Cash equivalents (money market funds) | $ 1,465 | $ 1,117 |
Derivative instruments (foreign exchange contracts) | 10 | 10 |
Assets, Long-term | ||
Trading securities | 35 | 35 |
Total assets measured at fair value | 1,510 | 1,162 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 8 | 4 |
Liabilities Long-term | ||
Deferred compensation liability | 35 | 35 |
Total liabilities measured at fair value | 43 | 39 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 1,465 | 1,117 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term | ||
Trading securities | 35 | 35 |
Total assets measured at fair value | 1,500 | 1,152 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 10 | 10 |
Assets, Long-term | ||
Trading securities | 0 | 0 |
Total assets measured at fair value | 10 | 10 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 8 | 4 |
Liabilities Long-term | ||
Deferred compensation liability | 35 | 35 |
Total liabilities measured at fair value | 43 | 39 |
Significant Unobservable Inputs (Level 3) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term | ||
Trading securities | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS, Fair54
FAIR VALUE MEASUREMENTS, Fair value measures and impairments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Long-Lived Assets | ||||
Impairment long-lived assets held and used | $ 0 | $ 0 | $ 0 | $ 0 |
Impairment of long-lived assets held for sale | 0 | 0 | 0 | 0 |
Investments | ||||
Impairment of Investments | $ 0 | $ 0 | $ 0 | $ 0 |
DERIVATIVES (Details)
DERIVATIVES (Details) - Income Statement and Other Comprehensive Income (Loss) Location [Domain] $ in Millions | Oct. 20, 2014USD ($) | Jul. 31, 2015USD ($)contracts | Jul. 01, 2012USD ($) | Aug. 09, 2011USD ($)contracts | Nov. 25, 2008USD ($)contracts |
Derivative Instruments and Hedging Activities Disclosure | |||||
Aggregate Fair Value of all Derivative Instruments with Credit-Risk-Related Contingent Features that were in a Net Liability Position | $ 3 | ||||
Derivative Contracts | |||||
Foreign exchange forward contracts designated as cash flow hedge (in units) | contracts | 58 | ||||
Foreign exchange forward contracts not designated as hedges (in units) | contracts | 159 | ||||
Senior Notes 2020 | |||||
Terminated Interest Rate Swaps | |||||
Number of Interest Rate Swap Contracts Designated as Fair Value Hedges Terminated (in units) | contracts | 5 | ||||
Notional Amount of Terminated Interest Rate Swaps | $ 500 | ||||
Amount to be amortized on terminated interest rates swaps | $ 20 | ||||
Senior Notes 2017 | |||||
Terminated Interest Rate Swaps | |||||
Number of Interest Rate Swap Contracts Designated as Fair Value Hedges Terminated (in units) | contracts | 2 | ||||
Notional Amount of Terminated Interest Rate Swaps | $ 400 | ||||
Amount to be amortized on terminated interest rates swaps | 2 | ||||
Derivative Instruments and Hedging Activities Disclosure | |||||
Debt Instrument, Face Amount | $ 600 | 100 | |||
Extinguishment of Debt, Amount | $ 500 | ||||
Treasury Lock | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosure | |||||
Notional Amount of Interest Rate Swap Contract Designated as Cash Flow Hedges | $ 400 | ||||
Remaining gain to be amortized on derivative | $ 2 |
DERIVATIVES, Disclosures and de
DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions | Jul. 31, 2015USD ($) |
Sell | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | $ 35 |
Sell | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 153 |
Sell | Euro | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 59 |
Sell | Euro | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 36 |
Sell | British Pound | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 6 |
Sell | British Pound | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 4 |
Sell | British Pound | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 25 |
Sell | Canadian Dollar | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 2 |
Sell | Canadian Dollar | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 29 |
Sell | Australian Dollars | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 3 |
Sell | Malaysian Ringgit | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 2 |
Sell | Japanese Yen | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 4 |
Sell | Japanese Yen | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 1 |
Sell | Japanese Yen | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 69 |
Sell | Other | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 0 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 183 |
Buy | Euro | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 169 |
Buy | Australian Dollars | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 14 |
Buy | Australian Dollars | Cash Flow Hedging | Forward Contracts USD | |
Derivative | |
Total notional amount | 6 |
Buy | United States of America, Dollars | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 31 |
Buy | Other | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | 4 |
Buy | Other | Forward Contracts DKK | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Total notional amount | $ 3 |
DERIVATIVES, Fair value of deri
DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Derivative Fair Value by Balance Sheet Location | ||
Total derivatives Asset | $ 10 | $ 10 |
Total derivatives Liabilities | 8 | 4 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location | ||
Total derivatives Asset | 7 | 9 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Accrued Liabilities | ||
Derivative Fair Value by Balance Sheet Location | ||
Total derivatives Liabilities | 1 | 1 |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location | ||
Total derivatives Asset | 3 | 1 |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Accrued Liabilities | ||
Derivative Fair Value by Balance Sheet Location | ||
Total derivatives Liabilities | $ 7 | $ 3 |
DERIVATIVES, Effect of derivati
DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Cash Flow Hedging | Cost of Sales | ||||
Derivative | ||||
Cash Flow Hedge Net Gain to be Reclassified within Twelve Months | $ 6 | |||
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | ||||
Derivative | ||||
Gain (loss) recognized in accumulated other comprehensive income (loss) | 3 | $ 3 | $ 11 | $ 1 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contracts | Cost of Sales | ||||
Derivative | ||||
Gain (loss) reclassified from accumulated other comprehensive income (loss) into cost of sales | 3 | (1) | 14 | (2) |
Derivatives Not Designated as Hedging Instruments | Other income (expense) | ||||
Derivative | ||||
Gain (loss) recognized in other income (expense) | $ (3) | $ (8) | $ (20) | $ (4) |
EXIT OF NMR BUSINESS (Details)
EXIT OF NMR BUSINESS (Details) - 9 months ended Jul. 31, 2015 $ in Millions | USD ($) |
Restructuring and Related Activities [Abstract] | |
Expected number of positions to be eliminated | 300 |
Number of Employees Pending Termination | 60 |
Restructuring Reserve | |
Beginning balance | $ 17 |
Income statement expense (reversal) | 9 |
Inventory charges and other | (7) |
Cash payments | (10) |
Ending balance | 9 |
Workforce Reduction | |
Restructuring Reserve | |
Beginning balance | 14 |
Income statement expense (reversal) | (2) |
Inventory charges and other | 0 |
Cash payments | (9) |
Ending balance | 3 |
Special charges related to inventory and others | |
Restructuring Reserve | |
Beginning balance | 3 |
Income statement expense (reversal) | 11 |
Inventory charges and other | (7) |
Cash payments | (1) |
Ending balance | $ 6 |
RETIREMENT PLANS AND POST RET60
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS- Components of net periodic costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Pensions (U.S. Plans) | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | $ 6 | $ 12 | $ 18 | $ 36 |
Interest cost on benefit obligation | 3 | 8 | 10 | 24 |
Expected return on plan assets | (7) | (16) | (21) | (48) |
Amortization: | ||||
Actuarial losses | 2 | 0 | 4 | 0 |
Prior service cost | (1) | (3) | (3) | (9) |
Total net plan costs | 3 | 1 | 8 | 3 |
Pensions (Non-U.S. Plans) | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | 4 | 9 | 12 | 27 |
Interest cost on benefit obligation | 6 | 19 | 18 | 56 |
Expected return on plan assets | (10) | (30) | (31) | (88) |
Amortization: | ||||
Actuarial losses | 6 | 11 | 19 | 33 |
Prior service cost | 0 | 0 | 0 | 0 |
Total net plan costs | 6 | 9 | 18 | 28 |
United States Post-retirement Benefit Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | 1 | 1 | 3 | 3 |
Interest cost on benefit obligation | 1 | 3 | 3 | 9 |
Expected return on plan assets | (2) | (6) | (6) | (17) |
Amortization: | ||||
Actuarial losses | 1 | 4 | 3 | 11 |
Prior service cost | (3) | (9) | (9) | (27) |
Total net plan costs | (2) | (7) | (6) | (21) |
Continuing Operations | Pensions (U.S. Plans) | ||||
Amortization: | ||||
Total net plan costs | 3 | 0 | 8 | 0 |
Continuing Operations | Pensions (Non-U.S. Plans) | ||||
Amortization: | ||||
Total net plan costs | 6 | 6 | 18 | 19 |
Continuing Operations | United States Post-retirement Benefit Plan | ||||
Amortization: | ||||
Total net plan costs | (2) | (4) | (6) | (12) |
Discontinued Operations | Pensions (U.S. Plans) | ||||
Amortization: | ||||
Total net plan costs | 0 | 1 | 0 | 3 |
Discontinued Operations | Pensions (Non-U.S. Plans) | ||||
Amortization: | ||||
Total net plan costs | 0 | 3 | 0 | 9 |
Discontinued Operations | United States Post-retirement Benefit Plan | ||||
Amortization: | ||||
Total net plan costs | $ 0 | $ (3) | $ 0 | $ (9) |
RETIREMENT PLANS AND POST RET61
RETIREMENT PLANS AND POST RETIREMENT - Transferred to Keysight Technologies, Inc. (Details) - Keysight Technologies, Inc. $ in Millions | Nov. 01, 2014USD ($) |
United States defined benefit plans | |
Defined Benefit Plan Disclosure | |
Fair value of plan assets transferred to Keysight | $ 491 |
Benefit obligation transferred to Keysight | 514 |
Non-United States defined benefit plans | |
Defined Benefit Plan Disclosure | |
Fair value of plan assets transferred to Keysight | 1,318 |
Benefit obligation transferred to Keysight | 1,429 |
United States post-retirement benefit plans | |
Defined Benefit Plan Disclosure | |
Fair value of plan assets transferred to Keysight | 187 |
Benefit obligation transferred to Keysight | $ 206 |
RETIREMENT PLANS AND POST RET62
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Pensions (U.S. Plans) | ||||
Defined Benefit Plans Contributions | ||||
Contributions to defined benefit plans | $ 0 | $ 0 | $ 15 | $ 15 |
Estimated future employer contributions in remainder of current fiscal year | 0 | |||
Pensions (Non-U.S. Plans) | ||||
Defined Benefit Plans Contributions | ||||
Contributions to defined benefit plans | 9 | $ 7 | $ 20 | $ 22 |
Estimated future employer contributions in remainder of current fiscal year | $ 6 | |||
Employees hired before November 1, 2014 | ||||
Defined Benefit Plan Disclosure | ||||
Maximum employer match in the Agilent 401(k) plan | 4.00% | |||
Employees hired on or after November 1, 2014 | ||||
Defined Benefit Plan Disclosure | ||||
Maximum employer match in the Agilent 401(k) plan | 6.00% |
WARRANTIES AND CONTINGENCIES (D
WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Movement in Standard Product Warranty Accrual | ||
Beginning balance at beginning of period | $ 30 | $ 31 |
Accruals for warranties including change in estimate | 38 | 31 |
Settlements made during the period | (39) | (34) |
Ending balance at end of period | 29 | 28 |
Standard Product Warranty Disclosure | ||
Accruals for warranties due within one year | 27 | 25 |
Accruals for warranties due after one year | 2 | 3 |
Ending balance at end of period | $ 29 | $ 28 |
SHORT-TERM DEBT Credit Facility
SHORT-TERM DEBT Credit Facility (Details) - Jul. 31, 2015 - USD ($) $ in Millions | Total |
Line of Credit Facility | |
Credit facility limit increase | $ 300 |
Line of Credit | |
Line of Credit Facility | |
Initiation date of credit facility | Sep. 15, 2014 |
Expiration date of credit facility | Sep. 15, 2019 |
Credit faciity terms (in years) | five |
Initial maximum borrowing capacity of credit facility | $ 400 |
New maximum borrowing capacity of credit facility | 700 |
Amount outstanding on credit facility | 0 |
Dako | |
Line of Credit Facility | |
New maximum borrowing capacity of credit facility | 7 |
Amount outstanding on credit facility | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Debt Instrument | ||
Long-term debt | $ 1,596 | $ 1,596 |
Interest Rate Swap | 22 | 25 |
Carrying Value of Senior Notes | 1,618 | 1,621 |
Senior Notes 2017 | ||
Debt Instrument | ||
Long-term debt | 100 | 100 |
Interest Rate Swap | 2 | 3 |
Carrying Value of Senior Notes | 102 | 103 |
Senior Notes 2020 | ||
Debt Instrument | ||
Long-term debt | 499 | 499 |
Interest Rate Swap | 20 | 22 |
Carrying Value of Senior Notes | 519 | 521 |
Senior Notes 2022 | ||
Debt Instrument | ||
Long-term debt | 399 | 399 |
Interest Rate Swap | 0 | 0 |
Carrying Value of Senior Notes | 399 | 399 |
Senior Notes 2023 | ||
Debt Instrument | ||
Long-term debt | 598 | 598 |
Interest Rate Swap | 0 | 0 |
Carrying Value of Senior Notes | $ 598 | $ 598 |
LONG-TERM DEBT Long-Term Debt -
LONG-TERM DEBT Long-Term Debt - Other Debt (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Other Long-term Debt | ||
Mortgage Loans on Real Estate | $ 37 | $ 42 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchase Program (Details) - USD ($) shares in Millions, $ in Millions | Nov. 22, 2013 | Jul. 31, 2015 | Jul. 31, 2015 | Jul. 31, 2014 | May. 28, 2015 |
Share repurchase program | |||||
Cost to repurchases shares of common stock under share repurchase program | $ 267 | $ 200 | |||
Number of shares repurchased (in shares) | 6 | 4 | |||
2014 Share Repurchase Program | |||||
Share repurchase program | |||||
Share repurchase program authorized amount | $ 1,000 | ||||
Maintain weighted average diluted shares count (in shares) | 335 | ||||
Remaining authorized repurchase amount under share repurchase program | $ 98 | $ 98 | |||
Expected total amount of share repurchases in fiscal year | $ 365 | ||||
2015 Repurchase Program | |||||
Share repurchase program | |||||
Share repurchase program authorized amount | $ 1,140 |
STOCKHOLDER"S EQUITY - Dividend
STOCKHOLDER"S EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Dividends Paid | ||
Cash paid per share for dividends previously declared | $ 0.300 | $ 0.396 |
Aggregate cash paid for dividends previously declared | $ 100 | $ 132 |
STOCKHOLDER'S EQUITY - Accumula
STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Beginning Balance | $ (334) | |||
Other comprehensive income (loss) | $ (62) | $ (79) | (330) | $ (38) |
Ending Balance | (332) | (332) | ||
Unrealized gain on investments | ||||
Beginning balance | 17 | |||
Tax (expense) benefit | 0 | (2) | 0 | (1) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (66) | (92) | (337) | (59) |
Foreign currency translation | ||||
Beginning balance | 156 | |||
Tax (expense) benefit | 1 | (1) | 8 | (1) |
Prior service credits | ||||
Beginning balance | 255 | |||
Amounts reclassified out of accumulated other comprehensive income (loss) | (4) | (12) | (12) | (36) |
Other comprehensive income (loss) | (3) | (8) | (8) | (24) |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Actuarial Gain (Loss), before Tax | ||||
Beginning balance | (771) | |||
Amounts reclassified out of accumulated other comprehensive income (loss) | 9 | 15 | 26 | 46 |
Other comprehensive income (loss) | 7 | $ 11 | 17 | $ 36 |
Unrealized gains (losses) on derivatives | ||||
Beginning balance | 9 | |||
Continuing Operations | ||||
Beginning Balance | (270) | (2) | ||
Other comprehensive income (loss), before reclassifications | (64) | (337) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 2 | 0 | ||
Tax (expense) benefit | 0 | 7 | ||
Other comprehensive income (loss) | (62) | (330) | ||
Ending Balance | (332) | (332) | ||
Unrealized gain on investments | ||||
Beginning balance | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | 0 | ||
Tax (expense) benefit | 0 | 0 | ||
Other comprehensive income (loss) | 0 | 0 | ||
Ending balance | 0 | 0 | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (66) | (337) | ||
Foreign currency translation | ||||
Beginning balance | (124) | 147 | ||
Other comprehensive income (loss) before reclassifications | (67) | (345) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | 0 | ||
Tax (expense) benefit | 1 | 8 | ||
Ending balance | (190) | (190) | ||
Prior service credits | ||||
Beginning balance | 167 | 172 | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (4) | (12) | ||
Tax (expense) benefit | 1 | 4 | ||
Other comprehensive income (loss) | (3) | (8) | ||
Ending balance | 164 | 164 | ||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Actuarial Gain (Loss), before Tax | ||||
Beginning balance | (317) | (327) | ||
Other comprehensive income (loss) before reclassifications | 0 | (3) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 9 | 26 | ||
Tax (expense) benefit | (2) | (6) | ||
Other comprehensive income (loss) | 7 | 17 | ||
Ending balance | (310) | (310) | ||
Unrealized gains (losses) on derivatives | ||||
Beginning balance | 4 | 6 | ||
Other comprehensive income (loss) before reclassifications | 3 | 11 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (3) | (14) | ||
Tax (expense) benefit | 0 | 1 | ||
Other comprehensive income (loss) | 0 | (2) | ||
Ending balance | $ 4 | 4 | ||
Discontinued Operations | ||||
Beginning Balance | 332 | |||
Unrealized gain on investments | ||||
Beginning balance | (17) | |||
Foreign currency translation | ||||
Beginning balance | (9) | |||
Prior service credits | ||||
Beginning balance | (83) | |||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Actuarial Gain (Loss), before Tax | ||||
Beginning balance | 444 | |||
Unrealized gains (losses) on derivatives | ||||
Beginning balance | $ (3) |
STOCKHOLDERS' EQUITY - Reclassi
STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||
Unrealized gains and (losses) on sale of securities reclassified to other income (expense) | $ 0 | $ 1 | $ 0 | $ 1 |
Total reclassification of unrealized gains and losses on equity securities before tax | 0 | 1 | 0 | 1 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 0 | 1 | 0 | 1 |
Unrealized losses on derivatives reclassified to cost of products | (1) | (2) | ||
Unrealized gains on derivatives reclassified to cost of products | 3 | 14 | ||
Unrealized gains and (losses) on derivatives reclassified to cost of products, before tax | 3 | (1) | 14 | (2) |
Reclassification of (gains) and losses into earnings related to derivative instruments, tax | (2) | 0 | (5) | 1 |
Unrealized gains and (losses) on derivatives reclassified to cost of products, net of tax | 1 | (1) | 9 | (1) |
Actuarial net loss | (9) | (15) | (26) | (46) |
Prior service benefit | 4 | 12 | 12 | 36 |
Actuarial net loss and prior service benefit reclassified, before tax | (5) | (3) | (14) | (10) |
Tax on actuarial net loss and prior service benefit reclassified | 1 | 0 | 2 | 0 |
Actuarial net loss and prior service benefit reclassified, net of tax | (4) | (3) | (12) | (10) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (3) | $ (3) | $ (3) | $ (10) |
SEGMENT INFORMATION - Profitabi
SEGMENT INFORMATION - Profitability (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2014USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | 3 | |||
Select Income Statement Components | ||||
Total net revenue | $ 1,014 | $ 1,009 | $ 3,003 | $ 3,005 |
Income from operations | 144 | 131 | 366 | 349 |
Life Sciences and Applied Markets | ||||
Select Income Statement Components | ||||
Total net revenue | 511 | 507 | 1,531 | 1,539 |
Income from operations | 95 | 84 | 277 | 260 |
Diagnostics and Genomics | ||||
Select Income Statement Components | ||||
Total net revenue | 167 | 166 | 484 | 491 |
Income from operations | 28 | 22 | 54 | 67 |
Agilent CrossLab | ||||
Select Income Statement Components | ||||
Total net revenue | 336 | 336 | 988 | 975 |
Income from operations | 76 | 84 | 213 | 223 |
Segment Total | ||||
Select Income Statement Components | ||||
Total net revenue | 1,014 | 1,009 | 3,003 | 3,005 |
Income from operations | $ 199 | $ 190 | $ 544 | $ 550 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Reportable Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | ||||
Total reportable segments’ income from operations | $ 199 | $ 190 | $ 544 | $ 550 |
Acceleration of share-based compensation expense related to workforce reduction | 0 | 0 | (2) | 0 |
Transformational initiatives | (12) | (7) | (41) | (18) |
Amortization of intangible | (38) | (46) | (119) | (144) |
Acquisition and integration costs | (4) | (2) | (6) | (10) |
Business exit and divestiture costs (primarily our NMR business) | 0 | 0 | (11) | 0 |
Pre-separation costs | 0 | (4) | 0 | (8) |
Other | (1) | 10 | 1 | 9 |
Interest income | 2 | 3 | 6 | 7 |
Interest expense | (17) | (28) | (50) | (87) |
Other income (expense), net | (1) | (21) | 15 | (18) |
Unallocated corporate charges | 0 | (10) | 0 | (30) |
Income from continuing operations before taxes | $ 128 | $ 85 | $ 337 | $ 251 |
SEGMENT INFORMATION - Segment A
SEGMENT INFORMATION - Segment Assets (Details) - USD ($) $ in Millions | Jul. 31, 2015 | Oct. 31, 2014 |
Segment Reporting Information | ||
Assets | $ 7,251 | $ 10,831 |
Life Sciences and Applied Markets | ||
Segment Reporting Information | ||
Assets | 1,531 | 1,663 |
Diagnostics and Genomics | ||
Segment Reporting Information | ||
Assets | 2,044 | 2,302 |
Agilent CrossLab | ||
Segment Reporting Information | ||
Assets | 991 | 1,001 |
Segment Total | ||
Segment Reporting Information | ||
Assets | $ 4,566 | $ 4,966 |