Exhibit 99.2
Unaudited Pro Forma Consolidated Financial Data
The following tables set forth unaudited pro forma consolidated financial data for the three year period ended October 31, 2005 and the nine months ended July 31, 2006, and our financial position at July 31, 2006. This unaudited pro forma consolidated financial data gives effect to the Distribution of Verigy which occurred on October 31, 2006. The unaudited pro forma consolidated statement of operations gives effect to the Distribution of Verigy as if it had occurred on November 1, 2002. The unaudited pro forma consolidated balance sheet gives effect to the transaction as if it had occurred on July 31, 2006.
This information should be read in conjunction with Summary Historical Consolidated Financial Data and our audited consolidated financial statements and the related notes filed as part of our Annual Report on Form 10-K for the year ended October 31, 2005 and the unaudited condensed consolidated financial statements and the related notes filed as part of our Quarterly Report on Form 10-Q for the quarter ended July 31, 2006. This unaudited pro forma consolidated financial data has been included for informational and comparative purposes only and is not necessarily indicative of the financial position or results that will be achieved in the future. Our future results are subject to prevailing economic and industry specific conditions and financial, business and other known and unknown risks and uncertainties, certain of which are beyond our control.
PRO FORMA CONSOLIDATED BALANCE SHEET
(In millions)
(Unaudited)
| | As of | | | | | |
| | July 31, | | Distribution of Verigy | | | |
| | 2006 | | (A) | | Pro Forma | |
| | | | | | | |
ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 2,249 | | $ | (206 | ) | $ | 2,043 | |
Accounts receivable, net | | 853 | | (157 | ) | 696 | |
Inventory | | 705 | | (79 | ) | 626 | |
Other current assets | | 412 | | (35 | ) | 377 | |
| | | | | | | |
Total current assets | | 4,219 | | (477 | ) | 3,742 | |
Property, plant and equipment, net | | 822 | | (36 | ) | 786 | |
Goodwill and other intangible assets, net | | 481 | | (18 | ) | 463 | |
Other assets | | 602 | | (19 | ) | 583 | |
Restricted cash and cash equivalents | | 1,605 | | — | | 1,605 | |
| | | | | | | |
Total assets | | $ | 7,729 | | $ | (550 | ) | $ | 7,179 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 425 | | $ | (67 | ) | $ | 358 | |
Employee compensation and benefits | | 422 | | (34 | ) | 388 | |
Deferred revenue | | 292 | | (57 | ) | 235 | |
Income and other taxes payable | | 381 | | (8 | ) | 373 | |
Other accrued liabilities | | 159 | | (15 | ) | 144 | |
| | | | | | | |
Total current liabilities | | 1,679 | | (181 | ) | 1,498 | |
Long-term debt | | 1,500 | | — | | 1,500 | |
Retirement and post-retirement benefits | | 266 | | (12 | ) | 254 | |
Other long-term liabilities | | 492 | | (74 | ) | 418 | |
| | | | | | | |
Total liabilities | | 3,937 | | (267 | ) | 3,670 | |
Commitments and contingencies | | | | | | | |
Stockholders’ equity: | | | | | | | |
Preferred stock | | — | | — | | — | |
Common stock | | 5 | | — | | 5 | |
Treasury Stock, at cost | | (4,469 | ) | — | | (4,469 | ) |
Additional paid-in-capital | | 6,543 | | — | | 6,543 | |
Retained Earnings | | 1,695 | | (283 | ) | 1,412 | |
Accumulated other comprehensive income | | 18 | | — | | 18 | |
| | | | | | | |
Total stockholders’ equity | | 3,792 | | (283 | ) | 3,509 | |
| | | | | | | |
Total liabilities and stockholders’ equity | | $ | 7,729 | | $ | (550 | ) | $ | 7,179 | |
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(A) On August 15, 2005, Agilent announced its intention to separate its semiconductor test solutions business, Verigy, into a stand-alone publicly traded company. The Distribution of Verigy occurred on October 31, 2006. The adjustments presented represent the removal of the book value of assets and liabilities based on carrying amounts at July 31, 2006 that we expect to transfer as part of the Distribution. The value of assets and liabilities that will actually transfer upon Distribution will differ from the amounts presented above.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except for per share amounts)
(Unaudited)
| | Nine Months | | | | | |
| | Ended | | | | | |
| | July 31 | | Distribution of Verigy | | | |
| | 2006 | | (A) | | Pro Forma | |
| | | | | | | |
Net revenue | | $ | 4,220 | | $ | (575 | ) | $ | 3,645 | |
Costs and expenses: | | | | | | | |
Cost of sales | | 2,018 | | (302 | ) | 1,716 | |
Research and development | | 572 | | (73 | ) | 499 | |
Selling, general and administrative | | 1,387 | | (151 | ) | 1,236 | |
Gain of sale of land | | (121 | ) | — | | (121 | ) |
| | | | | | | |
Total Costs and Expenses | | 3,856 | | (526 | ) | 3,330 | |
Income from operations | | 364 | | (49 | ) | 315 | |
Other income (expense), net | | 139 | | — | | 139 | |
| | | | | | | |
Income from continuing operations before taxes and equity income | | 503 | | (49 | ) | 454 | |
Provision for taxes | | 61 | | (17 | ) | 44 | |
Equity in net income of unconsolidated affiliate and gain on sale—Lumileds | | 901 | | — | | 901 | |
| | | | | | | |
Income from continuing operations | | $ | 1,343 | | $ | (32 | ) | $ | 1,311 | |
| | | | | | | |
Income from continuing operations per share—basic: | | $ | 3.07 | | $ | (0.07 | ) | $ | 3.00 | |
| | | | | | | |
Income from continuing operations per share—diluted: | | $ | 2.99 | | $ | (0.07 | ) | $ | 2.92 | |
| | | | | | | |
Weighted average shares outstanding used to compute income from continuing operations per share: | | | | | | | |
Basic | | 438 | | 438 | | 438 | |
| | | | | | | |
Diluted | | 449 | | 449 | | 449 | |
| | | | | | | |
| | Twelve Months | | | | | |
| | Ended | | | | | |
| | October 31 | | Distribution of Verigy | | | |
| | 2005 | | (A) | | Pro Forma | |
| | | | | | | |
Net revenue | | $ | 5,139 | | $ | (454 | ) | $ | 4,685 | |
Costs and expenses: | | | | | | | |
Cost of sales | | 2,617 | | (296 | ) | 2,321 | |
Research and development | | 738 | | (88 | ) | 650 | |
Selling, general and administrative | | 1,603 | | (105 | ) | 1,498 | |
| | | | | | | |
Total costs and expenses | | 4,958 | | (489 | ) | 4,469 | |
Income from operations | | 181 | | 35 | | 216 | |
Other income (expense), net | | 73 | | 2 | | 75 | |
| | | | | | | |
Income from continuing operations before taxes and equity income | | 254 | | 37 | | 291 | |
Provision for taxes | | 155 | | (12 | ) | 143 | |
Equity in net income of unconsolidated affiliate and gain on sale—Lumileds | | 42 | | — | | 42 | |
| | | | | | | |
Income from continuing operations | | $ | 141 | | $ | 49 | | $ | 190 | |
| | | | | | | |
Income from continuing operations per share—basic: | | $ | 0.29 | | $ | 0.10 | | $ | 0.39 | |
| | | | | | | |
Income from continuing operations per share—diluted: | | $ | 0.28 | | $ | 0.10 | | $ | 0.38 | |
| | | | | | | |
Weighted average shares outstanding used to compute income from continuing operations per share: | | | | | | | |
Basic | | 494 | | 494 | | 494 | |
| | | | | | | |
Diluted | | 500 | | 500 | | 500 | |
| | Twelve Months
Ended
October 31
2004 | | Distribution of Verigy
(A) | | Pro Forma | |
| | | | | | | |
Net revenue | | $ | 5,160 | | $ | (604 | ) | $ | 4,556 | |
Costs and expenses: | | | | | | | |
Cost of sales | | 2,723 | | (331 | ) | 2,392 | |
Research and development | | 689 | | (90 | ) | 599 | |
Selling, general and administrative | | 1,603 | | (101 | ) | 1,502 | |
| | | | | | | |
Total costs and expenses | | 5,015 | | (522 | ) | 4,493 | |
Income from operations | | 145 | | (82 | ) | 63 | |
Other income (expense), net | | 24 | | — | | 24 | |
| | | | | | | |
Income from continuing operations before taxes and equity income | | 169 | | (82 | ) | 87 | |
Provision for taxes | | 71 | | (14 | ) | 57 | |
Equity in net income of unconsolidated affiliate and gain on sale—Lumileds | | 29 | | — | | 29 | |
| | | | | | | |
Income from continuing operations | | $ | 127 | | $ | (68 | ) | $ | 59 | |
| | | | | | | |
Income from continuing operations per share—basic: | | $ | 0.26 | | $ | (0.14 | ) | $ | 0.12 | |
| | | | | | | |
Income from continuing operations per share—diluted: | | $ | 0.26 | | $ | (0.14 | ) | $ | 0.12 | |
| | | | | | | |
Weighted average shares outstanding used to compute income from continuing operations per share: | | | | | | | |
Basic | | 483 | | 483 | | 483 | |
| | | | | | | |
Diluted | | 490 | | 490 | | 490 | |
| | Twelve Months
Ended
October 31
2003 | | Distribution of Verigy
(A) | | Pro Forma | |
Net revenue | | $ | 4,468 | | $ | (538 | ) | $ | 3,930 | |
Costs and expenses: | | | | | | | |
Cost of sales | | 2,633 | | (290 | ) | 2,343 | |
Research and development | | 771 | | (84 | ) | 687 | |
Selling, general and administrative | | 1,784 | | (116 | ) | 1,668 | |
| | | | | | | |
Total costs and expenses | | 5,188 | | (490 | ) | 4,698 | |
Loss from operations | | (720 | ) | (48 | ) | (768 | ) |
Other income (expense), net | | 24 | | (2 | ) | 22 | |
| | | | | | | |
Loss from continuing operations before taxes and equity income | | (696 | ) | (50 | ) | (746 | ) |
Provision for taxes | | 1,090 | | (5 | ) | 1,085 | |
Equity in net income of unconsolidated affiliate and gain on sale—Lumileds | | 9 | | — | | 9 | |
| | | | | | | |
Loss from continuing operations | | $ | (1,777 | ) | $ | (45 | ) | $ | (1,822 | ) |
| | | | | | | |
Loss from continuing operations per share—basic | | $ | (3.76 | ) | $ | (0.10 | ) | $ | (3.86 | ) |
| | | | | | | |
Loss from continuing operations per share—diluted: | | $ | (3.76 | ) | $ | (0.10 | ) | $ | (3.86 | ) |
| | | | | | | |
Weighted average shares outstanding used to compute loss from continuing operations per share: | | | | | | | |
| | | | | | | |
Basic | | 473 | | 473 | | 473 | |
| | | | | | | |
Diluted | | 473 | | 473 | | 473 | |
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(A) These adjustments reflect the elimination of the historical operations of Verigy for the nine months ended July 31, 2006, and the twelve months ended October 31, 2003, 2004 and 2005. These adjustments include the add back of general corporate allocated expenses which were previously included in the separate financial statements of Verigy. The Distribution of Verigy occurred on October 31, 2006. We will be reporting Verigy as a discontinued operation in our consolidated financial statements effective in the fourth quarter of fiscal 2006, for all periods presented.
