Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2016 | Sep. 01, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Keysight Technologies, Inc. | |
Entity Central Index Key | 1,601,046 | |
Current Fiscal Year End Date | --10-31 | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 169,936,965 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2016 | |
Trading Symbol | KEYS |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Net revenue [Abstract] | ||||
Products | $ 591 | $ 557 | $ 1,810 | $ 1,783 |
Services and other | 124 | 108 | 357 | 323 |
Total net revenue | 715 | 665 | 2,167 | 2,106 |
Costs and expenses: | ||||
Cost of products | 246 | 236 | 776 | 760 |
Cost of services and other | 63 | 59 | 187 | 177 |
Total costs | 309 | 295 | 963 | 937 |
Research and development | 104 | 90 | 320 | 282 |
Selling, general and administrative | 200 | 183 | 607 | 581 |
Other Operating Expense (Income), Net | (4) | (3) | (22) | (14) |
Total costs and expenses | 609 | 565 | 1,868 | 1,786 |
Income from operations | 106 | 100 | 299 | 320 |
Interest income | 1 | 0 | 2 | 1 |
Interest expense | (11) | (12) | (35) | (35) |
Other income (expense), net | 1 | (1) | 2 | 1 |
Income before taxes, as reported | 97 | 87 | 268 | 287 |
Provision for income taxes | 6 | 17 | 25 | 51 |
Net Income | $ 91 | $ 70 | $ 243 | $ 236 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.54 | $ 0.41 | $ 1.43 | $ 1.40 |
Diluted (in dollars per share) | $ 0.53 | $ 0.41 | $ 1.41 | $ 1.38 |
Weighted average shares used in computing net income per share: | ||||
Basic (in shares) | 170 | 169 | 170 | 169 |
Diluted (in shares) | 172 | 172 | 172 | 171 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Other comprehensive income (loss): | ||||
Net Income | $ 91 | $ 70 | $ 243 | $ 236 |
Unrealized gain (loss) on investments, net of tax benefit (expense) of $1, $(2), $2 and $(3) | 2 | (7) | (5) | 1 |
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $2, $1, $2 and $2 | (3) | (2) | (4) | (3) |
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $(1), zero, $(3) and zero | 1 | 0 | 6 | (2) |
Foreign currency translation, net of tax benefit (expense) of zero | (1) | (12) | 30 | (46) |
Net defined benefit pension cost and post retirement plan costs: | ||||
Change in actuarial net loss, net of tax expense of $5, $4, $15 and $10 | 9 | 7 | 31 | 23 |
Change in net prior service benefit, net of tax benefit of $2, $3, $7 and $9 | (4) | (5) | (12) | (13) |
Other comprehensive income (loss) | 4 | (19) | 46 | (40) |
Total comprehensive income | $ 95 | $ 51 | $ 289 | $ 196 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract] | ||||
Unrealized gain (loss) on investments, tax | $ 1 | $ (2) | $ 2 | $ (3) |
Unrealized gain (loss) on derivative instruments, tax | 2 | 1 | 2 | 2 |
Amounts reclassified into earnings related to derivative instruments, tax | (1) | 0 | (3) | 0 |
Foreign currency translation, tax | 0 | 0 | 0 | 0 |
Net defined benefit pension cost and post retirement plan costs, tax [Abstract] | ||||
Change in actuarial net loss, tax | (5) | (4) | (15) | (10) |
Change in net prior service benefit, tax | $ 2 | $ 3 | $ 7 | $ 9 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions | Jul. 31, 2016 | Oct. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 664 | $ 483 |
Accounts receivable, net | 415 | 398 |
Inventory | 479 | 487 |
Deferred Tax Assets | 0 | 74 |
Other current assets | 153 | 137 |
Total current assets | 1,711 | 1,579 |
Property, plant and equipment, net | 522 | 518 |
Goodwill | 738 | 700 |
Other intangible assets, net | 217 | 246 |
Long-term investments | 56 | 70 |
Long-term deferred tax assets | 317 | 295 |
Other assets | 114 | 100 |
Total assets | 3,675 | 3,508 |
Current liabilities: | ||
Accounts payable | 156 | 209 |
Employee compensation and benefits | 158 | 168 |
Deferred revenue | 192 | 175 |
Income and other taxes payable | 33 | 50 |
Other accrued liabilities | 62 | 84 |
Total current liabilities | 601 | 686 |
Long-term debt | 1,100 | 1,099 |
Retirement and post-retirement benefits | 235 | 280 |
Long-term deferred revenue | 73 | 61 |
Other long-term liabilities | 69 | 80 |
Total liabilities | 2,078 | 2,206 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 1 billion shares authorized; 172 million shares at July 31, 2016 and 170 million shares at October 31, 2015 issued | 2 | 2 |
Treasury stock at cost; 2.3 million shares at July 31, 2016 and zero shares at October 31, 2015 | (62) | 0 |
Additional paid-in-capital | 1,233 | 1,165 |
Retained earnings | 857 | 614 |
Accumulated other comprehensive loss | (433) | (479) |
Total stockholder's equity | 1,597 | 1,302 |
Total liabilities and equity | $ 3,675 | $ 3,508 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2016 | Oct. 31, 2015 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
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) | 1,000,000,000 | 1,000,000,000 |
Common Stock, Shares, Issued | 172,000,000 | 170,000,000 |
Treasury Stock, Shares | 2,300,000 | 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Cash flows from operating activities: | ||
Net Income | $ 243 | $ 236 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 101 | 69 |
Share-based compensation | 39 | 49 |
Excess tax loss (benefit) from share-based plans | 4 | (4) |
Deferred taxes | 5 | 15 |
Excess and obsolete inventory related charges | 14 | 23 |
Gain on sale of land | (10) | 0 |
Other non-cash expenses, net | 4 | 2 |
Changes in assets and liabilities: | ||
Accounts receivable | (16) | 31 |
Inventory | (23) | (25) |
Accounts payable | (38) | 1 |
Payment to Agilent, net | 0 | (28) |
Employee compensation and benefits | 1 | (18) |
Retirement and post-retirement benefits | (30) | (29) |
Income tax payable | 3 | 1 |
Other assets and liabilities | (20) | (28) |
Net cash provided by operating activities | 277 | 295 |
Cash flows from investing activities: | ||
Investments in property, plant and equipment | (76) | (66) |
Purchase of investments | 0 | (7) |
Acquisition of businesses and intangible assets, net of cash acquired | (10) | 0 |
Proceeds from sale of land | 10 | 0 |
Other investing activities | 0 | 1 |
Net cash used in investing activities | (76) | (72) |
Cash flows from financing activities: | ||
Issuance of common stock under employee stock plans | 42 | 23 |
Excess tax benefit (loss) from share-based plans | (4) | 4 |
Return of capital to Agilent | 0 | (49) |
Treasury stock repurchases | (62) | 0 |
Repayments of Long-term Debt | 1 | 0 |
Net Cash used in Financing Activities | (25) | (22) |
Effect of exchange rate movements | 5 | (11) |
Net increase in cash and cash equivalents | 181 | 190 |
Cash and cash equivalents at beginning of period | 483 | 810 |
Cash and cash equivalents at end of period | 664 | 1,000 |
Interest Paid, Long-term Debt | 22 | 24 |
Income Taxes Paid, Net | $ 17 | $ 35 |
OVERVIEW, BASIS OF PRESENTATION
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview. Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries. 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. On November 1, 2014, Keysight became an independent publicly-traded company through the distribution by Agilent Technologies, Inc. ("Agilent") of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation"). Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date, resulting in the distribution of approximately 167 million shares of Keysight common stock. Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014. Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014. Basis of Presentation. We have prepared the accompanying financial statements pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements 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 to state fairly our condensed consolidated balance sheet as of July 31, 2016 and October 31, 2015 , condensed consolidated statement of comprehensive income for the three and nine months ended July 31, 2016 and 2015 , condensed consolidated statement of operations for the three and nine months ended July 31, 2016 and 2015 , and condensed consolidated statement of cash flows for the nine months ended July 31, 2016 and 2015 . Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP 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 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, inventory valuation, valuation of goodwill and other intangible assets, share-based compensation, retirement and post-retirement plan assumptions, restructuring, warranty and accounting for income taxes. Land Sale. On April 30, 2014 we entered into a binding sales contract with real estate developers to sell land in the U.K. The contract calls for proportionate transfers and payments of three separate land tracts totaling approximately $34 million in May 2014, November 2015 and November 2016. In the nine months ended July 31, 2016 we recognized a $10 million gain on the sale of the second of three land tracts in other operating expense (income), net. Restricted Cash. Restricted cash of $2 million primarily consists of deposits held as collateral against bank guarantees and is classified within other assets on the condensed consolidated balance sheet. Reclassifications. Net revenue for the nine months ended July 31, 2016 includes $5 million of product revenue that was previously classified as services and other revenue in the condensed consolidated statement of operations. Cost and expenses for the nine months ended July 31, 2016 includes $7 million of costs of products that was previously classified as cost of services and other in the condensed consolidated statement of operations. The changes have no effect on reported net revenue, total costs and expenses and income for any period presented. Update to Significant Accounting Policies. There have been no 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, 2015. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Jul. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 2. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance related to revenue recognition. The amendment was the result of a joint project between the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards ("IFRS"). To meet those objectives, the FASB amended the FASB Accounting Standards Codification and created a new Topic 606, Revenue from Contracts with Customers, and the IASB issued IFRS 15, Revenue from Contracts with Customers. On July 9, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016. In addition, during March, April, and May 2016, the FASB issued guidance that clarified the reporting of revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, narrow-scope improvements, and practical expedients. We are evaluating the impact of adopting this guidance on our consolidated financial statements. In November 2015, the FASB issued guidance that requires deferred income tax liabilities and assets to be classified as non-current in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a non-current amount in a classified balance sheet. The standard is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We adopted this guidance prospectively during the third quarter of 2016. Accordingly, the condensed consolidated balance sheet as of July 31, 2016 reflects the new classification but the prior period amounts were not adjusted to conform to the new guidance. As a result of the adoption of this guidance, $75 million of current deferred tax assets and $2 million of deferred tax liabilities were reclassed to non-current. In January 2016, the FASB issued guidance that amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. The standard generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for various provisions of the standard. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance. In February 2016, the FASB issued guidance that will require organizations that lease assets to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements. In March 2016, the FASB issued guidance that simplifies the accounting for taxes related to share-based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. The standard is effective for annual and interim periods beginning after December 31, 2016. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements. In June 2016, the FASB issued guidance that replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance. In August 2016, the FASB issued guidance that adds or clarifies guidance on eight cash flow classification issues that have been creating diversity in practice. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance. Other amendments to GAAP 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. |
ACQUISITION OF ANITE (Notes)
ACQUISITION OF ANITE (Notes) | 9 Months Ended |
Jul. 31, 2016 | |
Business Acquisition [Line Items] | |
Business Combination Disclosure [Text Block] | 3. ACQUISITION OF ANITE On August 13, 2015 , we acquired all share capital of Anite for a cash price of approximately $558 million , net of $43 million of cash acquired. Anite is a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions. As a result of the acquisition, Anite became a wholly-owned subsidiary of Keysight. Accordingly, the results of Anite have been included in Keysight's consolidated financial statements from the date of the acquisition. During the third quarter of 2016, the fair value measurements of assets acquired and liabilities assumed as of the acquisition date were revised. The total purchase price allocation adjustment to goodwill was approximately $3 million and related primarily to a reduction in the allocation to property, plant and equipment. The effect on earnings due to changes in depreciation and other income effects as a result of the change to the provisional purchase price allocation amounts were not material to our condensed consolidated financial statements. In February 2016, we paid approximately $1 million related to the contingent consideration established during the preliminary purchase price allocation in connection with Anite's equity-settled share-based payment arrangements. Acquisition and integration costs directly related to the Anite acquisition totaled $5 million and $12 million for the three and nine months ended July 31, 2016, respectively, and were recorded in selling, general and administrative expenses. The following represents pro forma operating results as if Anite had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2014 (in millions, except per share amounts): Three Months Ended July 31, 2015 Nine Months Ended July 31, 2015 Net revenue $ 700 $ 2,243 Net income $ 53 $ 222 Net income per share - Basic $ 0.31 $ 1.32 Net income per share - Diluted $ 0.31 $ 1.30 The unaudited pro forma financial information for the three and nine months ended July 31, 2015 combines the historical results of Keysight and Anite for the three and nine months ended July 31, 2015, assuming that the companies were combined as of November 1, 2013 and includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, the impact on cost of sales due to the respective estimated fair value adjustments to inventory, and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Jul. 31, 2016 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Keysight 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 ("RSUs"), 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 (“LTP”) Program based on estimated fair values. The impact of share-based compensation on our results was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Cost of products and services $ 2 $ 2 $ 9 $ 10 Research and development 2 2 7 8 Selling, general and administrative 6 3 23 31 Total share-based compensation expense $ 10 $ 7 $ 39 $ 49 At July 31, 2016 and 2015 , there was no share-based compensation capitalized within inventory. The expense for the three and nine months ended July 31, 2016 includes $1 million and $4 million , respectively, related to special inaugural RSU awards granted during the three months ended January 31, 2015. The expense for the three and nine months ended July 31, 2015 includes $1 million and $16 million , respectively, related to these special inaugural RSU grants. These awards will vest over three years from the date of grant. The following assumptions were used to estimate the fair value of employee stock options and LTP Program grants. Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 Stock Option Plans: Weighted average risk-free interest rate — — — 1.6 % Dividend yield — — — — % Weighted average volatility — — — 31 % Expected life — — — 4.9 years LTP Program: Volatility of Keysight shares 25 % 26 % 25 % 26 % Volatility of selected peer-company shares 14%-54% 17%-67% 14%-54% 17%-67% Price-wise correlation with selected peers 38 % 38 % 38 % 38 % The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the LTP Program 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. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant. We did not grant any option awards for the three and nine months ended July 31, 2016 and three months ended July 31, 2015. For the nine months ended July 31, 2015 , we used the average historical volatility of eleven peer companies to estimate the volatility for our stock option awards. We considered our ability to find traded options of peer companies in the current market with similar terms and prices to our options. In estimating the expected life of our options, we considered the historical option exercise behavior of our executives, which we believe is representative of future behavior. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As of July 31, 2016, we continue to include a best estimate of the deferred tax liability for foreign unremitted earnings due to the Separation as zero. Excess foreign tax credits associated with unremitted earnings are not recorded as an asset as they do not represent a separate deferred asset until earnings are remitted. However, unremitted foreign taxes reduce deferred tax liabilities associated with outside basis differences related to the investment in a foreign subsidiary to the extent the credit reduces a deferred tax liability of the investment. We continue to have ongoing discussions with Agilent regarding the allocation of certain deferred tax liability balances related to foreign unremitted earnings in accordance with the Separation agreements. The company’s effective tax rate was 5.9 percent and 9.2 percent for the three and nine months ended July 31, 2016, respectively. Income tax expense was $6 million and $25 million for the three and nine months ended July 31, 2016, respectively. The company's effective tax rate was 19.0 percent and 17.7 percent for the three and nine months ended July 31, 2015, respectively. Income tax expense was $17 million and $51 million for the three and nine months ended July 31, 2015, respectively. The decrease in effective tax rate and income tax expense from the three and nine months ended July 31, 2015 to the three and nine months ended July 31, 2016 is primarily related to the repatriation of cash to the U.S. and the corresponding realization of foreign tax credits. The income tax provision for the three and nine months ended July 31, 2016 included a net discrete benefit of $1 million and $2 million, respectively. The income tax provision for the three and nine months ended July 31, 2015 included a net discrete expense of $0.3 million and a net discrete benefit of $7 million, respectively. Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three and nine months ended July 31, 2016 by $10 million and $27 million , respectively, resulting in a benefit to net income per share (diluted) of approximately $0.06 and $0.16 for the three and nine months ended July 31, 2016, respectively. The impact of tax incentives decreased the income tax provision for the three and nine months ended July 31, 2015 by $10 million and $31 million , respectively, resulting in a benefit to net income per share (diluted) of approximately $0.06 and $0.18 for the three and nine months ended July 31, 2015, respectively. The Singapore tax incentive is due for renewal in fiscal 2024. For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014 , through the current tax year. For certain historical Agilent foreign entities that Keysight retained as part of the separation, the tax years generally remain open back to the year 2006 . For certain entities acquired during 2015, the tax years also remain open back to the year 2006 . Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Jul. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | 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, 2016 2015 2016 2015 (in millions) Numerator: Net income $ 91 $ 70 $ 243 $ 236 Denominator: Basic weighted-average shares 170 169 170 169 Potential common shares— stock options and other employee stock plans 2 3 2 2 Diluted weighted-average shares 172 172 172 171 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 the effect would be anti-dilutive. For both the three and nine months ended July 31, 2016, 1.7 million options to purchase shares were excluded from the calculation of diluted earnings per share. In addition, we excluded stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three and nine months ended July 31, 2016 , we excluded 17,700 and 21,300 shares, respectively. |
INVENTORY
INVENTORY | 9 Months Ended |
Jul. 31, 2016 | |
Inventory, Net [Abstract] | |
INVENTORY | INVENTORY July 31, October 31, (in millions) Finished goods $ 232 $ 235 Purchased parts and fabricated assemblies 247 252 Total Inventory $ 479 $ 487 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jul. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents goodwill balances and the movements for each of our reportable segments as of and for the nine months ended July 31, 2016 : Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total (in millions) Goodwill as of October 31, 2015 $ 433 $ 204 $ 63 $ 700 Foreign currency translation impact 18 9 2 29 Goodwill arising from acquisitions 6 3 — 9 Goodwill as of July 31, 2016 $ 457 $ 216 $ 65 $ 738 The components of other intangible assets as of July 31, 2016 and October 31, 2015 are shown in the table below: Other Intangible Assets at July 31, 2016 Other Intangible Assets at October 31, 2015 Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value (in millions) Developed technology $ 309 $ 151 $ 158 $ 305 $ 125 $ 180 Backlog 4 4 — 4 4 — Trademark/Tradename 20 3 17 20 2 18 Customer relationships 65 35 30 64 28 36 Total amortizable intangible assets 398 193 205 393 159 234 In-Process R&D 12 — 12 12 — 12 Total $ 410 $ 193 $ 217 $ 405 $ 159 $ 246 During the nine months ended July 31, 2016 , we recognized additions to goodwill and other intangible assets of $9 million and $9 million , respectively, due to an acquisition in 2016 and the revision to the preliminary purchase price allocation of the Anite acquisition. During the nine months ended July 31, 2016 , we recorded $4 million of foreign exchange translation impact to other intangible assets. Amortization of other intangible assets was $12 million and $34 million for the three and nine months ended July 31, 2016 , respectively. Amortization of other intangible assets was $2 million and $6 million for the three and nine months ended July 31, 2015, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $11 million for the remainder of 2016 , $41 million for 2017, $37 million for 2018, $37 million for 2019, $37 million for 2020 and $42 million thereafter. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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 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, 2016 and October 31, 2015 were as follows: Fair Value Measurements at July 31, 2016 Fair Value Measurements at October 31, 2015 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (in millions) Assets: Short-term Cash equivalents (money market funds) $ 482 $ 482 $ — $ — $ 295 $ 295 $ — $ — Derivative instruments (foreign exchange contracts) 3 — 3 — 1 — 1 — Long-term Trading securities 12 12 — — 12 12 — — Available-for-sale investments 28 28 — — 41 41 — — Total assets measured at fair value $ 525 $ 522 $ 3 $ — $ 349 $ 348 $ 1 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 8 $ — $ 8 $ — $ 10 $ — $ 10 $ — Long-term Deferred compensation liability 12 — 12 — 12 — 12 — Total liabilities measured at fair value $ 20 $ — $ 20 $ — $ 22 $ — $ 22 $ — Our money market funds, trading securities, and available-for-sale 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. Investments designated as available-for-sale and certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss). Realized gains and losses from the sale of these instruments are recorded in net income. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Jul. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options, to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. 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. Amounts associated with cash flow hedges are reclassified to cost of products 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 will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense), net 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), net over the life of the option contract. Ineffectiveness in the three and nine months ended July 31, 2016 and 2015 was not significant . 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), net 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 that 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, 2016 was $7 million . The credit-risk-related contingent features underlying these agreements had not been triggered as of July 31, 2016 . There were 132 foreign exchange forward contracts open as of July 31, 2016 that were designated as cash flow hedges. There were 66 foreign exchange forward contracts and zero foreign exchange option contract open as of July 31, 2016 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of July 31, 2016 were as follows: Derivatives in Cash Flow Hedging Relationships Derivatives Not Designated as Hedging Instruments Forward Contracts Forward Contracts Currency Buy/(Sell) Buy/(Sell) (in millions) Euro $ — $ 104 British Pound — 33 Singapore Dollar 9 — Malaysian Ringgit 72 (8 ) Japanese Yen (76 ) (56 ) Other currencies (16 ) 4 Totals $ (11 ) $ 77 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 condensed consolidated balance sheet as of July 31, 2016 and October 31, 2015 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 $ 2 $ — Other accrued liabilities $ 7 $ 8 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets 1 1 Other accrued liabilities 1 2 Total derivatives $ 3 $ 1 $ 8 $ 10 The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain (loss) recognized in accumulated other comprehensive income $ (5 ) $ (3 ) $ (6 ) $ (5 ) Gain (loss) reclassified from accumulated other comprehensive income into cost of sales $ (2 ) $ — $ (9 ) $ 2 Derivatives not designated as hedging instruments: Gain (loss) recognized in other income (expense), net $ (6 ) $ (1 ) $ (8 ) $ (5 ) The estimated amount of existing net loss at July 31, 2016 expected to be reclassified from other comprehensive income to cost of sales within the next twelve months is $6 million . |
RETIREMENT PLANS AND POST RETIR
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS | 9 Months Ended |
Jul. 31, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS | RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS For the three and nine months ended July 31, 2016 and 2015 , our net pension and post-retirement benefit costs were comprised of the following: Pensions U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plan Three Months Ended July 31, 2016 2015 2016 2015 2016 2015 (in millions) Service cost—benefits earned during the period $ 5 $ 5 $ 5 $ 4 $ — $ — Interest cost on benefit obligation 6 5 8 10 2 2 Expected return on plan assets (9 ) (9 ) (19 ) (18 ) (3 ) (4 ) Amortization: Net actuarial losses 2 1 7 8 5 3 Prior service credit (2 ) (2 ) — (1 ) (4 ) (5 ) Total periodic benefit cost (benefit) $ 2 $ — $ 1 $ 3 $ — $ (4 ) Pensions U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plan Nine Months Ended July 31, 2016 2015 2016 2015 2016 2015 (in millions) Service cost—benefits earned during the period $ 15 $ 16 $ 13 $ 13 $ — $ 1 Interest cost on benefit obligation 18 15 24 31 6 6 Expected return on plan assets (27 ) (28 ) (56 ) (55 ) (10 ) (11 ) Amortization: Net actuarial losses 6 3 21 22 15 9 Prior service credit (6 ) (5 ) — (1 ) (12 ) (16 ) Total periodic benefit cost (benefit) $ 6 $ 1 $ 2 $ 10 $ (1 ) $ (11 ) We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three and nine months ended July 31, 2016 and 2015 . We contributed $10 million and $29 million to our Non-U.S. Defined Benefit Plans during the three and nine months ended July 31, 2016, respectively, and contributed $10 million and $35 million to our Non-U.S. Defined Benefit Plans during the three and nine months ended July 31, 2015, respectively. During the remainder of 2016 , we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $8 million to our Non-U.S. Defined Benefit Plans. Employees hired on or after August 1, 2015 are not eligible to participate in the U.S. Defined Benefit Plans or the U.S. Post-Retirement Benefit Plan. We provide matching contributions to these employees under the Keysight Technologies, Inc. 401(k) Plan up to a maximum of 6 percent of the employee's annual eligible compensation. |
WARRANTY, COMMITMENTS AND CONTI
WARRANTY, COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
WARRANTY, COMMITMENTS AND CONTINGENCIES | WARRANTY, COMMITMENTS AND CONTINGENCIES Standard Warranty Our standard warranty term for most of our products from the date of delivery is typically three years. 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 related product revenue is recognized. Activity related to the standard warranty accrual, which is included in other accrued and other long-term liabilities in our condensed consolidated balance sheet, is as follows: Nine Months Ended July 31, 2016 2015 (in millions) Beginning balance $ 53 $ 51 Accruals for warranties including change in estimate 16 26 Settlements made during the period (24 ) (23 ) Ending balance $ 45 $ 54 Accruals for warranties due within one year $ 23 $ 42 Accruals for warranties due after one year 22 12 Ending balance $ 45 $ 54 During the nine months ended July 31 2016, we reduced the standard warranty accrual by $5 million as a result of lower than expected historical warranty charges. This benefit was recognized in the three and nine months ended July 31, 2016 in the condensed consolidated statement of operations. Commitments There were no material changes during the nine months ended July 31, 2016 to the operating lease commitments reported in the company’s 2015 Annual Report on Form 10-K. Contingencies We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows. |
DEBT (Notes)
DEBT (Notes) | 9 Months Ended |
Jul. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Short-Term Debt On September 15, 2014 , we entered into a five year credit agreement, which provides for a $300 million unsecured credit facility that will expire on November 1, 2019 . On July 21, 2015 , the total amount available under the credit facility was increased to $450 million . The company may use amounts borrowed under the facility for general corporate purposes. As of July 31, 2016 , we had no borrowings outstanding under the credit facility. We were in compliance with the covenants of the credit facility during the nine months ended July 31, 2016 . As a result of the Anite acquisition, we have an overdraft facility of £25 million that expired on July 31, 2016 , but by mutual agreement this facility continues to be available while a replacement short-term facility is negotiated. As of July 31, 2016, we had no borrowings outstanding under the facility. We were in compliance with the covenants of the facility during the nine months ended July 31, 2016. Long-Term Debt The following table summarizes the components of our long-term debt: July 31, 2016 October 31, 2015 (in millions) 3.30% Senior Notes due 2019 $ 500 $ 499 4.55% Senior Notes due 2024 600 600 Total $ 1,100 $ 1,099 The notes issued are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. There have been no changes to the principal, maturity, interest rates and interest payment terms of the senior notes, detailed in the table above, during the nine months ended July 31, 2016 as compared to the senior notes described in our Annual Report on Form 10-K for fiscal year ended October 31, 2015. In March 2016, we assumed approximately $1 million of long-term debt in connection with an acquisition. In May 2016, this debt was subsequently repaid in full. As of July 31, 2016 and October 31, 2015, we had $16 million and $19 million , respectively, of outstanding letters of credit unrelated to the credit facility that were issued by various lenders. The fair value of our long-term debt, calculated from quoted prices that are primarily Level 1 inputs under the accounting guidance fair value hierarchy, was above the carrying value by approximately $36 million and was below the carrying value by $8 million as of July 31, 2016 and October 31, 2015, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Jul. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |
STOCKHOLDERS EQUITY | STOCKHOLDERS' EQUITY Stock Repurchase Program On February 18, 2016, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $200 million of the company’s common stock. Under the program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The stock repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion and does not have an expiration date. For the nine months ended July 31, 2016, we repurchased 2.3 million shares of common stock for $62 million . All such shares and related costs are held as treasury stock and accounted for at trade date using the cost method. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component and related tax effects for the three and nine months ended July 31, 2016 and 2015 were as follows: Net defined benefit pension cost and post retirement plan costs Unrealized gain on investments Foreign currency translation Actuarial losses Prior service costs Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2016 $ 14 $ (17 ) $ (489 ) $ 57 $ (2 ) $ (437 ) Other comprehensive income (loss) before reclassifications 1 (1 ) — — (5 ) (5 ) Amounts reclassified out of accumulated other comprehensive loss — — 14 (6 ) 2 10 Tax (expense) benefit 1 — (5 ) 2 1 (1 ) Other comprehensive income (loss) 2 (1 ) 9 (4 ) (2 ) 4 As of July 31, 2016 $ 16 $ (18 ) $ (480 ) $ 53 $ (4 ) $ (433 ) As of October 31, 2015 $ 21 $ (48 ) $ (511 ) $ 65 $ (6 ) $ (479 ) Other comprehensive income (loss) before reclassifications (7 ) 30 4 — (6 ) 21 Amounts reclassified out of accumulated other comprehensive loss — — 42 (19 ) 9 32 Tax (expense) benefit 2 — (15 ) 7 (1 ) (7 ) Other comprehensive income (loss) (5 ) 30 31 (12 ) 2 46 As of July 31, 2016 $ 16 $ (18 ) $ (480 ) $ 53 $ (4 ) $ (433 ) Net defined benefit pension cost and post retirement plan costs Unrealized gain on investments Foreign currency translation Actuarial losses Prior service costs Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2015 $ 24 $ (28 ) $ (428 ) $ 75 $ — $ (357 ) Other comprehensive income (loss) before reclassifications (5 ) (12 ) — — (3 ) (20 ) Amounts reclassified out of accumulated other comprehensive loss — — 11 (8 ) — 3 Tax (expense) benefit (2 ) — (4 ) 3 1 (2 ) Other comprehensive income (loss) (7 ) (12 ) 7 (5 ) (2 ) (19 ) As of July 31, 2015 $ 17 $ (40 ) $ (421 ) $ 70 $ (2 ) $ (376 ) As of October 31, 2014 $ 16 $ 6 $ (444 ) $ 83 $ 3 $ (336 ) Other comprehensive income (loss) before reclassifications 4 (46 ) — — (5 ) (47 ) Amounts reclassified out of accumulated other comprehensive loss — — 33 (22 ) (2 ) 9 Tax (expense) benefit (3 ) — (10 ) 9 2 (2 ) Other comprehensive income (loss) 1 (46 ) 23 (13 ) (5 ) (40 ) As of July 31, 2015 $ 17 $ (40 ) $ (421 ) $ 70 $ (2 ) $ (376 ) Reclassifications out of accumulated other comprehensive loss for the three and nine months ended July 31, 2016 and 2015 were as follows: Details about Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in Statement of Operations Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Unrealized gain (loss) on derivatives $ (2 ) $ — $ (9 ) $ 2 Cost of sales 1 — 3 — Provision for income taxes (1 ) — (6 ) 2 Net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (14 ) (11 ) (42 ) (33 ) Prior service benefit 6 8 19 22 (8 ) (3 ) (23 ) (11 ) Total before income tax 3 1 8 1 Provision for income taxes (5 ) (2 ) (15 ) (10 ) Net of income tax Total reclassifications for the period $ (6 ) $ (2 ) $ (21 ) $ (8 ) An amount in parentheses indicates a reduction to income and an increase to the accumulated other comprehensive income. 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 11, "Retirement Plans and Post Retirement Pension Plans"). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We provide electronic design and test instruments and systems and related software, software design tools, and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. Related services include start-up assistance, instrument productivity and application services and instrument calibration and repair. We also offer customization, consulting and optimization services throughout the customer's product lifecycle. We have completed our previously announced organizational change to align our organization with the industries we serve. As a result of this organizational realignment, we now have three reportable operating segments, Communications Solutions Group (“CSG”), Electronic Industrial Solutions Group (“EISG”), and Services Solutions Group (“SSG”). CSG and EISG are from our previous Measurement Solutions segment, while SSG was formerly reported as the company's Customer Support and Services segment. The new organizational structure continues to include centralized enterprise functions that provide support across the groups. Prior period amounts were revised to conform to the current presentation. Our three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess 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. Descriptions of our three reportable segments are as follows: The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of industries within the electronic industrial end market, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment. 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 costs of centralized research and development, legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. 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. The following tables reflect the results of our reportable segments under our management reporting system. These results are not necessarily in conformity with GAAP. The performance of each segment is measured based on several metrics, including 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, among other things, charges related to the amortization of intangibles, the impact of restructuring and related costs, asset impairments, acquisition and integration costs, share-based compensation, separation and related costs, acquisition related fair value adjustments, interest income and interest expense as noted in the reconciliations below. Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Three Months Ended July 31, 2016: Total segment revenue $ 424 $ 191 $ 103 $ 718 Acquisition related fair value adjustments (3 ) — — (3 ) Total net revenue $ 421 $ 191 $ 103 $ 715 Segment income from operations $ 77 $ 44 $ 19 $ 140 Three Months Ended July 31, 2015: Total net revenue $ 389 $ 175 $ 101 $ 665 Segment income from operations $ 72 $ 32 $ 20 $ 124 Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Nine Months Ended July 31, 2016: Total segment revenue $ 1,310 $ 575 $ 294 $ 2,179 Acquisition related fair value adjustments (12 ) — — (12 ) Total net revenue $ 1,298 $ 575 $ 294 $ 2,167 Segment income from operations $ 239 $ 122 $ 43 $ 404 Nine Months Ended July 31, 2015: Total net revenue $ 1,250 $ 558 $ 298 $ 2,106 Segment income from operations $ 240 $ 110 $ 52 $ 402 The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Total reportable segments' income from operations $ 140 $ 124 $ 404 $ 402 Share-based compensation expense (10 ) (7 ) (39 ) (49 ) Restructuring and related costs — (10 ) — (10 ) Amortization of intangibles (12 ) (2 ) (34 ) (6 ) Acquisition and integration costs (4 ) (2 ) (11 ) (2 ) Separation and related costs (6 ) (3 ) (16 ) (15 ) Acquisition related fair value adjustments (3 ) — (12 ) — Other 1 — 7 — Interest income 1 — 2 1 Interest expense (11 ) (12 ) (35 ) (35 ) Other income (expense), net 1 (1 ) 2 1 Income before taxes, as reported $ 97 $ 87 $ 268 $ 287 The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments and other assets. Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Assets: As of July 31, 2016 $ 1,794 $ 772 $ 274 $ 2,840 As of October 31, 2015 $ 1,779 $ 752 $ 265 $ 2,796 |
DERIVATIVES DERIVATIVES (Polici
DERIVATIVES DERIVATIVES (Policies) | 9 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Derivatives, Policy [Policy Text Block] | 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. Amounts associated with cash flow hedges are reclassified to cost of products 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 will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense), net 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), net over the life of the option contract. Ineffectiveness in the three and nine months ended July 31, 2016 and 2015 was not significant . 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), net 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. |
WARRANTY, COMMITMENTS AND CON24
WARRANTY, COMMITMENTS AND CONTINGENCIES STANDARD WARRANTY (Policies) | 9 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Standard Product Warranty, Policy [Policy Text Block] | Standard Warranty Our standard warranty term for most of our products from the date of delivery is typically three years. 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 related product revenue is recognized. |
ACQUISITION OF ANITE (Tables)
ACQUISITION OF ANITE (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following represents pro forma operating results as if Anite had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2014 (in millions, except per share amounts): Three Months Ended July 31, 2015 Nine Months Ended July 31, 2015 Net revenue $ 700 $ 2,243 Net income $ 53 $ 222 Net income per share - Basic $ 0.31 $ 1.32 Net income per share - Diluted $ 0.31 $ 1.30 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Share-based Compensation [Abstract] | |
Allocated Share-based compensation expense disclosure | The impact of share-based compensation on our results was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Cost of products and services $ 2 $ 2 $ 9 $ 10 Research and development 2 2 7 8 Selling, general and administrative 6 3 23 31 Total share-based compensation expense $ 10 $ 7 $ 39 $ 49 |
Share-based compensation arrangement by share-based payment award fair value assumptions and methodology schedule | The following assumptions were used to estimate the fair value of employee stock options and LTP Program grants. Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 Stock Option Plans: Weighted average risk-free interest rate — — — 1.6 % Dividend yield — — — — % Weighted average volatility — — — 31 % Expected life — — — 4.9 years LTP Program: Volatility of Keysight shares 25 % 26 % 25 % 26 % Volatility of selected peer-company shares 14%-54% 17%-67% 14%-54% 17%-67% Price-wise correlation with selected peers 38 % 38 % 38 % 38 % The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
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, 2016 2015 2016 2015 (in millions) Numerator: Net income $ 91 $ 70 $ 243 $ 236 Denominator: Basic weighted-average shares 170 169 170 169 Potential common shares— stock options and other employee stock plans 2 3 2 2 Diluted weighted-average shares 172 172 172 171 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Inventory, Net [Abstract] | |
INVENTORY | July 31, October 31, (in millions) Finished goods $ 232 $ 235 Purchased parts and fabricated assemblies 247 252 Total Inventory $ 479 $ 487 |
GOODWILL AND OTHER INTANGIBLE29
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
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 as of and for the nine months ended July 31, 2016 : Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total (in millions) Goodwill as of October 31, 2015 $ 433 $ 204 $ 63 $ 700 Foreign currency translation impact 18 9 2 29 Goodwill arising from acquisitions 6 3 — 9 Goodwill as of July 31, 2016 $ 457 $ 216 $ 65 $ 738 |
Components of other intangibles during the period | The components of other intangible assets as of July 31, 2016 and October 31, 2015 are shown in the table below: Other Intangible Assets at July 31, 2016 Other Intangible Assets at October 31, 2015 Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value Gross Carrying Amount Accumulated Amortization and Impairments Net Book Value (in millions) Developed technology $ 309 $ 151 $ 158 $ 305 $ 125 $ 180 Backlog 4 4 — 4 4 — Trademark/Tradename 20 3 17 20 2 18 Customer relationships 65 35 30 64 28 36 Total amortizable intangible assets 398 193 205 393 159 234 In-Process R&D 12 — 12 12 — 12 Total $ 410 $ 193 $ 217 $ 405 $ 159 $ 246 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
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, 2016 and October 31, 2015 were as follows: Fair Value Measurements at July 31, 2016 Fair Value Measurements at October 31, 2015 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (in millions) Assets: Short-term Cash equivalents (money market funds) $ 482 $ 482 $ — $ — $ 295 $ 295 $ — $ — Derivative instruments (foreign exchange contracts) 3 — 3 — 1 — 1 — Long-term Trading securities 12 12 — — 12 12 — — Available-for-sale investments 28 28 — — 41 41 — — Total assets measured at fair value $ 525 $ 522 $ 3 $ — $ 349 $ 348 $ 1 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 8 $ — $ 8 $ — $ 10 $ — $ 10 $ — Long-term Deferred compensation liability 12 — 12 — 12 — 12 — Total liabilities measured at fair value $ 20 $ — $ 20 $ — $ 22 $ — $ 22 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
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, 2016 were as follows: Derivatives in Cash Flow Hedging Relationships Derivatives Not Designated as Hedging Instruments Forward Contracts Forward Contracts Currency Buy/(Sell) Buy/(Sell) (in millions) Euro $ — $ 104 British Pound — 33 Singapore Dollar 9 — Malaysian Ringgit 72 (8 ) Japanese Yen (76 ) (56 ) Other currencies (16 ) 4 Totals $ (11 ) $ 77 |
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 condensed consolidated balance sheet as of July 31, 2016 and October 31, 2015 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 $ 2 $ — Other accrued liabilities $ 7 $ 8 Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets 1 1 Other accrued liabilities 1 2 Total derivatives $ 3 $ 1 $ 8 $ 10 |
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 condensed consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain (loss) recognized in accumulated other comprehensive income $ (5 ) $ (3 ) $ (6 ) $ (5 ) Gain (loss) reclassified from accumulated other comprehensive income into cost of sales $ (2 ) $ — $ (9 ) $ 2 Derivatives not designated as hedging instruments: Gain (loss) recognized in other income (expense), net $ (6 ) $ (1 ) $ (8 ) $ (5 ) |
RETIREMENT PLANS AND POST RET32
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Schedule of net pension and post-retirement benefit costs | For the three and nine months ended July 31, 2016 and 2015 , our net pension and post-retirement benefit costs were comprised of the following: Pensions U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plan Three Months Ended July 31, 2016 2015 2016 2015 2016 2015 (in millions) Service cost—benefits earned during the period $ 5 $ 5 $ 5 $ 4 $ — $ — Interest cost on benefit obligation 6 5 8 10 2 2 Expected return on plan assets (9 ) (9 ) (19 ) (18 ) (3 ) (4 ) Amortization: Net actuarial losses 2 1 7 8 5 3 Prior service credit (2 ) (2 ) — (1 ) (4 ) (5 ) Total periodic benefit cost (benefit) $ 2 $ — $ 1 $ 3 $ — $ (4 ) Pensions U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans U.S. Post-Retirement Benefit Plan Nine Months Ended July 31, 2016 2015 2016 2015 2016 2015 (in millions) Service cost—benefits earned during the period $ 15 $ 16 $ 13 $ 13 $ — $ 1 Interest cost on benefit obligation 18 15 24 31 6 6 Expected return on plan assets (27 ) (28 ) (56 ) (55 ) (10 ) (11 ) Amortization: Net actuarial losses 6 3 21 22 15 9 Prior service credit (6 ) (5 ) — (1 ) (12 ) (16 ) Total periodic benefit cost (benefit) $ 6 $ 1 $ 2 $ 10 $ (1 ) $ (11 ) |
WARRANTY, COMMITMENTS AND CON33
WARRANTY, COMMITMENTS AND CONTINGENCIES (Tables) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard warranty | Activity related to the standard warranty accrual, which is included in other accrued and other long-term liabilities in our condensed consolidated balance sheet, is as follows: Nine Months Ended July 31, 2016 2015 (in millions) Beginning balance $ 53 $ 51 Accruals for warranties including change in estimate 16 26 Settlements made during the period (24 ) (23 ) Ending balance $ 45 $ 54 Accruals for warranties due within one year $ 23 $ 42 Accruals for warranties due after one year 22 12 Ending balance $ 45 $ 54 |
Standard Product Warranty Accrual, Period Increase (Decrease) | $ (5) |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the components of our long-term debt: July 31, 2016 October 31, 2015 (in millions) 3.30% Senior Notes due 2019 $ 500 $ 499 4.55% Senior Notes due 2024 600 600 Total $ 1,100 $ 1,099 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss by component and related tax effects for the three and nine months ended July 31, 2016 and 2015 were as follows: Net defined benefit pension cost and post retirement plan costs Unrealized gain on investments Foreign currency translation Actuarial losses Prior service costs Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2016 $ 14 $ (17 ) $ (489 ) $ 57 $ (2 ) $ (437 ) Other comprehensive income (loss) before reclassifications 1 (1 ) — — (5 ) (5 ) Amounts reclassified out of accumulated other comprehensive loss — — 14 (6 ) 2 10 Tax (expense) benefit 1 — (5 ) 2 1 (1 ) Other comprehensive income (loss) 2 (1 ) 9 (4 ) (2 ) 4 As of July 31, 2016 $ 16 $ (18 ) $ (480 ) $ 53 $ (4 ) $ (433 ) As of October 31, 2015 $ 21 $ (48 ) $ (511 ) $ 65 $ (6 ) $ (479 ) Other comprehensive income (loss) before reclassifications (7 ) 30 4 — (6 ) 21 Amounts reclassified out of accumulated other comprehensive loss — — 42 (19 ) 9 32 Tax (expense) benefit 2 — (15 ) 7 (1 ) (7 ) Other comprehensive income (loss) (5 ) 30 31 (12 ) 2 46 As of July 31, 2016 $ 16 $ (18 ) $ (480 ) $ 53 $ (4 ) $ (433 ) | Net defined benefit pension cost and post retirement plan costs Unrealized gain on investments Foreign currency translation Actuarial losses Prior service costs Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2015 $ 24 $ (28 ) $ (428 ) $ 75 $ — $ (357 ) Other comprehensive income (loss) before reclassifications (5 ) (12 ) — — (3 ) (20 ) Amounts reclassified out of accumulated other comprehensive loss — — 11 (8 ) — 3 Tax (expense) benefit (2 ) — (4 ) 3 1 (2 ) Other comprehensive income (loss) (7 ) (12 ) 7 (5 ) (2 ) (19 ) As of July 31, 2015 $ 17 $ (40 ) $ (421 ) $ 70 $ (2 ) $ (376 ) As of October 31, 2014 $ 16 $ 6 $ (444 ) $ 83 $ 3 $ (336 ) Other comprehensive income (loss) before reclassifications 4 (46 ) — — (5 ) (47 ) Amounts reclassified out of accumulated other comprehensive loss — — 33 (22 ) (2 ) 9 Tax (expense) benefit (3 ) — (10 ) 9 2 (2 ) Other comprehensive income (loss) 1 (46 ) 23 (13 ) (5 ) (40 ) As of July 31, 2015 $ 17 $ (40 ) $ (421 ) $ 70 $ (2 ) $ (376 ) |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive loss for the three and nine months ended July 31, 2016 and 2015 were as follows: Details about Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in Statement of Operations Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Unrealized gain (loss) on derivatives $ (2 ) $ — $ (9 ) $ 2 Cost of sales 1 — 3 — Provision for income taxes (1 ) — (6 ) 2 Net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (14 ) (11 ) (42 ) (33 ) Prior service benefit 6 8 19 22 (8 ) (3 ) (23 ) (11 ) Total before income tax 3 1 8 1 Provision for income taxes (5 ) (2 ) (15 ) (10 ) Net of income tax Total reclassifications for the period $ (6 ) $ (2 ) $ (21 ) $ (8 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Segment Reporting Information [Line Items] | |
Segment Profitability and Segment Assets | The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments and other assets. Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Assets: As of July 31, 2016 $ 1,794 $ 772 $ 274 $ 2,840 As of October 31, 2015 $ 1,779 $ 752 $ 265 $ 2,796 Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Three Months Ended July 31, 2016: Total segment revenue $ 424 $ 191 $ 103 $ 718 Acquisition related fair value adjustments (3 ) — — (3 ) Total net revenue $ 421 $ 191 $ 103 $ 715 Segment income from operations $ 77 $ 44 $ 19 $ 140 Three Months Ended July 31, 2015: Total net revenue $ 389 $ 175 $ 101 $ 665 Segment income from operations $ 72 $ 32 $ 20 $ 124 Communications Solutions Group Electronic Industrial Solutions Group Services Solutions Group Total Segments (in millions) Nine Months Ended July 31, 2016: Total segment revenue $ 1,310 $ 575 $ 294 $ 2,179 Acquisition related fair value adjustments (12 ) — — (12 ) Total net revenue $ 1,298 $ 575 $ 294 $ 2,167 Segment income from operations $ 239 $ 122 $ 43 $ 404 Nine Months Ended July 31, 2015: Total net revenue $ 1,250 $ 558 $ 298 $ 2,106 Segment income from operations $ 240 $ 110 $ 52 $ 402 |
Reconciliation of segment results to total enterprise results | The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2016 2015 2016 2015 (in millions) Total reportable segments' income from operations $ 140 $ 124 $ 404 $ 402 Share-based compensation expense (10 ) (7 ) (39 ) (49 ) Restructuring and related costs — (10 ) — (10 ) Amortization of intangibles (12 ) (2 ) (34 ) (6 ) Acquisition and integration costs (4 ) (2 ) (11 ) (2 ) Separation and related costs (6 ) (3 ) (16 ) (15 ) Acquisition related fair value adjustments (3 ) — (12 ) — Other 1 — 7 — Interest income 1 — 2 1 Interest expense (11 ) (12 ) (35 ) (35 ) Other income (expense), net 1 (1 ) 2 1 Income before taxes, as reported $ 97 $ 87 $ 268 $ 287 |
OVERVIEW, BASIS OF PRESENTATI37
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Common Stock [Member] | Oct. 22, 2014shares |
Spin off from Agilent [Line Items] | |
Sale of Stock, Number of Shares Issued in Transaction, Per Two Shares Held | 1 |
Stock Issued During Period, Shares, New Issues | 167,000,000 |
OVERVIEW, BASIS OF PRESENTATI38
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Land Sale (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Retail Land Sales, Installment Method, Gross Profit, Deferred [Abstract] | |
Date of Land Sale Agreeement | Apr. 30, 2014 |
Retail Land Sales, Installment Method, Sales Value | $ 34 |
Retail Land Sales, Installment Method, Gross Profit | $ 10 |
OVERVIEW, BASIS OF PRESENTATI39
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted Cash (Details) | Jul. 31, 2016USD ($) |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted Cash and Cash Equivalents, Noncurrent | $ 2,000,000 |
OVERVIEW, BASIS OF PRESENTATI40
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Re-classification (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Supplemental Income Statement Elements [Abstract] | |
Product Revenue that was previously classified as Services and Other Revenue | $ 5 |
Cost of Products that was previously classified as Cost of Services and Others | $ 7 |
NEW ACCOUNTING PRONOUNCEMENTS R
NEW ACCOUNTING PRONOUNCEMENTS Reclassification from Current Deferred tax to Non-Current Deferred Tax (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Deferred Tax Disclosure [Abstract] | |
Deferred Tax Asset Re-classification From Current to Non-Current | $ 75 |
Deferred Tax Liability Re-classification from Current to Non-Current | $ 2 |
ACQUISITION OF ANITE Pro Forma
ACQUISITION OF ANITE Pro Forma operating results - if acquisition was connsumated (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 31, 2015 | Jul. 31, 2015 | |
Business Combinations [Abstract] | ||
Business Acquisition, Pro Forma Revenue | $ 700 | $ 2,243 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 53 | $ 222 |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0.31 | $ 1.32 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.31 | $ 1.30 |
ACQUISITION OF ANITE (Narrative
ACQUISITION OF ANITE (Narrative) (Details) - USD ($) $ in Millions | Aug. 13, 2015 | Feb. 29, 2016 | Jul. 31, 2016 | Jul. 31, 2016 | Aug. 31, 2015 |
Business Acquisition [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||
Business Acquisition, Name of Acquired Entity | Anite | ||||
Anite [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Effective Date of Acquisition | Aug. 13, 2015 | ||||
Business Acquisition, Description of Acquired Entity | Anite is a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions. | ||||
Goodwill, Purchase Accounting Adjustments | $ 3 | ||||
Payments to Acquire Business, Net of Cash Acquired | $ 558 | ||||
Cash Acquired from Acquisition | $ 43 | ||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 1 | ||||
Anite [Member] | Selling, general and administrative | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Integration Related Costs | $ 5 | $ 12 |
SHARE-BASED COMPENSATION Alloca
SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 0 | $ 0 | ||
Allocated Share-based Compensation Expense | $ 10,000,000 | $ 7,000,000 | 39,000,000 | 49,000,000 |
Cost of products and services | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | 2,000,000 | 2,000,000 | 9,000,000 | 10,000,000 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | 2,000,000 | 2,000,000 | 7,000,000 | 8,000,000 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | 6,000,000 | 3,000,000 | 23,000,000 | 31,000,000 |
RSU grant vesting in 3 years [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 1,000,000 | $ 1,000,000 | $ 4,000,000 | $ 16,000,000 |
SHARE-BASED COMPENSATION Fair V
SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 | 0 | |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model. | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.00% | 0.00% | 0.00% | 1.60% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 0.00% | 0.00% | 0.00% | 31.00% |
Expected life (in years) | 0 years | 0 years | 0 years | 4 years 11 months |
LTPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Shares granted under the LTP Program were valued using a Monte Carlo simulation model. | |||
Volatility of Keysight shares (in hundredths) | 25.00% | 26.00% | 25.00% | 26.00% |
Volatility of selected peer-company shares minimum (in hundredths) | 14.00% | 17.00% | 14.00% | 17.00% |
Volatility of selected peer-company shares maximum (in hundredths) | 54.00% | 67.00% | 54.00% | 67.00% |
Price-wise correlation with selected peers (in hundredths) | 38.00% | 38.00% | 38.00% | 38.00% |
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Income Tax Examination [Line Items] | ||||
Income Tax Expense (Benefit) | $ 6 | $ 17 | $ 25 | $ 51 |
Other Information Pertaining to Income Taxes | The decrease in effective tax rate and income tax expense from the three and nine months ended July 31, 2015 to the three and nine months ended July 31, 2016 is primarily related to the repatriation of cash to the U.S. and the corresponding realization of foreign tax credits. | |||
Income Tax Holiday, Aggregate Dollar Amount | $ 10 | $ 10 | $ 27 | $ 31 |
Income Tax Holiday, Income Tax Benefits Per Share | $ 0.06 | $ 0.06 | $ 0.16 | $ 0.18 |
Majority of company's entities [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2,014 | |||
Entities retained as part of separation [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2,006 | |||
Entities acquired [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2,006 | |||
Foreign Tax Authority [Member] | ||||
Income Tax Examination [Line Items] | ||||
Income Tax Holiday, Description | Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. | |||
Income Tax Holiday, Termination Date | The Singapore tax incentive is due for renewal in fiscal 2024. | |||
Internal Revenue Service (IRS) [Member] | ||||
Income Tax Examination [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Percent | 5.90% | 19.00% | 9.20% | 17.70% |
Income Tax Expense (Benefit) | $ 6 | $ 17 | $ 25 | $ 51 |
Net Discrete Tax expense (Benefit) | $ (1) | $ 0 | $ (2) | $ (7) |
NET INCOME PER SHARE NET INCOME
NET INCOME PER SHARE NET INCOME PER SHARE - COMPUTATIONS (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Numerator: | ||||
Net Income | $ 91 | $ 70 | $ 243 | $ 236 |
Denominators: | ||||
Basic weighted-average shares (in shares) | 170 | 169 | 170 | 169 |
Potentially dilutive common shares equivalents - stock options and other employee stock plans (in shares) | 2 | 3 | 2 | 2 |
Diluted weighted average shares (in shares) | 172 | 172 | 172 | 171 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended |
Jul. 31, 2016 | Jul. 31, 2016 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from EPS Computation | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number | 1,700,000 | 1,700,000 |
Stock Options, ESPP, LTPP and restricted stock combined exercise price, unamortized fair value, excess tax benefits or shortfalls greater than average market price [Member] [Member] | ||
Antidilutive Securities Excluded from EPS Computation | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number | 17,700 | 21,300 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Oct. 31, 2015 |
Inventory, Net [Abstract] | ||
Finished goods | $ 232 | $ 235 |
Purchased parts and fabricated assemblies | 247 | 252 |
Inventory | $ 479 | $ 487 |
GOODWILL AND OTHER INTANGIBLE50
GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 700 |
Foreign currency translation impact | 29 |
Goodwill arising from acquisitions | 9 |
Goodwill ending balance | 738 |
Communications Solutions Group [Member] | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 433 |
Foreign currency translation impact | 18 |
Goodwill arising from acquisitions | 6 |
Goodwill ending balance | 457 |
Electronic Industrial Solutions Group [Member] | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 204 |
Foreign currency translation impact | 9 |
Goodwill arising from acquisitions | 3 |
Goodwill ending balance | 216 |
Services Solutions Group [Member] | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 63 |
Foreign currency translation impact | 2 |
Goodwill arising from acquisitions | 0 |
Goodwill ending balance | $ 65 |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Oct. 31, 2015 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 398 | $ 393 |
Accumulated Amortization and Impairments | 193 | 159 |
Finite-Lived Intangible Assets, Net | 205 | 234 |
In-Process R&D | 12 | 12 |
Gross book value | 410 | 405 |
Net Book Value | 217 | 246 |
Developed technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 309 | 305 |
Accumulated Amortization and Impairments | 151 | 125 |
Net Book Value | 158 | 180 |
Backlog | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 4 | 4 |
Accumulated Amortization and Impairments | 4 | 4 |
Net Book Value | 0 | 0 |
Trademark/Tradename | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 20 | 20 |
Accumulated Amortization and Impairments | 3 | 2 |
Net Book Value | 17 | 18 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 65 | 64 |
Accumulated Amortization and Impairments | 35 | 28 |
Net Book Value | $ 30 | $ 36 |
GOODWILL AND OTHER INTANGIBLE52
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill arising from acquisitions | $ 9 | |||
Additions to other intangible assets | 9 | |||
Impact to other intangibles due to Translation | 4 | |||
Amortization of intangible assets | $ 12 | $ 2 | $ 34 | $ 6 |
GOODWILL AND OTHER INTANGIBLE53
GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions | Jul. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2016 | $ 11 |
2,017 | 41 |
2,018 | 37 |
2,019 | 37 |
2,020 | 37 |
Thereafter | $ 42 |
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, 2016 | Oct. 31, 2015 |
Assets Short - term [Abstract] | ||
Cash equivalents (money market funds) | $ 482 | $ 295 |
Derivative instruments (foreign exchange contracts) | 3 | 1 |
Assets, Long-term [Abstract] | ||
Trading securities | 12 | 12 |
Available-for-sale investments | 28 | 41 |
Total assets measured at fair value | 525 | 349 |
Liabilities, Short-term [Abstract] | ||
Derivative instruments (foreign exchange contracts) | 8 | 10 |
Liabilities Long-term [Abstract] | ||
Deferred compensation liability | 12 | 12 |
Total liabilities measured at fair value | 20 | 22 |
Level 1 | ||
Assets Short - term [Abstract] | ||
Cash equivalents (money market funds) | 482 | 295 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term [Abstract] | ||
Trading securities | 12 | 12 |
Available-for-sale investments | 28 | 41 |
Total assets measured at fair value | 522 | 348 |
Liabilities, Short-term [Abstract] | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term [Abstract] | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 2 | ||
Assets Short - term [Abstract] | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 3 | 1 |
Assets, Long-term [Abstract] | ||
Trading securities | 0 | 0 |
Available-for-sale investments | 0 | 0 |
Total assets measured at fair value | 3 | 1 |
Liabilities, Short-term [Abstract] | ||
Derivative instruments (foreign exchange contracts) | 8 | 10 |
Liabilities Long-term [Abstract] | ||
Deferred compensation liability | 12 | 12 |
Total liabilities measured at fair value | 20 | 22 |
Level 3 | ||
Assets Short - term [Abstract] | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term [Abstract] | ||
Trading securities | 0 | 0 |
Available-for-sale investments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities, Short-term [Abstract] | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term [Abstract] | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
DERIVATIVES, Disclosures and de
DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($)contracts | |
Derivative [Line Items] | |
Cash Flow Hedge Ineffectiveness is Immaterial | not significant |
Derivative, Net Liability Position, Aggregate Fair Value | $ 7 |
Not Designated as Hedging Instruments | Sell | Singapore Dollar | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 0 |
Not Designated as Hedging Instruments | Sell | Malaysian Ringgit | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 8 |
Not Designated as Hedging Instruments | Sell | Japanese Yen | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 56 |
Not Designated as Hedging Instruments | Buy | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 77 |
Not Designated as Hedging Instruments | Buy | Euro | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 104 |
Not Designated as Hedging Instruments | Buy | British Pound | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 33 |
Not Designated as Hedging Instruments | Buy | Other currencies | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 4 |
Designated as Hedging Instruments | Sell | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 11 |
Designated as Hedging Instruments | Sell | Japanese Yen | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 76 |
Designated as Hedging Instruments | Sell | Other currencies | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 16 |
Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 0 |
Designated as Hedging Instruments | Buy | British Pound | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 0 |
Designated as Hedging Instruments | Buy | Singapore Dollar | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | 9 |
Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging | Forward Contracts Buy/(Sell) | |
Derivative [Line Items] | |
Total notional amount | $ 72 |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative, Number of Instruments Held | contracts | (66) |
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative, Number of Instruments Held | contracts | (132) |
Foreign Exchange Option [Member] | Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Derivative, Number of Instruments Held | contracts | 0 |
DERIVATIVES, Fair value of deri
DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Oct. 31, 2015 |
Derivative Fair Value by Balance Sheet Location [Abstract] | ||
Total derivatives Asset | $ 3 | $ 1 |
Total derivatives Liabilities | 8 | 10 |
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location [Abstract] | ||
Total derivatives Asset | 2 | 0 |
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Liabilities [Member] | ||
Derivative Fair Value by Balance Sheet Location [Abstract] | ||
Total derivatives Liabilities | 7 | 8 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location [Abstract] | ||
Total derivatives Asset | 1 | 1 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Liabilities [Member] | ||
Derivative Fair Value by Balance Sheet Location [Abstract] | ||
Total derivatives Liabilities | $ 1 | $ 2 |
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, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Cash Flow Hedging | Cost of products and services | ||||
Derivative [Line Items] | ||||
Cash Flow Hedge (Gain) Loss to be Reclassified within Twelve Months | $ 6 | |||
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in accumulated other comprehensive income | (5) | $ (3) | $ (6) | $ (5) |
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Cost of products and services | ||||
Derivative [Line Items] | ||||
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales | (2) | 0 | (9) | 2 |
Not Designated as Hedging Instruments | Other (income) expense, net | ||||
Derivative [Line Items] | ||||
Gain (loss) recognized in other income (expense),net | $ (6) | $ (1) | $ (8) | $ (5) |
RETIREMENT PLANS AND POST RET58
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Document Period End Date | Jul. 31, 2016 | |||
U.S. Defined Benefit Plans | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost—benefits earned during the period | $ 5 | $ 5 | $ 15 | $ 16 |
Interest cost on benefit obligation | 6 | 5 | 18 | 15 |
Expected return on plan assets | (9) | (9) | (27) | (28) |
Amortization: | ||||
Net actuarial losses | 2 | 1 | 6 | 3 |
Prior service credit | (2) | (2) | (6) | (5) |
Total periodic benefit cost (benefit) | 2 | 0 | 6 | 1 |
Non-U.S. Defined Benefit Plans | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost—benefits earned during the period | 5 | 4 | 13 | 13 |
Interest cost on benefit obligation | 8 | 10 | 24 | 31 |
Expected return on plan assets | (19) | (18) | (56) | (55) |
Amortization: | ||||
Net actuarial losses | 7 | 8 | 21 | 22 |
Prior service credit | 0 | (1) | 0 | (1) |
Total periodic benefit cost (benefit) | 1 | 3 | 2 | 10 |
U.S. Post-Retirement Benefit Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost—benefits earned during the period | 0 | 0 | 0 | 1 |
Interest cost on benefit obligation | 2 | 2 | 6 | 6 |
Expected return on plan assets | (3) | (4) | (10) | (11) |
Amortization: | ||||
Net actuarial losses | 5 | 3 | 15 | 9 |
Prior service credit | (4) | (5) | (12) | (16) |
Total periodic benefit cost (benefit) | $ 0 | $ (4) | $ (1) | $ (11) |
RETIREMENT PLANS AND POST RET59
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Document Period End Date | Jul. 31, 2016 | |||
U.S. Defined Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions by employer | $ 0 | $ 0 | ||
Estimated future employer contributions in remainder of current fiscal year | 0 | |||
Non-U.S. Defined Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions by employer | $ 10 | $ 10 | 29 | $ 35 |
Estimated future employer contributions in remainder of current fiscal year | $ 8 |
WARRANTIES AND CONTINGENCIES (D
WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance at beginning of period | $ 53 | $ 51 |
Accruals for warranties including change in estimate | 16 | 26 |
Settlements made during the period | (24) | (23) |
Ending balance at end of period | 45 | 54 |
Standard Product Warranty Disclosure [Abstract] | ||
Accruals for warranties due within one year | 23 | 42 |
Accruals for warranties due after one year | 22 | 12 |
Ending balance at end of period | $ 45 | $ 54 |
WARRANTY, COMMITMENTS AND CON61
WARRANTY, COMMITMENTS AND CONTINGENCIES STANDARD WARRANTY - CHANGE IN ACCOUNTING ESTIMATE (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2016USD ($) | |
Change in Accounting Estimate [Line Items] | |
Standard Product Warranty Accrual, Period Increase (Decrease) | $ (5) |
Warranty Reserves [Member] | |
Change in Accounting Estimate [Line Items] | |
Change in Accounting Estimate, Description | During the nine months ended July 31 2016, we reduced the standard warranty accrual by $5 million as a result of lower than expected historical warranty charges. This benefit was recognized in the three and nine months ended July 31, 2016 in the condensed consolidated statement of operations. |
DEBT Credit Facility (Details)
DEBT Credit Facility (Details) | 9 Months Ended | |||
Jul. 31, 2016USD ($) | Jul. 31, 2016GBP (£) | Oct. 31, 2015USD ($) | Jul. 21, 2015USD ($) | |
Unsecured Credit facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Borrowing Capacity, Description | On September 15, 2014 , we entered into a five year credit agreement, which provides for a $300 million unsecured credit facility that will expire on November 1, 2019 . On July 21, 2015 , the total amount available under the credit facility was increased to $450 million . The company may use amounts borrowed under the facility for general corporate purposes. | |||
Line of Credit Facility, Initiation Date | Sep. 15, 2014 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | |||
Line of Credit Facility, Expiration Date | Nov. 1, 2019 | |||
Line of Credit Facility, Accession Agreement Date | Jul. 21, 2015 | |||
Line of Credit Facility, Current Borrowing Capacity | $ 450,000,000 | |||
Line of Credit Facility, Revised Maximum Borrowing Capacity | $ 450,000,000 | |||
Line of Credit Facility, Outstanding | $ 0 | |||
Bank Overdrafts [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Borrowing Capacity, Description | As a result of the Anite acquisition, we have an overdraft facility of £25 million that expired on July 31, 2016 , but by mutual agreement this facility continues to be available while a replacement short-term facility is negotiated. As of July 31, 2016, we had no borrowings outstanding under the facility. | |||
Line of Credit Facility, Maximum Borrowing Capacity | £ | £ 25,000,000 | |||
Line of Credit Facility, Expiration Date | Jul. 31, 2016 | |||
Line of Credit Facility, Outstanding | $ 0 | |||
Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Outstanding | $ 16,000,000 | $ 19,000,000 |
DEBT Long Term Debt (Details)
DEBT Long Term Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended |
May 31, 2016 | Jul. 31, 2016 | Oct. 31, 2015 | |
Debt Instrument [Line Items] | |||
Unsecured Long-term Debt, Noncurrent | $ 1,100 | $ 1,099 | |
Long Term Debt Fair Value below (above) carrying Value | (36) | 8 | |
3.30% Senior Notes due 2019 | |||
Debt Instrument [Line Items] | |||
Unsecured Long-term Debt, Noncurrent | 500 | 499 | |
4.55% Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Unsecured Long-term Debt, Noncurrent | $ 600 | $ 600 | |
Other Debt Obligations [Member] | |||
Debt Instrument [Line Items] | |||
Repayment of debt | $ 1 |
STOCKHOLDER'S EQUITY - Accumula
STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ (437) | $ (357) | $ (479) | $ (336) |
OCI, before Reclassifications, before Tax, Attributable to Parent | (5) | (20) | 21 | (47) |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 10 | 3 | 32 | 9 |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (1) | (2) | (7) | (2) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 4 | (19) | 46 | (40) |
Ending balance | (433) | (376) | (433) | (376) |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 14 | 24 | 21 | 16 |
OCI, before Reclassifications, before Tax, Attributable to Parent | 1 | (5) | (7) | 4 |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 1 | (2) | 2 | (3) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 2 | (7) | (5) | 1 |
Ending balance | 16 | 17 | 16 | 17 |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (17) | (28) | (48) | 6 |
OCI, before Reclassifications, before Tax, Attributable to Parent | (1) | (12) | 30 | (46) |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (1) | (12) | 30 | (46) |
Ending balance | (18) | (40) | (18) | (40) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (489) | (428) | (511) | (444) |
OCI, before Reclassifications, before Tax, Attributable to Parent | 0 | 0 | 4 | 0 |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 14 | 11 | 42 | 33 |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (5) | (4) | (15) | (10) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 9 | 7 | 31 | 23 |
Ending balance | (480) | (421) | (480) | (421) |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 57 | 75 | 65 | 83 |
OCI, before Reclassifications, before Tax, Attributable to Parent | 0 | 0 | 0 | 0 |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | (6) | (8) | (19) | (22) |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 2 | 3 | 7 | 9 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (4) | (5) | (12) | (13) |
Ending balance | 53 | (70) | 53 | (70) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2) | 0 | (6) | 3 |
OCI, before Reclassifications, before Tax, Attributable to Parent | (5) | (3) | (6) | (5) |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 2 | 0 | 9 | (2) |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 1 | 1 | (1) | 2 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (2) | (2) | 2 | (5) |
Ending balance | $ (4) | $ (2) | $ (4) | $ (2) |
STOCKHOLDERS' EQUITY - Reclassi
STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Cost of Goods Sold | $ 246 | $ 236 | $ 776 | $ 760 |
Income Tax Expense (Benefit) | (6) | (17) | (25) | (51) |
Net Income | 91 | 70 | 243 | 236 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 97 | 87 | 268 | 287 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Net Income | (6) | (2) | (21) | (8) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Cost of Goods Sold | (2) | 0 | (9) | 2 |
Income Tax Expense (Benefit) | 1 | 0 | 3 | 0 |
Net Income | (1) | 0 | (6) | 2 |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | (14) | (11) | (42) | (33) |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 6 | 8 | 19 | 22 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Income Tax Expense (Benefit) | 3 | 1 | 8 | 1 |
Net Income | (5) | (2) | (15) | (10) |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | $ (8) | $ (3) | $ (23) | $ (11) |
STOCKHOLDERS' EQUITY Stock Repu
STOCKHOLDERS' EQUITY Stock Repurchase (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2016 | Feb. 18, 2016 | |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | ||
Stock Repurchase Program, Authorized Amount | $ 200 | |
Treasury Stock, Value, Acquired, Cost Method | $ 62 | |
Treasury Stock, Shares, Acquired | 2,300,000 |
SEGMENT INFORMATION Profitabili
SEGMENT INFORMATION Profitability (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Segment Reporting, Factors Used to Identify Entity's Reportable Segments | Our three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess 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. | |||
Segment Reporting, Additional Information about Entity's Reportable Segments | Descriptions of our three reportable segments are as follows: The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of industries within the electronic industrial end market, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment. | |||
Number of Operating Segments | 3 | |||
Number of Reportable Segments | 3 | |||
Business Combination Acquisition Related Fair Value Adjustments | $ (3) | $ 0 | $ (12) | $ 0 |
Total net revenue | 715 | 665 | 2,167 | 2,106 |
Segment income from operations | 106 | 100 | 299 | 320 |
Communications Solutions Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 424 | 1,310 | ||
Business Combination Acquisition Related Fair Value Adjustments | (3) | (12) | ||
Total net revenue | 421 | 389 | 1,298 | 1,250 |
Segment income from operations | 77 | 72 | 239 | 240 |
Electronic Industrial Solutions Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 191 | 575 | ||
Business Combination Acquisition Related Fair Value Adjustments | 0 | 0 | ||
Total net revenue | 191 | 175 | 575 | 558 |
Segment income from operations | 44 | 32 | 122 | 110 |
Services Solutions Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 103 | 294 | ||
Business Combination Acquisition Related Fair Value Adjustments | 0 | 0 | ||
Total net revenue | 103 | 101 | 294 | 298 |
Segment income from operations | 19 | 20 | 43 | 52 |
Total | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 718 | 2,179 | ||
Business Combination Acquisition Related Fair Value Adjustments | (3) | (12) | ||
Total net revenue | 715 | 665 | 2,167 | 2,106 |
Segment income from operations | $ 140 | $ 124 | $ 404 | $ 402 |
SEGMENT INFORMATION Reconciliat
SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Total reportable segments' income from operations | $ 140 | $ 124 | $ 404 | $ 402 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | (10) | (7) | (39) | (49) |
Restructuring Charges | 0 | (10) | 0 | (10) |
Business Combination Acquisition Related Fair Value Adjustments | (3) | 0 | (12) | 0 |
Amortization of Intangibles | (12) | (2) | (34) | (6) |
Acquisition and integration costs | (4) | (2) | (11) | (2) |
Separation and related costs | (6) | (3) | (16) | (15) |
Segment Reporting Other reconciling items for operating profit loss segment to consolidated | 1 | 0 | 7 | 0 |
Investment Income, Nonoperating | 1 | 0 | 2 | 1 |
Interest expense | (11) | (12) | (35) | (35) |
Other Nonoperating Gains (Losses) | 1 | (1) | 2 | 1 |
Income before taxes, as reported | $ 97 | $ 87 | $ 268 | $ 287 |
SEGMENT INFORMATION Segment Ass
SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions | Jul. 31, 2016 | Oct. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Assets | $ 3,675 | $ 3,508 |
Communications Solutions Group [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,794 | 1,779 |
Electronic Industrial Solutions Group [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 772 | 752 |
Services Solutions Group [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 274 | 265 |
Total Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 2,840 | $ 2,796 |