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 Agilent Technologies Reports Third-Quarter Fiscal Year 2017 Financial Results
   Tuesday, August 15, 2017 4:05:00 PM ET

--Highlights:

--GAAP net income of $175 million, or $0.54 per share

--Non-GAAP net income of $191 million, or $0.59 per share(1), $0.09 above midpoint guidance of $0.50 per share

--Revenue of $1.11 billion, representing growth of 7 percent (core revenue growth of 7.5 percent(2) versus midpoint guidance of 4.0 percent)

--Increasing fiscal year 2017 core revenue growth guidance from a midpoint of 5.0 percent to a midpoint of 6.0 percent(2). Increasing fiscal year 2017 non-GAAP earnings guidance from a midpoint of $2.18 to a midpoint of $2.30 per share(3).

--Raising fiscal year 2017 free cash flow guidance by $40 million to $665 million(4).

Agilent Technologies, Inc. (A ) today reported revenue of $1.11 billion, up 7 percent year over year (up 7.5 percent on a core basis(2)) for the third fiscal quarter ended July 31, 2017.



Third-quarter GAAP net income was $175 million, or $0.54 per share. Last year’s third-quarter GAAP net income was $124 million, or $0.38 per share.

During the third quarter, Agilent had intangible amortization of $27 million, acquisition and integration costs of $4 million, transformation costs of $3 million, and $1 million in other costs. Excluding these items and a tax benefit of $19 million, Agilent reported third-quarter non-GAAP net income of $191 million, or $0.59 per share(1).

"Our team is executing very well. We had another great quarter delivering above-market revenue growth, expanding operating margins and growing our adjusted EPS," said Mike McMullen, Agilent President and CEO. "We saw strength across all our business groups."

"Our focus remains on driving sustainable above-market growth and providing long-term value to our shareholders," he added. "We launched several new products that raise the bar on new capabilities for our customers. We also closed the acquisition of Cobalt Light Systems, enhancing our customer value proposition and providing us with immediate entry into the attractive, fast-growing Raman spectroscopy market."

Third-quarter revenue of $531 million from Agilent’s Life Sciences and Applied Markets Group (LSAG) grew 5 percent year over year (up 7 percent on a core basis(2)), with strength in chemical and energy, pharma and environmental end markets. LSAG’s operating margin for the quarter was 21.3 percent.

Third-quarter revenue of $386 million from Agilent CrossLab Group (ACG) grew 7 percent year over year (up 8 percent on a core basis(2)). Both services and consumables saw solid growth across all end markets and geographies. ACG’s operating margin for the quarter was 23.4 percent.

Third-quarter revenue of $197 million from Agilent’s Diagnostics and Genomics Group (DGG) grew 9 percent year over year (up 8 percent on a core basis(2)) led by pharma and diagnostic and clinical end markets. DGG’s operating margin for the quarter was 16.9 percent.

Agilent expects fourth-quarter 2017 revenue in the range of $1.15 billion to $1.17 billion. Fourth-quarter 2017 non-GAAP earnings are expected to be in the range of $0.60 to $0.62 per share(3).

For fiscal year 2017, Agilent expects revenue of $4.435 billion to $4.455 billion and non-GAAP earnings of $2.29 to $2.31 per share(3). The guidance is based on July 31, 2017, currency exchange rates.

About Agilent Technologies

Agilent Technologies Inc. (A ) is a global leader in life sciences, diagnostics and applied chemical markets. With more than 50 years of insight and innovation, Agilent instruments, software, services, solutions, and people provide trusted answers to its customers’ most challenging questions. The company generated revenues of $4.20 billion in fiscal 2016 and employs about 13,000 people worldwide. Information about Agilent is available at www.agilent.com.

Agilent’s management will present more details about its third-quarter FY2017 financial results on a conference call with investors today at 1:30 p.m. PT. This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Q3 2017 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events Calendar of Events" section. The webcast will remain available on the company’s website for 90 days.

Additional information regarding financial results can be found at www.investor.agilent.com by selecting "Financial Results" in the "Financial Information" section.

A telephone replay of the conference call will be available at approximately 4:30 p.m. PST today through August 22 by dialing +1 855 859-2056 (or +1 404 537 3406 from outside the United States) and entering pass code 55782589.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent’s future revenue, earnings and profitability; planned new products; market trends; the future demand for the company’s products and services; customer expectations; and revenue and non-GAAP earnings guidance for the fourth quarter and full fiscal year 2017. These forward-looking statements involve risks and uncertainties that could cause Agilent’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; unforeseen changes in the currency markets; customer purchasing decisions and timing, and the risk that we are not able to realize the savings expected from integration and restructuring activities.

In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross-margin pressures; the risk that our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties and global economic conditions on our operations, our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability of our supply chain to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix; the ability of Agilent to successfully integrate recent acquisitions; the ability of Agilent to successfully comply with certain complex regulations; and other risks detailed in Agilent’s filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended April 30, 2017. Forward-looking statements are based on the beliefs and assumptions of Agilent’s management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.

(1) Non-GAAP net income and non-GAAP earnings per share primarily excludes the impacts of acquisition and integration costs, transformation initiatives, business exit and divestiture costs, and non-cash intangibles amortization. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or is not expected to occur again with any regularity or predictability. A reconciliation between non-GAAP net income and GAAP net income is set forth on page 6 of the attached tables along with additional information regarding the use of this non-GAAP measure.

(2) Core revenue growth excludes the impact of currency, the NMR business and acquisitions and divestitures within the past 12 months. Core revenue is a non-GAAP measure. A reconciliation between Q3 FY17 GAAP revenue and core revenue is set forth on page 8 of the attached tables along with additional information regarding the use of this non-GAAP measure. Core revenue growth as projected for full fiscal year 2017 excludes the impact of currency, the NMR business and acquisitions and divestitures within the past 12 months. Most of these exclude amounts that pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided.

(3) Non-GAAP earnings per share as projected for Q4 FY17 and full fiscal year 2017 excludes primarily the future impact of acquisition and integration costs, pension settlement gain, and non-cash intangibles amortization. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or is not expected to occur again with any regularity or predictability. Most of these excluded amounts that pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $27 million per quarter.

(4) Free cash flow as projected for fiscal year 2017 is a non-GAAP measure determined by deducting the projected capital expenditures for fiscal year 2017 from the projected operating cash flow for fiscal year 2017.

NOTE TO EDITORS: Further technology, corporate citizenship and executive news is available on the Agilent news site at www.agilent.com/go/news.

 
                                                                                                              AGILENT TECHNOLOGIES, INC.
                                                                                                    CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                                                                                        (In millions, except per share amounts)
                                                                                                                      (Unaudited)
                                                                                                                      PRELIMINARY
                                                                                                                                                                       
                                                                                                                                                                                                                                  
                                                                                                                                       Three Months Ended
                                                                                                                                            July 31,                                                                                    Percent
                                                                                     -----------------------------------------------------------------------------------------------------------------------
                                                                                        2017                            2016                               Inc/(Dec)
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------                      ---------------------
                                                                                                                                                                                                                                  
Net revenue                                                                                             $  1,114                                                              $  1,044                                                    7 %
                                                                                                                                                                                                                                  
Costs and expenses:
   Cost of products and services                                                                             518                                                                   502                                                    3 %
   Research and development                                                                                   87                                                                    86                                                    1 %
   Selling, general and administrative                                                    308                             310                                (1 %)
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
      Total costs and expenses                                                            913                             898                                 2 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income from operations                                                                                       201                                                                   146                                                   38 %
                                                                                                                                                                                                                                  
Interest income                                                                                                6                                                                     3                                                  100 %
Interest expense                                                                                             (19 )                                                                 (17 )                                                 12 %
Other income (expense), net                                                                 5                               2                               150 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income before taxes                                                                                          193                                                                   134                                                   44 %
                                                                                                                                                                                                                                  
Provision for income taxes                                                                                    18                                                                    10                                                   80 %
                                                                                                                                         
                                                                                     -------------------------------------------------                     -------------------------------------------------
Net income                                                                                              $    175                                           $    124                                41 %
                                                                                     ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
Net income per share:
                    Basic                                                                               $   0.55                                                              $   0.38
                    Diluted                                                                             $   0.54                                                              $   0.38
                                                                                                                                                                                                                                  
Weighted average shares used in computing net income per share:
                    Basic                                                                                    321                                                                   325
                    Diluted                                                                                  326                                                                   328
                                                                                                                                                                                                                                  
Cash dividends declared per common share                                                                $  0.132                                                              $  0.115
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
     The preliminary income statement is estimated based on our current
     information.
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                        Page 1
                                                                                                                                                                                                                                  
 
                                                                                                              AGILENT TECHNOLOGIES, INC.
                                                                                                    CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                                                                                        (In millions, except per share amounts)
                                                                                                                      (Unaudited)
                                                                                                                      PRELIMINARY
                                                                                                                                                                       
                                                                                                                                                                                                                                  
                                                                                                                                        Nine Months Ended
                                                                                                                                            July 31,                                                                                    Percent
                                                                                     -----------------------------------------------------------------------------------------------------------------------
                                                                                        2017                            2016                               Inc/(Dec)
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------                      ---------------------
                                                                                                                                                                                                                                  
Net revenue                                                                                             $  3,283                                                              $  3,091                                                    6 %
                                                                                                                                                                                                                                  
Costs and expenses:
   Cost of products and services                                                                           1,521                                                                 1,482                                                    3 %
   Research and development                                                                                  250                                                                   245                                                    2 %
   Selling, general and administrative                                                    904                             932                                (3 %)
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
      Total costs and expenses                                                          2,675                           2,659                                 1 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income from operations                                                                                       608                                                                   432                                                   41 %
                                                                                                                                                                                                                                  
Interest income                                                                                               15                                                                     8                                                   88 %
Interest expense                                                                                             (59 )                                                                 (53 )                                                 11 %
Other income (expense), net                                                                13                               6                               117 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income before taxes                                                                                          577                                                                   393                                                   47 %
                                                                                                                                                                                                                                  
Provision for income taxes                                                                                    70                                                                    57                                                   23 %
                                                                                                                                         
                                                                                     -------------------------------------------------                     -------------------------------------------------
Net income                                                                                              $    507                                           $    336                                51 %
                                                                                     ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
Net income per share:
                    Basic                                                                               $   1.57                                                              $   1.03
                    Diluted                                                                             $   1.56                                                              $   1.02
                                                                                                                                                                                                                                  
Weighted average shares used in computing net income per share:
                    Basic                                                                                    322                                                                   326
                    Diluted                                                                                  325                                                                   329
                                                                                                                                                                                                                                  
Cash dividends declared per common share                                                                $  0.396                                                              $  0.345
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
     The preliminary income statement is estimated based on our current
     information.
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                        Page 2
 
 
                                                                                                                                                                    AGILENT TECHNOLOGIES, INC.
                                                                                                                                                     CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                                                                                                                           (In millions)
                                                                                                                                                                            (Unaudited)
                                                                                                                                                                            PRELIMINARY
                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                          
                                                                                                                                             Three Months Ended                                                                                                                            Nine Months Ended
                                                                                                                                                  July 31,                                                                                                                                     July 31,
                                                                                             -------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------
                                                                                               2017                          2016                          2017                               2016       
                                                                                             -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                          
Net income                                                                                                      $  175                                                              $  124                                                              $  507                                                              $            336
                                                                                                                                                                                                                                                                                                          
Other comprehensive income (loss), net of tax:
                                                                                                                                                                                                                                                                                                          
   Unrealized loss on derivative instruments                                                                        (3 )                                                                (5 )                                                                (3 )                                                                         (11 )
   Amounts reclassified into earnings related to derivative instruments                                             (1 )                                                                 1                                                                  (2 )                                                              --
   Foreign currency translation                                                                                     57                                                                 (48 )                                                                61                                                                            41
   Net defined benefit pension cost and post retirement plan costs:
      Change in actuarial net loss                                                                                   8                                                                   8                                                                  34                                                                            29
      Change in net prior service benefit                                                        (1 )                                             (2 )                                             (4 )                                                      (13 )
                                                                                             -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- -------------- --------------------
Other comprehensive income (loss)                                                                60                           (46 )                                             86                                      46  
                                                                                             -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- ---- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                          
Total comprehensive income                                                                                      $  235                                           $   78                                           $  593                                           $            382  
                                                                                             ==================== ==== ====================                      ==================== ==== ====================                      ==================== ==== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                          
The preliminary statement of comprehensive income is estimated based
on our current information.
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                              Page 3
 
 
                                                                                                                                                             AGILENT TECHNOLOGIES, INC.
                                                                                                                                                        CONDENSED CONSOLIDATED BALANCE SHEET
                                                                                                                                                  (In millions, except par value and share amounts)
                                                                                                                                                                     (Unaudited)
                                                                                                                                                                     PRELIMINARY
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                            
                                                                                                July 31,                                                  October 31,
                                                                                                                                                                              2017                                                                                                                                  2016(a)
                                                                                           ------------------------------------------------------------------------------------------------------------------------------------------------------------------------                        ------------------------------------------------------
ASSETS
                                                                                                                                                                                                                                                                                            
Current assets:
    Cash and cash equivalents                                                                                                                     $                                                    2,563                                                                                                  $          2,289
    Accounts receivable, net                                                                                                                                                                             678                                                                                                               631
    Inventory                                                                                                                                                                                            566                                                                                                               533
    Other current assets                                                                                                                                                              189                                                                         182  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total current assets                                                                                                                                                                           3,996                                                                                                             3,635
                                                                                                                                                                                                                                                                                            
Property, plant and equipment, net                                                                                                                                                                       716                                                                                                               639
Goodwill                                                                                                                                                                                               2,612                                                                                                             2,517
Other intangible assets, net                                                                                                                                                                             375                                                                                                               408
Long-term investments                                                                                                                                                                                    137                                                                                                               135
Other assets                                                                                                                                                                          425                                                                         460  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total assets                                                                                                                              $                                                    8,261                                                                               $          7,794  
                                                                                           ======================================================== ======================================================== ========================================================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                            
LIABILITIES AND EQUITY
                                                                                                                                                                                                                                                                                            
Current liabilities:
    Accounts payable                                                                                                                              $                                                      289                                                                                                  $            257
    Employee compensation and benefits                                                                                                                                                                   230                                                                                                               235
    Deferred revenue                                                                                                                                                                                     301                                                                                                               269
    Short-term debt                                                                                                                                                                                      280                                                                                                    --
    Other accrued liabilities                                                                                                                                                         141                                                                         184  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total current liabilities                                                                                                                                                                      1,241                                                                                                               945
                                                                                                                                                                                                                                                                                            
Long-term debt                                                                                                                                                                                         1,801                                                                                                             1,904
Retirement and post-retirement benefits                                                                                                                                                                  323                                                                                                               360
Other long-term liabilities                                                                                                                                                           285                                                                         339  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total liabilities                                                                                                                                                           3,650                                                                       3,548  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                            
Total Equity:
    Stockholders’ equity:
                                                                                                                                                                                              --                                                                                                    --
    Preferred stock; $0.01 par value; 125 million shares authorized;
    none issued and outstanding
                                                                                                                                                                                                           3                                                                                                                 6
    Common stock; $0.01 par value, 2 billion shares authorized; 322
    million shares at July 31, 2017 and 614 million shares at October
    31, 2016, issued
                                                                                                                                                                                              --                                                                                                           (10,508 )
    Treasury stock at cost; zero shares at July 31, 2017 and 290
    million shares at October 31, 2016
    Additional paid-in-capital                                                                                                                                                                         5,282                                                                                                             9,159
    (Accumulated deficit) retained earnings                                                                                                                                                             (260 )                                                                                                           6,089
    Accumulated other comprehensive loss                                                                                                                                             (417 )                                                                                         (503 )
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total stockholders’ equity                                                                                                                                                                     4,608                                                                                                             4,243
    Non-controlling interest                                                                                                                                                            3                                                                           3  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
        Total equity                                                                                                                                                                4,611                                                                       4,246  
                                                                                           -------------------------------------------------------- -------------------------------------------------------- --------------------------------------------------------                      -------------------- -------------- --------------------
            Total liabilities and equity                                                                                                          $                                                    8,261                                                                               $          7,794  
                                                                                           ======================================================== ======================================================== ========================================================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                            
(a) Includes the impact of the adoption of ASU 2015-15.
                                                                                                                                                                                                                                                                                            
The preliminary balance sheet is estimated based on our current
information.
                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                            
                                                                                                                                                                       Page 4
 
 
                                                                                                                                                                                                              AGILENT TECHNOLOGIES, INC.
                                                                                                                                                                                                    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                                                                                                                                     (In millions)
                                                                                                                                                                                                                      (Unaudited)
                                                                                                                                                                                                                      PRELIMINARY
                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                          Three Months                                                                  Three Months                                                                   Nine Months                                                                   Nine Months
                                                                                                                                                                              Ended                                                                         Ended                                                                         Ended                                                                         Ended
                                                                                                                                                                            July 31,                                                                      July 31,                                                                      July 31,                                                                      July 31,
                                                                                                                                                           2017                                    2016                                    2017                                    2016       
                                                                                                                                                    -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from operating activities:
                                          Net income                                                                                                                   $            175                                                              $            124                                                              $            507                                                              $            336
                                                                                                                                                                                                                                                                                                                                                                                               
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
                                          Depreciation and amortization                                                                                                              51                                                                            60                                                                           160                                                                           190
                                          Share-based compensation                                                                                                                   13                                                                            11                                                                            48                                                                            47
                                          Excess and obsolete inventory related charges                                                                                               4                                                                             4                                                                            19                                                                            16
                                          Other non-cash expenses, net                                                                                                                3                                                                             8                                                                             5                                                                            16
                                          Changes in assets and liabilities:
                                                                                    Accounts receivable                                                                              19                                                                --                                                                           (29 )                                                                          19
                                                                                    Inventory                                                                                       (17 )                                                                           2                                                                           (46 )                                                                         (11 )
                                                                                    Accounts payable                                                                                  5                                                                            26                                                                            11                                                                           (27 )
                                                                                    Employee compensation and benefits                                                              (18 )                                                                          (1 )                                                                         (11 )                                                                         (14 )
                                                                                    Other assets and liabilities                                                  (7 )                                                      (40 )                                                      (63 )                                                      (13 )
                                                                                                                                                    -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash provided by operating activities (a)                                                                                                                                       228                                                                           194                                                                           601                                                                           559
                                                                                                                                                                                                                                                                                                                                                                                               
Cash flows from investing activities:
                                          Investments in property, plant and equipment                                                                                              (43 )                                                                         (24 )                                                                        (118 )                                                                         (87 )
                                          Proceeds from divestitures                                                                                                     --                                                                --                                                                             1                                                                --
                                          Proceeds from sale of investment securities                                                                                    --                                                                --                                                                --                                                                             1
                                          Payment to acquire cost method investment                                                                                      --                                                                --                                                                --                                                                           (80 )
                                          Loan to equity method investment                                                                                               --                                                                --                                                                --                                                                            (3 )
                                          Change in restricted cash and cash equivalents, net                                                                            --                                                                --                                                                --                                                                           245
                                          Payment in exchange for convertible note                                                                                                   (1 )                                                              --                                                                            (1 )                                                                          (1 )
                                          Acquisition of businesses and intangible assets, net of cash acquired                                                  (57 )                                           --                                    (127 )                                                     (235 )
                                                                                                                                                    -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash used in investing activities                                                                                                                                              (101 )                                                                         (24 )                                                                        (245 )                                                                        (160 )
                                                                                                                                                                                                                                                                                                                                                                                               
Cash flows from financing activities:
                                          Issuance of common stock under employee stock plans                                                                                        32                                                                            27                                                                            58                                                                            59
                                          Payment of taxes related to net share settlement of equity awards                                                              --                                                                            (1 )                                                                         (13 )                                                                          (6 )
                                          Payment of dividends                                                                                                                      (42 )                                                                         (37 )                                                                        (127 )                                                                        (112 )
                                          Proceeds from revolving credit facility                                                                                                   115                                                                --                                                                           343                                                                           255
                                          Repayment of revolving credit facility                                                                                                    (76 )                                                              --                                                                          (163 )                                                                         (20 )
                                          Treasury stock repurchases                                                                                  --                                     (94 )                                                     (194 )                                                     (388 )
                                                                                                                                                    -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash provided by (used in) financing activities                                                                                                                                  29                                                                          (105 )                                                                         (96 )                                                                        (212 )
                                                                                                                                                                                                                                                                                                                                                                                               
Effect of exchange rate movements                                                                                                                                                    18                                                                            (5 )                                                                          14                                                                             9
                                                                                                                                                                                                                                                                                                                                                                                               
Net increase in cash and cash equivalents                                                                                                                                           174                                                                            60                                                                           274                                                                           196
                                                                                                                                                                                                                                                                                                                                                                                               
Cash and cash equivalents at beginning of period                                                                                                               2,389                                   2,139                                   2,289                                   2,003  
                                                                                                                                                    -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                               
Cash and cash equivalents at end of period                                                                                                                             $          2,563                                           $          2,199                                           $          2,563                                           $          2,199  
                                                                                                                                                    ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                               
                                          (a) Cash payments included in operating activities:
                                                                                    Income tax payments (refunds), net                                                 $             15                                                              $             33                                                              $             56                                                              $             54
                                                                                    Interest payments                                                                  $             29                                                              $             29                                                              $             69                                                              $             66
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                               
The preliminary cash flow is estimated based on our current
information.
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                        Page 5
 
 
                                                                                                                                                                                                                                     AGILENT TECHNOLOGIES, INC.
                                                                                                                                                                                                                                     NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
                                                                                                                                                                                                                                     (In millions, except per share amounts)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                     PRELIMINARY
                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                     Three Months Ended                                                                                                                                                                                                                                                                                                  Nine Months Ended
                                                                                                                                                                                                                                                                                          July 31,                                                                                                                                                                                                                                                                                                           July 31,
                                                                                                                                                    2017                                 Diluted EPS                                                   2016                                 Diluted EPS                                                   2017                                 Diluted EPS                                              2016                            Diluted EPS
                                                                                                                                             -------------------- -------------- -------------------- -------------------- ---------------------------------------------------------                     -------------------- -------------- -------------------- -------------------- ---------------------------------------------------------                     -------------------- -------------- -------------------- -------------------- ---------------------------------------------------------                     -------------------- ---- -------------------- -------------------- ---------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
GAAP Net income                                                                                                                                                 $            175                                                              $           0.54                                                              $            124                                                              $           0.38                                                              $            507                                                              $           1.56                                                              $  336                                                              $           1.02
                                          Non-GAAP adjustments:
                                                                                    Asset impairments                                                             --                                                                --                                                                             4                                                                          0.01                                                                --                                                                --                                                                   4                                                                          0.01
                                                                                    Intangible amortization                                                                   27                                                                          0.08                                                                            37                                                                          0.11                                                                            89                                                                          0.27                                                                 120                                                                          0.36
                                                                                    Business exit and divestiture costs                                           --                                                                --                                                                             1                                                                --                                                                --                                                                --                                                                   6                                                                          0.02
                                                                                    Transformational initiatives                                                               3                                                                          0.01                                                                            11                                                                          0.03                                                                             5                                                                          0.02                                                                  32                                                                          0.10
                                                                                    Acquisition and integration costs                                                          4                                                                          0.01                                                                            11                                                                          0.03                                                                            27                                                                          0.08                                                                  28                                                                          0.09
                                                                                    Pension curtailment gain                                                      --                                                                --                                                                --                                                                --                                                                --                                                                --                                                                 (15 )                                                                       (0.05 )
                                                                                    Pension settlement gain                                                       --                                                                --                                                                --                                                                --                                                                           (32 )                                                                       (0.10 )                                                                (1 )                                                              --
                                                                                    Other                                                                                      1                                                                --                                                                             2                                                                          0.01                                                                             5                                                                          0.02                                                                   5                                                                          0.02
                                                                                    Adjustment for taxes (a)                                              (19 )                                 (0.05 )                                                      (30 )                                 (0.08 )                                                      (51 )                                 (0.16 )                                            (57 )                                 (0.18 )
                                                                                                                                             -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- ---- -------------------- -------------------- -------------------- -------------- --------------------
Non-GAAP Net income                                                                                                                                             $            191                        $           0.59                                           $            160                        $           0.49                                           $            550                        $           1.69                                           $  458                        $           1.39  
                                                                                                                                             ==================== ============== ==================== ==================== ==================== ============== ====================                      ==================== ============== ==================== ==================== ==================== ============== ====================                      ==================== ============== ==================== ==================== ==================== ============== ====================                      ==================== ==== ==================== ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
(a) The adjustment for taxes excludes tax benefits that
management believes are not directly related to on-going operations
and which are either isolated or cannot be expected to occur again
with any regularity or predictability. For the three and nine months
ended July 31, 2017, management uses a non-GAAP effective tax rate
of 16.2% and 18.0%, respectively. In the same periods last year,
management used a non-GAAP effective tax rate of 20.0%.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
We provide non-GAAP net income and non-GAAP net income per share
amounts in order to provide meaningful supplemental information
regarding our operational performance and our prospects for the
future. These supplemental measures exclude, among other things,
charges related to asset impairments, amortization of intangibles,
business exit and divestiture costs, transformational initiatives,
acquisition and integration costs, pension curtailment gain and
pension settlement gain.
 
                                              Asset impairments include assets that have been written down
                                              to their fair value.
                                           
                                              Business exit and divestiture costs include costs associated
                                              with the exit of the NMR business and other business divestitures.
                                           
                                              Transformational initiatives include expenses associated with
                                              targeted cost reduction activities such as manufacturing transfers,
                                              small site consolidations, legal entity and other business
                                              reorganizations, insourcing or outsourcing of activities. Such costs
                                              may include move and relocation costs, one-time termination benefits
                                              and other one-time reorganization costs. Included in this category
                                              are also expenses associated with the post-separation resizing of
                                              the IT infrastructure and streamlining of IT system as well as
                                              company programs to transform our product lifecycle management (PLM)
                                              system and financial systems.
                                           
                                              Acquisition and Integration costs include all incremental
                                              expenses incurred to effect a business combination. Such acquisition
                                              costs may include advisory, legal, accounting, valuation, and other
                                              professional or consulting fees. Such integration costs may include
                                              expenses directly related to integration of business and facility
                                              operations, the transfer of assets and intellectual property,
                                              information technology systems and infrastructure and other
                                              employee-related costs.
                                           
                                              Pension curtailment gain resulted from certain retirement
                                              plans benefit reductions.
                                           
                                              Pension settlement gain resulted from transfer of the
                                              substitutional portion of our Japanese pension plan to the
                                              government.
                                           
                                              Other includes certain legal costs and settlements in
                                              addition to other miscellaneous adjustments.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Our management uses non-GAAP measures to evaluate the performance of
our core businesses, to estimate future core performance and to
compensate employees. Since management finds this measure to be
useful, we believe that our investors benefit from seeing our
results "through the eyes" of management in addition to seeing our
GAAP results. This information facilitates our management’s internal
comparisons to our historical operating results as well as to the
operating results of our competitors.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Our management recognizes that items such as amortization of
intangibles can have a material impact on our cash flows and/or our
net income. Our GAAP financial statements including our statement of
cash flows portray those effects. Although we believe it is useful
for investors to see core performance free of special items,
investors should understand that the excluded items are actual
expenses that may impact the cash available to us for other uses. To
gain a complete picture of all effects on the company’s profit and
loss from any and all events, management does (and investors should)
rely upon the GAAP income statement. The non-GAAP numbers focus
instead upon the core business of the company, which is only a
subset, albeit a critical one, of the company’s performance.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
The preliminary non-GAAP net income and diluted EPS reconciliation
is estimated based on our current information.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                     Page 6
 
 
                                               AGILENT TECHNOLOGIES, INC.
                                                   SEGMENT INFORMATION
                                            (In millions, except where noted)
                                                       (Unaudited)
                                                       PRELIMINARY
                                                             
Life Sciences and Applied Markets Group
                                                                    Q3’17                                   Q3’16
                                                             ------------------                     ---------------------
  Revenue                                                          $     531                              $     504
  Gross Margin, %                                                       59.7 %                                 57.8 %
  Income from Operations                                           $     113                              $      96
  Operating margin, %                                                   21.3 %                                 19.1 %
                                                                                                     
                                                                                                     
Diagnostics and Genomics Group
                                                                    Q3’17                                   Q3’16
                                                             ------------------                     ---------------------
  Revenue                                                          $     197                              $     180
  Gross Margin, %                                                       52.7 %                                 55.8 %
  Income from Operations                                           $      33                              $      34
  Operating margin, %                                                   16.9 %                                 18.8 %
                                                                                                     
                                                                                                     
Agilent CrossLab Group
                                                                    Q3’17                                   Q3’16
                                                             ------------------                     ---------------------
  Revenue                                                          $     386                              $     360
  Gross Margin, %                                                       49.9 %                                 48.7 %
  Income from Operations                                           $      90                              $      82
  Operating margin, %                                                   23.4 %                                 22.7 %
                                                                                                     
                                                                                                     
Income from operations reflect the results of our reportable
segments under Agilent’s management reporting system which are not
necessarily in conformity with GAAP financial measures. Income from
operations of our reporting segments exclude, among other things,
charges related to asset impairments, amortization of intangibles,
business exit and divestiture costs, transformational initiatives,
acquisition and integration costs, pension curtailment gain and
pension settlement gain.
                                                                                                     
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
                                                                                                     
The preliminary segment information is estimated based on our
current information.
                                                                                                     
                                                                                                     
                                                         Page 7
 
 
                                                                                                                                                                      AGILENT TECHNOLOGIES, INC.
                                                                                                                                                   RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING THE NMR BUSINESS,
                                                                                                                                                   ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS
                                                                                                                                                                                (CORE)
                                                                                                                                                                             (in millions)
                                                                                                                                                                              (Unaudited)
                                                                                                                                                                              PRELIMINARY
                                           
                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                          Year-over-Year
                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                   
                                                                                                                     GAAP
                                                             --------------------------------------------------------------------------------------------------------------------
                                                                                                                                                           Year-over-Year
GAAP Revenue by Segment                                               Q3’17                   Q3’16          % Change  
---------------------------------------                      --------------------  -------------------- --------------------  -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                       
Life Sciences and Applied Markets Group                               $        531                               $        504                             5 %
                                                                                                                                                                                                                                                                                                                                       
Diagnostics and Genomics Group                                                 197                                        180                             9 %
                                                                                                                                                                                                                                                                                                                                       
Agilent CrossLab Group                                                         386                                        360                             7 %
                                                                   
                                                             ------------------------------------------ ----------------------
Agilent                                                               $      1,114            $      1,044                             7 %
                                                             ========== ========== ==================== ========== ==========
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                   Non-GAAP                                                                           Currency Adjustments                                                                       Currency-Adjusted (a)
                                                                                                       (excluding NMR and Acquisitions)
                                                             ------------------------------------------------------------------------------------------------------------                             ------------------                        --------------------------------------------------------------------------------------------------------------
                                                                                                                                                           Year-over-Year                                                                                                                                                                      Year-over-Year
Non GAAP Revenue by Segment                                           Q3’17                   Q3’16          % Change                                Q3’17                                      Q3’17                   Q3’16           % Change   
---------------------------------------                      --------------------  -------------------- --------------------  -------------------- -------- --------------------                      ------------------                        --------------------  -------------------- --------------------  -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                       
Life Sciences and Applied Markets Group                               $        531                               $        500                             6 %                                              $     (4 )                                    $        535                               $        500                               7 %
                                                                                                                                                                                                                                                                                                                                       
Diagnostics and Genomics Group                                                 194                                        180                             8 %                                                    (1 )                                             195                                        180                               8 %
                                                                                                                                                                                                                                                                                                                                       
Agilent CrossLab Group                                                         384                                        360                             7 %                                                    (3 )                                             387                                        360                               8 %
                                                                                                                                                                          
                                                             ------------------------------------------ ----------------------                                                                        ---------------------                     ------------------------------------------ ----------------------
Agilent (Core)                                                        $      1,109            $      1,040                             7 %                                              $     (8 )                                    $      1,117            $      1,040                               7 %
                                                             ========== ========== ==================== ========== ==========                                                                         ====== ====== ======                      ========== ========== ==================== ========== ==========
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                       
(a) We compare the year-over-year change in revenue
excluding the effect of the NMR business, recent acquisitions and
divestitures and foreign currency rate fluctuations to assess the
performance of our underlying business. To determine the impact of
currency fluctuations, current period results for entities reporting
in currencies other than United States dollars are converted into
United States dollars at the actual exchange rate in effect during
the respective prior periods.
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                       
The preliminary reconciliation of GAAP revenue adjusted for the NMR
business, recent acquisitions and divestitures and impact of
currency is estimated based on our current information.
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                Page 8

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170815006015r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170815006015/en/

SOURCE: Agilent Technologies, Inc.

Agilent Technologies, Inc. 
INVESTOR CONTACT: 
Alicia Rodriguez, +1 408-345-8948 
alicia_rodriguez@agilent.com 
or 
EDITORIAL CONTACT: 
Stefanie Notaney, +1 408-345-8955 
stefanie.notaney@agilent.com


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