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 Agilent Technologies Reports Fourth-Quarter Fiscal Year 2017 Financial Results
   Monday, November 20, 2017 4:05:00 PM ET

--Highlights:

--GAAP net income of $177 million, or $0.54 per share

--Non-GAAP net income of $218 million, or $0.67 per share(1), $0.06 above midpoint guidance of $0.61 per share

--Revenue of $1.19 billion, representing growth of 7.1 percent (core revenue growth of 5.8 percent(2) versus midpoint guidance of 3.5 percent)

--First-quarter fiscal year 2018 revenue guidance of $1.145 billion to $1.165 billion and non-GAAP earnings guidance of $0.55 to $0.57 per share(3)

--Fiscal year 2018 revenue guidance of $4.720 billion to $4.740 billion and non-GAAP earnings guidance of $2.50 to $2.56 per share(3)

--Fiscal year 2018 operating cash flow guidance of $970 million

Agilent Technologies, Inc. (A ) today reported revenue of $1.19 billion for the fourth-quarter ended October 31, 2017, up 7.1 percent year over year (up 5.8 percent on a core basis(2)).



Fourth-quarter GAAP net income was $177 million, or $0.54 per share. Last year’s fourth-quarter GAAP net income was $126 million, or $0.38 per share.

During the fourth quarter, Agilent had intangible amortization of $28 million, transformation costs of $7 million and acquisition and integration costs of $5 million. Excluding these items and a tax expense of $1 million, Agilent reported fourth-quarter non-GAAP net income of $218 million, or $0.67 per share(1).

"We ended fiscal 2017 with another strong quarter of revenue and profit growth," said Mike McMullen, Agilent CEO and President. "Every quarter this year we have delivered strong revenue growth, expanded operating margins and increased non-GAAP earnings per share. Our consistently excellent financial performance demonstrates our sustained ability to win in the marketplace, while also driving operational improvements."

"We are successfully executing our strategy positioning Agilent for future growth," he added. "We continue strengthening our portfolio through our own R&D investment and M&A, bringing new capabilities and highly differentiated products to our customers. We have positive momentum heading into fiscal year 2018, and will continue our focus on driving sustainable above-market growth and delivering value to shareholders."

Fourth-quarter revenue of $575 million from Agilent’s Life Sciences and Applied Markets Group (LSAG) grew 5 percent year over year (up 4 percent on a core basis(2)), with strength in chemical and energy, academia and government and food end markets. LSAG’s operating margin for the quarter was 23.9 percent.

Fourth-quarter revenue of $404 million from Agilent CrossLab Group (ACG) grew 9 percent year over year (up 8 percent on a core basis(2)). Growth was healthy across services and consumables, most regions and end markets. ACG’s operating margin for the quarter was 22.9 percent.

Fourth-quarter revenue of $210 million from Agilent’s Diagnostics and Genomics Group (DGG) grew 9 percent year over year (up 7 percent on a core basis(2)) led by increasing demand for pathology products and companion diagnostics services. DGG’s operating margin for the quarter was 20.8 percent.

Agilent expects first-quarter 2018 revenue in the range of $1.145 billion to $1.165 billion. First-quarter 2018 non-GAAP earnings are expected to be in the range of $0.55 to $0.57 per share(3).

For fiscal year 2018, Agilent expects revenue of $4.720 billion to $4.740 billion and non-GAAP earnings of $2.50 to $2.56 per share(3). The guidance is based on October 31, 2017, currency exchange rates.

Conference Call

Agilent’s management will present more details about its fourth-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 "Q4 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 November 27 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the United States) and entering pass code 2283927.

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 $4.47 billion in fiscal 2017 and employs 13,500 people worldwide. Information about Agilent is available at www.agilent.com.

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 first quarter and full fiscal year 2018. 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 July 31, 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 or expenses 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 Q4 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.

(3) Non-GAAP earnings per share as projected for Q1 FY18 and full fiscal year 2018 excludes primarily the future impact of acquisition and integration costs, transformation costs, non-cash intangibles amortization, and other related costs. 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 $25 million per quarter.

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
                                                                                                                                           October 31,                                                                                  Percent
                                                                                     -----------------------------------------------------------------------------------------------------------------------
                                                                                                           2017                                                                  2016                                                  Inc/(Dec)
                                                                                     -------------------------------------------------                     -------------------------------------------------                     ---------------------
                                                                                                                                                                                                                                  
Net revenue                                                                                             $  1,189                                                              $  1,111                                                        7 %
                                                                                                                                                                                                                                  
Costs and expenses:
   Cost of products and services                                                                             542                                                                   523                                                        4 %
   Research and development                                                                                   89                                                                    84                                                        6 %
   Selling, general and administrative                                                    325                             321                                     1 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
      Total costs and expenses                                                            956                             928                                     3 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income from operations                                                                                       233                                                                   183                                                       27 %
                                                                                                                                                                                                                                  
Interest income                                                                                                7                                                                     3                                                      133 %
Interest expense                                                                                             (20 )                                                                 (19 )                                                      5 %
Other income (expense), net                                                                 6                             (16 )                                         --
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income before taxes                                                                                          226                                                                   151                                                       50 %
                                                                                                                                                                                                                                  
Provision for income taxes                                                                                    49                                                                    25                                                       96 %
                                                                                                                                         
                                                                                     -------------------------------------------------                     -------------------------------------------------
Net income                                                                                              $    177                                           $    126                                    40 %
                                                                                     ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
Net income per share:
                    Basic                                                                               $   0.55                                                              $   0.39
                    Diluted                                                                             $   0.54                                                              $   0.38
                                                                                                                                                                                                                                  
Weighted average shares used in computing net income per share:
                    Basic                                                                                    322                                                                   324
                    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
                                                                                                                                                                       
                                                                                                                                                                                                                                  
                                                                                                                                           Years Ended
                                                                                                                                           October 31,                                                                                  Percent
                                                                                     -----------------------------------------------------------------------------------------------------------------------
                                                                                                           2017                                                                  2016                                                  Inc/(Dec)
                                                                                     -------------------------------------------------                     -------------------------------------------------                     ---------------------
                                                                                                                                                                                                                                  
Net revenue                                                                                             $  4,472                                                              $  4,202                                                        6 %
                                                                                                                                                                                                                                  
Costs and expenses:
   Cost of products and services                                                                           2,063                                                                 2,005                                                        3 %
   Research and development                                                                                  339                                                                   329                                                        3 %
   Selling, general and administrative                                                  1,229                           1,253                                    (2 %)
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
      Total costs and expenses                                                          3,631                           3,587                                     1 %
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income from operations                                                                                       841                                                                   615                                                       37 %
                                                                                                                                                                                                                                  
Interest income                                                                                               22                                                                    11                                                      100 %
Interest expense                                                                                             (79 )                                                                 (72 )                                                     10 %
Other income (expense), net                                                                19                             (10 )                                         --
                                                                                     -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                  
Income before taxes                                                                                          803                                                                   544                                                       48 %
                                                                                                                                                                                                                                  
Provision for income taxes                                                                                   119                                                                    82                                                       45 %
                                                                                                                                         
                                                                                     -------------------------------------------------                     -------------------------------------------------
Net income                                                                                              $    684                                           $    462                                    48 %
                                                                                     ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                  
Net income per share:
                    Basic                                                                               $   2.12                                                              $   1.42
                    Diluted                                                                             $   2.10                                                              $   1.40
                                                                                                                                                                                                                                  
Weighted average shares used in computing net income per share:
                    Basic                                                                                    322                                                                   326
                    Diluted                                                                                  326                                                                   329
                                                                                                                                                                                                                                  
Cash dividends declared per common share                                                                $  0.528                                                              $  0.460
                                                                                                                                                                                                                                  
                                                                                          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                                                                                                                                 Years Ended    
                                                                                                                                         October 31,                                                                                                                                                       October 31,   
                                                                                             --------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  2017                                                        2016                                       2017                                  2016   
                                                                                             --------------------------------------------                        ----------------------------                        ------------------------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                  
Net income                                                                                                      $  177                                                              $  126                                                                          $                                              684                                                                                                                   $  462
                                                                                                                                                                                                                                                                                                                                                                                                  
Other comprehensive income (loss), net of tax:
                                                                                                                                                                                                                                                                                                                                                                                                  
   Unrealized gain (loss) on derivative instruments                                                                  3                                                                   5                                                                                                              --                                                                                                                       (6 )
   Amounts reclassified into earnings related to derivative instruments                                              1                                                                   3                                                                                                                          (1 )                                                                                                                      3
   Foreign currency translation                                                                                    (21 )                                                               (49 )                                                                                                                        40                                                                                                                       (8 )
   Net defined benefit pension cost and post retirement plan costs:
      Change in actuarial net loss                                                                                  84                                                                (115 )                                                                                                                       118                                                                                                                      (86 )
      Change in net prior service benefit                                                        (2 )                                             (2 )                                                                                                     (6 )                                                                                                 (15 )
                                                                                             -------------------- ---- --------------------                      -------------------- ---- ----                      ------------------------------------------------ ------------------------------------------------ ------------------------------------------------                          ----------------------------------------- ---- -----------------------------------------------------------------------------
Other comprehensive income (loss)                                                                65                          (158 )                                                                                                    151                                                                               (112 )
                                                                                             -------------------- ---- --------------------                      -------------------- ---- ----                      ------------------------------------------------ ------------------------------------------------ ------------------------------------------------                          ----------------------------------------- ---- -----------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                  
Total comprehensive income (loss)                                                                               $  242                                           $  (32 )                                                                        $                                              835                                                                                                $  350  
                                                                                             ==================== ==== ====================                      ==================== ==== ====                      ================================================ ================================================ ================================================                          ========================================= ==== =============================================================================
                                                                                                                                                                                                                                                                                                                                                                                                  
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
                                                                                                                                
                                                                                                                                                                        
                                                                                                                October 31,                                                                   October 31,
                                                                                                                   2017                                                                         2016(a)
                                                                                         ------------------------------------------------------                        ------------------------------------------------------
ASSETS
                                                                                                                                                                        
Current assets:
   Cash and cash equivalents                                                                                $          2,678                                                              $          2,289
   Accounts receivable, net                                                                                              724                                                                           631
   Inventory                                                                                                             575                                                                           533
   Other current assets                                                                               192                                     182  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total current assets                                                                                             4,169                                                                         3,635
                                                                                                                                                                        
Property, plant and equipment, net                                                                                       757                                                                           639
Goodwill                                                                                                               2,607                                                                         2,517
Other intangible assets, net                                                                                             361                                                                           416
Long-term investments                                                                                                    138                                                                           135
Other assets                                                                                          397                                     452  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total assets                                                                                          $          8,429                                           $          7,794  
                                                                                         ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                        
LIABILITIES AND EQUITY
                                                                                                                                                                        
Current liabilities:
   Accounts payable                                                                                         $            305                                                              $            257
   Employee compensation and benefits                                                                                    276                                                                           235
   Deferred revenue                                                                                                      291                                                                           269
   Short-term debt                                                                                                       210                                                                --
   Other accrued liabilities                                                                          181                                     184  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total current liabilities                                                                                        1,263                                                                           945
                                                                                                                                                                        
Long-term debt                                                                                                         1,801                                                                         1,904
Retirement and post-retirement benefits                                                                                  242                                                                           360
Other long-term liabilities                                                                           293                                     339  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total liabilities                                                                             3,599                                   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 October 31, 2017 and 614 million shares at
   October 31, 2016, issued
                                                                                                              --                                                                       (10,508 )
   Treasury stock at cost; zero shares at October 31, 2017 and 290
   million shares at October 31, 2016
   Additional paid-in-capital                                                                                          5,301                                                                         9,159
   (Accumulated deficit) retained earnings                                                                              (126 )                                                                       6,089
   Accumulated other comprehensive loss                                                              (352 )                                                     (503 )
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total stockholders’ equity                                                                                       4,826                                                                         4,243
   Non-controlling interest                                                                             4                                       3  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total equity                                                                                  4,830                                   4,246  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
         Total liabilities and equity                                                                       $          8,429                                           $          7,794  
                                                                                         ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                        
(a) Includes the impact of the adoption of ASU 2015-15
and reclassification of technology and licenses from third parties
from other assets to other intangible assets, net.
 
                                                                                                                                                                        
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 Ended                                                                                                                                              Years Ended
                                                                                                                     October 31,                                                                   October 31,                                                                   October 31,                                                                   October 31,
                                                                                                                        2017                                                                          2016                                                                          2017                                                                          2016
                                                                                              ---------------------------------------------------------                     ---------------------------------------------------------                     ---------------------------------------------------------                     ---------------------------------------------------------
Cash flows from operating activities:
   Net income                                                                                                    $            177                                                              $            126                                                              $            684                                                              $            462
                                                                                                                                                                                                                                                                                                                                         
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
   Depreciation and amortization                                                                                               52                                                                            56                                                                           212                                                                           246
   Share-based compensation                                                                                                    12                                                                            11                                                                            60                                                                            58
   Excess and obsolete inventory related charges                                                                                5                                                                             4                                                                            24                                                                            20
   Impairment of equity method investment and loans                                                                --                                                                            25                                                                --                                                                            25
   Other non-cash expenses, net                                                                                                 2                                                                             3                                                                             7                                                                            19
   Changes in assets and liabilities:
      Accounts receivable                                                                                                     (52 )                                                                         (52 )                                                                         (81 )                                                                         (33 )
      Inventory                                                                                                               (15 )                                                                           4                                                                           (61 )                                                                          (7 )
      Accounts payable                                                                                                         (9 )                                                                          12                                                                             2                                                                           (15 )
      Employee compensation and benefits                                                                                       49                                                                            29                                                                            38                                                                            15
      Interest rate swap payments                                                                                  --                                                                           (10 )                                                              --                                                                           (10 )
      Other assets and liabilities                                                                          67                                      26                                       4                                      13  
                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash provided by operating activities (a)                                                                                 288                                                                           234                                                                           889                                                                           793
                                                                                                                                                                                                                                                                                                                                         
Cash flows from investing activities:
   Investments in property, plant and equipment                                                                               (58 )                                                                         (52 )                                                                        (176 )                                                                        (139 )
   Proceeds from sale of investment securities                                                                     --                                                                --                                                                --                                                                             1
   Payment to acquire cost method investment                                                                                   (1 )                                                              --                                                                            (1 )                                                                         (80 )
   Loan to equity method investment                                                                                --                                                                --                                                                --                                                                            (3 )
   Change in restricted cash and cash equivalents, net                                                                         (1 )                                                              --                                                                            (1 )                                                                         245
   Payment in exchange for convertible note                                                                        --                                                                --                                                                            (1 )                                                                          (1 )
   Proceeds from divestitures                                                                                                   1                                                                --                                                                             2                                                                --
   Acquisition of businesses and intangible assets, net of cash acquired                                    (1 )                                                      (26 )                                                     (128 )                                                     (261 )
                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash used in investing activities                                                                                         (60 )                                                                         (78 )                                                                        (305 )                                                                        (238 )
                                                                                                                                                                                                                                                                                                                                         
Cash flows from financing activities:
   Issuance of common stock under employee stock plans                                                                          8                                                                             3                                                                            66                                                                            62
   Payment of taxes related to net share settlement of equity awards                                                           (1 )                                                              --                                                                           (14 )                                                                          (6 )
   Payment of dividends                                                                                                       (43 )                                                                         (38 )                                                                        (170 )                                                                        (150 )
   Proceeds from debts and credit facility                                                                                     57                                                                --                                                                           400                                                                           255
   Repayment of debts and credit facility                                                                                    (127 )                                                                        (272 )                                                                        (290 )                                                                        (292 )
   Proceeds from issuance of senior notes                                                                          --                                                                           299                                                                --                                                                           299
   Debt issuance cost                                                                                              --                                                                            (2 )                                                              --                                                                            (2 )
   Treasury stock repurchases                                                                   --                                     (46 )                                                     (194 )                                                     (434 )
                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash used in financing activities                                                                                        (106 )                                                                         (56 )                                                                        (202 )                                                                        (268 )
                                                                                                                                                                                                                                                                                                                                         
Effect of exchange rate movements                                                                                              (7 )                                                                         (10 )                                                                           7                                                                            (1 )
                                                                                                                                                                                                                                                                                                                                         
Net increase in cash and cash equivalents                                                                                     115                                                                            90                                                                           389                                                                           286
                                                                                                                                                                                                                                                                                                                                         
Cash and cash equivalents at beginning of period                                                         2,563                                   2,199                                   2,289                                   2,003  
                                                                                              -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                         
Cash and cash equivalents at end of period                                                                       $          2,678                                           $          2,289                                           $          2,678                                           $          2,289  
                                                                                              ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                         
   (a) Cash payments included in operating activities:
      Income tax payments, net                                                                                   $              7                                                              $             13                                                              $             63                                                              $             67
      Interest payments                                                                                          $             13                                                              $              8                                                              $             82                                                              $             73
                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                         
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                                                                                                                                                                                                                                                                                Years Ended
                                                                                                                                                                                      October 31,                                                                                                                                                                                                                                                                                   October 31,
                                                                               2017                                 Diluted                                                             2016                                                      Diluted                                                                        2017                                                      Diluted                                                                   2016                                                Diluted
                                                                                                                                         EPS                                                                                                                                              EPS                                                                                                                                                         EPS                                                                                                                                              EPS
                                                               ----------------------------------  -------------------- ----------------------------------                       ------------------------------------------------------   -------------------- ------------------------------------------------------                        ------------------------------------------------------   -------------------- ------------------------------------------------------                        -------------------------------------------   -------------------- ------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
GAAP Net income                                                                   $            177                                         $           0.54                                         $            126                                                              $           0.38                                                              $            684                                                              $           2.10                                                              $ 462                                                              $           1.40
   Non-GAAP adjustments:
      Asset impairments                                                             --                                           --                                           --                                                                --                                                                --                                                                --                                                                  4                                                                          0.01
      Intangible amortization                                                                   28                                                     0.09                                                       32                                                                          0.10                                                                           117                                                                          0.36                                                                152                                                                          0.46
      Business exit and divestiture costs                                           --                                           --                                                        4                                                                          0.01                                                                --                                                                --                                                                 10                                                                          0.03
      Transformational initiatives                                                               7                                                     0.02                                                        6                                                                          0.02                                                                            12                                                                          0.04                                                                 38                                                                          0.12
      Acquisition and integration costs                                                          5                                                     0.02                                                       13                                                                          0.04                                                                            32                                                                          0.10                                                                 41                                                                          0.12
      Impairment of investment and loans                                            --                                           --                                                       25                                                                          0.08                                                                --                                                                --                                                                 25                                                                          0.08
      Pension curtailment gain                                                      --                                           --                                           --                                                                --                                                                --                                                                --                                                                (15 )                                                                       (0.05 )
      Pension settlement gain                                                       --                                           --                                           --                                                                --                                                                           (32 )                                                                       (0.10 )                                                               (1 )                                                              --
      Other                                                                         --                                           --                                                        1                                                                --                                                                             5                                                                          0.02                                                                  6                                                                          0.02
      Adjustment for taxes (a)                                                1     --                                   (14 )                                 (0.04 )                                                      (50 )                                 (0.16 )                                           (71 )                                 (0.21 )
                                                               -------------------- -------------- -------------------- -------------------- --------------                      -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------                      -------------------- --- -------------------- -------------------- -------------------- -------------- --------------------
Non-GAAP Net income                                                               $            218                      $           0.67                                         $            193                        $           0.59                                           $            768                        $           2.36                                           $ 651                        $           1.98  
                                                               ==================== ============== ==================== ==================== ==============                      ==================== ============== ==================== ==================== ==================== ============== ====================                      ==================== ============== ==================== ==================== ==================== ============== ====================                      ==================== === ==================== ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
(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 months and year
ended October 31, 2017, management uses a non-GAAP effective tax
rate of 18.0% for both periods. In the same periods last year,
management used a non-GAAP effective tax rate of 16.8% and 19.0%,
respectively.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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, impairment of investment and
loans, 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,
      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, tax, 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.
 
      Impairment of investment and loans include an investment and
      the related convertible loans that have been written down to their
      fair value.
 
      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
                                                                     Q4’17                                     Q4’16
                                                             --------------------                     ----------------------
   Revenue                                                           $       575                               $        548
   Gross Margin, %                                                         61.0%                                      59.4%
   Income from Operations                                            $       138                               $        125
   Operating margin, %                                                     23.9%                                      22.8%
                                                                                                       
                                                                                                       
Diagnostics and Genomics Group
                                                                     Q4’17                                     Q4’16
                                                             --------------------                     ----------------------
   Revenue                                                           $       210                               $        193
   Gross Margin, %                                                         55.2%                                      55.4%
   Income from Operations                                            $        44                               $         38
   Operating margin, %                                                     20.8%                                      19.6%
                                                                                                       
                                                                                                       
Agilent CrossLab Group
                                                                     Q4’17                                     Q4’16
                                                             --------------------                     ----------------------
   Revenue                                                           $       404                               $        370
   Gross Margin, %                                                         49.6%                                      49.4%
   Income from Operations                                            $        92                               $         84
   Operating margin, %                                                     22.9%                                      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, impairment of investment and
loans, 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                                                         Q4’17                                       Q4’16                       % Change
---------------------------------------                      ----------------------------------------  -------------------- ----------------------------------------  -------------------- -------------
                                                                                                                                                                                                                                                                                                                                                                                                                             
Life Sciences and Applied Markets Group                                         $                  575                                         $                  548                            5 %
                                                                                                                                                                                                                                                                                                                                                                                                                             
Diagnostics and Genomics Group                                                                     210                                                            193                            9 %
                                                                                                                                                                                                                                                                                                                                                                                                                             
Agilent CrossLab Group                                                                             404                                                            370                            9 %
                                                                      
                                                             -------------------- -------------------- -------------------- -------------------- --------------------
Agilent                                                                         $                1,189                      $                1,111                            7 %
                                                             ==================== ==================== ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                               Non-GAAP                                                                                                         Currency                                                                                                     Currency-Adjusted (a)
                                                                                                                   (excluding NMR and Acquisitions)                                                                                            Adjustments
                                                             -------------------------------------------------------------------------------------------------------------------------------------                             ----------------------------------------                       -------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                           Year-over-Year                                                                                                                                                                                                                      Year-over-Year
Non GAAP Revenue by Segment                                                     Q4’17                                       Q4’16                       % Change                                            Q4’17                                                          Q4’17                                       Q4’16                          % Change
---------------------------------------                      ----------------------------------------  -------------------- ----------------------------------------  -------------------- -------------                       ----------------------------------------                       ----------------------------------------  -------------------- ----------------------------------------  -------------------- -------------------
                                                                                                                                                                                                                                                                                                                                                                                                                             
Life Sciences and Applied Markets Group                                         $                  573                                         $                  547                            5 %                                              $                    4                                         $                  569                                         $                  547                               4 %
                                                                                                                                                                                                                                                                                                                                                                                                                             
Diagnostics and Genomics Group                                                                     208                                                            193                            7 %                                                                   2                                                            206                                                            193                               7 %
                                                                                                                                                                                                                                                                                                                                                                                                                             
Agilent CrossLab Group                                                                             404                                                            370                            9 %                                                                   5                                                            399                                                            370                               8 %
                                                                                                                                                                  
                                                             -------------------- -------------------- -------------------- -------------------- --------------------                                                          -------------------- --------------------                      -------------------- -------------------- -------------------- -------------------- --------------------
Agilent (Core)                                                                  $                1,185                      $                1,110                            7 %                                              $                   11                                         $                1,174                      $                1,110                               6 %
                                                             ==================== ==================== ==================== ==================== ====================                                                          ==================== ====================                      ==================== ==================== ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                             
(a) We compare the year-over-year change in revenue
excluding the effect of 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=20171120006018r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171120006018/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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