AGILENT TECHNOLOGIES, INC.

TABLE OF CONTENTS


PART I	— FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share amounts)

(Unaudited)


	Three Months Ended						Three Months Ended
	January 31,						January 31,
	2016			2015 (As Revised)			2017			2016
Net revenue:
Products	$	795		$	809		$	818		$	795
Services and other	233			217			249			233
Total net revenue	1,028			1,026			1,067			1,028
Costs and expenses:
Cost of products	365			390			349			365
Cost of services and other	126			123			144			126
Total costs	491			513			493			491
Research and development	78			88			79			78
Selling, general and administrative	304			310			289			304
Total costs and expenses	873			911			861			873
Income from operations	155			115			206			155
Interest income	2			2			4			2
Interest expense	(18		)	(16		)	(20		)	(18		)
Other income (expense), net	3			12			3			3
Income from continuing operations before taxes	142			113
Income before taxes							193			142
Provision for income taxes	19			20			25			21
Income from continuing operations	123			93
Loss from discontinued operations, net of tax expense (benefit) of $0 and $(2)	—			(30		)
Net income	$	123		$	63		$	168		$	121

Net income per share - basic:
Income from continuing operations	$	0.37		$	0.28
Loss from discontinued operations	—			(0.09		)
Net income per share - basic	$	0.37		$	0.19

Net income per share - diluted:
Income from continuing operations	$	0.37		$	0.28
Loss from discontinued operations	—			(0.09		)
Net income per share - diluted	$	0.37		$	0.19
Net income per share:
Basic							$	0.52		$	0.37
Diluted							0.52			$	0.36

Weighted average shares used in computing net income per share:
Basic	329			336			322			329
Diluted	332			338			326			332

Cash dividends declared per common share	$	0.115		$	0.100		$	0.132		$	0.115

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(Unaudited)

Three Months Ended
January 31,
2016
2015
(As Revised)

Net income $ 123
$ 63

Other comprehensive income (loss):
Unrealized gain on derivative instruments, net of tax expense of $1 and $3 3
7

Amounts reclassified into earnings related to derivative instruments, net of tax (benefit) of $0 and $(1) (1 ) (3 )
Foreign currency translation, net of tax (benefit) of $(1) and $(6) (56 ) (265 )
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $4 and $2 15
4

Change in net prior service benefit, net of tax (benefit) of $(5) and $(2) (8 ) (2 )
Other comprehensive loss (47 ) (259 )
Total comprehensive income (loss) $ 76
$ (196 )



	Three Months Ended
	January 31,
	2017			2016

Net income	$	168		$	121
Other comprehensive income (loss):
Unrealized gain on derivative instruments, net of tax expense of $1 and $1	1			3
Amounts reclassified into earnings related to derivative instruments, net of tax expense (benefit) of $(1) and $0	—			(1		)
Foreign currency translation, net of tax benefit of $(1) and $(1)	(3		)	(56		)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $8 and $4	17			15
Change in net prior service benefit, net of tax benefit of $(1) and $(5)	(1		)	(8		)
Other comprehensive income (loss)	14			(47		)
Total comprehensive income	$	182		$	74

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share amounts)

(Unaudited)


	January 31, 2016			October 31, 2015			January 31, 2017			October 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	1,931		$	2,003		$	2,241		$	2,289
Short-term restricted cash and cash equivalents	—			242
Accounts receivable, net	617			606			653			631
Inventory	554			541			551			533
Other current assets	297			294			190			182
Total current assets	3,399			3,686			3,635			3,635
Property, plant and equipment, net	594			604			653			639
Goodwill	2,478			2,366			2,563			2,517
Other intangible assets, net	513			445			411			408
Long-term investments	76			86			133			135
Other assets	242			292			477			460
Total assets	$	7,302		$	7,479		$	7,872		$	7,794
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	250		$	279		$	268		$	257
Employee compensation and benefits	171			221			189			235
Deferred revenue	277			258			299			269
Short-term debt	80			—			190			—
Other accrued liabilities	169			218			143			184
Total current liabilities	947			976			1,089			945
Long-term debt	1,653			1,655			1,802			1,904
Retirement and post-retirement benefits	242			264			350			360
Other long-term liabilities	412			414			331			339
Total liabilities	3,254			3,309			3,572			3,548
Commitments and contingencies (Note 12)
Commitments and contingencies (Note 11)
Total equity:
Stockholders’ equity:
Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding	—			—			—			—
Common stock; $0.01 par value; 2 billion shares authorized; 612 million shares at January 31, 2016 and 611 million shares at October 31, 2015 issued	6			6
Treasury stock at cost; 284 million shares at January 31, 2016 and 279 million shares at October 31, 2015	(10,274		)	(10,074		)
Common stock; $0.01 par value; 2 billion shares authorized; 322 million shares at January 31, 2017 and 614 million shares at October 31, 2016 issued							3			6
Treasury stock at cost; zero shares at January 31, 2017 and 290 million shares at October 31, 2016							—			(10,508		)
Additional paid-in-capital	9,085			9,045			5,236			9,159
Retained earnings	5,666			5,581
(Accumulated deficit) retained earnings							(453		)	6,089
Accumulated other comprehensive loss	(438		)	(391		)	(489		)	(503		)
Total stockholders' equity	4,045			4,167			4,297			4,243
Non-controlling interest	3			3			3			3
Total equity	4,048			4,170			4,300			4,246
Total liabilities and equity	$	7,302		$	7,479		$	7,872		$	7,794

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)


	Three Months Ended						Three Months Ended
	January 31,						January 31,
	2016			2015 (As Revised)			2017			2016
Cash flows from operating activities:
Net income	123			63			$	168		$	121
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	66			68			55			66
Share-based compensation	23			22			20			23
Excess tax benefit from share-based plans	(2		)	—
Deferred taxes	4			6			16			4
Excess and obsolete inventory related charges	4			4			7			4
Other non-cash (income) expense, net	2			3
Other non-cash expense, net							2			2
Changes in assets and liabilities:
Accounts receivable	(15		)	(15		)	(31		)	(15		)
Inventory	(13		)	(5		)	(26		)	(13		)
Accounts payable	(18		)	(39		)	9			(18		)
Employee compensation and benefits	(47		)	(34		)	(43		)	(47		)
Other assets and liabilities	(23		)	(93		)	(61		)	(16		)
Net cash provided by (used in) operating activities	104			(20		)
Net cash provided by operating activities							116			111

Cash flows from investing activities:
Investments in property, plant and equipment	(38		)	(32		)	(32		)	(38		)
Payment in exchange for convertible note	(1		)	—			—			(1		)
Change in restricted cash and cash equivalents, net	245			1			—			245
Proceeds from sale of investment securities	1			—			—			1
Proceeds from divestitures							1			—
Acquisitions of businesses and intangible assets, net of cash acquired	(235		)	—			(70		)	(235		)
Net cash used in investing activities	(28		)	(31		)	(101		)	(28		)

Cash flows from financing activities:
Issuance of common stock under employee stock plans	24			8			18			24
Payment of taxes related to net share settlement of equity awards							(12		)	(5		)
Payment of dividends	(38		)	(34		)	(42		)	(38		)
Excess tax benefit from share-based plans	2			—
Net transfer of cash and cash equivalents to Keysight	—			(796		)
Proceeds from revolving credit facility	100			—			131			100
Repayment of revolving credit facility	(20		)	—			(42		)	(20		)
Treasury stock repurchases	(200		)	(6		)	(111		)	(200		)
Net cash used in financing activities	(132		)	(828		)	(58		)	(139		)

Effect of exchange rate movements	(16		)	(31		)	(5		)	(16		)

Net decrease in cash and cash equivalents	(72		)	(910		)	(48		)	(72		)

Change in cash and cash equivalents related to discontinued operations	—			810

Cash and cash equivalents at beginning of period	2,003			2,218			2,289			2,003
Cash and cash equivalents at end of period	$	1,931		$	2,118		$	2,241		$	1,931

Supplemental cash flow information:
Income tax paid, net							$	27		$	37
Interest payments							$	29		$	29

The accompanying notes are an integral part of these condensed consolidated financial statements.

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AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


1.	OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Agilent Technologies, Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

Basis of Presentation. We have prepared the accompanying financial data for the three months ended January 31, ~~2016~~2017 and ~~2015~~2016 pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The October 31, 2016 condensed balance sheet data was derived from audited financial statements but does not include all the disclosures required in audited financial statements by U.S. GAAP. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2015.~~2016.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair statement of our condensed consolidated balance sheet as of January 31, ~~2016~~2017 and October 31, ~~2015,~~2016, condensed consolidated statement of comprehensive income (loss) for the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, condensed consolidated statement of operations for the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, and condensed consolidated statement of cash flows for the three months ended January 31, ~~2016~~2017 and ~~2015.~~

~~Revision of Services and Other and Product Net Revenues and related Cost of Sales.~~In 2015, we revised amounts shown in our condensed consolidated statement of operations to more accurately reflect the character of items delivered to customers. Our diagnostic and genomics segment identified a stream of service revenues that had been presented as product revenue in the prior year. We have now revised prior year's presentation to show the revenue within services and other. The cost of sales associated with these newly identified service revenues has also been revised to align with the new presentation. For the three months ended January 31, 2015 service and other revenue increased $6 million and service and other cost of sales increased $5 million with corresponding reductions in product revenue and cost of sales. These corrections to the classifications are not considered to be material to current or prior periods and had no impact to our results of operations previously reported in our condensed consolidated statement of operations.2016.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, ~~valuation of goodwill and purchased intangible assets,~~ inventory valuation, share-based compensation, retirement and post-retirement benefit plan assumptions, goodwill and purchased intangible assets and accounting for income taxes.

Retirement of Treasury Shares. Upon the formal retirement of treasury shares, we deduct the par value of the retired treasury shares from common stock and allocate the excess of cost over par as a deduction between additional paid-in capital and retained earnings. All retired treasury shares revert to the status of authorized but unissued shares.

Variable Interest Entities. We make a determination upon entering into an arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). The company evaluates its investments in privately held companies on an ongoing basis. We have determined that as of January 31, 2017 there were no VIE’s required to be consolidated in the company’s consolidated financial statements because we do not have a controlling financial interest in any of the VIE’s that we have invested in nor are we the primary beneficiary. We account for these investments under either the equity or cost method, depending on the circumstances. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, based on changes in facts and circumstances including changes in contractual arrangements and capital structure. As of January 31, 2017, the carrying value of our investment in a VIE was $80 million with a maximum exposure of $80 million. The investments are included on the long term investments line of the condensed consolidated balance sheet.

Fair Value of Financial Instruments.The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments is determined using quoted market prices for those securities when available. For those long-term equity investments accounted for under the cost or equity method, their carrying value approximates their estimated fair value. Equity method investments are reported at the amount of the company’s initial investment and adjusted each period for the company’s share of the investee’s income or loss and dividend paid. There are no equity method investments as of January 31, 2017. The fair value of our long-term debt, calculated from quoted prices which

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately ~~$53~~$154 million and ~~$30~~$104 million as of January 31, ~~2016~~2017 and October 31, ~~2015,~~2016, respectively. The change in the excess of fair value over carrying value in the three months ended January 31, ~~2016~~2017 is due to fluctuations in market interest rates. The carrying value as of October 31, 2016 reflects the new accounting guidance related to the presentation of debt issuance costs which we adopted on November 1, 2016. The fair value of foreign currency contracts used for hedging purposes is estimated internally by using inputs tied to active markets. These inputs, for example, interest rate yield curves, foreign exchange rates, and forward and spot prices for currencies are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. See also Note 9,8, "Fair Value Measurements" for additional information on the fair value of financial instruments.

~~AGILENT TECHNOLOGIES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)~~

Goodwill and Purchased Intangible Assets. Under the authoritative guidance we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The accounting standard gives an entity the option to first assess qualitative factors to determine whether performing the two-step test is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required.

The guidance includes examples of events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. These include macro-economic conditions such as deterioration in the entity's operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the stock price on either an absolute basis or relative to peers.

If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the provisions of authoritative guidance require that we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of each reporting unit to its carrying value. The second step (if necessary) measures the amount of impairment by applying fair-value-based tests to the individual assets and liabilities within each reporting unit. As defined in the authoritative guidance, a reporting unit is an operating segment, or one level below an operating segment. We aggregate components of an operating segment that have similar economic characteristics into our reporting units.

In fiscal year ~~2015,~~2016, we assessed goodwill impairment for our three reporting units which consisted of three segments: life sciences and applied markets, diagnostics and genomics and Agilent CrossLab. ~~Due to the new segment structure in November 2014 we~~We performed a ~~quantitative~~qualitative test for goodwill impairment of the three reporting units, as of September 30, ~~2015.~~2016. Based on the results of our qualitative testing, we believe that it is more-likely-than-not- that the fair value of these reporting units are greater than their respective carrying values. Each quarter we review the events and circumstances to determine if goodwill impairment is indicated. There was no impairment of goodwill during the three months ended January 31, ~~2016~~2017 and ~~2015.~~2016.

Purchased intangible assets consist primarily of acquired developed technologies, proprietary know-how, trademarks, and customer relationships and are amortized using the best estimate of the asset's useful life that reflect the pattern in which the economic benefits are consumed or used up or a straight-line method ranging from 6 months to 15 years. In-process research and development ("IPR&D") is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When the IPR&D project is complete, it is reclassified as an amortizable purchased intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned, Agilent will record a charge for the value of the related intangible asset to Agilent's condensed consolidated statement of operations in the period it is abandoned.

Agilent's indefinite-lived intangible assets are IPR&D intangible assets. The accounting guidance allows a qualitative approach for testing indefinite-lived intangible assets for impairment, similar to the issued impairment testing guidance for goodwill and allows the option to first assess qualitative factors (events and circumstances) that could have affected the significant inputs used in determining the fair value of the indefinite-lived intangible asset to determine whether it is more-likely-than-not (i.e. greater than 50% chance) that the indefinite-lived intangible asset is impaired. An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value. We performed a qualitative test for impairment of indefinite-lived intangible assets as of September 30, ~~2015.~~2016. Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these indefinite-lived intangible assets is greater than their respective carrying values. Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible assets is indicated. There were no indicators of impairment of indefinite-lived intangible assets during the three months ended January 31, ~~2016~~2017 and ~~2015.~~2016.

~~2. REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS~~

During the years ended October 31, 2014 and 2015 the company identified and recorded various out of period income tax adjustments. We determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Report on Form 10-K for the year ended October 31, 2014 or for any quarterly periods included therein or through our Quarterly Report on Form 10-Q for the nine months ended July 31, 2015. However, as a result of the company presenting continuing operations and discontinued operations for the first time in our Annual Report on Form 10-K for the year ended October 31, 2015, we determined that the effect of the errors is significant to our financial results for the year ending October 31, 2014 and 2013. Accordingly, we revised our historical financial statements presented in our Form 10-K for the year ended October 31, 2015.

For the three months ended January 31, 2016, we are presenting comparative fiscal 2015 quarterly information. The fiscal 2015 results for the three months ended January 31, 2015 have been revised to reflect the quarterly impact of the out of period

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

adjustments described above. The following out of period adjustments were included in the as-reported column in the revision adjustment table and have been removed in the adjustments column: $13 million of tax benefit from the reduction in deferred tax liabilities due to tax rate changes in Denmark occurring in a prior year and $4 million of tax expense attributable to an error discovered on a prior year U.S. tax return.

Three Months Ended January 31, 2015
As Reported Adjustments As Revised
(in millions, except per share data)
Income from continuing operations before taxes 113
113
Provision for income taxes 11
9
20
Income from continuing operations 102
93
Loss from discontinued operations, net of tax benefit of $2 $ (30 ) $ (30 )
Net Income $ 72
$ (9 ) $ 63

Net income per share - basic
Income from continuing operations $ 0.30
$ 0.28
Loss from discontinued operations $ (0.09 ) $ (0.09 )
Net income per share - basic $ 0.21
$ 0.19

Net income per share - diluted
Income from continuing operations $ 0.30
$ 0.28
Loss from discontinued operations $ (0.09 ) $ (0.09 )
Net income per share - diluted $ 0.21
$ 0.19

Total comprehensive loss $ (187 ) $ (9 ) $ (196 )

~~The adjustments resulted in the following revisions to our condensed consolidated statement of cash flow.~~

Three Months Ended January 31, 2015

As
Reported
Adjustments
As
Revised
(in millions)
Net income $ 72
$ (9 ) $ 63
Deferred taxes $ (7 ) $ 13
$ 6
Changes in assets and liabilities:
Other assets and liabilities $ (89 ) $ (4 ) $ (93 )
Net cash used in operating activities (20 ) —
(20 )

3. 2. NEW ACCOUNTING PRONOUNCEMENTS

There were no changes to the new accounting pronouncements not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2015~~2016 except for the following:

In ~~February~~April 2015, the FASB issued amendments to simplify the presentation of debt issuance costs. The amendments require that debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs remain unchanged. The amendments were effective for us beginning November 1, 2016. The impact of adoption to our condensed consolidated balance sheet was a decrease of $8 million in other assets and long-term debt. The October 31, 2016 consolidated balance sheet has been revised to reflect the ~~Financial Accounting Standards Board ("FASB")~~new disclosure requirement.

In January 2017, the FASB issued guidance ~~which amends~~intended to clarify the ~~existing accounting standards~~definition of a business in connection with business combinations with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for ~~leases. Consistent with existing guidance, the recognition, measurement, and presentation~~as acquisitions (or disposals) of ~~expenses and cash flows arising from a lease by a lessee primarily will depend on its classification. Under the new guidance, a lessee will be required to recognize right-of-use~~ assets ~~and lease liabilities on the balance sheet. The new~~or businesses. This guidance is effective for us ~~from~~beginning November 1, ~~2020,~~2018, and for interim periods within that year. Adjustments will be recorded in the ~~following year. Early adoption~~period that they are determined rather than applied retrospectively via revision to the period of acquisition and each period thereafter. We do not expect this guidance ~~is permitted and we will be required~~ to ~~adopt using~~have a ~~modified retrospective approach. We are evaluating the timing and the~~material impact ~~of adopting this guidance~~ on our consolidated financial statements and disclosures.

In January ~~2016,~~2017, the FASB issued ~~amendments~~an amendment to ~~address certain aspects~~modify the concept of ~~recognition, measurement, presentation, and disclosure~~impairment from the condition that exists when the carrying amount of ~~financial instruments. The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at~~goodwill exceeds its implied fair value ~~and recognize any changes in~~to the condition that exists when the carrying amount of a reporting unit exceeds its fair ~~value in net income.~~value. The ~~provisions under this~~ amendment also simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments are effective for us ~~from~~beginning November 1, ~~2018, and~~2020. Early adoption is permitted for interim ~~periods in the following year and early adoption is~~or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not ~~permitted. We are evaluating the impact of adopting~~expect this guidance to have a material impact on our consolidated financial ~~statements.~~

~~AGILENT TECHNOLOGIES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)~~

~~In November 2015, FASB issued guidance intended to simplify accounting for deferred taxes. Beginning on November 1, 2017~~statements and including the interim periods following that date, we will be required to present all deferred tax balances as non-current. Existing GAAP guidance requires us to record deferred tax balances as either current or non-current in accordance with the classification of the underlying attributes. Early adoption of this guidance is permitted and may be applied either prospectively or retrospectively to all periods presented. We expect to early adopt this guidance prospectively at the end of the second quarter of fiscal year 2016, but we are still evaluating how significant the impact of the adoption will be on our consolidated balance sheet.disclosures.

Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

4.3. SHARE-BASED COMPENSATION

Agilent accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors including employee stock option awards, restricted stock units, employee stock purchases made under our employee stock purchase plan (“ESPP”) and performance share awards granted to selected members of our senior management under the long-term performance plan (“LTPP”) based on estimated fair values.

Participants in the LTPP are entitled to receive unrestricted shares of the company's stock after the end of a three-year period, if specified performance targets are met. Certain LTPP awards are generally designed to meet the criteria of a performance award with the performance metrics and peer group comparison based on the Total Stockholders’ Return (“TSR”) set at the beginning of the performance period. Effective November 1, 2015, the Compensation Committee of the Board of Directors approved another type of performance stock award, for the company's executive officers and other key employees. Participants in this program are also entitled to receive unrestricted shares of the company's stock after the end of a three-year period, if specified performance targets over the three-year period are met. The performance target for grants made in 2016 and 2017 were based on Operating Margin (“OM”) ~~over~~and Earnings Per Share ("EPS"), respectively. The performance targets for the ~~three-~~LTPP-EPS grants for year 2 and year 3 of the performance period ~~are met.~~will be set in the first quarter of year 2 and year 3, respectively. All LTPP awards granted after November 1, 2015, are subject to a ~~one year~~one-year post-vest holding period.

Based on the performance metrics the final LTPP award may vary from zero to 200 percent of the target award. The maximum award value cannot exceed 300 percent of the grant date target value. We consider the dilutive impact of these programs in our diluted net income per share calculation only to the extent that the performance conditions are expected to be met. Restricted stock units generally vest, with some exceptions, at a rate of 25 percent per year over a period of four years from the date of grant.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

The impact on our results for share-based compensation was as follows:


	Three Months Ended				Three Months Ended
	January 31,				January 31,
	2016		2015		2017		2016
	(in millions)				(in millions)
Cost of products and services	$	6	$	5	$	6	$	6
Research and development	2		2		2		2
Selling, general and administrative	15		15		13		15
Total share-based compensation expense	$	23	$	22	$	21	$	23

At January 31, ~~2016~~2017 and October 31, ~~2015,~~2016, there was no share-based compensation capitalized within inventory. ~~For the three months ended January 31, 2016 and 2015, the windfall tax benefit realized from exercised stock options and similar awards was $2 million and zero, respectively.~~

~~AGILENT TECHNOLOGIES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)~~

The following assumptions were used to estimate the fair value of the ~~options and~~ LTPP grants.

Three Months Ended
January 31,
2016 2015
Stock Option Plans:
Weighted average risk-free interest rate — 1.8%
Dividend yield — 1%
Weighted average volatility — 28%
Expected life — 5.5yrs
LTPP:
Volatility of Agilent shares 24% 25%
Volatility of selected peer-company shares 14%-50% 12%-57%
Price-wise correlation with selected peers 35% 37%



	Three Months Ended
	January 31,
	2017	2016
LTPP:
Volatility of Agilent shares	23%	24%
Volatility of selected peer-company shares	15%-63%	14%-50%
Price-wise correlation with selected peers	36%	35%

~~The fair value of share-based awards for employee stock option awards was estimated using the Black-Scholes option pricing model.~~ Shares granted under the LTPP (TSR) were valued using a Monte Carlo ~~simulation~~simulations model. ~~Both the Black-Scholes and~~The Monte Carlo simulation fair value ~~models require~~model requires the use of highly subjective and complex assumptions, including the ~~option’s expected life and the~~ price volatility of the underlying stock.

Due to the separation of Keysight on November 1, 2014, expected volatility for grants of options in fiscal 2015 was based on a 5.5 year average historical stock price volatility of a group of our peer companies. For the volatility of our 2015 and 2016 LTPP (TSR) grants, we used the 3 year average historical stock price volatility of a group of our peer companies. We ~~believe~~believed our historical volatility prior to the separation of Keysight isin 2015 was no longer relevant to use. For the ~~grants~~volatility of ~~options and~~our 2017 LTPP (TSR) ~~prior to November 1, 2014, the expected~~grants, we used our own historical stock price ~~volatility assumption was determined using the historical volatility of Agilent’s stock over the most recent historical period equivalent to the expected life of the stock options and LTPP (TSR).~~

In developing our estimated life assumption of our employees' stock options of 5.5 years, we considered the separation of Keysight and the historical option exercise behavior for our executive employees who were granted the majority of the options in the annual grants made which we believe is representative of future behavior. No stock options were granted during the three months ended January 31, 2016.volatility.

The ESPP allows eligible employees to purchase shares of our common stock at 85 percent of the price at purchase ~~price~~ and uses the purchase date to establish the fair market value.

The estimated fair value of restricted stock ~~unit~~units, LTPP (OM) and LTPP ~~(OM)~~(EPS) awards is determined based on the market price of Agilent’s common stock on the date of grant adjusted for expected dividend yield. The compensation cost for LTPP (OM) and LTPP (EPS) reflects the cost of awards that are probable to vest at the end of the performance period.

All awards granted in 2017 and 2016 to our senior management employees have a ~~one year~~one-year post-vest holding restriction. The estimated discount associated with post-vest holding ~~restriction~~restrictions is calculated using the Finnerty model. The model calculates the potential lost value if the employee were able to sell the shares during the lack of marketability period, instead of being required to hold the shares. The model used the ~~3 year average~~same historical stock price volatility ~~of a group of our peer companies~~and dividend yield assumption used for the Monte Carlo simulations model and an expected dividend yield to compute the discount. The grants made during 2017 have a discount of 5.3 percent while computing the fair value. The grants made during 2016 have a discount of 5.5 percent while computing the fair value.

5.4. INCOME TAXES

The company’s effective tax rate ~~from continuing operations~~ was ~~13.4~~13.0 percent and ~~17.7~~14.8 percent for the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, respectively. The income tax expense ~~from continuing operations~~ was ~~$19~~$25 million and ~~$20~~$21 million for the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, respectively.

The income tax provision ~~from continuing operations~~for the three months ended January 31, 2017 included net discrete tax benefits of $2 million. The net discrete tax benefit for the three months ended January 31, 2017, included $7 million of tax benefit for the settlement of an audit in Italy, $11 million of tax expense related to the employee pension settlement gain and $6 million of other discrete tax benefit items.

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

The income tax provision for the three months ended January 31, 2016 included a net discrete tax benefit of $6 million. ~~Current period items~~The net discrete tax benefit for the three months ended January 31, 2016 included ~~in this total are~~ $5 million of tax benefit for the extension, which occurred in the first quarter of 2016, of the U.S. research and development tax credit attributable to the company's ~~prior~~2015 fiscal year, and $6 million of tax expense related to the curtailment gain recognized with respect to the USU.S. retirement plan and Supplemental Benefits Plan. The net discrete tax benefit for the three months ended January 31, 2016 also included $9 million of tax benefit related primarily to return to provision adjustments and $2 million of other discrete tax expense items.

~~AGILENT TECHNOLOGIES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)~~

The income tax provision from continuing operations for the three months ended January 31, 2015 included a net discrete benefit of $3 million. Current period items included in this total were $6 million of tax benefit for the extension, which occurred in the first quarter of 2015, of the U.S. research and development tax credit attributable to the company's prior fiscal year, and $3 million of other discrete tax expense items.

In the U.S., tax years remain open back to the year 2012 for federal income tax purposes and the year 2000 for significant states. ~~On September 22, 2015, we reached an agreement with~~There were no substantial changes from our 2016 Annual Report on Form 10-K to the ~~Internal Revenue Service ("IRS") for the~~status of these open tax years ~~2008 through 2011. During~~in the first ~~quarter~~three months of 2016, we made a payment of approximately $9 million of tax plus interest as part of closing the exam. In 2015, we reclassified a portion of other long-term liabilities to other accrued liabilities related to uncertain tax positions of continuing operations that we expected to pay within the next twelve months. This amount was partially offset by a prepaid tax account of approximately $3 million that the IRS allowed as an offset to the $12 million in incremental taxes. The settlement resulted in the recognition, within the continuing operations, of previously unrecognized tax benefits of $119 million, offset by a tax liability on foreign distributions of approximately $99 million principally related to the repatriation of foreign earnings.fiscal 2017.

In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year ~~2003.~~ 2001. During the first quarter of 2017, the company settled its ongoing tax audit in Italy for the years 2011-2013 resulting in a net tax expense of $7 million. The settlement resulted in the recognition of previously unrecognized tax benefits of approximately $14 million.

With these jurisdictions and the U.S., it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was entered by the U.S. Tax Court on December 1, 2015. ~~At this time,~~The IRS is appealing the ~~U.S. Department~~decision and filed its arguments opposing the Tax Court decision in June 2016. Due to the uncertainty surrounding the status of the ~~Treasury has not withdrawn~~current regulations, questions related to the ~~requirement from its regulations to include stock-based compensation in an intercompany cost-sharing arrangement. The IRS notified~~scope of potential benefits or obligations, and the ~~U.S. Court~~risk of ~~Appeals for~~ the ~~Ninth Circuit on February 19, 2016 of its intent to~~Tax Court’s decision being overturned upon appeal, ~~the Tax' Court's decision in the case. We~~we concluded that no adjustment to our condensed consolidated financial statements is appropriate at this ~~time due to the uncertainties with respect to the ultimate resolution of this case.~~time.

6.5. NET INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:


	Three Months Ended					Three Months Ended
	January 31,					January 31,
	2016		2015 (As Revised)			2017		2016
	(in millions)					(in millions)
Numerator:
Income from continuing operations	$	123	$	93
Loss from discontinued operations	—		(30		)
Net income	$	123	$	63		$	168	$	121
Denominator:
Basic weighted-average shares	329		336			322		329
Potential common shares— stock options and other employee stock plans	3		2			4		3
Diluted weighted-average shares	332		338			326		332

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense ~~the tax benefits or shortfalls recorded to additional paid-in capital~~ and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense ~~and tax benefits or shortfalls~~ collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

~~AGILENT TECHNOLOGIES, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)~~

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For the three months ended January 31, ~~2016~~2017 and ~~2015,~~ ~~1.2 million~~2016, zero and ~~1.3~~1.2 million options to purchase shares were excluded from the calculation of diluted earnings per share, respectively. In addition, we ~~also~~ exclude from the calculation of diluted earnings per share stock options, ESPP, LTPP and restricted stock awards

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

whose combined exercise price and unamortized fair value ~~and excess tax benefits or shortfalls collectively~~ were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, zero and 4,300 ~~and zero~~ additional shares were excluded from the calculation of diluted earnings per share, respectively.

7.6. INVENTORY


	January 31, 2016		October 31, 2015		January 31, 2017		October 31, 2016
	(in millions)				(in millions)
Finished goods	$	367	$	362	$	354	$	339
Purchased parts and fabricated assemblies	187		179		197		194
Inventory	$	554	$	541	$	551	$	533

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Net Cash Provided by Operating Activities

Net cash inflow from operating activities was ~~$104~~$116 million for the three months ended January 31, ~~2016~~2017 compared to cash ~~outflow~~inflow of ~~$20~~$111 million for the same period in ~~2015.~~2016. In the three months ended January 31, ~~2016~~2017, we paid approximately ~~$47~~$58 million under our variable and incentive pay programs, as compared to a total of ~~$39~~$47 million paid ~~out~~ during the same period of ~~2015 .~~2016. The increase in the incentive amount paid in 2017 compared to the same period last year is primarily due to changes made for certain incentive pay programs which are now paid annually versus semi-annually in 2016. Net cash paid for income taxes was approximately ~~$37~~$27 million and ~~$73~~$37 million in the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, respectively. For the three months ended January 31, 2017 and 2016, other assets and liabilities used cash of $61 million and $16 million, respectively. The usage of cash ~~paid for income taxes~~ in the three months ended January 31, ~~2015 was due to tax payments related to the separation. For the three months ended~~ ~~January 31, 2016~~ ~~and 2015,~~2017 in other assets and liabilities ~~used cash~~was largely related to the payment of ~~$23 million~~income taxes, interest payment on senior notes, transaction taxes and ~~$93 million, respectively.~~the employee pension settlement gain. The usage of cash in the three months ended January 31, 2016 in other assets and liabilities was largely ~~related to the payment of income taxes. The usage of cash in the three months ended January 31, 2015 in other assets and liabilities was largely~~ the result of ~~contributions to defined benefit plans, changes in interest and restructuring accruals,~~ income tax ~~liabilities and transaction tax assets and liabilities.~~payments.

In the three months ended January 31, ~~2016~~2017, accounts receivable used cash of ~~$15~~$31 million compared to cash used of $15 million for the same period in ~~2015.~~2016. Days’ sales outstanding ~~are 54~~increased to 55 days as of January 31, ~~2016~~2017 ~~and 2015 respectively.~~from 54 days compared to a year ago. Accounts payable ~~used~~provided cash of ~~$18~~$9 million for the three months ended January 31, ~~2016~~2017 compared to cash used of ~~$39~~$18 million in the same period in ~~2015.~~2016. Cash used for inventory was ~~$13~~$26 million for the three months ended January 31, ~~2016~~2017 compared to cash used of $5$13 million for the same period in ~~2015.~~2016. Inventory days on-hand ~~increased~~decreased to ~~102~~101 days as of January 31, ~~2016~~2017 compared to 98102 days as of the end of the same period last year.

We contributed approximately $4$3 million and $5$4 million to our defined benefit plans in the three months ended January 31, ~~2016~~2017 and ~~2015,~~2016, respectively. Our annual contributions are highly dependent on the relative performance of our assets versus our projected liabilities, among other factors. We expect to contribute approximately ~~$21~~$42 million to our defined benefit plans during the remainder of ~~2016~~2017.

Net Cash Used in Investing Activities

Net cash used in investing activities was ~~$28~~$101 million for the three months ended January 31, ~~2016~~2017 as compared to net cash used in investing activities of ~~$31~~$28 million. Investments in property, plant and equipment were ~~$38~~$32 million for the three months ended January 31, ~~2016~~2017 compared to ~~$32~~$38 million in the same period of ~~2015.~~2016. We expect that total capital expenditures for the current year will be approximately ~~$140~~$200 million. In the three months ended January 31, ~~2016,~~2017, we ~~acquired Seahourse Bioscience for $235~~invested $70 million in acquisition of business, net of cash acquired, compared to ~~zero~~$235 million in the same period last year. We made a payment of $1 million in exchange for convertible notes for the three months ended January 31, 2016.We recorded proceeds from sale of investment securities of $1 million for the three months ended January 31, 2016.

Net Cash Used in Financing Activities

Net cash used in financing activities for the three months ended January 31, ~~2016~~2017 was ~~$132~~$58 million compared to cash used of ~~$828~~$139 million for the same period of ~~2015. The decrease in cash used was largely due to the net cash transferred to Keysight in the three months ended January 31, 2015.~~2016.

Treasury stock repurchases

On November 22, 2013 we announced that our board of directors had authorized a share repurchase program effective in the first quarter of fiscal year 2014, upon the conclusion of the company's previous $1 billion repurchase program. The program iswas designed to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs to target maintaining a weighted average share count of approximately 335 million diluted shares. During the three months ended January 31, 2016, we repurchased approximately 2.4 million shares for $98 million, which completed the purchases under this authorization. All such shares and related costs are held as treasury stock and accounted for using the cost method. For the three months ended January 31, 2015, we repurchased 158 thousand shares for $6 million under this plan.

On May 28, 2015 we announced that our board of directors had approved a new share repurchase program (the "2015 repurchase program"). The 2015 repurchase program authorizes the purchase of up to $1.14 billion of our common stock through and including November 1, 2018. The 2015 repurchase program does not require the company to acquire a specific number of shares and may be suspended or discontinued at any time. During the three months ended January 31, ~~2016, upon~~2017, we repurchased approximately 2.5 million shares for $111 million under this authorization. During the ~~completion of our previous repurchase program,~~three months ended January 31, 2016, we repurchased approximately 2.5 million shares for $102 million under this authorization. ~~All such shares and related costs are held as treasury stock and accounted for using the cost method.~~ As of January 31, ~~2016,~~2017, we had remaining authorization to repurchase ~~$1.04 billion~~up to $693 million of our common stock under this ~~program~~program.

~~Table~~In the first quarter of ~~Contents~~2017, we retired 292.5 million treasury shares at an aggregate cost of $10.6 billion, which represents all our previously repurchased shares over the past 11 years and our repurchases made in the first quarter of fiscal year 2017. The retirement of our treasury shares resulted in a decrease of $6.7 billion to retained earnings and a decrease of $3.9 billion to additional paid-in-capital.

Dividends

During the three months ended January 31, 2017, we paid cash dividends of $0.132 per common share or $42 million on the company's common stock. During the three months ended January 31, 2016,, we paid cash dividends of $0.115 per common share or $38 million on the company's common stock. ~~During the three months ended~~ ~~January 31, 2015, we paid cash dividends of $0.100 per common share or $34 million on the company's common stock.~~

~~The timing and amounts of any future dividends are subject to determination and approval by our board of directors.~~

Credit Facilities

On September 15, 2014, Agilent entered into a credit agreement with a group of financial institutions which provides for a $400 million five-year unsecured credit facility that will expire on September 15, 2019. On June 9, 2015, the commitments under the existing credit facility were increased by $300 million so that the aggregate commitments under the facility now total $700 million. ~~As of~~During the three months ended January 31, ~~2016,~~2017, the company had borrowings of ~~$80~~$131 million and repaid $42 million. As of January 31, 2017, the company had borrowings of $89 million outstanding under the credit facility. ~~We borrowed $100 million and paid back $20 million during three months ended January 31, 2016.~~ We were in compliance with the covenants for the credit facility during the three months ended January 31, ~~2016.~~2017.

Short-term debt and Long-term debt

On November 1, 2016, we adopted new guidance related to the presentation of debt issuance costs in the balance sheet. As a result, the amortized principal of long-term debt decreased by $8 million. There have been no other changes to the principal, maturity, interest rates and interest payment terms of the Agilent outstanding senior notes ~~and mortgage debt~~ in the three months ended January 31, ~~2016~~2017 as compared to the senior notes ~~and mortgage debt~~ as described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2015~~.2016.

Other

As of January 31, ~~2016~~2017 our contractual obligations reported under “other purchase commitments” were approximately ~~$63~~$50 million, ~~an increase~~a decrease of approximately ~~$10~~$12 million in the first three months of fiscal year 2017, primarily due to ~~a long-term technical support contract related to~~ the ~~purchase of a software license.~~reduction in commitments that occurred as purchases were made. There were no other substantial changes from our ~~2015~~2016 Annual Report on Form 10-K to our contractual commitments in the first three months of fiscal ~~2016.~~2017. We have contractual commitments for ~~non- cancelable~~non-cancelable operating leases. We have no other material ~~non- cancelable~~non-cancelable guarantees or commitments.

Other long-term liabilities include ~~$235~~$166 million and ~~$227~~$190 million related to uncertain tax positions of continuing operations as of January 31, ~~2016~~2017 and ~~as of~~ October 31, ~~2015.~~2016, respectively. We are unable to accurately predict when these amounts will be realized or released. However, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitations or a tax audit settlement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to foreign currency exchange rate risks inherent in our sales commitments, anticipated sales, and assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. We hedge future cash flows denominated in currencies other than the functional currency using sales forecasts up to twelve months in advance. Our exposure to exchange rate risks is managed on an enterprise-wide basis. This strategy utilizes derivative financial instruments, including option and forward contracts, to hedge certain foreign currency exposures with the intent of offsetting gains and losses that occur on the underlying exposures with gains and losses on the derivative contracts hedging them. We do not currently and do not intend to utilize derivative financial instruments for speculative trading purposes. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the cost of the transaction.

Our operations generate non-functional currency cash flows such as revenues, third party vendor payments and inter-company payments. In anticipation of these foreign currency cash flows and in view of volatility of the currency market, we enter into such foreign exchange contracts as are described above to manage our currency risk. Approximately 5553 percent and 5655 percent of our ~~revenues were~~revenue was generated in U.S. dollars during the three months ended January 31, 2017 and 2016, ~~and 2015.~~respectively. The unfavorable effects of changes in foreign currency exchange rates, principally as a result of the strength of the U.S. dollar, has decreased revenue by approximately 51 percentage ~~points~~point in the three months ended January 31, ~~2016.~~2017. The impact of foreign currency movements is calculated by applying the prior period foreign currency exchange rates to the current year period.

We performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of January 31, ~~2016~~2017, the analysis indicated that these

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hypothetical market movements would not have a material effect on our condensed consolidated financial position, results of operations or cash flows.

We are ~~also~~ exposed to interest rate risk due to the mismatch between the interest expense we pay on our loans at fixed rates and the variable rates of interest we receive from cash, cash equivalents and other short-term investments. We have issued long-term debt in U.S. dollars or foreign currencies at fixed interest rates based on the market conditions at the time of financing. We believe that the fair value of our fixed rate debt changes when the underlying market rates of interest change, and we may use interest rate swaps to modify such market risk.

We performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in interest rates relating to the underlying fair value of our fixed rate debt. As of January 31, ~~2016~~2017, the sensitivity analyses indicated that a hypothetical 10 percent adverse movement in interest rates would result in an immaterial impact to the fair value of our fixed interest rate debt.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report.

~~As previously disclosed under Item 9A. "Controls~~ Based on that evaluation, the Chief Executive Officer and ~~Procedures” in our Annual Report on Form 10-K for our fiscal year ended October 31, 2015, we~~Chief Financial Officer have concluded that ~~our~~these disclosure controls and procedures were not effective based on the material weakness identified. During the year ended October 31, 2015, management identified certain errors in the tax accounts, primarily related to prior years, and as a result, concluded that the company did not design and maintain effective controls over the accounting for income taxes. Specifically, certain controls activities over the completeness and accuracy of our accounting for (i) U.S. taxes on foreign earnings, (ii) international provision for income taxes and (iii) reconciliation of income taxes payable were not performed on a timely basis or at the appropriate level of precision. These control deficiencies in the accounting for income taxes could result in a material misstatement that would not be prevented or detected. Management has reviewed the Company’s process for preparation and review of the Company’s income tax provision and is working to enhance the design of controls within the process and to implement measures to improve the operating effectiveness of those controls.

~~Although significant progress has been made through January 31, 2016 these enhanced controls have not yet operated for a sufficient period of time to conclude they~~ are ~~operating effectively, therefore the material weakness continues to exist.~~effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended January 31, ~~2016~~2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, intellectual property, commercial and employment matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are probable or reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS

Risks, Uncertainties and Other Factors That May Affect Future Results

Our operating results and financial condition could be harmed if the markets into which we sell our products decline or do not grow as anticipated.

Visibility into our markets is limited. Our quarterly sales and operating results are highly dependent on the volume and timing of orders received during the fiscal quarter, which are difficult to forecast and may be cancelled by our customers. A large amount of our orders are back-end loaded toward the end of our second and fourth fiscal quarters and their timing may be influenced by the sales incentive programs we have in place. In addition, our ~~revenues~~revenue and earnings forecasts for future fiscal quarters are often based on the expected seasonality of our markets. However, the markets we serve do not always experience the seasonality that we expect. Any decline in our customers' markets or in general economic conditions would likely result in a reduction in demand for our products and services. Also, if our customers' markets decline, we may not be able to collect on outstanding amounts due to us. Such declines could harm our consolidated financial position, results of operations, cash flows and stock price, and could limit our profitability. Also, in such an environment, pricing pressures could intensify. Since a significant portion of our operating expenses is relatively fixed in nature due to sales, research and development and manufacturing costs, if we were unable to respond quickly enough these pricing pressures could further reduce our operating margins.

If we do not introduce successful new products and services in a timely manner to address increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards, our products and services will become obsolete, and our operating results will suffer.

We generally sell our products in industries that are characterized by increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards. In addition, many of the markets in which we operate are seasonal. Without the timely introduction of new products, services and enhancements, our products and services will become technologically obsolete over time, in which case our revenue and operating results would suffer. The success of our new products and services will depend on several factors, including our ability to:

properly identify customer needs and predict future needs;

innovate and develop new technologies, services and applications;

successfully commercialize new technologies in a timely manner;

manufacture and deliver our products in sufficient volumes and on time;

differentiate our offerings from our competitors' offerings;

price our products competitively;

anticipate our competitors' development of new products, services or technological innovations; and

control product quality in our manufacturing process.

General economic conditions may adversely affect our operating results and financial condition.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the ~~U.S.~~United States. Slower global economic growth and uncertainty in the markets in which we operate may adversely impact our business resulting in:

reduced demand for our products, delays in the shipment of orders, or increases in order cancellations;

increased risk of excess and obsolete inventories;

increased price pressure for our products and services; and

greater risk of impairment to the value, and a detriment to the liquidity, of our investment portfolio.

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Failure to adjust our purchases due to changing market conditions or failure to accurately estimate our customers' demand could adversely affect our income.

Our income could be harmed if we are unable to adjust our purchases to reflect market fluctuations, including those caused by the seasonal nature of the markets in which we operate. The sale of our products and services are dependent, to a large degree, on customers whose industries are subject to seasonal trends in the demand for their products. During a market upturn, we may not be able to purchase sufficient supplies or components to meet increasing product demand, which could materially affect our results. In the past we have seen a shortage of parts for some of our products. In addition, some of the parts that require custom design are not readily available from alternate suppliers due to their unique design or the length of time necessary for design work. Should a supplier cease manufacturing such a component, we would be forced to reengineer our product. In addition to discontinuing parts, suppliers may also extend lead times, limit supplies or increase prices due to capacity constraints or other factors. In order to secure components for the production of products, we may continue to enter into non-cancelable purchase commitments with vendors, or at times make advance payments to suppliers, which could impact our ability to adjust our inventory to declining market demands. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional ~~charges.~~expenses.

Demand for some of our products and services depends on the capital spending policies of our customers, research and development budgets and on government funding policies.

Our customers include pharmaceutical companies, laboratories, universities, healthcare providers, government agencies and public and private research institutions. ~~Fluctuations in the research and development budgets at these organizations could have a significant effect on the demand for our products and services.~~ Many factors, including public policy spending priorities, available resources, mergers and ~~consolidation,~~consolidations, spending priorities, institutional and governmental budgetary policies and product and economic cycles, have a significant effect on the capital spending policies of these entities. Fluctuations in the research and development budgets at these organizations could have a significant effect on the demand for our products and services. Research and development budgets fluctuate due to changes in available resources, consolidation, spending priorities, general economic conditions and institutional and governmental budgetary policies. The timing and amount of ~~revenues~~revenue from customers that rely on government funding or research may vary significantly due to factors that can be difficult to ~~forecast. These policies~~forecast, including changes in ~~turn can have a significant effect on the demand~~spending authorizations and budgetary priorities for our products and services. If demand for our products and services is adversely affected, our revenue and operating results would suffer.

Economic, political, foreign currency and other risks associated with international sales and operations could adversely affect our results of operations.

Because we sell our products worldwide, our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue. International ~~revenues~~revenue and costs are subject to the risk that fluctuations in foreign currency exchange rates could adversely affect our financial results when translated into U.S. dollars for financial reporting purposes. The unfavorable effects of changes in foreign currency exchange rates has decreased revenues by approximately 51 percentage ~~points~~point in the three months ended January 31, ~~2016.~~2017. In addition, many of our employees, contract manufacturers, suppliers, job functions and manufacturing facilities are located outside the ~~U.S.~~United States. Accordingly, our future results could be harmed by a variety of factors, including:

interruption to transportation flows for delivery of parts to us and finished goods to our customers;

~~changes in foreign currency exchange rates;~~

changes in a specific country's or region's political, economic or other conditions;

trade protection measures and import or export licensing requirements;

negative consequences from changes in tax laws including changes to U.S. tax legislation that could materially increase our effective tax rate;

difficulty in staffing and managing widespread operations;

differing labor regulations;

differing protection of intellectual property;

unexpected changes in regulatory requirements; and

geopolitical turmoil, including terrorism and war.

We centralized most of our accounting and tax processes to two locations: India and Malaysia. These processes include general accounting, cost accounting, accounts payable, accounts receivables and tax functions. If conditions change in those countries, it may adversely affect operations, including impairing our ability to pay our suppliers and collect our receivables. Our results of operations, as well as our liquidity, may be adversely affected and possible delays may occur in reporting financial results.

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Additionally, we must comply with complex foreign and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other local laws prohibiting corrupt payments to governmental officials, anti-competition regulations and ~~anti-competition~~sanctions imposed by the U.S. Office of Foreign Assets Control and other similar laws and regulations. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our products in one or more countries, and could also materially affect our brand, our ability to attract and retain employees, our international operations, our business and our operating results. Although we have implemented policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, or agents will not violate our policies.

In addition, although the majority of our products are priced and paid for in U.S. dollars, a significant amount of certain types of expenses, such as payroll, utilities, tax, and marketing expenses, are paid in local currencies. Our hedging programs reduce, but do not always entirely eliminate, within any given ~~twelve month~~twelve-month period, the impact of currency exchange rate movements, and therefore fluctuations in exchange rates, including those caused by currency controls, could impact our business, operating results and financial condition by resulting in lower revenue or increased expenses. However, for expenses beyond that ~~twelve month~~twelve-month period, our hedging strategy does not mitigate our exposure. In addition, our currency hedging programs involve third party financial institutions as counterparties. The weakening or failure of financial institution counterparties may adversely affect our hedging programs and our financial condition through, among other things, a reduction in available counterparties, increasingly unfavorable terms, and the failure of the counterparties to perform under hedging contracts.

Our strategic initiatives to adjust our cost structure could have long-term adverse effects on our business and we may not realize the operational or financial benefits from such actions.

We have implemented multiple strategic initiatives across our businesses to adjust our cost structure, and we may engage in similar activities in the future. These strategic initiatives and our regular ongoing cost reduction activities may distract management, could slow improvements in our products and services and limit our ability to increase production quickly if demand for our products increases. In addition, delays in implementing our strategic initiatives, unexpected costs or failure to meet targeted improvements may diminish the operational and financial benefits we realize from such actions. Any of the above circumstances could have an adverse effect on our business and financial statements.

Our business will suffer if we are not able to retain and hire key personnel.

Our future success depends partly on the continued service of our key research, engineering, sales, marketing, manufacturing, executive and administrative personnel. If we fail to retain and hire a sufficient number of these personnel, we will not be able to maintain or expand our business. The markets in which we operate are very dynamic, and our businesses continue to respond with reorganizations, workforce reductions and site closures. We believe our pay levels are very competitive within the regions that we operate. However, there is an intense competition for certain highly technical specialties in geographic areas where we continue to recruit, and it may become more difficult to hire and retain our key employees.

Our acquisitions, strategic investments and alliances, joint ventures, exiting of businesses and divestitures may result in financial results that are different than expected.

In the normal course of business, we frequently engage in discussions with third parties relating to possible acquisitions, strategic investments and alliances, joint ventures and divestitures, and generally expect to complete several transactions per year. In addition, we may decide to exit a particular business within our product portfolio. As a result of such transactions, our financial results may differ from our own or the investment community's expectations in a given fiscal quarter, or over the long term. We may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances the performance of our combined businesses or product lines. Transactions such as acquisitions have resulted, and may in the future result in, unexpected significant costs and expenses. In the future, we may be required to record charges to earnings during the period if we determine there is an impairment of goodwill or intangible assets, up to the full amount of the value of the ~~assets. In addition, acquisitions~~assets,

or, in the case of strategic investments and alliances, consolidate results, including losses, of third parties or write down investment values or loans and convertible notes related to the strategic investment.

Integrating the operations of acquired businesses within Agilent could be a difficult, costly and time-consuming process that involves a number of risks. Acquisitions and strategic investments and alliances may require us to integrate and collaborate with a different company culture, management team, business infrastructure and ~~business infrastructure.~~sales and distribution methodologies and assimilate and retain geographically dispersed, decentralized operations and personnel. Depending on the size and complexity of an acquisition, our successful integration of the entity depends on a variety of factors, including introducing new products and meeting revenue targets as expected, the retention of key employees and ~~the retention~~key customers, increased exposure to certain governmental regulations and compliance requirements and increased costs and use of ~~key customers.~~

~~The~~resources. Further, the integration of acquired businesses is likely to result in our systems and internal controls becoming increasingly complex and more difficult to manage. Any difficulties in the assimilation of acquired businesses into our control system could harm our operating results or cause us to fail to meet our financial reporting obligations.

Even if we are able to successfully integrate acquired businesses within Agilent, we may not be able to realize the revenue and other synergies and growth that we anticipated from the acquisition in the time frame that we expected, and the costs of achieving these benefits may be higher than what we expected. As a result, the acquisition and integration of acquired businesses may not contribute to our earnings as expected, we may not achieve our operating margin targets when expected, or at all, and we may not achieve the other anticipated strategic and financial benefits of this transaction.

A successful divestiture depends on various factors, including our ability to effectively transfer liabilities, contracts, facilities and employees to the purchaser, identify and separate the intellectual property to be divested from the intellectual property that

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we wish to keep and reduce fixed costs previously associated with the divested assets or business. In addition, if customers of the divested business do not receive the same level of service from the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other Agilent products. In exiting a business, we may still retain liabilities associated with the support and warranty of those businesses. All of these efforts require varying levels of management resources, which may divert our attention from other business operations. If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results, which could lead to a loss of investor confidence in our financial statements and have an adverse effect on our stock price.

Effective internal controls are necessary for us to provide reliable and accurate financial statements and to effectively prevent fraud. We devote significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes Oxley Act of ~~2002. As further described in Item 9A “Controls~~2002 and Procedures” in our Annual Report on Form 10-K for our fiscal year ended October 31, 2015, management has concluded that, because of a material weakness in accounting for income taxes, our disclosure controls and procedures were not effective as of October 31, 2015. The Company has and will continue to enhance ~~its controls and expects to remediate the material weakness.~~our controls. However, we cannot be certain ~~that these measures will be successful or~~ that we will be able to prevent future significant deficiencies or material weaknesses. Inadequate internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on investor confidence in our financial statements, the trading price of our stock and our access to capital.

~~Integrating Dako A/S may be more difficult, costly or time consuming than expected and our business and financial condition may be materially impaired.~~

We may not achieve the desired benefits from our acquisition and integration of Dako. In addition, the operation of Dako within Agilent may be a difficult, costly and time-consuming process that involves a number of risks, including, but not limited to:

~~our response to significant competitive pressure;~~

~~difficulties in meeting new product timelines;~~

~~the ability to grow in emerging markets;~~

~~increased exposure to certain governmental regulations and compliance requirements;~~

increased costs to address certain governmental regulations and compliance issues, such as the United States Food and Drug Administration (“FDA”) warning letter received in August 2013 which has now been lifted by the FDA;

~~increased costs and use of resources; and~~

difficulties in the assimilation of different corporate cultures, practices and sales and distribution methodologies, as well as in the assimilation and retention of geographically dispersed, decentralized operations and personnel.

Even if we are able to successfully operate Dako within Agilent, we may not be able to realize the revenue and other synergies and growth that we anticipated from the acquisition in the time frame that we expected, and the costs of achieving these benefits may be higher than what we expected. As a result, the Dako acquisition and integration may not contribute to our earnings as expected, we may not achieve our operating margin targets when expected, or at all, and we may not achieve the other anticipated strategic and financial benefits of this transaction.

Our customers and we are subject to various governmental regulations, compliance with or changes in such regulations may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.

Our customers and we are subject to various significant international, federal, state and local regulations, including but not limited to regulations in the areas of health and safety, packaging, product content, employment, labor and immigration, import/export ~~regulations.~~controls, trade restrictions and anti-competition. These regulations are complex, change frequently and have tended to become more stringent over time. We may be required to incur significant expenses to comply with these regulations or to remedy any violations of these regulations. Any failure by us to comply with applicable government regulations could also result in the cessation of our operations or portions of our operations, product recalls or impositions of fines and restrictions on our ability to carry on or expand our operations. In addition, because many of our products are regulated or sold into regulated industries, we must comply with additional regulations in marketing our products. We develop, configure and market our products to meet customer needs created by these regulations. Any significant change in these regulations could reduce demand for our products, force us to modify our products to comply with new regulations or increase our costs of producing these products. If demand for our products is adversely affected or our costs increase, our business would suffer.

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Our products and operations are also often subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies such as the FDA. We also must comply with work safety rules. If we fail to adequately address any of these regulations, our businesses could be harmed.

We are subject to extensive regulation by the FDA and certain similar foreign regulatory agencies, and failure to comply with such regulations could harm our reputation, business, financial condition and results of operations.

A number of our products are subject to regulation by the FDA and certain similar foreign regulatory agencies. In addition, a number of our products may be in the future be subject to regulation by the FDA and certain similar foreign regulatory agencies. These regulations govern a wide variety of ~~product related~~product-related activities, from quality management, design and development to labeling, manufacturing, promotion, sales and distribution. If we or any of our suppliers or distributors fail to comply with FDA and other applicable regulatory requirements or are perceived to potentially have failed to comply, we may face, among other things, warning letters, adverse publicity affecting both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil penalties; import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of operating restrictions; increased difficulty in obtaining required FDA clearances or approvals or foreign equivalents; seizures or recalls of our products or those of our customers; or the inability to sell our products. Any such FDA or other regulatory agency actions could disrupt our business and operations, lead to significant remedial costs and have a material adverse impact on our financial position and results of operations.

Some of our products are ~~exposed~~subject to ~~particular~~particularly complex regulations such as regulations of toxic substances and failure to comply with such regulations could harm our business.

Some of our products and related consumables are used in conjunction with chemicals whose manufacture, processing, distribution and notification requirements are regulated by the U.S. Environmental Protection Agency (“EPA”) under the Toxic Substances Control Act, and by regulatory bodies in other countries ~~with~~under similar laws. The Toxic Substances Control Act regulations govern, among other similar things, the testing, manufacture, processing and distribution of chemicals, the testing of regulated chemicals for their effects on human health and safety and import and export of chemicals. The Toxic Substances Control Act prohibits persons from manufacturing any chemical in the ~~U.S.~~United States that has not been reviewed by EPA for its effect on health and safety, and placed on an EPA inventory of chemical substances. We must ensure conformance of the manufacturing, processing, distribution of and notification about these chemicals to these laws and adapt to regulatory requirements in all applicable countries as these requirements change. If we fail to comply with the notification, record-keeping and other requirements in the manufacture or distribution of our products, then we could be ~~made~~subject to ~~pay~~ civil penalties, ~~face~~ criminal prosecution and, in some cases, ~~be prohibited~~prohibition from distributing or marketing our products until the products or component substances are brought into compliance.

Our business may suffer if we fail to comply with government contracting laws and regulations.

We derive a portion of our ~~revenues~~revenue from direct and indirect sales to U.S., state, local, and foreign governments and their respective agencies. Such contracts are subject to various procurement laws and regulations and contract provisions relating to their formation, administration and performance. Failure to comply with these laws, regulations or provisions in our government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments, or suspension from future government contracting. If our government contracts are terminated, if we are suspended from government work, or if our ability to compete for new contracts is adversely affected, our business could suffer.

Our retirement and post retirement pension plans are subject to financial market risks that could adversely affect our future results of operations and cash flows.

We have significant retirement and post retirement pension ~~plans~~plan assets and obligations. The performance of the financial markets and interest rates impact our plan expenses and funding obligations. Significant decreases in market interest rates, decreases in the fair value of plan assets and investment losses on plan assets will increase our funding obligations, and adversely impact our results of operations and cash flows.

The impact of consolidation and acquisitions of competitors is difficult to predict and may harm our business.

The life sciences industry is intensely competitive and has been subject to increasing consolidation. Consolidation in our industries could result in existing competitors increasing their market share through business combinations and result in stronger competitors, which could have a material adverse effect on our business, financial condition and results of operations. We may not be able to compete successfully in increasingly consolidated industries and cannot predict with certainty how industry consolidation will affect our competitors or us.

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If we are unable to successfully manage the consolidation and streamlining of our manufacturing operations, we may not achieve desired efficiencies and our ability to deliver products to our customers could be disrupted.

Although we utilize manufacturing facilities throughout the world, we have been consolidating, and may continue to consolidate, our manufacturing operations to certain of our plants to achieve efficiencies and gross margin improvements. Additionally, we typically consolidate the production of products from our acquisitions into our supply chain and manufacturing processes, which are technically complex and require expertise to operate. If we are unable to establish processes to efficiently and effectively produce high quality products in the consolidated locations, we may not achieve the anticipated synergies and production may be disrupted, which could adversely affect our business and operating results.

Our operating results may suffer if our manufacturing capacity does not match the demand for our products.

Because we cannot immediately adapt our production capacity and related cost structures to rapidly changing market conditions, when demand does not meet our expectations, our manufacturing capacity ~~will likely~~may exceed our production requirements. If, during a general market upturn or an upturn in one of our segments, we cannot increase our manufacturing capacity to meet product demand, we ~~will~~may not be able to fulfill orders in a timely manner which could lead to order cancellations, contract breaches or indemnification obligations. This inability could materially and adversely limit our ability to improve our results. By contrast, if during an economic downturn we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins, and operating results.

Dependence on contract manufacturing and outsourcing other portions of our supply chain, including logistics and third-party package delivery services, may adversely affect our ability to bring products to market and damage our reputation. Dependence on outsourced information technology and other administrative functions may impair our ability to operate effectively.

As part of our efforts to streamline operations and to cut costs, we outsource aspects of our manufacturing processes and other functions and continue to evaluate additional outsourcing. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers' orders on a timely basis. The ability of these manufacturers to perform is largely outside of our control. If one or more of the third-party package delivery providers experiences a significant disruption in services or institutes a significant price increase, we may have to seek alternative providers, our costs could increase and the delivery of our products could be prevented or delayed. Additionally, changing or replacing our contract manufacturers, logistics providers or other outsourcers could cause disruptions or delays. In addition, we outsource significant portions of our information technology ("IT") and other administrative functions. Since IT is critical to our operations, any failure to perform on the part of our IT providers could impair our ability to operate effectively. In addition to the risks outlined above, problems with manufacturing or IT outsourcing could result in lower ~~revenues~~revenue and unexecuted efficiencies, and impact our results of operations and our stock price. Much of our outsourcing takes place in developing countries and, as a result, may be subject to geopolitical uncertainty.

Environmental contamination from past operations could subject us to unreimbursed costs and could harm on-site operations and the future use and value of the properties involved, and environmental contamination caused by ongoing operations could subject us to substantial liabilities in the future.

Certain properties transferred to Keysight Technologies, Inc. (“Keysight”) as part of the separation are undergoing remediation by HP Inc. and Hewlett-Packard Enterprise (formerly Hewlett-Packard Company) (together "HP") for subsurface contaminations that were known at the time of our separation from HP. HP has agreed to retain the liability for this subsurface contamination, perform the required remediation and indemnify Keysight with respect to claims arising out of that contamination. HP will have access to those Keysight properties to perform remediation. While HP has agreed to minimize interference with on-site operations at those properties, remediation activities and subsurface contamination may require Keysight to incur unreimbursed costs and could harm on-site operations and the future use and value of the properties. We cannot be sure that Keysight will not seek additional reimbursement from us for that interference or unreimbursed costs. We cannot be sure that HP will continue to fulfill its indemnification or remediation obligations, in which case Keysight may seek indemnification from us. In addition, the determination of the existence and cost of any additional contamination caused by us prior to the separation could involve costly and time-consuming negotiations and litigation.

Other than those properties currently undergoing remediation by HP, we have agreed to indemnify HP, with respect to any liability associated with contamination from past operations, and Keysight, with respect to any liability associated with contamination prior to the separation, at, respectively, properties transferred from HP to us and properties transferred by us to Keysight. While we are not aware of any material liabilities associated with any potential subsurface contamination at any of

those properties, subsurface contamination may exist, and we may be exposed to material liability as a result of the existence of that contamination.

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Our current and historical manufacturing processes involve, or have involved, the use of substances regulated under various international, federal, state and local laws governing the environment. As a result, we may become subject to liabilities for environmental contamination, and these liabilities may be substantial. While we have divested substantially all of our semiconductor related businesses to Avago Technologies Ltd. and Advantest Corporation and regardless of indemnification arrangements with those parties, we may still become subject to liabilities for historical environmental contamination related to those businesses. Although our policy is to apply strict standards for environmental protection at our sites inside and outside the ~~U.S.,~~United States, even if the sites outside the ~~U.S.~~United States are not subject to regulations imposed by foreign governments, we may not be aware of all conditions that could subject us to liability.

As part of our acquisition of Varian, Inc. (“Varian”) we assumed the liabilities of Varian, including Varian's costs and potential liabilities for environmental matters. One such cost is our obligation, along with the obligation of Varian Semiconductor Equipment Associates, Inc. ("VSEA") to each indemnify Varian Medical Systems, Inc. (“VMS”) for certain costs relating to (a) environmental investigation, monitoring and/or remediation activities at certain facilities previously operated by Varian Associates, Inc. ("VAI") and third-party claims made in connection with environmental conditions at those facilities, and (b) EPA or third-party claims alleging that VAI or VMS is a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, in connection with certain sites to which VAI allegedly shipped manufacturing waste for recycling, treatment or disposal. Although any ultimate liability arising from environmental-related matters could result in significant expenditures that, if aggregated and assumed to occur within a single fiscal year, could be material to our financial statements, the likelihood of such occurrence is considered ~~remote.~~unlikely. Based on information currently available and our best assessment of the ultimate amount and timing of environmental-related events, management believes that the costs of environmental-related matters are unlikely to have a material adverse effect on our financial condition or results of operations.

Regulations related to “conflict minerals” may cause us to incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing our products.

~~In August 2012,~~We are subject to the ~~SEC adopted a new rule requiring~~rules of the Securities and Exchange Commission (“SEC”) which require disclosures by public companies of specified minerals, known as conflict minerals, that are necessary to the functionality or production of products manufactured or contracted to be manufactured. The rule, which ~~went into effect for calendar year 2013 and~~ requires an annual disclosure report to be filed with the SEC by May 31st of each year, requires companies to perform due diligence, disclose and report whether or not such minerals originate from the Democratic Republic of Congo or an adjoining country. There are costs associated with complying with these disclosure requirements, including for diligence in regards to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities. In addition, our ongoing implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products. The rule could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products, including tin, tantalum, gold and tungsten. The number of suppliers who provide conflict-free minerals may be limited. In addition, there may be material costs associated with complying with the disclosure requirements, such as costs related to the due diligence process of determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities. As our supply chain is complex and we use contract manufacturers for some of our products, we may not be able to sufficiently verify the origins of the relevant minerals used in our products through the due diligence procedures that we implement, which may harm our reputation. We may also encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could place us at a competitive disadvantage if we are unable to do so.

Third parties may claim that we are infringing their intellectual property and we could suffer significant litigation or licensing expenses or be prevented from selling products or services.

From time to time, third parties may claim that one or more of our products or services infringe their intellectual property rights. We analyze and take action in response to such claims on a case by case basis. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming due to the complexity of our technology and the uncertainty of intellectual property litigation and could divert our management and key personnel from our business operations. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which might not be available under acceptable terms or at all, could require us to redesign our products, which would be costly and time-consuming, and/or could subject us to significant damages or to an injunction against the development and sale of certain of our products or services. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of intellectual property infringement. In certain of our businesses, we rely on third party intellectual property licenses and we cannot ensure that these licenses will continue to be available to us in the future on favorable terms or at all.

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Third parties may infringe our intellectual property and we may suffer competitive injury or expend significant resources enforcing our rights.

Our success depends in large part on our proprietary technology, including technology we obtained through acquisitions. We rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish our proprietary rights. If we do not enforce our intellectual property rights successfully, our competitive position may suffer which could harm our operating results.

Our pending patent, ~~applications, and our pending~~ copyright and trademark registration applications, may not be allowed or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us a significant competitive advantage.

We may need to spend significant resources monitoring our intellectual property rights and we ~~may or~~ may not be able to detect infringement by third parties. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights quickly or at all. In some circumstances, we may choose to not pursue enforcement because an infringer has a dominant intellectual property position or for other business reasons. In addition, competitors might avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries which could make it easier for competitors to capture market share and could result in lost revenues. Furthermore, some of our intellectual property is licensed to others which allow them to compete with us using that intellectual property.

~~We are subject to ongoing~~Changes in tax laws, unfavorable resolution of tax examinations, ~~of our~~or exposure to additional income tax ~~returns by the Internal Revenue Service and other tax authorities. An adverse outcome of any such audit or examination by the IRS or other tax authority~~liabilities could have a material adverse effect on our results of operations, financial condition and liquidity.

We are subject to income taxes in the U.S., Singapore and various foreign jurisdictions. Governments in the jurisdictions in which we operate implement changes to tax laws and regulations from time to time. Any changes in corporate income tax laws relating to transfer pricing or repatriation of capital, any changes in the interpretation of existing tax laws and regulations, or any implementation of tax laws relating to proposals to curb base erosion and profit shifting or proposals for fundamental U.S., Singapore and any other foreign corporate tax reform, could lead to increases in overall tax liability, which could materially impact our effective tax rate and have a significant adverse impact on our results of operations. We are also subject to ongoing tax examinations of our tax returns by the U.S. Internal Revenue Service and other tax authorities in various jurisdictions. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of our provision for income taxes. These assessments can require ~~considerable estimates~~a high degree of judgment and ~~judgments.~~estimation. Intercompany transactions associated with the sale of inventory, services, intellectual property and cost share arrangements are complex and affect our tax liabilities. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in multiple jurisdictions. There can be no assurance that the outcomes from ongoing tax examinations will not have an adverse effect on our operating results and financial condition. A difference in the ultimate resolution of tax uncertainties from what is currently estimated could have an adverse effect on our operating results and financial condition.

If tax incentives change or cease to be in effect, our income taxes could increase significantly.

Agilent benefits from tax incentives extended to its foreign subsidiaries to encourage investment or employment. Several jurisdictions have granted Agilent tax incentives which require renewal at various times in the future. The incentives are conditioned on achieving various thresholds of investments and employment, or specific types of income. Agilent's taxes could increase if the incentives are not renewed upon expiration. If Agilent cannot or does not wish to satisfy all or parts of the tax incentive conditions, we may lose the related tax incentive and could be required to refund tax incentives previously realized. As a result, our effective tax rate could be higher than it would have been had we maintained the benefits of the tax incentives.

We have substantial cash requirements in the United States while most of our cash is generated outside of the United States. The failure to maintain a level of cash sufficient to address our cash requirements in the United States could adversely affect our financial condition and results of operations.

Although the cash generated in the United States from our operations should cover our normal operating requirements and debt service requirements, a substantial amount of additional cash is required for special purposes such as the maturity of our debt obligations, our stock repurchase program, our declared dividends and acquisitions of third parties. Our business operating results, financial condition, and strategic initiatives could be adversely impacted if we were unable to address our U.S. cash requirements through the efficient and timely repatriations of overseas cash or other sources of cash obtained at an acceptable cost.

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We have outstanding debt and may incur other debt in the future, which could adversely affect our financial condition, liquidity and results of operations.

We currently have outstanding an aggregate principal amount of ~~$1.6~~$1.9 billion in senior unsecured ~~notes, and a $37 million secured mortgage.~~notes. We also are party to a five-year unsecured revolving credit facility which expires in September 2019. On June 9, 2015, we increased the commitments under the existing credit facility by $300 million so that the aggregate commitments under the facility now total $700 million and retained a provision that allows us to further increase commitments to the credit facility by $300 million in the aggregate, subject to certain conditions. As of January 31, ~~2016,~~2017, we had borrowings of ~~$80~~$89 million outstanding under the credit facility. We may borrow additional amounts in the future and use the proceeds from any future borrowing for general corporate purposes, other future acquisitions, expansion of our business or repurchases of our outstanding shares of common stock.

Our incurrence of this debt, and increases in our aggregate levels of debt, may adversely affect our operating results and financial condition by, among other things:

increasing our vulnerability to downturns in our business, to competitive pressures and to adverse economic and industry conditions;

requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash ~~flow~~flows available for other purposes, including capital expenditures, acquisitions, stock repurchases and dividends; and

limiting our flexibility in planning for, or reacting to, changes in our business and our industry.

Our current revolving credit facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control. In addition, the indenture governing our senior notes contains covenants that may adversely affect our ability to incur certain liens or engage in certain types of sale and leaseback transactions. If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, our outstanding indebtedness could be declared immediately due and payable.

If we suffer a loss to our factories, facilities or distribution system due to catastrophe, our operations could be seriously harmed.

Our factories, facilities and distribution system are subject to catastrophic loss due to fire, flood, terrorism or other natural or man-made disasters. In particular, several of our facilities could be subject to a catastrophic loss caused by earthquake due to their locations. Our production facilities, headquarters ~~and Agilent Technologies Laboratories~~laboratories in California, and our production facilities in Japan, are all located in areas with above-average seismic activity. If any of ~~these~~our facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. If such a disruption were to occur, we could breach agreements, our reputation could be harmed, and our business and operating results could be adversely affected. In addition, since we have consolidated our manufacturing facilities, we are more likely to experience an interruption to our operations in the event of a catastrophe in any one location. Although we carry insurance for property damage and business interruption, we do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism. Also, our third party insurance coverage will vary from time to time in both type and amount depending on availability, cost and our decisions with respect to risk retention. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which we are able to obtain third party insurance. If our third party insurance coverage is adversely affected or to the extent we have elected to self-insure, we may be at a greater risk that our operations will be harmed by a catastrophic loss.

~~Table of Contents~~

If we experience a significant disruption in, or breach in security of, our information technology systems, or if we fail to implement new systems and software successfully, our business could be adversely affected.

We rely on several centralized information technology systems throughout our company to provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. Our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. Our information technology systems also may experience interruptions, delays or cessations of service or produce errors in connection with system integration, software upgrades or system migration work that takes place from time to time. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to us or to our employees, partners, customers or suppliers, which could result in our suffering significant financial or reputational damage.

Adverse conditions in the global banking industry and credit markets may adversely impact the value of our cash investments or impair our liquidity.

As of January 31, ~~2016,~~2017, we had cash and cash equivalents of approximately ~~$1.9~~$2.2 billion invested or held in a mix of money market funds, time deposit accounts and bank demand deposit accounts. Disruptions in the financial markets may, in some cases, result in an inability to access assets such as money market funds that traditionally have been viewed as highly liquid. Any failure of our counterparty financial institutions or funds in which we have invested may adversely impact our cash and cash equivalent positions and, in turn, our results and financial condition.

We could incur significant liability if the distribution of Keysight common stock to our shareholders is determined to be a taxable transaction.

We have received an opinion from outside tax counsel to the effect that the separation and distribution of Keysight qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code. The opinion relies on certain facts, assumptions, representations and undertakings from Keysight and us regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, our shareholders and we may not be able to rely on the opinion of tax counsel and could be subject to significant tax liabilities. Notwithstanding the opinion of tax counsel, we have received, the IRS could determine on audit that the separation is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion. If the separation is determined to be taxable for U.S. federal income tax purposes, our shareholders that are subject to U.S. federal income tax and we could incur significant U.S. federal income tax liabilities.

We may be exposed to claims and liabilities as a result of the separation with Keysight.

We entered into a separation and distribution agreement and various other agreements with Keysight to govern the separation and the relationship of the two companies going forward. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us. The indemnity rights we have against Keysight under the agreements may not be sufficient to protect us. In addition, our indemnity obligations to Keysight may be significant and these risks could negatively affect our financial condition.

We cannot assure you that we will continue to pay dividends on our common stock.

~~Table~~Since the first quarter of ~~Contents~~fiscal year 2012, we have paid a quarterly dividend on our common stock. The timing, declaration, amount and payment of any future dividends fall within the discretion of our Board of Directors and will depend on many factors, including our available cash, estimated cash needs, earnings, financial condition, operating results, capital requirements, as well as limitations in our contractual agreements, applicable law, regulatory constraints, industry practice and other business considerations that our Board of Directors considers relevant. A change in our dividend program could have an adverse effect on the market price of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

The table below summarizes information about the Company’s purchases, based on trade ~~date;~~date, of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended January 31, ~~2016~~2017.

Period
Total Number of
Shares of Common
Stock Purchased (1)

Weighted Average
Price Paid per Share
of
Common Stock (3)

Total
Number of
Shares of Common
Stock Purchased as
Part of Publicly
Announced Plans or
Programs (1) (2)

Maximum
Approximate Dollar
Value of Shares of
Common Stock that
May Yet Be
Purchased Under the
Plans or Programs
(in millions) (1)(2)

(a)
(b)
(c)
(d)
Nov. 1, 2015 through Nov. 30, 2015
2,405,201

$ 40.65

2,405,201

$ —
Dec. 1, 2015 through Dec. 31, 2015
2,497,960

$ 40.88

2,497,960

$ 1,040
Jan. 1, 2016 through Jan. 31, 2016
—

$ —

—

$ 1,040
Total
4,903,161

$ 40.77

4,903,161



Period	Total Number of Shares of Common Stock Purchased (1)	Weighted Average Price Paid per Share of Common Stock (2)		Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Approximate Dollar Value of Shares of Common Stock that May Yet Be Purchased Under the Plans or Programs (in millions) (1)
	(a)	(b)		(c)	(d)
November 1, 2016 through November 30, 2016	2,320,643	$	45.21	2,320,643	$	693
December 1, 2016 through December 31, 2016	—	N/A		—	$	693
January 1, 2017 through January 31, 2017	—	N/A		—	$	693
Total	2,320,643	$	45.21	2,320,643	$	693

(1)

On November 22, 2013 we announced that our board of directors had authorized a share repurchase program effective in the first quarter of fiscal year 2014, upon the conclusion of the company's previous $1 billion repurchase program. The program is designed to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs to target maintaining a weighted average share count of approximately 335 million diluted shares. During the three months ended January 31, 2016, we repurchased approximately 2.4 million shares for $98 million, which completed the purchases under this authorization. All such shares and related costs are held as treasury stock and accounted for using the cost method.

~~(2)~~

On May 28, 2015, we announced that our board of directors had approved a new share repurchase program (the "2015 repurchase program"). The 2015 repurchase program authorizes the purchase of up to $1.14 billion of our common stock through and including November 1, 2018. The 2015 repurchase program does not require the company to acquire a specific number of shares and may be suspended or discontinued at any time. During the three months ended January 31, 2016, upon the completion of our previous repurchase program, we repurchased approximately 2.5 million shares for $102 million under this authorization. All such shares and related costs are held as treasury stock and accounted for using the cost method. As of January 31, ~~2016, we had remaining authorization to repurchase up to $1.04 billion of our common stock under this program.~~2017, all repurchased shares have been retired.


~~(3)~~(2)	The weighted average price paid per share of common stock does not include the cost of commissions.

ITEM 6. EXHIBITS

(a)Exhibits:

A list of exhibits is set forth in the Exhibit Index found on page 5150 of this report.

~~Table of Contents~~

AGILENT TECHNOLOGIES, INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Dated:	March 8, ~~2016~~2017	By:	/s/ Didier Hirsch
			Didier Hirsch
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)


Dated:	March 8, ~~2016~~2017	By:	/s/ Rodney Gonsalves
			Rodney Gonsalves
			Vice President, Corporate Controllership
			(Principal Accounting Officer)

~~Table of Contents~~

AGILENT TECHNOLOGIES, INC.

EXHIBIT INDEX



Exhibit
Number	Description
~~10.1~~		Letter of Terms and Conditions U.S. Indefinite Relocation and U.S. Domestic Relocation Agreement, each by and among Michael R. McMullen and the Company.*

11.1	See Note 6,5, “Net Income Per Share”, to our Condensed Consolidated Financial Statements on page ~~12.~~11.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL	Instance Document

101.SCH XBRL	Schema Document

101.CAL XBRL	Calculation Linkbase Document

101.LAB XBRL	Labels Linkbase Document

101.PRE XBRL	Presentation Linkbase Document

101.DEF XBRL	Definition Linkbase Document

* Indicates management contract or compensatory plan, contract or arrangement.

5150



DELAWARE		77-0518772
(State or other jurisdiction of		(IRS employer
incorporation or organization)		Identification no.)

5301 STEVENS CREEK BLVD.,
SANTA CLARA, CALIFORNIA		95051
(Address of principal executive offices)		(Zip Code)



Large accelerated filer x		Accelerated filer ¨

Non-accelerated filer ¨		Smaller reporting company ¨
(do not check if a smaller reporting company)



CLASS		OUTSTANDING AT ~~JANUARY 31, 2016~~FEBRUARY 28, 2017
COMMON STOCK, $0.01 PAR VALUE		~~327,770,081~~322,300,905



			Page Number
Part I.	Financial Information		3
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
		Condensed Consolidated Statement of Operations	3
		Condensed Consolidated Statement of Comprehensive Income (Loss)	4
		Condensed Consolidated Balance Sheet	5
		Condensed Consolidated Statement of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2625
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3736
	Item 4.	Controls and Procedures	3837
Part II.	Other Information		3938
	Item 1.	Legal Proceedings	3938
	Item 1A.	Risk Factors	3938
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4948
	Item 6.	Exhibits	4948
Signature			5049
Exhibit Index			5150


	Purchased Other Intangible Assets						Purchased Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in millions)						(in millions)
As of October 31, 2015:
Purchased technology	$	746	$	476	$	270
Trademark/Tradename	141		50		91
Customer relationships	230		168		62
Total amortizable intangible assets	1,117		694		423
In-Process R&D	22		—		22
Total	$	1,139	$	694	$	445
As of January 31, 2016:
As of October 31, 2016
Purchased technology	816		498		318		$	823	$	572	$	251
Backlog	1		1		—		1		1		—
Trademark/Tradename	147		52		95		149		61		88
Customer relationships	258		180		78		263		211		52
Total amortizable intangible assets	1,222		731		491		1,236		845		391
In-Process R&D	22		—		22		17		—		17
Total	$	1,244	$	731	$	513	$	1,253	$	845	$	408
As of January 31, 2017
Purchased technology							$	845	$	588	$	257
Trademark/Tradename							149		64		85
Customer relationships							145		93		52
Total amortizable intangible assets							1,139		745		394
In-Process R&D							17		—		17
Total							$	1,156	$	745	$	411



	Three Months Ended January 31, 2015
	As Reported			Adjustments			As Revised
	(in millions, except per share data)
Income from continuing operations before taxes	113						113
Provision for income taxes	11			9			20
Income from continuing operations	102						93
Loss from discontinued operations, net of tax benefit of $2	$	(30	)				$	(30	)
Net Income	$	72		$	(9	)	$	63

Net income per share - basic
Income from continuing operations	$	0.30					$	0.28
Loss from discontinued operations	$	(0.09	)				$	(0.09	)
Net income per share - basic	$	0.21					$	0.19

Net income per share - diluted
Income from continuing operations	$	0.30					$	0.28
Loss from discontinued operations	$	(0.09	)				$	(0.09	)
Net income per share - diluted	$	0.21					$	0.19

Total comprehensive loss	$	(187	)	$	(9	)	$	(196	)



	Three Months Ended January 31, 2015
	As Reported			Adjustments			As Revised
	(in millions)
Net income	$	72		$	(9	)	$	63
Deferred taxes	$	(7	)	$	13		$	6
Changes in assets and liabilities:
Other assets and liabilities	$	(89	)	$	(4	)	$	(93	)
Net cash used in operating activities	(20		)	—			(20		)


	Life Sciences and Applied Markets		Diagnostics and Genomics			Agilent CrossLab			Total			Life Sciences and Applied Markets		Diagnostics and Genomics		Agilent CrossLab		Total
	(in millions)											(in millions)
Goodwill as of October 31, 2015	$	650	$	1,234		$	482		$	2,366
Goodwill as of October 31, 2016												$	790	$	1,223	$	504	$	2,517
Foreign currency translation impact	—		(27		)	(1		)	(28		)	—		—		—		—
Goodwill arising from acquisitions	140		—			—			140			—		46		—		46
Goodwill as of January 31, 2016	$	790	$	1,207		$	481		$	2,478
Goodwill as of January 31, 2017												$	790	$	1,269	$	504	$	2,563


Estimated future amortization expense:
(in millions)
Remainder of 2016	$	108
2017	$	110
Remainder of 2017			$	87
2018	$	79	$	91
2019	$	57	$	64
2020	$	46	$	53
2021	$	35	$	41
2022			$	25
Thereafter	$	56	$	33



			Fair Value Measurement at January 31, 2016 Using
	January 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	1,383	$	1,383	$	—	$	—
Derivative instruments (foreign exchange contracts)	6		—		6		—
Long-term
Trading securities	28		28		—		—
Total assets measured at fair value	$	1,417	$	1,411	$	6	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	4	$	—	$	4	$	—
Long-term
Deferred compensation liability	28		—		28		—
Total liabilities measured at fair value	$	32	$	—	$	32	$	—


			Fair Value Measurement at October 31, 2015 Using								Fair Value Measurement at October 31, 2016 Using
	October 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		October 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)								(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	1,411	$	1,411	$	—	$	—	$	1,482	$	1,482	$	—	$	—
Derivative instruments (foreign exchange contracts)	4		—		4		—		9		—		9		—
Long-term
Trading securities	35		35		—		—		31		31		—		—
Total assets measured at fair value	$	1,450	$	1,446	$	4	$	—	$	1,522	$	1,513	$	9	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	8	$	—	$	8	$	—
Long-term
Deferred compensation liability	35		—		35		—		31		—		31		—
Total liabilities measured at fair value	$	40	$	—	$	40	$	—	$	39	$	—	$	39	$	—


	Derivatives Designated as Cash Flow Hedges			Derivatives Not Designated as Hedging Instruments						Derivatives Designated as Cash Flow Hedges			Derivatives Not Designated as Hedging Instruments
	Forward Contracts USD			Forward Contracts USD			Forward Contracts DKK			Forward Contracts USD			Forward Contracts USD
Currency	Buy/(Sell)			Buy/(Sell)			Buy/(Sell)			Buy/(Sell)			Buy/(Sell)
	(in millions)									(in millions)
Euro	$	(24	)	$	185		$	(61	)	$	(9	)	$	78
British Pound	(32		)	(3		)	(5		)	(30		)	(17		)
Canadian Dollar	(20		)	—			(3		)	(20		)	(3		)
Australian Dollar	7			15			(3		)	3			15
Malaysian Ringgit	—			(2		)	—			—			(3		)
Japanese Yen	(68		)	3			(4		)	(44		)	(7		)
American Dollar	—			—			44
Other	(7		)	16			(8		)	3			(12		)
Totals	$	(144	)	$	214		$	(40	)	$	(97	)	$	51

																					Fair Values of Derivative Instruments
Asset Derivatives	Asset Derivatives					Liability Derivatives					Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value					Fair Value					Fair Value
Balance Sheet Location		January 31, 2016		October 31, 2015		Balance Sheet Location	January 31, 2016		October 31, 2015			January 31, 2017		October 31, 2016		Balance Sheet Location	January 31, 2017		October 31, 2016
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets		$	4	$	2	Other accrued liabilities	$	—	$	1		$	3	$	5	Other accrued liabilities	$	—	$	3

Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets		$	2	$	2	Other accrued liabilities	$	4	$	4		$	5	$	4	Other accrued liabilities	$	3	$	5
Total derivatives		$	6	$	4		$	4	$	5		$	8	$	9		$	3	$	8



	Pensions
	U.S. Plans						Non-U.S. Plans						U.S. Post Retirement Benefit Plans
	Three Months Ended January 31,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	6		$	6		$	4		$	4		$	—		$	1
Interest cost on benefit obligation	3			4			4			6			1			1
Expected return on plan assets	(6		)	(7		)	(11		)	(11		)	(2		)	(2		)
Amortization:
Actuarial losses	2			1			7			7			3			1
Prior service cost	(1		)	(1		)	—			—			(2		)	(3		)
Total net plan costs	$	4		$	3		$	4		$	6		$	—		$	(2	)
Curtailments and settlements	$	(16	)	—			—			—			—			—



	January 31, 2016						October 31, 2015
	Amortized Principal		Swap		Total		Amortized Principal		Swap		Total
	(in millions)
2017 Senior Notes	$	100	$	2	$	102	$	100	$	2	$	102
2020 Senior Notes	499		18		517		499		19		518
2022 Senior Notes	399		—		399		399		—		399
2023 Senior Notes	598		—		598		598		—		598
Total	$	1,596	$	20	$	1,616	$	1,596	$	21	$	1,617



	January 31, 2017						October 31, 2016
	Amortized Principal		Swap		Total		Amortized Principal		Swap		Total
	(in millions)
2017 Senior Notes	—		—		—		100		1		101
2020 Senior Notes	498		14		512		498		15		513
2022 Senior Notes	398		—		398		398		—		398
2023 Senior Notes	595		—		595		595		—		595
2026 Senior Notes	297		—		297		297		—		297
Total	$	1,788	$	14	$	1,802	$	1,888	$	16	$	1,904


				Net defined benefit pension cost and post retirement plan costs															Net defined benefit pension cost and post retirement plan costs
Three Months Ended January 31, 2016	Foreign currency translation			Prior service credits			Actuarial Losses			Unrealized gains (losses) on derivatives			Total
Three Months Ended January 31, 2017																Foreign currency translation			Prior service credits			Actuarial Losses			Unrealized gains (losses) on derivatives			Total
	(in millions)															(in millions)
As of October 31, 2015	$	(189	)	$	161		$	(365	)	$	2		$	(391	)
As of October 31, 2016																$	(197	)	$	146		$	(451	)	$	(1	)	$	(503	)

Other comprehensive income (loss) before reclassifications	(57		)	6			6			4			(41		)	(4		)	—			3			2			1

Amounts reclassified out of accumulated other comprehensive income (loss)	—			(19		)	13			(1		)	(7		)	—			(2		)	22			(1		)	19

Tax (expense) benefit	1			5			(4		)	(1		)	1			1			1			(8		)	—			(6		)

Other comprehensive income (loss)	(56		)	(8		)	15			2			(47		)	(3		)	(1		)	17			1			14

As of January 31, 2016	$	(245	)	$	153		$	(350	)	$	4		$	(438	)
As of January 31, 2017																$	(200	)	$	145		$	(434	)	$	—		$	(489	)


Details about accumulated other	Amounts Reclassified						Affected line item in
comprehensive income (loss) components	from other comprehensive income (loss)						statement of operations
Details about accumulated other comprehensive income (loss) components								Amounts Reclassified from other comprehensive income (loss)						Affected line item in statement of operations

	Three Months Ended
	January 31,							Three Months Ended
	2016			2015				January 31,
								2017			2016
Unrealized gains and (losses) on derivatives	$	1		$	4		Cost of products

Unrealized gains on derivatives								$	1		$	1		Cost of products
	1			4			Total before income tax	1			1			Total before income tax
	—			(1		)	Provision for income tax	(1		)	—			(Provision) benefit for income tax
	1			3			Total net of income tax	—			1			Total net of income tax
Net defined benefit pension cost and post retirement plan costs:

Actuarial net loss	(13		)	(9		)		(22		)	(13		)
Prior service benefit	19			4				2			19
	6			(5		)	Total before income tax	(20		)	6			Total before income tax
	(4		)	—			Provision for income tax	6			(4		)	(Provision) benefit for income tax
	2			(5		)	Total net of income tax	(14		)	2			Total net of income tax

Total reclassifications for the period	$	3		$	(2	)		$	(14	)	$	3


	Three Months Ended				Year over Year Change	Three Months Ended				Year over Year Change
	January 31,				Three	January 31,				Three
	2016		2015		Months	2017		2016		Months
	(in millions)					(in millions)
Net revenue:
Products	$	795	$	809	(2)%	$	818	$	795	3%
Services and other	233		217		7%	249		233		7%
Total net revenue	$	1,028	$	1,026	—%	$	1,067	$	1,028	4%