UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

x☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

~~FOR THE QUARTERLY PERIOD ENDED JANUARY~~For the quarterly period ended July 31, ~~2018~~2022

¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

~~FOR THE TRANSITION PERIOD FROM TO~~For transition period from to

~~COMMISSION FILE NUMBER:~~Commission File Number: 001-15405

AGILENT TECHNOLOGIES, INC.

(~~EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)~~Exact Name of registrant as specified in its charter)

~~DELAWARE~~

Delaware

77-0518772

(State or other jurisdiction of

~~(IRS employer~~

incorporation or organization)

(IRS Employer Identification ~~no.~~No.)

~~5301 STEVENS CREEK BLVD.,~~

~~SANTA CLARA, CALIFORNIA~~

~~95051~~

~~(Address of principal executive offices)~~

~~(Zip Code)~~

5301 Stevens Creek Blvd.,

Santa Clara, California 95051

(Address of principal executive offices)

Registrant’s telephone number, including area code: ~~(408) 345-8886~~(800) 227-9770

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class

Trading Symbol

Name of each Exchange on which registered

Common Stock, $0.01 par value

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filerx

☒

Accelerated filer¨

☐

Non-accelerated filer

☐

~~Non-accelerated filer~~ ¨

Smaller reporting company¨

~~(do not check if a smaller reporting company)~~

☐

Emerging growth company¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐No x☒

~~Indicate~~

As of August 24, 2022, the ~~number of~~registrant had 296,040,570 shares ~~outstanding of each of the issuer’s classes~~ of common stock, as$0.01 par value per share, outstanding.

Table of ~~the latest practicable date.~~ Contents



~~CLASS~~		~~OUTSTANDING AT FEBRUARY 28, 2018~~
~~COMMON STOCK, $0.01 PAR VALUE~~		~~322,476,579~~

AGILENT TECHNOLOGIES, INC.

TABLE OF CONTENTS

Page
Number

Part I.

~~Page~~Financial Information

~~Number~~3

~~Part I.~~

~~Financial Information~~

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Statement of Operations

Condensed Consolidated Statement of Comprehensive Income (Loss)

Condensed Consolidated Balance Sheet

Condensed Consolidated Statement of Cash Flows

Condensed Consolidated Statement of Equity

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2533

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3747

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

5061

Item 6.

Exhibits

~~Item 6.~~62

~~Exhibits~~

Signature

5263


~~PART I~~	~~— FINANCIAL INFORMATION~~

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				Nine Months Ended
	January 31,							July 31,				July 31,
	2018			2017				2022		2021		2022		2021
Net revenue:							Net revenue:
Products	$	930		$	815		Products	$	1,306	$	1,188	$	3,773	$	3,510
Services and other	281			252			Services and other	412		398		1,226		1,149
Total net revenue	1,211			1,067			Total net revenue	1,718		1,586		4,999		4,659
Costs and expenses:							Costs and expenses:
Cost of products	383			347			Cost of products	558		521		1,633		1,534
Cost of services and other	155			146			Cost of services and other	221		213		656		618
Total costs	538			493			Total costs	779		734		2,289		2,152
Research and development	93			79			Research and development	116		113		348		325
Selling, general and administrative	341			289			Selling, general and administrative	412		403		1,215		1,230
Total costs and expenses	972			861			Total costs and expenses	1,307		1,250		3,852		3,707
Income from operations	239			206			Income from operations	411		336		1,147		952
Interest income	9			4			Interest income	2		—		4		1
Interest expense	(20		)	(20		)	Interest expense	(19)		(21)		(61)		(60)
Other income (expense), net	5			3			Other income (expense), net	3		12		(41)		19
Income before taxes	233			193			Income before taxes	397		327		1,049		912
Provision for income taxes	553			25			Provision for income taxes	68		63		163		144
Net income (loss)	$	(320	)	$	168
Net income							Net income	$	329	$	264	$	886	$	768

Net income (loss) per share:
Net income per share:							Net income per share:
Basic	$	(0.99	)	$	0.52		Basic	$	1.10	$	0.87	$	2.95	$	2.52
Diluted	$	(0.99	)	$	0.52		Diluted	$	1.10	$	0.86	$	2.94	$	2.50

Weighted average shares used in computing net income per share:							Weighted average shares used in computing net income per share:
Basic	323			322			Basic	298		303		300		305
Diluted	323			326			Diluted	299		306		301		307

Cash dividends declared per common share	$	0.149		$	0.132

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

Table of Contents

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(Unaudited)


	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021

Net income	$	329	$	264	$	886	$	768
Other comprehensive income (loss):


Unrealized gain (loss) on derivative instruments, net of tax expense (benefit) of $1, $1, $8 and $(1)	4		—		26		(4)
Amounts reclassified into earnings related to derivative instruments, net of tax expense (benefit) of $(3), $1, $(5) and $5	(8)		4		(14)		14
Foreign currency translation, net of tax expense of $0, $0, $0 and $0	(29)		(17)		(110)		27
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $2, $3, $7 and $11	5		11		19		32
Change in net prior service benefit, net of tax expense of $0, $0, $0 and $0	(1)		—		(1)		(1)
Other comprehensive income (loss)	(29)		(2)		(80)		68
Total comprehensive income	$	300	$	262	$	806	$	836

Three Months Ended
January 31,
2018 2017

Net income (loss) $ (320 ) $ 168
Other comprehensive income (loss):
Unrealized gain (loss) on derivative instruments, net of tax expense (benefit) of $(3) and $1 (7 ) 1
Amounts reclassified into earnings related to derivative instruments, net of tax expense (benefit) of $0 and $(1) —
—
Foreign currency translation, net of tax expense (benefit) of $0 and $(1) 79
(3 )
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $2 and $8 6
17
Change in net prior service benefit, net of tax benefit of $(1) and $(1) (1 ) (1 )
Other comprehensive income 77
14
Total comprehensive income (loss) $ (243 ) $ 182

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

Table of Contents

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share amounts)

(Unaudited)


	July 31, 2022		October 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,071	$	1,484
Short-term investments	6		91
Accounts receivable, net	1,345		1,172
Inventory	1,010		830
Other current assets	258		222
Total current assets	3,690		3,799
Property, plant and equipment, net	1,054		945
Goodwill	3,948		3,975
Other intangible assets, net	849		981
Long-term investments	194		185
Other assets	749		820
Total assets	$	10,484	$	10,705
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	558	$	446
Employee compensation and benefits	389		493
Deferred revenue	498		441
Short-term debt	180		—
Other accrued liabilities	277		328
Total current liabilities	1,902		1,708
Long-term debt	2,732		2,729
Retirement and post-retirement benefits	176		220
Other long-term liabilities	583		659
Total liabilities	5,393		5,316
Commitments and contingencies (Notes 9 and 12)
Total equity:
Stockholders’ equity:
Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding at July 31, 2022 and October 31, 2021	—		—
Common stock; $0.01 par value; 2 billion shares authorized; 296 million shares at July 31, 2022 and 302 million shares at October 31, 2021 issued and outstanding	3		3
Additional paid-in-capital	5,311		5,320
Retained earnings	139		348
Accumulated other comprehensive loss	(362)		(282)
Total stockholders' equity	5,091		5,389


Total liabilities and stockholders' equity	$	10,484	$	10,705

January 31,
2018 October 31,
2017
ASSETS

Current assets:

Cash and cash equivalents $ 2,887
$ 2,678
Accounts receivable, net 751
724
Inventory 608
575
Other current assets 151
192
Total current assets 4,397
4,169
Property, plant and equipment, net 792
757
Goodwill 2,633
2,607
Other intangible assets, net 341
361
Long-term investments 140
138
Other assets 395
394
Total assets $ 8,698
$ 8,426
LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $ 292
$ 305
Employee compensation and benefits 221
276
Deferred revenue 321
291
Short-term debt 345
210
Other accrued liabilities 182
181
Total current liabilities 1,361
1,263
Long-term debt 1,800
1,801
Retirement and post-retirement benefits 241
234
Other long-term liabilities 770
293
Total liabilities 4,172
3,591
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; 323 million shares at January 31, 2018 and 322 million shares at October 31, 2017 issued 3
3
Treasury stock at cost; 37 thousand shares at January 31, 2018 and zero shares at October 31, 2017 (3 ) —
Additional paid-in-capital 5,320
5,300
Accumulated deficit (529 ) (126 )
Accumulated other comprehensive loss (269 ) (346 )
Total stockholders' equity 4,522
4,831
Non-controlling interest 4
4
Total equity 4,526
4,835
Total liabilities and equity $ 8,698
$ 8,426

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

Table of Contents

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)


								Nine Months Ended
	Three Months Ended							July 31,
	January 31,							2022		2021
Cash flows from operating activities:							Cash flows from operating activities:
Net income							Net income	$	886	$	768
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization							Depreciation and amortization	244		237
	2018			2017

Net income (loss)	$	(320	)	$	168
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	51			55
Share-based compensation	31			20			Share-based compensation	99		88
Deferred taxes	(6		)	16			Deferred taxes	25		41
Excess and obsolete inventory related charges	5			7			Excess and obsolete inventory related charges	16		21
Loss on extinguishment of debt							Loss on extinguishment of debt	9		17
Net (gain) loss on equity securities							Net (gain) loss on equity securities	60		(24)
Asset impairment charges							Asset impairment charges	—		2
Change in fair value of contingent consideration							Change in fair value of contingent consideration	(25)		—
Other non-cash expense, net	1			2			Other non-cash expense, net	10		1
Changes in assets and liabilities:							Changes in assets and liabilities:
Accounts receivable	(5		)	(31		)
Accounts receivable, net							Accounts receivable, net	(233)		(69)
Inventory	(34		)	(26		)	Inventory	(206)		(115)
Accounts payable	(3		)	9			Accounts payable	110		46
Employee compensation and benefits	(62		)	(43		)	Employee compensation and benefits	(98)		38
Change in assets and liabilities due to Tax Act	533			—
Other assets and liabilities	24			(61		)	Other assets and liabilities	(33)		(7)
Net cash provided by operating activities	215			116			Net cash provided by operating activities	864		1,044

Cash flows from investing activities:							Cash flows from investing activities:
Investments in property, plant and equipment	(60		)	(32		)	Investments in property, plant and equipment	(221)		(126)
Payment to acquire cost method investments	(1		)	—
Proceeds from divestitures	—			1

Payment to acquire equity securities							Payment to acquire equity securities	(10)		(15)
Payment in exchange for convertible note							Payment in exchange for convertible note	(1)		(2)

Proceeds from sale of equity securities							Proceeds from sale of equity securities	22		—

Acquisitions of businesses and intangible assets, net of cash acquired	(6		)	(70		)	Acquisitions of businesses and intangible assets, net of cash acquired	(18)		(547)
Net cash used in investing activities	(67		)	(101		)	Net cash used in investing activities	(228)		(690)

Cash flows from financing activities:							Cash flows from financing activities:
Issuance of common stock under employee stock plans	25			18			Issuance of common stock under employee stock plans	55		52
Payment of taxes related to net share settlement of equity awards	(28		)	(12		)	Payment of taxes related to net share settlement of equity awards	(65)		(74)
Payment of dividends	(48		)	(42		)	Payment of dividends	(188)		(177)
Proceeds from revolving credit facility	274			131
Repayment of debt and revolving credit facility	(139		)	(42		)

Issuance of senior notes and long-term loan							Issuance of senior notes and long-term loan	600		848
Debt issuance costs							Debt issuance costs	—		(7)

Repayment of senior notes							Repayment of senior notes	(609)		(417)

Proceeds from commercial paper							Proceeds from commercial paper	940		1,492
Repayment of commercial paper							Repayment of commercial paper	(760)		(1,437)

Treasury stock repurchases	(47		)	(111		)	Treasury stock repurchases	(1,004)		(652)
Net cash provided by (used in) financing activities	37			(58		)
Net cash used in financing activities							Net cash used in financing activities	(1,031)		(372)

Effect of exchange rate movements	24			(5		)	Effect of exchange rate movements	(22)		6

Net increase (decrease) in cash and cash equivalents	209			(48		)
Net decrease in cash, cash equivalents and restricted cash							Net decrease in cash, cash equivalents and restricted cash	(417)		(12)

Cash and cash equivalents at beginning of period	2,678			2,289
Cash and cash equivalents at end of period	$	2,887		$	2,241
Cash, cash equivalents and restricted cash at beginning of period							Cash, cash equivalents and restricted cash at beginning of period	1,490		1,447
Cash, cash equivalents and restricted cash at end of period							Cash, cash equivalents and restricted cash at end of period	$	1,073	$	1,435

Supplemental cash flow information:							Supplemental cash flow information:
Income tax paid, net	$	32		$	27		Income tax paid, net	$	217	$	164
Interest payments	$	29		$	29		Interest payments	$	56	$	53
Non-cash changes in investments in property, plant and equipment - increase (decrease)	$	(12	)	$	6
Net change in property, plant and equipment included in accounts payable and accrued liabilities-increase (decrease)							Net change in property, plant and equipment included in accounts payable and accrued liabilities-increase (decrease)	$	1	$	1

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

Table of Contents

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(in millions, except number of shares in thousands)

(Unaudited)



	Common Stock							Accumulated Other Comprehensive Loss
Three Months Ended July 31, 2022	Number of Shares	Par Value		Additional Paid-in Capital		Retained Earnings				Total Stockholders' Equity
Balance as of April 30, 2022	298,565	$	3	$	5,292	$	160	$	(333)	$	5,122

Components of comprehensive income, net of tax:
Net income	—	—		—		329		—		329
Other comprehensive loss	—	—		—		—		(29)		(29)
Total comprehensive income										300

Cash dividends declared ($0.210 per common share)	—	—		—		(62)		—		(62)
Share-based awards issued, net of tax of $1	308	—		26		—		—		26
Repurchase of common stock	(2,673)	—		(35)		(288)		—		(323)
Share-based compensation	—	—		28		—		—		28
Balance as of July 31, 2022	296,200	$	3	$	5,311	$	139	$	(362)	$	5,091



	Common Stock							Accumulated Other Comprehensive Loss
Nine Months Ended July 31, 2022	Number of Shares	Par Value		Additional Paid-in Capital		Retained Earnings				Total Stockholders' Equity
Balance as of October 31, 2021	302,208	$	3	$	5,320	$	348	$	(282)	$	5,389

Components of comprehensive income, net of tax:
Net income	—	—		—		886		—		886
Other comprehensive loss	—	—		—		—		(80)		(80)
Total comprehensive income										806

Cash dividends declared ($0.630 per common share)	—	—		—		(188)		—		(188)
Share-based awards issued, net of tax of $65	1,323	—		(11)		—		—		(11)
Repurchase of common stock	(7,331)	—		(97)		(907)		—		(1,004)
Share-based compensation	—	—		99		—		—		99
Balance as of July 31, 2022	296,200	$	3	$	5,311	$	139	$	(362)	$	5,091

Table of Contents



	Common Stock							Accumulated Other Comprehensive Loss
Three Months Ended July 31, 2021	Number of Shares	Par Value		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)				Total Stockholders' Equity
Balance as of April 30, 2021	303,403	$	3	$	5,271	$	(12)	$	(452)	$	4,810

Components of comprehensive income, net of tax:
Net income	—	—		—		264		—		264
Other comprehensive loss	—	—		—		—		(2)		(2)
Total comprehensive income										262

Cash dividends declared ($0.194 per common share)	—	—		—		(59)		—		(59)
Share-based awards issued, net of tax of $1	296	—		24		—		—		24
Repurchase of common stock	(804)	—		(10)		(103)		—		(113)
Share-based compensation	—	—		22		—		—		22
Balance as of July 31, 2021	302,895	$	3	$	5,307	$	90	$	(454)	$	4,946




	Common Stock							Accumulated Other Comprehensive Loss
Nine Months Ended July 31, 2021	Number of Shares	Par Value		Additional Paid-in Capital		Retained Earnings				Total Stockholders' Equity
Balance as of October 31, 2020	306,198	$	3	$	5,311	$	81	$	(522)	$	4,873

Components of comprehensive income, net of tax:
Net income	—	—		—		768		—		768
Other comprehensive income	—	—		—		—		68		68
Total comprehensive income										836

Cash dividends declared ($0.582 per common share)	—	—		—		(177)		—		(177)
Share-based awards issued, net of tax of $74	1,939	—		(22)		—		—		(22)
Repurchase of common stock	(5,242)	—		(70)		(582)		—		(652)
Share-based compensation	—	—		88		—		—		88
Balance as of July 31, 2021	302,895	$	3	$	5,307	$	90	$	(454)	$	4,946

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

Table of Contents

AGILENT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


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

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

Overview. Agilent Technologies, Inc. ("~~we",~~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.

New Segment Structure. In the first quarter of fiscal year 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers. Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment. Service revenue and cost of sales related to the previous acquisition of BioTek moved from our life sciences and applied markets business segment to our Agilent CrossLab business segment. Following this reorganization, we continue to have three business segments (life sciences and applied markets, diagnostics and genomics and Agilent CrossLab), each of which continues to comprise a reportable segment. We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022. Historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes. There was no change to our diagnostics and genomics business segment.

Basis of Presentation. We have prepared the accompanying financial data for the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017~~2021 pursuant to the rules and regulations of the U.S. 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, ~~2017~~2021 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, ~~2017.~~2021.

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~~July 31, ~~2018~~2022 and October 31, ~~2017,~~2021, condensed consolidated statement of comprehensive income (loss) for the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017,~~2021, condensed consolidated statement of operations for the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017, and~~2021, condensed consolidated statement of cash flows for the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017.~~

~~Revision of Services~~2021 and ~~Other and Product Net Revenues and related Cost of Sales.~~ ~~In 2018, we~~ ~~revised amounts shown in our~~ condensed consolidated statement of operations to more accurately reflect the character of items delivered to customers. We 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. Forequity for the three and nine months ended ~~January~~July 31, ~~2017 service~~2022 and other revenue increased $3 million and service and other cost of sales increased $2 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.2021.

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, inventory valuation, ~~share-based compensation,~~ retirement and post-retirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes.

AGILENT TECHNOLOGIES, INC.

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

Restricted Cash and Restricted Cash Equivalents. Restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. A reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet follows:


	July 31,		October 31,
	2022		2021
	(in millions)
Cash and cash equivalents	$	1,071	$	1,484
Restricted cash included in other assets	2		6
Total cash, cash equivalents and restricted cash	$	1,073	$	1,490

Leases. As of July 31, 2022 and October 31, 2021, operating lease right-of-use assets where we are the lessee were $158 million and $178 million, respectively, and were included within other assets in the accompanying condensed consolidated balance sheet. The associated operating lease liabilities were $161 million and $182 million as of July 31, 2022 and October 31, 2021, respectively, and were included in other accrued liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheet.

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~~We evaluate our investments in privately held companies on an ongoing basis. We have determined that as of ~~January~~July 31, ~~2018~~2022 and October 31, 2021, there were no ~~VIE’s~~VIEs required to be consolidated in ~~the company’s~~our consolidated financial statements because we do not have a controlling financial interest in any of the ~~VIE’s that~~VIEs in which we have invested in nor are we the primary beneficiary. We account for these investments under either the equity method or ~~cost method,~~as equity investments without readily determinable fair value ("RDFV"), 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 and vice-versa, based on changes in facts and circumstances including changes in contractual arrangements and capital structure.

As of ~~January~~July 31, ~~2018,~~2022 and October 31, 2021, the total carrying value of investments and loans in privately held companies considered as VIEs was $82 million and $76 million respectively. The maximum exposure is equal to the carrying value ~~of our cost method investment in Lasergen, Inc. ("Lasergen"), a VIE, was $80 million with a maximum exposure of $80 million.~~because we do not have future funding commitments. The investments are included on the long-term investments line and the loans on the other current assets and other assets lines (depending upon tenure of loan) on the condensed consolidated balance sheet. Agilent’s initial ownership stake in Lasergen was 48 percent and we have the option to acquire all of the remaining shares of Lasergen until March 2, 2018, for an additional consideration of $105 million. See also Note 16, "Subsequent Events" for additional information on Lasergen.

~~AGILENT TECHNOLOGIES, INC.~~

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

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 short-term and long-term equity investments ~~is determined~~which are readily determinable, and which are not accounted under the equity method are reported at fair value using quoted market prices for those securities when ~~available.~~available with gains and losses included in net income. The fair value of long-term equity investments which are not readily determinable, and which are not accounted under the equity method are reported at cost with adjustments for observable changes in prices or impairments included in net income. The fair value of the term loans approximates its carrying value, and the fair value of our senior notes was $1,870 million with a carrying value of $2,132 million as of July 31, 2022. This compares to the fair value of our senior notes of $2,806 million with a carrying value of $2,729 million as of October 31, 2021. The change in the fair value over carrying value in the nine months ended July 31, 2022 is primarily due to increased market interest rates. The fair value was calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately $25 million and $58 million as of January 31, 2018 and October 31, 2017, respectively. The change in the excess of fair value over carrying value in the three months ended January 31, 2018 is primarily due to fluctuations in market interest rates.guidance. 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 8,9, "Fair Value Measurements" for additional information on the fair value of financial ~~instruments.~~instruments and contingent consideration.

AGILENT TECHNOLOGIES, INC.

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

2. NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In January 2020, accounting guidance was issued that clarifies the accounting guidance for equity method investments, joint ventures, and derivatives and hedging. The guidance clarifies the interaction between different sections of the accounting guidance that could be applicable and which guidance should be applied in certain situations which should increase relevance and comparability of financial statement information. On November 1, 2021 we adopted this guidance which did not have a material impact on our condensed consolidated financial statements and disclosures.

In October 2021, the FASB issued an update to improve the accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer to use the guidance in ASC 606, Revenue from Contracts with Customers, rather than using fair value, when recognizing and measuring contract assets and contract liabilities related to customer contracts assumed in a business combination. On November 1, 2021 we early adopted this guidance which did not have a material impact on our condensed consolidated financial statements and disclosures.

Accounting Pronouncements Not Yet Adopted

There were no ~~changes~~additions 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, ~~2017 except for the following:~~2021.

In February 2018, the Financial Accounting Standards Board ("FASB") issued amendments to reporting comprehensive income to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act that was enacted in December 2017 that reduced the U.S. federal corporate income tax rate and made other changes to U.S. federal tax laws. The amendments in this update also require certain disclosures about stranded tax effects. The amendments are effective for us beginning November 1, 2019, and for interim periods within that fiscal year and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption of this guidance is permitted. We are currently evaluating the timing of our adoption and the impact the adoption of this guidance will have on our consolidated financial statements and 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 condensed consolidated financial statements upon adoption.

3. REVENUE

The following table presents the company’s total revenue and segment revenue disaggregated by geographical region:


	Three Months Ended July 31,
	2022								2021
	Life Sciences and Applied Markets		Agilent CrossLab		Diagnostics and Genomics		Total		Life Sciences and Applied Markets		Agilent CrossLab		Diagnostics and Genomics		Total
	(in millions)
Revenue by Region
Americas	$	336	$	147	$	188	$	671	$	289	$	130	$	187	$	606
Europe	210		94		103		407		218		94		111		423
Asia Pacific	473		118		49		640		390		119		48		557
Total	$	1,019	$	359	$	340	$	1,718	$	897	$	343	$	346	$	1,586



	Nine Months Ended July 31,
	2022								2021
	Life Sciences and Applied Markets		Agilent CrossLab		Diagnostics and Genomics		Total		Life Sciences and Applied Markets		Agilent CrossLab		Diagnostics and Genomics		Total
	(in millions)
Revenue by Region
Americas	$	974	$	416	$	577	$	1,967	$	864	$	376	$	502	$	1,742
Europe	678		289		314		1,281		677		281		317		1,275
Asia Pacific	1,239		366		146		1,751		1,160		346		136		1,642
Total	$	2,891	$	1,071	$	1,037	$	4,999	$	2,701	$	1,003	$	955	$	4,659

AGILENT TECHNOLOGIES, INC.

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

The following table presents the company’s total revenue disaggregated by end markets and by revenue type:


	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021
	(in millions)
Revenue by End Markets
Pharmaceutical and Biopharmaceutical	$	643	$	576	$	1,834	$	1,628
Chemical and Energy	389		334		1,097		976
Diagnostics and Clinical	234		242		718		691
Food	151		143		446		449
Academia and Government	139		138		426		423
Environmental and Forensics	162		153		478		492
Total	$	1,718	$	1,586	$	4,999	$	4,659

Revenue by Type
Instrumentation	$	737	$	640	$	2,074	$	1,953
Non-instrumentation and other	981		946		2,925		2,706
Total	$	1,718	$	1,586	$	4,999	$	4,659

Revenue by region is based on the ship to location of the customer. Revenue by end market is determined by the market indicator of the customer and by customer type. Instrumentation revenue includes sales from instruments, remarketed instruments and third-party products. Non-instrumentation and other revenue include sales from contract and per incident services, our companion diagnostics and our nucleic acid solutions businesses as well as sales from spare parts, consumables, reagents, vacuum pumps, subscriptions, software licenses and associated services.

Contract Balances

Contract Assets

Contract assets (unbilled accounts receivable) primarily relate to the company's right to consideration for work completed but not billed at the reporting date. The unbilled receivables are reclassified to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the condensed consolidated balance sheet. The balances of contract assets as of July 31, 2022 and October 31, 2021 were $273 million and $197 million, respectively.

Contract Liabilities

The following table provides information about contract liabilities (deferred revenue) and the significant changes in the balances during the nine months ended July 31, 2022:


	Contract Liabilities
	(in millions)

Ending balance as of October 31, 2021	$	519
Net revenue deferred in the period	391
Revenue recognized that was included in the contract liability balance at the beginning of the period	(336)
Change in deferrals from customer cash advances, net of revenue recognized	39

Currency translation and other adjustments	(25)
Ending balance as of July 31, 2022	$	588

During the nine months ended July 31, 2021 revenue recognized that was included in the contract liability balance at October 31, 2020 was $322 million.

AGILENT TECHNOLOGIES, INC.

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

Contract liabilities primarily relate to multiple element arrangements for which billing has occurred but transfer of control of all elements to the customer has either partially or not occurred at the balance sheet date. This includes cash received from customers for products and related installation and services in advance of the transfer of control. Contract liabilities are classified as either current in deferred revenue or long-term in other long-term liabilities in the condensed consolidated balance sheet based on the timing of when we expect to complete our performance obligation.

Contract Costs

Incremental costs of obtaining a contract with a customer are recognized as an asset if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. The change in total capitalized costs to obtain a contract was immaterial during the three and nine months ended July 31, 2022 and was included in other current and long-term assets on the condensed consolidated balance sheet. We have applied the practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include the company's internal sales force compensation program, as we have determined that annual compensation is commensurate with annual sales activities.

Transaction Price Allocated to the Remaining Performance Obligations

We have applied the practical expedient in ASC 606-10-50-14 and have not disclosed information about transaction price allocated to remaining performance obligations that have original expected durations of one year or less.

The estimated revenue expected to be recognized for remaining performance obligations that have an original term of more than one year, as of July 31, 2022, was $382 million, the majority of which is expected to be recognized over the next 12 months. Remaining performance obligations primarily include extended warranty, customer manufacturing contracts, software maintenance contracts and revenue associated with lease arrangements.

4. SHARE-BASED COMPENSATION

~~Agilent accounts~~We account 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,~~options, 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.

We have two LTPP performance stock award programs, which are administered under the 2018 Stock Plan, for our executive officers and other key employees. Participants in ~~the~~our LTPP Total Stockholders’ Return (“TSR”) and LTPP Earnings Per Share (“EPS”) programs are entitled to receive ~~unrestricted~~ shares of the company's stock after the end of a three-year period, if specified performance targets for the programs are met. ~~Certain LTPP~~The LTPP-TSR 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”)~~TSR set at the beginning of the performance period. ~~Effective November 1, 2015,~~The LTPP-EPS awards are based on the ~~Compensation Committee of the Board of Directors approved another type of~~company’s EPS 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~~over a three-year period, if specified performance targets over the three-year period are met. The performance target for grants made in 2016 were based on Operating Margin (“OM”) and the performance grants made in 2017 and 2018 were based on Earnings Per Share ("EPS").period. The performance targets for the LTPP-EPS ~~grants~~ for year 2 and year 3 of the performance period ~~will be~~are 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 post-vest holding period.

The final LTPP award may vary from ~~zero~~0 percent to 200 percent of the target award. ~~The maximum award value for awards granted in 2016 and 2017 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.

In fiscal year 2021, we resumed granting stock options. Stock options granted under the 2018 Stock Plan may be either "incentive stock options", as defined in Section 422 of the Internal Revenue Code, or non-statutory. Options generally vest at a rate of 25 percent per year over a period of four years from the date of grant with a maximum contractual term of ten years. The exercise price for stock options is generally not less than 100 percent of the fair market value of our common stock on the date the stock award is granted. We issue new shares of common stock when employee stock options are exercised.

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				Nine Months Ended
	January 31,					July 31,				July 31,
	2018		2017			2022		2021		2022		2021
	(in millions)					(in millions)
Cost of products and services	$	7	$	6	Cost of products and services	$	7	$	6	$	24	$	21
Research and development	3		2		Research and development	3		3		11		9
Selling, general and administrative	21		13		Selling, general and administrative	18		14		65		60
Total share-based compensation expense	$	31	$	21	Total share-based compensation expense	$	28	$	23	$	100	$	90

At ~~January~~July 31, ~~2018~~2022 and October 31, ~~2017, there was~~2021, no share-based compensation was capitalized within inventory.

The following assumptions were used to estimate the fair value of awards granted.


				Three Months Ended		Nine Months Ended
	Three Months Ended			July 31,		July 31,
	January 31,			2022	2021	2022	2021
	2018	2017
Stock Option Plans:			Stock Option Plans:
Weighted average risk-free interest rate			Weighted average risk-free interest rate	3.2%	0.9%	1.4%	0.5	%
Dividend yield			Dividend yield	0.7%	0.6%	0.5%	0.7	%
Weighted average volatility			Weighted average volatility	27%	26%	26%	26	%
Expected life			Expected life	5.5 years	5.5 years	5.5 years	5.5 years
LTPP:			LTPP:
Volatility of Agilent shares	21%	23%	Volatility of Agilent shares	29%	30%	29%	30%
Volatility of selected peer-company shares	14%-66%	15%-63%	Volatility of selected peer-company shares	23%-81%	24%-57%	23%-81%	24%-57%
Price-wise correlation with selected peers	32%	36%
Pair-wise correlation with selected peers			Pair-wise correlation with selected peers	41%	45%	41%	45%

Post-vest holding restriction discount for all executive awards	4.8%	5.3%	Post-vest holding restriction discount for all executive awards	6.5%	6.8%	6.5%	6.8%

The fair value of share-based awards for our 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 ~~simulations~~simulation model. The Monte Carlo simulation fair value model requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. For the volatility of our ~~2017 and 2018~~ LTPP (TSR) grants, we used our own historical stock price volatility.

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

We use historical volatility to estimate the expected stock price volatility assumption for employee stock option awards. In reaching the conclusion, we have considered many factors including the extent to which our options are currently traded and our ability to find traded options in the current market with similar terms and prices to the options we are valuing. In estimating the expected life of our options granted, we considered the historical option exercise behavior of our executives, which we believe is representative of future behavior.

The estimated fair value of restricted stock units ~~LTPP (OM)~~ and LTPP (EPS) awards is determined based on the market price of ~~Agilent’s~~our 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 LTPP awards granted ~~in 2016 and thereafter~~ to our senior management employees have a one-year post-vest holding restriction. The estimated discount associated with post-vest holding restrictions is calculated using the Finnerty ~~model (see table above).~~model. The model calculates the potential lost value if the ~~employee~~employees were able to sell the shares during the lack of marketability period, instead of being required to hold the shares. The model used the same historical stock price volatility and dividend yield assumption used for the Monte Carlo ~~simulations~~simulation model and an expected dividend yield to compute the discount.

~~4. INCOME TAXES~~

For the three months ended January 31, 2018, the company's income tax expense was $553 million with an effective tax rate of 237.3 percent. Our effective tax rate and the resulting provision for income taxes were significantly impacted by the discrete charge of $533 million related to the enactment of the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as discussed below. The income taxes for the three months ended January 31, 2018 also includes the excess tax benefits of $11 million from stock based compensation.

For the three months ended January 31, 2017, the company's income tax expense was $25 million with an effective tax rate of 13.0 percent. The income tax provision for the three months ended January 31, 2017 included net discrete tax benefits of $2 million. The significant component of the net discrete tax benefit for the three months ended January 31, 2017 included a $11 million tax expense related to an employee pension settlement gain and $7 million of tax benefit for the settlement of an audit in Italy.

AGILENT TECHNOLOGIES, INC.

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

5. INCOME TAXES

~~2017 U.S. Tax Reform - Tax Cuts and Jobs Act~~

On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted into law. The Tax Act enacted significant changes affecting our fiscal year 2018, including, but not limited to, (1) reducing the U.S. federal corporate tax rate and (2) imposing a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that had not been previously taxed in the U.S.

The Tax Act also establishes new tax provisions affecting our fiscal year 2019, including, but not limited to, (1) creating a new provision designed to tax global intangible low-tax income (“GILTI”); (2) generally eliminating U.S. federal taxes on dividends from foreign subsidiaries; (3) eliminating the corporate alternative minimum tax (“AMT”); (4) creating the base erosion anti-abuse tax (“BEAT”); (5) establishing a deduction for foreign derived intangible income ("FDII"); (6) repealing domestic production activity deduction; and (7) establishing new limitations on deductible interest expense and certain executive compensation.

The Tax Act reduces the U.S. federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Due to our fiscal year end, the lower corporate tax rate will be phased in, resulting in a U.S. statutory federal rate of 23 percent for our fiscal year ending October 31, 2018 and 21 percent for subsequent fiscal years.

ASC 740, Income Taxes, requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118")which allows companies to record provisional amounts during a measurement period not extending beyond one year from the Tax Act enactment date. As of January 31, 2018, the company has not completed the accounting for all the impacts of the Tax Act. During the quarter, the company recognized a provisional amount of $533 million which includes (1) an estimated provision of $480 million of U.S. transition tax and correlative items on deemed repatriated earnings of non-U.S. subsidiaries and (2) an estimated provision of $53 million associated with the impact of decreased U.S. corporate tax rate as described below.

~~Deemed Repatriation Transition Tax ("Transition Tax")~~: The Transition Tax is based on the company’s total unrepatriated post-1986 earnings and profits ("E&P") of its foreign subsidiaries and the amount of non-U.S. taxes paid on such earnings. Historically, the company permanently reinvested a significant portion of these post-1986 E&P outside the U.S. For the ~~remaining portion, the company previously accrued deferred taxes. Since the Tax Act required all foreign earnings to be taxed currently, the company recorded a provisional~~three and nine months ended July 31, 2022, our income tax expense was $68 million with an effective tax rate of ~~$643 million for its one-time transition U.S. federal tax~~17.1 percent and ~~a benefit of~~ $163 million ~~for the reversal of related deferred tax liabilities. The resulting $480 million net transition tax, reduced by existing tax credits, will be paid over 8 years in accordance~~ with the election available under the Tax Act. These amounts represent the best estimate of all required calculations based on currently available information and do not include any potential state tax impacts. The one-time transition tax is based in part on cash and illiquid asset amounts present on various comparable measurement dates, some of which are as of our future fiscal year end. As a result, the company’s calculation of the transition tax will change as the measurement dates occur and as federal and state tax authorities provide further guidance.

~~Reduction of U.S. federal corporate tax rate: The reduction of the corporate income~~an effective tax rate ~~requires companies to remeasure their deferred tax assets and liabilities as~~ of ~~the date of enactment. The provisional amount recorded in~~15.5 percent, respectively. For the three months ended ~~January~~July 31, ~~2018~~2022, there were no significant discrete items. The income taxes for the ~~remeasurement due to~~nine months ended July 31, 2022 include the excess tax benefits from stock-based compensation of $18 million. For the nine months ended July 31, 2022, our effective tax rate ~~change is $53~~and the resulting provision for income taxes were also impacted by the expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $8 million. ~~We have not yet completed our accounting~~

Our calculation of income tax expense for the ~~measurement~~three and nine months ended July 31, 2022 is dependent in part on forecasts of ~~deferred taxes. To calculate~~full year results. The impact of COVID-19 on the ~~remeasurement~~economic environment is uncertain and may change these forecasts, which could impact tax expense.

For the three and nine months ended July 31, 2021, our income tax expense was $63 million with an effective tax rate of ~~deferred~~19.3 percent and $144 million with an effective tax rate of 15.8 percent, respectively. The income taxes ~~we estimated when~~for the ~~existing deferred~~nine months ended July 31, 2021 include the excess tax benefits from stock-based compensation of $24 million. For the three and nine months ended July 31, 2021, our effective tax rate and the resulting provision for income taxes ~~will be settled or realized. These estimates may be affected~~were also impacted by ~~activities~~the expiration of various foreign statutes of limitations which resulted in the ~~remaining quarters~~recognition of previously unrecognized tax benefits of $8 million and ~~other analysis related to the Tax Act, including, but not limited to, the impact of state conformity to the tax law change.~~$24 million, respectively.

~~GILTI:~~ The Tax Act subjects a U.S. corporation to tax on its GILTI. The U.S. GAAP allows companies to make an accounting policy election to either (1) treat taxes due on future GILTI inclusions in the U.S. taxable income as a current-period expense when incurred (“period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (“deferred method”). Our analysis of the new GILTI rules and how they may impact us is incomplete. Accordingly, we have not made a policy election regarding the treatment of GILTI tax.

Indefinite Reinvestment Assertion: The company incurred U.S. tax on substantially all of the prior accumulated earnings of its foreign subsidiaries as part of the Transition Tax. This increased the company’s previously taxed earnings and will allow for the repatriation of the majority of its foreign earnings without any U.S. federal tax. However, any repatriation of its foreign earnings could still be subjected to withholding taxes, state taxes or other income taxes that might be incurred. The company’s analysis is incomplete at this time with respect to its investments intentions for its accumulated foreign earnings. During the period prescribed by SAB 118, the company will evaluate, among other factors, the need for cash within and outside the United States, legal entity capitalization requirements, cash controls imposed in foreign jurisdictions, withholding taxes and the availability to offset with foreign tax credits in determining its investment assertion on its accumulated foreign earnings.

~~AGILENT TECHNOLOGIES, INC.~~

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

Our estimates as described above, may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB and various other taxing jurisdictions. In particular, we anticipate the U.S. state jurisdictions will continue to determine and announce their conformity or decoupling from the Tax Act either in its entirety or with respect to specific provisions. All of these potential legislative and interpretive actions could result in adjustments to our provisional estimates when the accounting for the income tax effects of the Tax Act is completed.

~~There were no substantial changes from our 2017 Annual Report on Form 10-K to the status of the open tax years in the first three months of fiscal year 2018.~~ In the U.S., tax years remain open back to the year ~~2014~~2018 for federal income tax purposes and ~~the year 2000~~ for significant states. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year ~~2001.~~2012.

With these jurisdictions and the U.S., it is reasonably possible 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.~~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.

5.6. 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				Nine Months Ended
	January 31,						July 31,				July 31,
	2018			2017			2022		2021		2022		2021
	(in millions)						(in millions)
Numerator:						Numerator:
Net income (loss)	$	(320	)	$	168
Net income						Net income	$	329	$	264	$	886	$	768
Denominator:						Denominator:
Basic weighted-average shares	323			322		Basic weighted-average shares	298		303		300		305
Potential common shares— stock options and other employee stock plans	—			4		Potential common shares— stock options and other employee stock plans	1		3		1		2
Diluted weighted-average shares	323			326		Diluted weighted-average shares	299		306		301		307

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 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 collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. In addition, we exclude from the calculation of diluted earnings per share stock options, ESPP, LTPP and restricted stock awards whose combined exercise price and

AGILENT TECHNOLOGIES, INC.

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

unamortized fair value were greater than the average market price of our common stock because their effect would also be anti-dilutive.

For the three and nine months ended ~~January~~July 31, ~~2018, the diluted net loss per share is the same as basic net loss per share as the effects of all 6.7 million~~2022 and 2021, potential common shares ~~outstanding would be anti-dilutive. For the three months ended January 31, 2017, no potential common shares were~~ excluded from the calculation of diluted earnings per ~~share.~~share were not material.

~~AGILENT TECHNOLOGIES, INC.~~

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

6.7. INVENTORY

Inventory as of July 31, 2022 and October 31, 2021 consisted of the following:


	July 31, 2022		October 31, 2021
	(in millions)
Finished goods	$	545	$	463
Purchased parts and fabricated assemblies	465		367
Inventory	$	1,010	$	830

January 31,
2018 October 31,
2017
(in millions)
Finished goods $ 372
$ 363
Purchased parts and fabricated assemblies 236
212
Inventory $ 608
$ 575

7.8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments during the ~~three~~nine months ended ~~January~~July 31, ~~2018~~:2022:


	Life Sciences and Applied Markets		Diagnostics and Genomics		Agilent CrossLab		Total
	(in millions)
Goodwill as of October 31, 2021	$	1,743	$	1,964	$	268	$	3,975
Foreign currency translation impact	(11)		(10)		(6)		(27)

Goodwill as of July 31, 2022	$	1,732	$	1,954	$	262	$	3,948

In the first quarter of fiscal year 2022, we reorganized our operating segments and moved our chemistries and supplies business and our remarketed instruments business from our Agilent CrossLab business segment to our life sciences and applied markets business segment. As a result, we reassigned approximately $307 million of goodwill from our Agilent Crosslab business segment to our life sciences and applied markets business segment using the relative fair value allocation approach. In addition, we moved service revenue and cost of sales related to the previous acquisition of BioTek from our life sciences and applied markets business segment to our Agilent CrossLab business segment. As a result, we reassigned approximately $10 million of goodwill from our life sciences and applied markets segment to our Agilent Crosslab business segment using the relative fair value allocation approach. Goodwill balances as of October 31, 2021, have been recast to conform to this new presentation. There were no changes to our reporting units due to this reorganization. In addition, we performed a goodwill impairment test, and the results of the analysis indicated that the fair values for all three of our reporting units were in excess of their carrying values by substantial amounts; therefore, no impairment was indicated.

AGILENT TECHNOLOGIES, INC.

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

Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total
(in millions)
Goodwill as of October 31, 2017 $ 818
$ 1,285
$ 504
$ 2,607
Foreign currency translation impact 8
9
4
21
Goodwill arising from acquisitions 5
—
—
5
Goodwill as of January 31, 2018 $ 831
$ 1,294
$ 508
$ 2,633

The ~~components~~component parts of other intangible assets as of ~~January~~July 31, ~~2018~~2022 and October 31, ~~2017~~2021 are shown in the table below:


	Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in millions)
As of October 31, 2021
Purchased technology	$	1,742	$	972	$	770
Trademark/Tradename	196		133		63
Customer relationships	357		228		129
Backlog	8		3		5
Third-party technology and licenses	11		8		3
Total amortizable intangible assets	2,314		1,344		970
In-Process R&D	11		—		11
Total	$	2,325	$	1,344	$	981
As of July 31, 2022
Purchased technology	$	1,735	$	1,047	$	688
Trademark/Tradename	196		144		52
Customer relationships	353		278		75
Backlog	8		7		1
Third-party technology and licenses	32		9		23
Total amortizable intangible assets	2,324		1,485		839
In-Process R&D	10		—		10
Total	$	2,334	$	1,485	$	849

Purchased Other Intangible Assets

Gross
Carrying
Amount

Accumulated
Amortization

Net Book
Value
(in millions)
As of October 31, 2017

Purchased technology $ 855
$ 646
$ 209
Trademark/Tradename 149
73
76
Customer relationships 151
112
39
Third-party technology and licenses 27
14
13
Total amortizable intangible assets 1,182
845
337
In-Process R&D 24
—
24
Total $ 1,206
$ 845
$ 361
As of January 31, 2018

Purchased technology $ 863
$ 665
$ 198
Trademark/Tradename 149
76
73
Customer relationships 153
119
34
Third-party technology and licenses 27
16
11
Total amortizable intangible assets 1,192
876
316
In-Process R&D 25
—
25
Total $ 1,217
$ 876
$ 341

During the ~~three~~nine months ended ~~January~~July 31, ~~2018,~~2022, there were no additions to goodwill. During the nine months ended July 31, 2022, we recorded ~~additions to goodwill~~$21 million of ~~$5 million and additions to~~ other intangible assets ~~of $2 million~~ related to ~~an acquisition.~~the acquisition of advanced artificial intelligence technology. During the ~~three~~nine months ended ~~January~~July 31, ~~2018,~~2022, other intangible assets ~~net increased $4~~in total decreased $3 million due to the impact of foreign ~~exchange~~currency translation.

In general, for U.S. federal tax purposes, goodwill from asset purchases is deductible; however, any goodwill created as part of a stock acquisition is not deductible.

Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible assets and goodwill is indicated. ~~There were no indicators~~During the three and nine months ended July 31, 2022 and 2021 we did not identify any triggering events or circumstances which would indicate an impairment of ~~impairments of~~goodwill or indefinite-lived intangible ~~assets or goodwill during the three months ended January 31, 2018 and 2017, respectively.~~assets.

~~AGILENT TECHNOLOGIES, INC.~~

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

Amortization expense of intangible assets was ~~$26~~$48 million and ~~$32~~$150 million for the three and nine months ended ~~January~~July 31, ~~2018~~2022, respectively. Amortization expense of intangible assets was $54 million and ~~2017,~~$144 million for the three and nine months ended July 31, 2021, respectively.

Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year ~~2018~~2022 and for each of the next five ~~succeeding~~ fiscal years and thereafter is estimated below:

Estimated future amortization expense:
(in millions)
Remainder of 2018 $ 73
2019 $ 71
2020 $ 56
2021 $ 42
2022 $ 32
2023 $ 21
Thereafter $ 21


Estimated future amortization expense:
(in millions)
Remainder of 2022	$	41
2023	$	143
2024	$	125
2025	$	100
2026	$	71
2027	$	69
Thereafter	$	290

AGILENT TECHNOLOGIES, INC.

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

9. FAIR VALUE MEASUREMENTS

The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The guidance establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2- applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data.

Level 3- applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

AGILENT TECHNOLOGIES, INC.

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

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of ~~January~~July 31, ~~2018~~2022 were as follows:


			Fair Value Measurement at July 31, 2022 Using
	July 31, 2022		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)	$	479	$	479	$	—	$	—
Derivative instruments (foreign exchange contracts)	23		—		23		—
Short-term investments - Equity securities with RDFV	5		—		5		—
Long-term
Trading securities	32		32		—		—
Other investments	25		—		25		—

Total assets measured at fair value	$	564	$	511	$	53	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	8	$	—	$	8	$	—
Contingent consideration	66		—		—		66
Long-term
Deferred compensation liability	32		—		32		—
Contingent consideration	1		—		—		1
Total liabilities measured at fair value	$	107	$	—	$	40	$	67

Fair Value Measurement at January 31, 2018 Using
January 31,
2018
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) $ 1,960
$ 1,960
$ —
$ —
Derivative instruments (foreign exchange contracts) 9
—
9
—
Long-term
Trading securities 31
31
—
—
Total assets measured at fair value $ 2,000
$ 1,991
$ 9
$ —
Liabilities:

Short-term
Derivative instruments (foreign exchange contracts) $ 16
$ —
$ 16
$ —
Long-term
Deferred compensation liability 31
—
31
—
Total liabilities measured at fair value $ 47
$ —
$ 47
$ —

Financial assets and liabilities measured at fair value on a recurring basis as of October 31, ~~2017~~2021 were as follows:


			Fair Value Measurement at October 31, 2017 Using									Fair Value Measurement at October 31, 2021 Using
	October 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			October 31, 2021		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:									Assets:
Short-term									Short-term
Cash equivalents (money market funds)	$	1,659	$	1,659	$	—	$	—	Cash equivalents (money market funds)	$	919	$	919	$	—	$	—
Derivative instruments (foreign exchange contracts)	4		—		4		—		Derivative instruments (foreign exchange contracts)	9		—		9		—
Short-term investments - Equity securities with RDFV									Short-term investments - Equity securities with RDFV	91		83		8		—
Long-term									Long-term
Trading securities	32		32		—		—		Trading securities	34		34		—		—
Other investments									Other investments	31		—		31		—
Total assets measured at fair value	$	1,695	$	1,691	$	4	$	—	Total assets measured at fair value	$	1,084	$	1,036	$	48	$	—
Liabilities:									Liabilities:
Short-term									Short-term
Derivative instruments (foreign exchange contracts)	$	6	$	—	$	6	$	—	Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—
Contingent consideration									Contingent consideration	62		—		—		62
Long-term									Long-term
Deferred compensation liability	32		—		32		—		Deferred compensation liability	34		—		34		—
Contingent consideration									Contingent consideration	27		—		—		27
Total liabilities measured at fair value	$	38	$	—	$	38	$	—	Total liabilities measured at fair value	$	128	$	—	$	39	$	89

AGILENT TECHNOLOGIES, INC.

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

Our money market funds and trading securities ~~investments~~ are generally valued using quoted market prices and therefore are classified within level 1 of the fair value hierarchy. Our derivative financial instruments are classified within level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable.

Short- term investments - equity securities with readily determinable fair value ("RDFV") are shares in marketable equity securities which are classified as level 1 in the fair value hierarchy as they are measured based on quotes in active markets. Equity securities with RDFV also include potential shares received from an equity investment in a company that went public and can vest under certain stock performance circumstances, and these have been classified as level 2 because the fair value was calculated using the Monte Carlo simulation method in which quoted market price and other observable inputs are used.

Other investments represent shares we own in a special fund that targets underlying investments of approximately 40 percent in debt securities and 60 percent in equity securities. These shares have been classified as level 2 because, although the shares of the fund are not traded on any active stock exchange, each of the individual underlying securities are or can be derived from and hence we have a readily determinable value for the underlying securities, from which we are able to determine the fair market value for the special fund itself.

Trading securities, which isare comprised of mutual funds, bonds and other similar instruments, other investments and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income.

~~AGILENT TECHNOLOGIES, INC.~~

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

Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive ~~loss~~income (loss) within stockholders' equity. Realized gains and losses from the sale of these instruments are recorded in net income.

Gains and losses reflected in other income (expense), net for our equity investments with RDFV and equity investments without RDFV are summarized below:



	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021
	(in millions)
Net gain (loss) recognized during the period on equity securities	$	2	$	9	$	(60)	$	24
Less: net gain on equity securities sold during the period	$	12	$	—	$	12	$	—
Unrealized gain (loss) on equity securities	$	(10)	$	9	$	(72)	$	24

Contingent Consideration. The fair value of the contingent consideration liability relates to milestone payments in connection with the acquisition of advanced artificial intelligence technology in February 2022 and the acquisition of Resolution Bioscience in April 2021.

Resolution Bioscience. The fair value of the potential future milestone payments, which is set to certain revenue and technical targets, was based on (i) the probability of achieving the relevant revenue targets and technical milestones and (ii) the timing of achieving such milestones, which are significant unobservable inputs, and has been classified as Level 3. We used the Monte Carlo simulation approach to estimate the fair value of the revenue component which resulted in a fair value of zero. The probability-weighted expected return method was used to estimate the fair value of the technical target component. Assumptions used in the calculations include probability of success, duration of the earn-out and discount rate. A change in any of these unobservable inputs can significantly change the fair value of the contingent consideration. As of July 31, 2022, the expected maximum earn-out period for the contingent payments does not exceed 2.4 years and potential future payments will not exceed $145 million.

AGILENT TECHNOLOGIES, INC.

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

The contingent consideration liability is our only recurring Level 3 asset or liability. A summary of the Level 3 activity follows:


	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021
	(in millions)
Beginning balance	$	67	$	96	$	89	$	—
Additions to contingent consideration (including measurement period adjustment)	$	—	$	14	$	3	$	110
Change in fair value (included within selling, general and administrative expenses)	$	—	$	—	$	(25)	$	—
Ending balance	$	67	$	110	$	67	$	110

The fair value of the contingent consideration liability as of July 31, 2022 was estimated to be $67 million of which $66 million was recorded in other accrued liabilities and $1 million was recorded in other long-term liabilities on the condensed consolidated balance sheet. The net decrease in the fair value of the contingent consideration was primarily driven by a decline in the probability of achieving the revenue milestone related to our acquisition of Resolution Bioscience.

Impairment of Investments. There were no impairments of investments for the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017.~~2021.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

For the three and nine months ended ~~January~~July 31, ~~2018 and 2017,~~2022, there were no impairments of long-lived assets held and used or long-lived assets held for sale. For the three months ended July 31, 2021, there were no impairments of long-lived assets held and used. For the nine months ended July 31, 2021, long-lived assets held and used with a carrying amount of $2 million were written down to fair value of zero, resulting in an impairment of $2 million. For the three and nine months ended July 31, 2021, there were no impairments of long-lived assets held for sale.

For the three and nine months ended July 31, 2022 and 2021, there were no impairments of non-marketable securities. For the three and nine months ended July 31, 2022, an unrealized gain of $2 million and $5 million, respectively, was included in net income as an adjustment to the carrying value of non-marketable securities without readily determinable fair value based on an observable market transaction. For both the three and nine months ended July 31, 2021, an unrealized gain of $11 million was included in net income as an adjustment to the carrying value of non-marketable securities without readily determinable fair value based on an observable market transaction. As of July 31, 2022 and October 31, 2021, the carrying amount of non-marketable equity securities without readily determinable fair values was $136 million and $120 million, respectively.

Fair values for the non-marketable securities included in long-term investments on the condensed consolidated balance sheet were measured using Level 3 inputs because they are primarily equity stock issued by private companies without quoted market prices. To estimate the fair value of our non-marketable securities, we use the measurement alternative to record these investments at cost and adjust for impairments and observable price changes (orderly transactions for the identical or a similar security from the same issuer) as and when they occur.

10. DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates.

~~Fair Value Hedges~~

We are 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 at fixed interest rates based on the market conditions at the time of financing. The fair value of our fixed rate debt changes when the underlying market rates of interest change, and, in the past, we have used interest rate swaps to change our fixed interest rate payments to U.S. dollar LIBOR-based variable interest expense to match the floating interest income from our cash, cash equivalents and other short term investments. As of ~~January 31, 2018, all interest rate swap contracts had either been terminated or had expired.~~

On August 9, 2011, we terminated five interest rate swap contracts related to our 2020 senior notes that represented the notional amount of $500 million. The remaining gain to be amortized at January 31, 2018 was $10 million. All deferred gains from terminated interest rate swaps are being amortized over the remaining life of the respective senior notes.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance and are assessed for effectiveness against the underlying exposure every reporting period. ~~Changes~~For open contracts as of July 31, 2022, changes in the time value of the foreign exchange contract are excluded from the assessment of hedge effectiveness and are recognized in ~~other income (expense) each period.~~cost of sales over the life of the foreign exchange contract. The changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income (loss).

AGILENT TECHNOLOGIES, INC.

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

Amounts associated with cash flow hedges are reclassified to cost of sales in the condensed consolidated statement of operations when the forecasted transaction occurs. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income (loss) will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense), net in the condensed consolidated statement of operations in the current period. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in ~~other income (expense)~~cost of sales over the life of the option contract. For the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017~~2021, ineffectiveness and gains and losses recognized in other income (expense), net due to de-designation of cash flow hedge contracts were not significant.

~~In July 2012, Agilent executed treasury lock agreements for~~ ~~$400 million~~ in connection with future interest payments to be made on our 2022 senior notes issued on September 10, 2012. We designated the treasury lock as a cash flow hedge. The treasury lock contracts were terminated on September 10, 2012 and we recognized a deferred gain in accumulated other comprehensive income which is being amortized to interest expense over the life of the 2022 senior notes. The remaining gain to be amortized related to the treasury lock agreements at January 31, 2018 was $2 million.

In February 2016, Agilent executed three forward-starting pay fixed/receive variable interest rate swaps for the notional amount of $300 million in connection with future interest payments to be made on our 2026 senior notes issued on September 15, 2016. These derivative instruments were designated and qualified as cash flow hedges under the criteria prescribed in the

~~AGILENT TECHNOLOGIES, INC.~~

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

authoritative guidance. The swap arrangements were terminated on September 15, 2016 with a payment of $10 million, and we recognized this as a deferred loss in accumulated other comprehensive income (loss) which is being amortized to interest expense over the life of the 2026 senior notes. The remaining loss to be amortized related to the interest rate swap agreements at ~~January~~July 31, ~~2018~~2022 was $8$4 million.

In August 2019, Agilent executed treasury lock agreements for $250 million in connection with future interest payments to be made on our 2029 senior notes issued on September 16, 2019. We designated the treasury lock as a cash flow hedge. The treasury lock contracts were terminated on September 6, 2019, and we recognized a deferred loss of $6 million in accumulated other comprehensive income (loss) which is being amortized to interest expense over the life of the 2029 senior notes. The remaining loss to be amortized related to the treasury lock agreements at July 31, 2022 was $4 million.

Net Investment Hedges

We enter into foreign exchange contracts to hedge net investments in foreign operations to mitigate the risk of adverse movements in exchange rates. These foreign exchange contracts are carried at fair value and are designated and qualify as net investment hedges under the criteria prescribed in the authoritative guidance. Changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income (loss) and are assessed for effectiveness against the underlying exposure every reporting period. If the company’s net investment changes during the year, the hedge relationship will be assessed and de-designated if the hedge notional amount is outside of prescribed tolerance with a gain/loss reclassified from other comprehensive income (loss) to other income (expense) in the current period. For the three and nine months ended July 31, 2022, ineffectiveness and the resultant effect of any gains or losses recognized in other income (expense) due to de-designation of the hedge contracts were not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in value of the derivative instruments are recognized in other income (expense), net in the condensed consolidated statement of operations, in the current period, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions which are selected based on their credit ratings and other factors. We have established policies and procedures for mitigating credit risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties.

A number of our derivative agreements contain threshold limits to the net liability position with counterparties and are dependent on our corporate credit rating determined by the major credit rating agencies. The counterparties to the derivative instruments may request collateralization, in accordance with derivative agreements, on derivative instruments in net liability positions.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of ~~January~~July 31, ~~2018~~,2022, was ~~$10 million~~.not material. The credit-risk-related contingent features underlying these agreements had not been triggered as of ~~January~~July 31, ~~2018~~.

~~There were~~ 77 ~~foreign exchange forward contracts open as of~~ ~~January 31, 2018~~ ~~and designated as cash flow hedges. There were~~ ~~153~~ ~~foreign exchange forward contracts open as of~~ ~~January 31, 2018~~ ~~not designated as hedging instruments. The aggregated notional amounts by currency and designation as of~~ ~~January 31, 2018~~ ~~were as follows:~~

2022.

Derivatives Designated as Cash Flow
Hedges

Derivatives
Not
Designated
as Hedging
Instruments

Forward
Contracts USD

Forward
Contracts USD
Currency Buy/(Sell) Buy/(Sell)
(in millions)
Euro $ (80 ) $ 54
British Pound (47 ) 11
Canadian Dollar (36 ) 9
Australian Dollar 5
16
Malaysian Ringgit —
(2 )
Japanese Yen (54 ) (17 )
Danish Krone —
18
Korean Won (39 ) (2 )
Singapore Dollar 14
2
Swiss Franc —
29
Other —
(18 )
Totals $ (237 ) $ 100

AGILENT TECHNOLOGIES, INC.

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

There were 276 foreign exchange forward contracts open as of July 31, 2022 and designated as cash flow hedges. There were 173 foreign exchange forward contracts open as of July 31, 2022 and not designated as hedging instruments. There were 3 foreign exchange forward contracts open as of July 31, 2022 and designated as a net investment hedge.

The aggregated notional amounts by currency and designation as of July 31, 2022 were as follows:


	Derivatives Designated as Cash Flow Hedges		Derivatives Designated as Net Investment Hedges	Derivatives Not Designated as Hedging Instruments
	Forward Contracts USD			Forward Contracts USD		Forward Contracts USD
Currency	Buy/(Sell)			Buy/(Sell)		Buy/(Sell)
	(in millions)
Euro	$	(72)		$	(11)	$	22
British Pound	(67)			—		8
Canadian Dollar	(50)			—		(17)


Japanese Yen	(96)			—		(28)
Danish Krone	—			—		37
Korean Won	(68)			—		(16)
Singapore Dollar	33			—		26

Chinese Yuan Renminbi	(82)			—		(76)


Taiwan Dollar	—			—		(12)
Indian Rupee	—			—		(9)


Other	6			—		(8)
Totals	$	(396)		$	(11)	$	(73)

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of ~~January~~July 31, ~~2018~~2022 and October 31, ~~2017~~2021 were as follows:


Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	July 31, 2022		October 31, 2021		Balance Sheet Location	July 31, 2022		October 31, 2021
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	19	$	6	Other accrued liabilities	$	3	$	2






Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	$	4	$	3	Other accrued liabilities	$	5	$	3
Total derivatives	$	23	$	9		$	8	$	5

Fair Values of Derivative Instruments
Asset Derivatives Liability Derivatives
Fair Value Fair Value
Balance Sheet Location January 31,
2018 October 31,
2017 Balance Sheet Location January 31,
2018 October 31,
2017
(in millions)
Derivatives designated as hedging instruments:

Cash flow hedges
Foreign exchange contracts
Other current assets $ 1
$ 2
Other accrued liabilities $ 10
$ 2

Derivatives not designated as hedging instruments:

Foreign exchange contracts

Other current assets $ 8
$ 2
Other accrued liabilities $ 6
$ 4
Total derivatives $ 9
$ 4
$ 16
$ 6

AGILENT TECHNOLOGIES, INC.

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

The ~~effect~~effects of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows:



	Three Months Ended							Three Months Ended				Nine Months Ended
	January 31,							July 31,				July 31,
	2018			2017				2022		2021		2022		2021
	(in millions)							(in millions)
Derivatives designated as hedging instruments:							Derivatives designated as hedging instruments:

Cash Flow Hedges							Cash Flow Hedges
Foreign exchange contracts:							Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income (loss)	$	(10	)	$	2
Gain (loss) reclassified from accumulated other comprehensive income (loss) into cost of sales	$	—		$	1
Gain (loss) recognized in accumulated other comprehensive loss							Gain (loss) recognized in accumulated other comprehensive loss	$	5	$	1	$	34	$	(5)
Loss reclassified from accumulated other comprehensive loss into interest expense							Loss reclassified from accumulated other comprehensive loss into interest expense	$	(1)	$	(1)	$	(1)	$	(1)
Gain (loss) reclassified from accumulated other comprehensive loss into cost of sales							Gain (loss) reclassified from accumulated other comprehensive loss into cost of sales	$	12	$	(4)	$	20	$	(18)

Gain (loss) on time value of forward contracts recorded in cost of sales							Gain (loss) on time value of forward contracts recorded in cost of sales	$	—	$	(1)	$	—	$	(1)

Net Investment Hedges							Net Investment Hedges
Foreign exchange contracts:							Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive loss - translation adjustment							Gain (loss) recognized in accumulated other comprehensive loss - translation adjustment	$	—	$	1	$	4	$	(2)

Derivatives not designated as hedging instruments:							Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense)	$	6		$	(3	)	Gain (loss) recognized in other income (expense)	$	—	$	(3)	$	(1)	$	(4)

At ~~January~~July 31, ~~2018~~,2022, the ~~estimated~~ amount of existing net ~~loss~~gain that is expected to be reclassified from accumulated other comprehensive income (loss) is $17 million. Within the next twelve months it is estimated that $16 million of gain included within the net amount of accumulated other comprehensive income (loss) will be reclassified to cost of sales ~~within the next twelve months is~~ ~~$8 million~~.in respect of cash flow hedges.

AGILENT TECHNOLOGIES, INC.

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

~~10.~~11. RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

Components of net periodic ~~costs.~~costs (benefits). For the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017,~~2021, our net pension and post retirement benefit costs (benefits) were comprised of the following:


	Three Months Ended July 31,
	U.S. Pension Plans				Non-U.S. Pension Plans				U.S. Post Retirement Benefit Plans
	2022		2021		2022		2021		2022		2021
	(in millions)
Service cost—benefits earned during the period	$	—	$	—	$	6	$	7	$	—	$	1
Interest cost on benefit obligation	3		3		2		2		1		—
Expected return on plan assets	(6)		(7)		(10)		(12)		(1)		(2)
Amortization:
Actuarial losses	—		1		6		13		—		1
Prior service credits	—		—		—		—		(1)		—
Total net plan costs (benefits)	$	(3)	$	(3)	$	4	$	10	$	(1)	$	—


	Pensions
	U.S. Plans						Non-U.S. Plans						U.S. Post Retirement Benefit Plans							Nine Months Ended July 31,
	Three Months Ended January 31,																			U.S. Pension Plans				Non-U.S. Pension Plans				U.S. Post Retirement Benefit Plans
	2018			2017			2018			2017			2018			2017				2022		2021		2022		2021		2022		2021
	(in millions)																			(in millions)
Service cost—benefits earned during the period	$	—		$	—		$	6		$	4		$	—		$	—		Service cost—benefits earned during the period	$	—	$	—	$	18	$	18	$	—	$	1
Interest cost on benefit obligation	4			3			3			3			1			1			Interest cost on benefit obligation	10		10		7		6		2		2
Expected return on plan assets	(7		)	(6		)	(11		)	(10		)	(2		)	(2		)	Expected return on plan assets	(20)		(22)		(33)		(37)		(4)		(5)
Amortization:																			Amortization:
Actuarial losses	—			1			7			9			2			3
Actuarial losses (gains)																			Actuarial losses (gains)	—		3		19		40		(1)		3
Prior service credits	—			—			—			—			(2		)	(2		)	Prior service credits	—		—		—		—		(1)		(1)
Total net plan costs	$	(3	)	$	(2	)	$	5		$	6		$	(1	)	$	—
Settlements gains	$	—		$	—		$	(5	)	$	(32	)	$	—		$	—
Total net plan costs (benefits)																			Total net plan costs (benefits)	$	(10)	$	(9)	$	11	$	27	$	(4)	$	—

~~We made no contributions to our U.S. defined benefit plans during the three months ended January 31, 2018. We contributed~~ ~~$6 million~~ ~~to our non-U.S. defined benefit plans during the three months ended January 31, 2018.~~

~~We made no contributions to our U.S. defined benefit plans during the three months ended January 31, 2017. We contributed~~ ~~$3 million~~ ~~to our non-U.S. defined benefit plans during the three months ended~~ ~~January 31, 2017~~.

We do not expect to contribute to our U.S. defined benefit plans during the remainder of 2018 and we expect to contribute $17 million to our non-U.S. defined benefit plans during the remainder of 2018.

~~Japanese Welfare Pension Insurance Law. In Japan, Agilent has employees' pension fund plans, which are defined benefit pension plans established under the Japanese Welfare Pension Insurance Law (JWPIL).~~ The ~~plans are composed of (a) a substitutional portion based on the pay-related part of the old-age pension benefits prescribed by JWPIL (similar to social security benefits~~service cost component is recorded in ~~the United States) and (b) a corporate portion based on a contributory defined benefit pension arrangement established at the discretion of the company.~~ ~~During the~~ ~~three months ended January 31, 2017~~, Agilent received government approval and returned the substitutional portion of Japan's pension plan to the Japanese government, as allowed by the JWPIL. The initial transfer resulted in a net gain of $32 million which was recorded within cost of sales and operating expenses in the condensed consolidated statement of operations. ~~The~~All other cost components are recorded in other income (expense), net ~~gain consisted~~in the condensed consolidated statement of ~~two parts - a gain of $41 million, representing~~operations.

Employer contributions and expected future employer contributions for the ~~difference between the fair values~~remainder of the Accumulated Benefit Obligation (ABO) settled of $65 million and the assets transferred from the pension trust to the government of Japan of $24 million, offset by a settlement loss of $9 million related to the recognition of previously unrecognized actuarial losses included in accumulated other comprehensive income. In the first quarter of 2018, after the Japanese government’s final review of our initial payment, we received a refund of $5.2 million which was recordedyear were as ~~a settlement gain.~~follows:


	Three Months Ended				Nine Months Ended				Employer Contributions
	July 31,				July 31,				For Remainder of Year
	2022		2021		2022		2021			2022
	(in millions)
U.S. defined benefit plans	$	—	$	—	$	—	$	—		$	—
Non-U.S. defined benefit plans	$	5	$	7	$	13	$	16		$	6

~~11.~~

12. WARRANTIES AND CONTINGENCIES

Warranties

We accrue for standard warranty costs based on historical trends in actual warranty charges ~~as a percentage of net product shipments.~~over the past 12 months. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost ~~estimates. Estimated warranty charges are recorded within cost of products at~~over the ~~time products are sold.~~period. The standard warranty accrual balances are held in other accrued and other long-term liabilities on our condensed consolidated balance sheet. Our standard warranty terms typically extend to one year from the date of delivery, depending on the product.

AGILENT TECHNOLOGIES, INC.

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

A summary of the standard warranty accrual activity is shown in the table below:

Three Months Ended
January 31,
2018 2017
(in millions)
Beginning balance as of November 1, $ 34
$ 35
Accruals for warranties including change in estimate 11
13
Settlements made during the period (12 ) (13 )
Ending balance as of January 31, $ 33

$ 35

Accruals for warranties due within one year $ 33
$ 34
Accruals for warranties due after one year —
1
Ending balance as of January 31, $ 33
$ 35


	Nine Months Ended
	July 31,
	2022		2021
	(in millions)
Standard warranty accrual, beginning balance	$	30	$	32
Accruals for warranties including change in estimates	38		41
Settlements made during the period	(37)		(41)
Standard warranty accrual, ending balance	$	31	$	32

Accruals for warranties due within one year	$	30	$	31
Accruals for warranties due after one year	1		1
Standard warranty accrual, ending balance	$	31	$	32

Bank Guarantees

Guarantees consist primarily of outstanding standby letters of credit and bank guarantees and were approximately $39 million and $46 million as of July 31, 2022 and October 31, 2021, respectively. A standby letter of credit is a guarantee of payment issued by a bank on behalf of us that is used as payment of last resort should we fail to fulfill a contractual commitment with a third party. A bank guarantee is a promise from a bank or other lending institution that if we default on a loan, the bank will cover the loss.

Contingencies

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

~~12.~~13. SHORT-TERM DEBT

Credit Facilities

On ~~September 15, 2014, Agilent~~March 13, 2019, we entered into a credit agreement with a group of financial institutions which, ~~provides~~as amended, provided for a ~~$400 million~~$1 billion five-year unsecured credit facility that will expire on ~~September 15, 2019.~~March 13, 2024 and incremental term loan facilities in an aggregate amount of up to $500 million. On ~~June 9, 2015,~~April 21, 2021, we entered into an incremental assumption agreement, pursuant to which the ~~commitments~~aggregate amount available for borrowing under the ~~existing~~revolving credit facility ~~were~~was increased ~~by $300 million~~to $1.35 billion and ~~on July 14, 2017, the commitments under the existing credit facility were increased by an additional $300 million so that~~ the aggregate ~~commitments under the facility now total $1 billion.~~amount available for incremental facilities was refreshed to remain at $500 million. As of ~~January~~July 31, ~~2018, the company~~2022, we had no borrowings ~~of $345 million~~ outstanding under the credit ~~facility.~~facility and no borrowings under the incremental facilities. We were in compliance with the covenants for the credit facility during the ~~three~~nine months ended ~~January~~July 31, ~~2018.~~2022.

~~2017 Senior Notes~~

Commercial Paper

~~In October 2007,~~

Under our U.S. commercial paper program, the company ~~issued an~~may issue and sell unsecured, short-term promissory notes in the aggregate principal amount ~~of $600 million~~not to exceed $1.35 billion with up to 397-day maturities. At any point in ~~senior notes ("2017 senior notes"). On October 20, 2014, we settled~~time, the ~~redemption of $500 million~~company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the ~~$600~~commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the nine months ended July 31, 2022, we borrowed $940 million and repaid $760 million. As of July 31, 2022, we had borrowings of $180 million outstanding ~~aggregate principal amount~~under our U.S. commercial paper program and had a weighted average annual interest rate of ~~our 2017 senior notes. The remaining $100 million in senior notes matured on November 1, 2017 and were paid in full.~~2.43 percent.

~~13.~~

AGILENT TECHNOLOGIES, INC.

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

14. LONG-TERM DEBT

Senior Notes

The following table summarizes the company’s long-term senior ~~notes~~notes:


	July 31, 2022		October 31, 2021
	Amortized Principal		Amortized Principal
	(in millions)
2023 Senior Notes	—		599
2026 Senior Notes	299		298
2029 Senior Notes	494		494
2030 Senior Notes	496		496
2031 Senior Notes	843		842
Total Senior Notes	$	2,132	$	2,729

Term Loan Facility

On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025. As of July 31, 2022, we had $600 million borrowings outstanding under the term loan facility and ~~the related~~had a weighted average interest rate ~~swaps:~~of 2.75 percent. Loans under the term loan agreement bear interest, at our option, either at: (i) the alternate base rate, as defined in the term loan agreement, plus the applicable margin for such loans or (ii) adjusted term SOFR, as defined in the term loan agreement, plus the applicable margin for such loans. The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants.

On May 4, 2022, we used the proceeds from the term loan and repaid the $600 million outstanding aggregate principal amount of our 2023 senior notes due July 15, 2023. The total redemption price of approximately $609 million was computed in accordance with the terms of the 2023 senior notes as the present value of the remaining scheduled payments of principal and unpaid interest on the notes being redeemed. In May 2022, we recorded a loss on extinguishment of debt of $9 million in other income (expense), net in the condensed consolidated statement of operations. In addition, $7 million of accrued interest, up to but not including the applicable redemption date, was paid.

January 31, 2018 October 31, 2017
Amortized Principal Swap Total
Amortized
Principal
Swap Total
(in millions)
2020 Senior Notes 499
10
509
499
11
510
2022 Senior Notes 398
—
398
398
—
398
2023 Senior Notes 596
—
596
596
—
596
2026 Senior Notes 297
—
297
297
—
297
Total $ 1,790
$ 10
$ 1,800
$ 1,790
$ 11
$ 1,801

~~AGILENT TECHNOLOGIES, INC.~~

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

All outstanding notes listed above are unsecured and rank equally in right of payment with all of Agilent’s other senior unsecured indebtedness. There have been no other changes to the principal, maturity, interest rates and interest payment terms of the Agilent senior notes, detailed in the table above, in the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2017. All interest rate swap contracts have been terminated and amounts to be amortized over the remaining life of the senior notes as of~~ ~~January 31, 2018~~ ~~and~~ ~~October 31, 2017~~ ~~are detailed above.~~2021.

~~14.~~15. STOCKHOLDERS' EQUITY

Stock Repurchase Program

On ~~May 28, 2015,~~November 19, 2018 we announced that our board of directors had approved a ~~new~~ share repurchase program (the ~~"2015~~"2019 repurchase program"). designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The ~~2015~~2019 repurchase program authorizes the purchase of up to ~~$1.14~~$1.75 billion of our common stock at the company's discretion ~~through~~ and ~~including November 1, 2018.~~has no fixed termination date. The ~~2015~~2019 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. During the nine months ended July 31, 2021, we repurchased and retired 3.05 million shares for $365 million under this authorization. Effective February 18, 2021, the 2019 repurchase program was terminated and replaced by the new share repurchase program. The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

On February 16, 2021 we announced that our board of directors had approved a new share repurchase program (the "2021 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2021 repurchase program authorizes the purchase of up to $2.0 billion of our common stock at the company's discretion and has no fixed termination date. The 2021 repurchase program which became

AGILENT TECHNOLOGIES, INC.

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

effective on February 18, 2021, replaced and terminated the 2019 repurchase program on that date. The 2021 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. During the three and nine months ended ~~January~~July 31, ~~2018,~~2022, we repurchased ~~674,000~~and retired 2.673 million shares for ~~$47~~$323 million and 7.331 million shares for $1,004 million, respectively, under this authorization. During the three and nine months ended July 31, 2021, we repurchased and retired 804,352 shares for $113 million and 2.192 million shares for $287 million, respectively, under this authorization. As of ~~January~~July 31, 2018, we retired approximately 637,000 shares and the remaining 37,000 shares as of January 31, 2018 were retired in February 2018. During the three months ended January 31, 2017, we repurchased and retired approximately 2.5 million shares for $111 million, under this authorization. As of January 31, 2018,2022, we had remaining authorization to repurchase up to ~~$563~~approximately $573 million of our common stock under ~~this~~the 2021 repurchase program.

Cash Dividends on Shares of Common Stock

During the three and nine months ended ~~January~~July 31, ~~2018~~,2022, we paid cash dividends of ~~$0.149~~$0.210 per common share or ~~$48~~$62 million and $0.630 per common share or $188 million, respectively, on the company's common stock. During the three and nine months ended ~~January~~July 31, ~~2017~~,2021, we paid cash dividends of ~~$0.132~~$0.194 per common share or ~~$42~~$59 million and $0.582 per common share or $177 million, respectively, 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.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component and related tax effects were as follows (in millions):


			Net defined benefit pension cost and post retirement plan costs
Three Months Ended July 31, 2022	Foreign currency translation		Prior service credits		Actuarial Losses		Unrealized gains (losses) on derivatives		Total
	(in millions)
As of April 30, 2022	$	(266)	$	124	$	(210)	$	19	$	(333)

Other comprehensive income (loss) before reclassifications	(29)		—		—		5		(24)

Amounts reclassified out of accumulated other comprehensive income (loss)	—		(1)		7		(11)		(5)

Tax (expense) benefit	—		—		(2)		2		—

Other comprehensive income (loss)	(29)		(1)		5		(4)		(29)

As of July 31, 2022	$	(295)	$	123	$	(205)	$	15	$	(362)

Nine Months Ended July 31, 2022

As of October 31, 2021	$	(185)	$	124	$	(224)	$	3	$	(282)

Other comprehensive income (loss) before reclassifications	(110)		—		7		34		(69)

Amounts reclassified out of accumulated other comprehensive income (loss)	—		(1)		19		(19)		(1)

Tax expense	—		—		(7)		(3)		(10)

Other comprehensive income (loss)	(110)		(1)		19		12		(80)

As of July 31, 2022	$	(295)	$	123	$	(205)	$	15	$	(362)

Net defined benefit pension cost and post retirement plan costs
Three Months Ended January 31, 2018 Foreign currency translation Prior service credits Actuarial Losses Unrealized gains (losses) on derivatives Total
(in millions)
As of October 31, 2017 $ (156 ) $ 140
$ (328 ) $ (2 ) $ (346 )

Other comprehensive income (loss) before reclassifications 79
—
(1 ) (10 ) 68

Amounts reclassified out of accumulated other comprehensive income (loss) —
(2 ) 9
—
7

Tax (expense) benefit —
1
(2 ) 3
2

Other comprehensive income (loss) 79
(1 ) 6
(7 ) 77

As of January 31, 2018 $ (77 ) $ 139
$ (322 ) $ (9 ) $ (269 )

AGILENT TECHNOLOGIES, INC.

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

Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017~~2021 were as follows (in millions):


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				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021






Unrealized gain (loss) on derivatives	$	12	$	(4)	$	20	$	(18)	Cost of sales
Unrealized gain (loss) on derivatives	(1)		(1)		(1)		(1)		Interest expense
	11		(5)		19		(19)		Total before income tax
	(3)		1		(5)		5		(Provision) benefit for income tax
	8		(4)		14		(14)		Total net of income tax
Net defined benefit pension cost and post retirement plan costs:

Actuarial net loss	(7)		(15)		(19)		(47)		Other income (expense)
Prior service benefit	1		—		1		1		Other income (expense)
	(6)		(15)		(18)		(46)		Total before income tax
	2		3		5		11		Benefit for income tax
	(4)		(12)		(13)		(35)		Total net of income tax

Total reclassifications for the period	$	4	$	(16)	$	1	$	(49)

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,
2018
2017

Unrealized gain (loss) on derivatives $ —

$ 1
Cost of products
—

1
Total before income tax
—

(1 ) (Provision) benefit for income tax
—

—
Total net of income tax
Net defined benefit pension cost and post retirement plan costs:

Actuarial net loss (9 )
(22 )
Prior service benefit 2

2

(7 )
(20 ) Total before income tax
1

6
(Provision) benefit for income tax
(6 )
(14 ) Total net of income tax

Total reclassifications for the period $ (6 )
$ (14 )

Amounts in parentheses indicate reductions to income and increases to other comprehensive income (loss).

Reclassifications out of accumulated other comprehensive income (loss) of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost ~~together with curtailments and settlements~~ (see Note 1011, "Retirement Plans and Post Retirement Pension Plans").

~~15.~~16. SEGMENT INFORMATION

Description of segments. We are 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.

Following this reorganization, we continue to have three business segments comprised of life sciences and ~~the~~applied markets, diagnostics and genomics and Agilent CrossLab, ~~business~~ each of which ~~comprises~~continues to comprise a reportable segment. The three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

AGILENT TECHNOLOGIES, INC.

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

A description of our three reportable segments is as follows:

Our life sciences and applied markets business provides application-focused solutions that include instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level. Key product categories include: liquid chromatography ("LC") systems and components; liquid chromatography mass spectrometry ("LCMS") systems; gas chromatography ("GC") systems and components; gas chromatography mass spectrometry ("GCMS") systems; inductively coupled plasma mass spectrometry ("ICP-MS") instruments; atomic absorption ("AA") instruments; microwave plasma-atomic emission spectrometry ~~(“MP-AES”~~("MP-AES") instruments; inductively coupled plasma optical emission spectrometry ("ICP-OES") instruments; raman spectroscopy; cell analysis plate based assays; flow cytometer; real-time cell analyzer; cell imaging systems; microplate reader; laboratory software for sample tracking; information management and ~~informatics~~analytics; laboratory automation and robotic systems; ~~laboratory automation;~~ dissolution testing; vacuum pumps and measurement technologies. Our consumables portfolio is designed to improve customer outcomes. Most of the portfolio is vendor neutral, meaning Agilent can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries to supplies. Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies.

~~AGILENT TECHNOLOGIES, INC.~~

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

Our diagnostics and genomics business is comprised of ~~five~~six areas of activity providing active pharmaceutical ingredients ("APIs") for oligo-based therapeutics as well as solutions that include reagents, instruments, software and consumables, which enable customers in the clinical and life sciences research areas to interrogate samples at the cellular and molecular level. First, our genomics business includes arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling, gene expression profiling, as well as next generation sequencing ("NGS") target enrichment and genetic data management and interpretation support software. This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy. Second, our nucleic acid solutions business provides equipment and expertise focused on production of synthesized oligonucleotides under pharmaceutical good manufacturing practices ("GMP") conditions for use as ~~active pharmaceutical ingredients ("API")~~API in an emerging class of drugs that utilize nucleic acid molecules for disease therapy. ~~Next,~~Third, our pathology solutions business is focused on product offerings tofor cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry ~~(“IHC”~~("IHC"), in situ hybridization ~~(“ISH”~~("ISH"), hematoxylin and eosin (“("H~~&E”~~&E") staining and special staining. WeFourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue and liquid-based pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. ~~Finally,~~Fifth, the reagent partnership business is a provider of reagents used for turbidimetry and flow cytometry. Finally, our biomolecular analysis business provides complete workflow solutions, including instruments, consumables and software, for quality control analysis of nucleic acid samples. Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques utilized in clinical and life science research applications.

The Agilent CrossLab business spans the entire lab with its extensive ~~consumables and~~ services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning ~~Agilent~~we can serve and supply customers regardless of their instrument purchase choices. ~~Solutions range from chemistries and supplies to~~The services ~~and software helping to connect the entire lab. Key product categories in consumables~~portfolio include ~~GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies. Services include startup, operational,~~repairs, parts, maintenance, installations, training, ~~and~~ compliance support, software as a service, ~~as well as~~ asset management, consulting and ~~consultative~~various other custom services ~~that help increase customer productivity.~~to support the customers' laboratory operations. Custom ~~service and consumable bundles~~services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements.

A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include legal, accounting, tax, real estate, insurance services, information technology services, treasury, order administration, other corporate infrastructure expenses, ~~and~~ costs of centralized research and ~~development.~~development and joint sales and marketing costs. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. In addition, we do not allocate asset impairments, amortization ~~and impairment~~ of acquisition-related intangible assets, ~~pension curtailment or settlement gains, restructuring and transformational expenses,~~change in the fair value of acquisition-related contingent consideration, acquisition and integration costs, ~~special compliance costs, some nucleic acid solutions division ("NASD") site~~transformational initiatives expenses, business exit and divestiture costs and certain other charges to the operating margin for each segment because management does not include this information in its measurement of the performance of the operating segments. Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers, site consolidations, legal entity and other business reorganizations, in-sourcing or outsourcing of activities.

AGILENT TECHNOLOGIES, INC.

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

The following tables reflect the results of our reportable segments under our management reporting system. The performance of each segment is measured based on several metrics, including segment income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding items such as transformational initiatives, acquisition and integration costs, amortization of intangible assets related to business combinations, interest income, interest expense and other items as noted in the reconciliations below:


	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021
	(in millions)
Net Revenue:
Life Sciences and Applied Markets	$	1,019	$	897	$	2,891	$	2,701
Diagnostics and Genomics	340		346		1,037		955
Agilent CrossLab	359		343		1,071		1,003
Total net revenue	$	1,718	$	1,586	$	4,999	$	4,659

Segment Income From Operations:
Life Sciences and Applied Markets	$	311	$	250	$	821	$	741
Diagnostics and Genomics	73		78		232		202
Agilent CrossLab	88		84		266		229
Total segment income from operations	$	472	$	412	$	1,319	$	1,172

AGILENT TECHNOLOGIES, INC.

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

The profitability of each of the segments is measured after excluding restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization and other items as noted in the reconciliations below:

Three Months Ended
January 31,
2018 2017
(in millions)
Net Revenue:
Life Sciences and Applied Markets $ 618
$ 540
Diagnostics and Genomics 185
164
Agilent CrossLab 408
363
Total net revenue $ 1,211
$ 1,067

Segment Income From Operations:

Life Sciences and Applied Markets $ 159
$ 126
Diagnostics and Genomics 22
23
Agilent CrossLab 88
74
Total segment income from operations $ 269
$ 223

The following table reconciles ~~reportable segments’~~segment income from operations to Agilent’s total enterprise income before taxes:


	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2022		2021		2022		2021
	(in millions)
Total segment income from operations	$	472	$	412	$	1,319	$	1,172
Transformational initiatives	(8)		(12)		(21)		(32)
Amortization of intangible assets related to business combinations	(48)		(53)		(149)		(143)
Acquisition and integration costs	(4)		(10)		(19)		(32)
Asset impairment	—		—		—		(2)
Change in fair value of contingent consideration	—		—		25		—

Business exit and divestiture costs	—		—		(7)		(4)



Other	(1)		(1)		(1)		(7)
Interest income	2		—		4		1
Interest expense	(19)		(21)		(61)		(60)
Other income (expense), net (1)	3		12		(41)		19
Income before taxes, as reported	$	397	$	327	$	1,049	$	912

Three Months Ended
January 31,
2018 2017
(in millions)
Total reportable segments’ income from operations $ 269
$ 223
Transformational initiatives (4 ) (2 )
Amortization of intangible assets related to business combinations (25 ) (31 )
Acquisition and integration costs (3 ) (14 )
Pension settlement gain 5
32
NASD site costs (2 ) —
Special compliance costs (1 ) —
Other —
(2 )
Interest income 9
4
Interest expense (20 ) (20 )
Other income (expense), net 5
3
Income before taxes, as reported $ 233
$ 193

(1) For the three and nine months ended July 31, 2022 and 2021, other income (expense), net includes net (gains) losses on the fair value of equity securities.

The following table reflects segment assets under our management reporting system. Segment assets include allocations of corporate assets, goodwill, net other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, ~~the valuation allowance relating to~~short-term and long-term investments, deferred tax assets, right-of-use assets and other assets.


	July 31, 2022		October 31, 2021
	(in millions)
Segment Assets:
Life Sciences and Applied Markets	$	3,888	$	3,741
Diagnostics and Genomics	3,445		3,320
Agilent CrossLab	872		839
Total segment assets	$	8,205	$	7,900

January 31,
2018 October 31,
2017
(in millions)
Segment Assets:
Life Sciences and Applied Markets $ 1,804
$ 1,753
Diagnostics and Genomics 2,130
2,119
Agilent CrossLab 1,181
1,138
Total segment assets $ 5,115
$ 5,010

~~AGILENT TECHNOLOGIES, INC.~~

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

~~16. SUBSEQUENT EVENTS~~

~~On February 23, 2018, we exercised our option to acquire all~~Table of the remaining shares of Lasergen, Inc. that we do not already own for consideration of $105 million. The completion of this transaction is contingent on executing the merger agreement and certain closing conditions.Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding ~~trends, seasonality~~growth opportunities, including for revenue and ~~growth in,~~our end markets, recognizing delayed revenue, strength and drivers of the markets into which we sell, ~~into,~~sales funnels, our strategic direction, new product and service introductions and the position of our current products and services, market demand for and adoption of our products, the ability of our products and solutions to address customer needs and meet industry requirements, our focus on differentiating our product solutions, improving our customers’ experience and growing our earnings, future ~~effective tax rate~~financial results, our operating margin, mix, our investments, including in manufacturing infrastructure, research and ~~tax valuation allowance, earnings from~~development and expanding and improving our ~~foreign subsidiaries, lease~~applications and ~~site services income from Keysight,~~solutions portfolios, expanding our position in developing countries and emerging markets, our focus on balanced capital allocation, our contributions to our pension and other defined benefit plans, impairment of goodwill and other intangible assets, the impact of foreign currency movements, ~~on our performance,~~ our hedging programs ~~indemnification, new product~~ and ~~service introductions,~~other actions to offset the ~~ability~~effects of tariffs and foreign currency movements, our ~~products to meet market needs, adoption of our products, changes to our manufacturing processes, the use of contract manufacturers, out sourcing~~future effective tax rate, tax valuation allowance and ~~third-party package delivery services, source and supply of materials used in our products,~~unrecognized tax benefits, the impact of local government regulations on our ability to pay vendors or conduct operations, our ~~liquidity position, our~~ ability to ~~generate~~satisfy our liquidity requirements, including through cash generated from operations, ~~growth in our businesses, our investments, including in research and development,~~ the potential impact of adopting new accounting pronouncements, indemnification, source and supply of materials used in our ~~financial results, our operating margin,~~products, our sales, our purchase commitments, our capital expenditures, ~~our contributions to our pension~~the integration and ~~other defined benefit plans, our strategic initiatives, our cost-control activities and other cost saving initiatives, the integration~~effects of our acquisitions and other transactions, ~~impairment of goodwill and other intangible assets,~~ our stock repurchase program ~~our declared~~and dividends, and the ~~existence~~potential or anticipated direct or indirect impact of ~~economic instability,~~COVID-19 on our business that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations, comprehensive income (loss) or cash flows. 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 periods.

Executive Summary

Agilent Technologies, Inc. ("~~we",~~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.

~~On February 23, 2018,~~In the first quarter of fiscal year 2022, we ~~exercised~~announced a change in organizational structure designed to enable our ~~option~~growth strategies and strengthen our focus on customers. Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to ~~acquire all~~our life sciences and applied markets business segment. Service revenue and cost of sales related to the previous acquisition of BioTek moved from our life sciences and applied markets business segment to our Agilent CrossLab business segment. We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022. Historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes. There was no change to our diagnostics and genomics business segment.

COVID-19 Pandemic

Both our domestic and international operations have been and continue to be affected by the ongoing global pandemic of a novel strain of coronavirus (“COVID-19”) and the resulting volatility and uncertainty it has caused in the U.S. and international markets. During the three and nine months ended July 31, 2022, many businesses and countries, including the U.S., continued applying preventative and precautionary measures to mitigate the spread of the virus.

In the latter part of our second quarter, we had to shut down our primary gas chromatography production facility and logistics center in Shanghai in compliance with lockdown measures related to COVID-19. During the three months ended July 31, 2022, we recognized over half of the revenue that was delayed from our second quarter due to this shutdown of our facility. We continue to believe the revenue impact due to the lockdown was temporary, and we now expect the remaining ~~shares~~delayed revenue to be recognized throughout the fourth quarter of ~~Lasergen, Inc. that~~fiscal year 2022.

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While conditions related to the COVID-19 pandemic have improved in 2022 compared to 2021, the pandemic continues to be dynamic, and near-term challenges across the economy remain. The ongoing effects of COVID-19 remain difficult to predict due to numerous uncertainties, including the severity, duration and resurgence of the outbreak, new variants and the contagiousness of these new variants, the effectiveness of health and safety measures including vaccines and therapies, government and community responses including additional lockdowns, managing the different pace of return-to-office in different locations, the pace and strength of the economic recovery, supply chain pressures, delivery and installation delays due to variable access to customer sites, among others. We will continue to actively monitor the effects of the pandemic and will continue to take appropriate steps to mitigate the impacts to our employees and on our business results.

Russia-Ukraine Conflict

In response to the ongoing conflict in Ukraine, at the beginning of March, we ~~do not already own for consideration~~suspended sales prohibited by sanctions, halted the shipment of ~~$105 million. The completion~~products to Russia with the exception of ~~this transaction is contingent on executing~~diagnostics and healthcare products and limited our in-country service to those diagnostics and healthcare customers. Subsequently, effective May 23, 2022 we ceased major operations within Russia and as a result, we recorded an immaterial expense associated with the ~~merger agreement and certain closing conditions.~~

~~Net revenue~~shutdown of ~~$1,211 million~~operations for the three months ended ~~January~~April 30, 2022. For the year ended October 31, ~~2018~~2021, sales derived from customers based in Russia represented an immaterial percentage of our total revenue.

Actual Results

Net revenue of $1,718 million and $4,999 million for the three and nine months ended July 31, 2022 increased 148 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended ~~January~~July 31, ~~2018~~2022 had ~~a favorable~~an overall unfavorable impact on revenue growth of ~~approximately 4~~5 percentage points and 3 percentage points, respectively, when compared to the same ~~period~~periods last year. ~~We calculate~~This revenue growth came from increases in the ~~impact of foreign currency exchange rates movements~~Americas and Asia Pacific regions and from our two largest end markets (pharmaceutical and chemical and energy markets). Revenue generated by ~~applying the actual foreign currency exchange rates in effect during the last month of the current year period to both the current year and prior year periods.~~

~~Revenue in the~~our life sciences and applied markets business ~~for~~in the three and nine months ended ~~January~~July 31, ~~2018,~~2022 increased 14 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended July 31, 2022, had an overall ~~favorable~~unfavorable impact on revenue growth of 4 percentage points and 3 percentage points, ~~in the three months ended January 31, 2018~~respectively, when compared to the same ~~period~~periods last year. ~~For the three months ended January 31, 2018,~~Revenue generated by our performance within the life sciences market showed revenue growth from all our key end markets, led by strong growth in the pharmaceutical and biotechnology market and strong growth in our academia and government market. Within the applied markets, there was strong revenue growth in the chemical and energy markets and the environmental market in the three months ended January 31, 2018, when compared to the same period last year.

~~Revenue in the~~ diagnostics and genomics business for the three and nine months ended ~~January~~July 31, ~~2018,~~2022 decreased 2 percent and increased 139 percent, respectively, when compared to the same ~~period~~periods last year.Foreign currency movements for the three and nine months ended July 31, 2022 had an overall unfavorable impact on revenue growth of 5 percentage points and 2 percentage points, respectively when compared to the same periods last year. Revenue generated by our Agilent CrossLab business in the three and nine months ended July 31, 2022 increased 5 percent and 7 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2022 had an overall ~~favorable~~unfavorable impact on revenue growth of 45 percentage points ~~on revenue in the three months ended January 31, 2018~~and 3 percentage points, respectively when compared to the same ~~period~~periods last year. For the three months ended January 31, 2018, our performance within the diagnostics and clinical market continued to improve when compared to the same period last year, led by strong revenue growth from our pathology and companion diagnostics businesses.

Revenue generated by Agilent CrossLab in the three months ended January 31, 2018, increased 12 percent when compared to the same period last year. Foreign currency movements had an overall favorable impact of 3 percentage points on revenue in

the three months ended January 31, 2018 when compared to the same period last year. For the three months ended January 31, 2018, revenue grew across nearly all key markets led by strong growth in the food, chemical and energy and pharmaceutical and biotechnology markets primarily driven by our consumables portfolio.

Net ~~loss~~income for the three and nine months ended ~~January~~July 31, ~~2018~~2022 was ~~$320~~$329 million and $886 million, respectively, compared to net income of ~~$168~~$264 million and $768 million, respectively, for the corresponding ~~period~~periods last year. ~~Net loss for~~In the ~~three~~nine months ended ~~January~~July 31, ~~2018 was significantly impacted~~2022, cash provided by the discrete tax charge of $533 million related to the enactment of the U.S. Tax Cuts and Jobs Act (the “Tax Act”) passed on December 22, 2017. See Note 4, "Income Taxes" for more details. In the three months ended ~~January 31, 2018, cash generated from~~ operations was ~~$215~~$864 million compared to ~~$116~~cash provided by operations of $1,044 million in the same period last year.

~~For~~During the three and nine months ended ~~January~~July 31, ~~2018~~ ~~and 2017,~~2022, we paid cash dividends of ~~$48~~$0.210 per common share or $62 million and ~~$42~~$0.630 per common share or $188 million, respectively, ~~were paid~~ on the company's ~~outstanding~~ common stock. ~~The timing~~During the three and ~~amounts~~nine months ended July 31, 2021, we paid cash dividends of ~~any future dividends are subject to determination~~$0.194 per common share or $59 million and ~~approval by our board of directors.~~$0.582 per common share or $177 million, respectively, on the company's common stock.

On ~~May 28, 2015,~~February 16, 2021 we announced that our board of directors had approved a new share repurchase program (the ~~"2015~~"2021 repurchase program"). designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The ~~2015~~2021 repurchase program authorizes the purchase of up to ~~$1.14~~$2.0 billion of our common stock at the company's discretion ~~through~~ and ~~including November 1, 2018.~~has no fixed termination date. The ~~2015~~2021 repurchase program which became effective on February 18, 2021, replaced and terminated the 2019 repurchase program on that date. The 2021 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. During the three and nine months ended ~~January~~July 31, ~~2018,~~2022, we repurchased ~~approximately 674,000~~and retired 2.673 million shares for ~~$47~~$323 million and 7.331 million shares for $1.004 billion, respectively, under this authorization. During the three and nine months ended July 31, 2021, we repurchased and retired 804,352 shares for $113 million and 2.192 million shares for $287 million, respectively, under this authorization. As of ~~January~~July 31, 2018, we retired approximately 637,000 shares and the remaining 37,000 shares as of January 31, 2018 were retired in February 2018. During the three months ended January 31, 2017, we repurchased and retired approximately 2.5 million shares for $111 million, under this authorization. As of January 31, 2018,2022, we had remaining authorization to repurchase up to ~~$563~~approximately $573 million of our common stock under ~~this~~the 2021 repurchase program.

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During the nine months ended July 31, 2021, we repurchased and retired 3.05 million shares for $365 million under the 2019 repurchase program. Effective February 18, 2021, the 2019 repurchase program was terminated and replaced by the 2021 repurchase program. The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

Looking forward, as conditions related to the COVID-19 pandemic evolve, we continue to ~~focus~~take appropriate proactive measures to guard the health and safety of our employees and customer interactions. We also remain focused on ~~the growth of operating margin in~~improving our ~~businesses by exploring new ways to simplify our operations, differentiate~~customers’ experience, differentiating product solutions and ~~improve our customers' experience. In addition,~~productivity. We expect to face continued inflationary and logistical pressures (such as longer lead times and limited sources of supply in the near term) which we ~~remain focused on returning a significant proportion of our cash flow~~will continue to ~~shareholders~~mitigate through ~~our dividend~~targeted pricing and ~~share repurchase programs.~~various sourcing strategies. We ~~started fiscal year 2018 with good momentum and strong broad-based growth for all of our businesses. While it is difficult to predict future market conditions, we~~ remain optimistic about our growth opportunities in ~~most~~all of our ~~key~~ end ~~markets. The favorable effects of changes in foreign currency exchange rates increased revenue by approximately 4 percentage points~~markets in the three months ended January 31, 2018. Costs and expenses, incurred in local currency, were subject to the unfavorable effects due to changes in foreign currency exchange rates in the three months ended January 31, 2018, increasing our overall net exposure. The impactfourth quarter of foreign currency exchange rates movements can be positive or negative in any period and is calculated by applying the actual foreign currency exchange rates in effect during the last month of the currentfiscal year ~~period to both the current year and prior year periods.~~2022.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. The preparation of condensed consolidated financial statements in conformity with GAAP in the U.S. requires management to make estimates, judgments and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, ~~share-based compensation,~~ retirement and post-retirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes. ~~Other than accounting for income taxes as described below, there~~There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2017.~~2021. 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.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made and if different estimates that reasonably could have been used or changes in the accounting estimate that are reasonably likely to occur could materially change the financial statements.

~~Accounting for Income Taxes.~~ We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, benefits and deductions, and in the calculation of certain tax assets and liabilities which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as interest and penalties related to uncertain tax positions. Significant

changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period. On a quarterly basis, we provide for income taxes based upon an estimated annual effective tax rate. The effective tax rate is highly dependent upon the geographic composition of worldwide earnings, tax regulations governing each region, availability of tax credits and the effectiveness of our tax planning strategies. We monitor the changes in many factors and adjust our effective income tax rate on a timely basis. If actual results differ from these estimates, this could have a material effect on our financial condition and results of operations.

Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part. When it is more-likely-than-not that all or some portion of deferred tax assets may not be realized, a valuation allowance must be established against such deferred tax assets. We consider all available positive and negative evidence on a jurisdiction-by-jurisdiction basis when assessing whether it is more likely than not that deferred tax assets are recoverable. We consider evidence such as our past operating results, the existence of losses in recent years and our forecast of future taxable income. At January 31, 2018, we continue to recognize a valuation allowance for certain U.S. and U.S state and foreign deferred tax assets. We intend to maintain a valuation allowance in these jurisdictions until sufficient positive evidence exists to support its reversal.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax law and regulations in a multitude of jurisdictions. Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met those thresholds will continue to require significant judgment by management. In accordance with the guidance on the accounting for uncertainty in income taxes, for all U.S. and other tax jurisdictions, we recognize potential liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes and interest will be due. The ultimate resolution of tax uncertainties may differ from what is currently estimated, which could result in a material impact on income tax expense. If our estimate of income tax liabilities proves to be less than the ultimate assessment, a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. We include interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of operations.

On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted into law. The Tax Act significantly changes the existing U.S. tax law and includes numerous provisions that affect our business. ASC 740, Income Taxes, requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin 118 which allows companies to record provisional amounts during a measurement period that should not extend beyond one year from the Tax Act enactment date. We have recognized the provisional tax charge of $480 million due to transition tax liability and $53 million due to the impact of reduction in U.S. tax rates in the period when the tax law was enacted as a component of provision for income taxes from continuing operations. See Note 4, "Income Taxes" for more details. The company will continue to assess the impact of the enacted tax law, expected further guidance from federal and state tax authorities as well as any further guidance for the associated income tax accounting on its business and consolidated financial statements. The company will also continue to evaluate the impact of the tax law change as it relates to the accounting for the outside basis difference of its foreign entities. We expect to fully complete our provisional calculation within the reasonable measurement period allowed by SEC staff guidance.

Adoption of New Pronouncements

See Note 2, “New Accounting Pronouncements,” to the condensed consolidated financial statements for a description of new accounting pronouncements.

Foreign Currency

Our revenues, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. ~~The favorable effects~~Foreign currency movements for the nine months ended July 31, 2022 had an overall unfavorable impact on revenue of ~~changes~~3 percentage points when compared to the same period last year. When movements in foreign currency exchange rates ~~has increased~~have a negative impact on revenue, they will also have a positive impact by ~~approximately 4 percentage points in~~reducing our costs and expenses. We calculate the ~~three months ended January 31, 2018. Costs and expenses, incurred in local currency, were subject to the unfavorable effects due to changes~~impact of movements in foreign currency exchange rates ~~in the three months ended January 31, 2018, increasing our overall net exposure. We calculate the impact of foreign currency exchange rates movements~~ by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year ~~period~~ to both the applicable current and prior year periods. We hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short term and anticipated basis. We do experience some fluctuations within individual lines of the condensed consolidated statement of operations and balance sheet because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (up to a rolling ~~twelve-month~~thirteen-month period). ~~Therefore, we are exposed to~~We may also hedge equity balances denominated in foreign currency ~~fluctuations over the longer term.~~on a long-term basis. 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 U.S. dollar cost of the transaction.

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Results from Operations

Net Revenue

Three Months Ended
Year over Year Change
January 31,
Three
2018
2017
Months
(in millions)
Net revenue:
Products $ 930
$ 815
14%
Services and other 281
252
12%
Total net revenue $ 1,211

$ 1,067

14%


	Three Months Ended				Nine Months Ended				Year over Year Change
	July 31,				July 31,				Three	Nine
	2022		2021		2022		2021		Months	Months
	(in millions)
Net revenue:
Products	$	1,306	$	1,188	$	3,773	$	3,510	10%	7%
Services and other	412		398		1,226		1,149		4%	7%
Total net revenue	$	1,718	$	1,586	$	4,999	$	4,659	8%	7%

Net revenue of ~~$1,211~~$1,718 million and $4,999 million for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 148 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended ~~January~~July 31, ~~2018~~2022 had ~~a favorable~~an overall unfavorable impact on revenue growth of ~~approximately 4~~5 percentage points and 3 percentage points, respectively, when compared to the same ~~period~~periods last year. In the three and nine months ended July 31, 2022, net revenue increased in the Americas and Asia Pacific regions and from our two largest end markets (pharmaceutical and chemical and energy markets). In the three months ended July 31, 2022, net revenue in the Asia Pacific region increased partly due to the recognition of revenue from our second quarter that was delayed when the COVID-related lockdown in Shanghai caused the temporary shutdown of our gas chromatography production facility and logistics center.

Revenue from products for the three and nine months ended July 31, 2022 increased 10 percent and 7 percent, respectively, when compared to the same periods last year. Product revenue growth in the three months ended July 31, 2022 was driven by increased sales within our liquid chromatography, spectroscopy, cell analysis and consumables businesses. Product revenue growth in the nine months ended July 31, 2022 was primarily driven by increased sales within our liquid chromatography, spectroscopy, nucleic acid solutions and consumables businesses.

Services and other revenue ~~increased 12 percent~~ for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 4 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Services and other revenue ~~primarily consists~~consist of ~~revenue generated from Agilent CrossLab~~contract repair, preventative maintenance, compliance services, repair and maintenance, installation services and consulting services inrelated to the companion diagnostics ~~business. Some of~~and nucleic acid solutions businesses. For the ~~prominent~~three and nine months ended July 31, 2022, service revenue increases reflected solid growth from contract repair services, ~~include repair and maintenance on multi-vendor instruments,~~ compliance services, consultative services and ~~installation~~relocation services. Agilent CrossLab service revenue increased 12 percent with a 4 percentage point favorable currency impact, driven by strong growth in the Asia Pacific region, growth across a broad spectrum of service types, and strong growth in nearly all end markets. Companion diagnostics business revenue increased 10 percent with no material currency impact, driven by the demand from our pharmaceutical partners.

Net Revenue By Segment


	Three Months Ended				Nine Months Ended				Year over Year Change
	July 31,				July 31,				Three	Nine
	2022		2021		2022		2021		Months	Months
	(in millions)
Net revenue by segment:
Life sciences and applied markets	$	1,019	$	897	$	2,891	$	2,701	14%	7%
Diagnostics and genomics	340		346		1,037		955		(2)%	9%
Agilent CrossLab	359		343		1,071		1,003		5%	7%
Total net revenue	$	1,718	$	1,586	$	4,999	$	4,659	8%	7%

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months
(in millions)
Net revenue by segment:
Life sciences and applied markets $ 618
$ 540
14%
Diagnostics and genomics 185
164
13%
Agilent Crosslab 408
363
12%
Total net revenue $ 1,211
$ 1,067
14%

Revenue in the life sciences and applied markets business for the three and nine months ended ~~January~~July 31, ~~2018,~~2022 increased 14 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended July 31, 2022 had an overall ~~favorable~~unfavorable impact on revenue growth of 4 percentage points and 3 percentage points, ~~in the three months ended January 31, 2018~~respectively, when compared to the same ~~period~~periods last year. For the three months ended ~~January~~July 31, ~~2018, our performance within the life sciences market showed~~2022, we saw revenue growth ~~from~~across all our ~~key~~ end markets led by strong revenue growth inwithin the pharmaceutical and ~~biotechnology market and strong growth in our academia and government market. Within the applied markets, there was strong revenue growth in the~~ chemical and energy markets ~~and the environmental market in the three months ended January 31, 2018,~~ when compared to the same ~~period~~periods last year. For the nine months ended July 31, 2022, we saw strong revenue growth within the chemical and energy and pharmaceutical markets and moderate revenue growth in the diagnostics and

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clinical markets partially offset by a decline in the environmental and forensics and food markets when compared to the same periods last year.

Revenue in the diagnostics and genomics business for the three and nine months ended ~~January~~July 31, ~~2018,~~2022, decreased 2 percent and increased 139 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended July 31, 2022 had an overall ~~favorable~~unfavorable impact on revenue growth of 45 percentage points ~~on revenue in~~and 2 percentage points, respectively when compared to the same periods last year. For the three months ended ~~January~~July 31, ~~2018~~2022, revenue declined within the diagnostics and clinical and the academia and government markets partially offset by moderate revenue growth within the pharmaceutical market when compared to the same period last year. For the ~~three~~nine months ended ~~January~~July 31, ~~2018, our performance~~2022, revenue growth was strong within the ~~diagnostics and clinical~~pharmaceutical market ~~continued to improve when compared to the same period last year,~~ led by strong revenue growth from our ~~pathology and companion diagnostics businesses.~~nucleic acid solutions business.

Revenue generated by Agilent CrossLab in the three and nine months ended ~~January~~July 31, ~~2018,~~2022, increased 125 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended July 31, 2022 had an overall ~~favorable~~unfavorable impact on revenue growth of 5 percentage points and 3 percentage points, ~~on revenue in the three months ended January 31, 2018~~respectively when compared to the same ~~period~~periods last year. For the three and nine months ended ~~January~~July 31, ~~2018,~~2022, we saw revenue ~~grew~~growth across ~~nearly all key~~most of our end markets led by strong revenue growth infrom the ~~food,~~pharmaceutical and chemical and energy ~~and pharmaceutical and biotechnology~~ markets ~~primarily driven by our consumables portfolio.~~when compared to the same periods last year.

Operating Results


									Three Months Ended						Nine Months Ended						Year over Year Change
	Three Months Ended						Year over Year Change		July 31,						July 31,						Three	Nine
	January 31,						Three		2022			2021			2022			2021			Months	Months
	2018			2017			Months
(in millions, except margin data)								(in millions, except margin data)
Total gross margin	55.6		%	53.8		%	2 ppts	Total gross margin	54.7		%	53.7		%	54.2		%	53.8		%	1 ppt	—
Operating margin	19.7		%	19.3		%	—

(in millions)
Research and development	$	93		$	79		17%	Research and development	$	116		$	113		$	348		$	325		3%	7%
Selling, general and administrative	$	341		$	289		18%	Selling, general and administrative	$	412		$	403		$	1,215		$	1,230		2%	(1)%
Operating margin								Operating margin	23.9		%	21.2		%	22.9		%	20.4		%	3 ppts	3 ppts
Income from operations								Income from operations	$	411		$	336		$	1,147		$	952		22%	21%

Total gross margin for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 21 percentage ~~points~~point and was relatively flat, respectively, when compared to the same ~~period~~periods last year. ~~Increases in total gross~~Gross margin for the three and nine months ended ~~January~~July 31, ~~2018, reflects~~2022 was impacted by higher sales volume, ~~favorable business mix, lower manufacturing materials costs~~price increases and lower ~~amortization expense of intangible assets partially~~inventory charges which were offset by ~~wage increases~~higher materials, shipping and ~~variable pay.~~logistics costs, wages and intangible amortization expense.

~~Total operating margin was flat in~~Research and development expenses for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 3 percent and 7 percent, respectively, when compared to the same period last year. In the three months ended January 31, 2018, total operating margin was impacted by improved gross margin, lower amortization expense and lower acquisition and integration costs offset by increased research and development costs, general administrative costs, wages and variable pay when compared to the same period last year.

~~Research and development expenses in the three months ended January 31, 2018 increased 17 percent when compared to the same period~~periods last year. Research and development expenses for the three and nine months ended July 31, 2022 increased due ~~to increased program spending on new products related to all of our businesses in addition~~ to higher wages and ~~variable pay when compared to spending~~program investments in ~~the same period last year. We remain committed to invest significantly in~~our mass spectrometry business within our our life sciences and applied markets segment. The nine months ended July 31, 2022 also included additional research and development ~~and have focused our development efforts on key strategic opportunities in order~~expenses related to ~~align our business with available markets and position ourselves to capture market share.~~the Resolution Bioscience acquisition.

Selling, general and administrative expenses for the three and nine months ended July 31, 2022 increased 182 percent and decreased 1 percent, respectively, when compared to the same periods last year. The increase in the three months ended ~~January~~July 31, ~~2018~~2022, was due to higher wages and share-based compensation expense partially offset by lower acquisition and integration costs and commissions. The decrease in selling, general and administrative expenses for the nine months ended July 31, 2022 was due to the decrease in the fair value of an acquisition-related contingent consideration, lower commissions, variable pay, acquisition and integration costs and transformational initiative expenses partially offset by higher wages and share-based compensation expense.

Total operating margin for the three and nine months ended July 31, 2022 increased 3 percentage points in both periods when compared to the same ~~period~~periods last year. ~~Selling, general~~Operating margin for the three and ~~administrative expenses~~nine months ended July 31, 2022 increased primarily due to higher sales volume.

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Income from operations for the three and nine months ended July 31, 2022 increased ~~corporate costs, higher share-based compensation expense, higher selling~~$75 million or 22 percent and ~~administrative costs, unfavorable currency movements, higher wages~~$195 million or 21 percent, respectively, on a corresponding revenue increase of $132 million and ~~variable pay.~~$340 million, respectively.

At ~~January~~July 31, ~~2018,~~2022, our headcount was approximately ~~13,800~~17,700 as compared to approximately ~~12,600~~16,700 at ~~January~~July 31, ~~2017.~~2021. The increase in headcount was to address the increase in business.

Other income (expense), net

In the three months ended ~~January~~July 31, ~~2018 and 2017,~~2022 other income ~~(expense),~~and expense, net includes a $9 million loss on the extinguishment of long-term debt and a net gain on equity securities of $2 million. In the nine months ended July 31, 2022 other income and expense, net includes a $9 million loss on the extinguishment of long-term debt and a net loss on equity securities of $60 million. In the three and nine months ended July 31, 2022 other income and expense, net also includes income of $3 million ~~of income in both periods~~and $8 million, respectively, related to the provision of site service costs to, and lease income from ~~Keysight.~~Keysight Technologies, Inc. The costs associated with these services are reported within income from operations.

In the three and nine months ended July 31, 2021 other income and expense, net includes net gains on the fair value of equity investments of $9 million and $24 million, respectively. In the three and nine months ended July 31, 2021 other income and expense, net includes income of $2 million and $7 million, respectively, related to the provision of site service costs to, and lease income from Keysight Technologies, Inc. The costs associated with these services are reported within income from operations. In the nine months ended July 31, 2021 other income and expense, net also includes a $17 million loss on the extinguishment of debt.

Income Taxes

For the three and nine months ended ~~January~~July 31, ~~2018, the company's~~2022, our income tax expense was ~~$553~~$68 million with an effective tax rate of ~~237.3 percent. Our~~17.1 percent and $163 million with an effective tax rate of 15.5 percent, respectively. For the three months ended July 31, 2022, there were no significant discrete items. The income taxes for the nine months ended July 31, 2022 include the excess tax benefits from stock-based compensation of $18 million. For the nine months ended July 31, 2022, our effective tax rate and the resulting provision for income taxes were ~~significantly~~also impacted by the ~~discrete charge~~expiration of ~~$533 million related to~~various foreign statutes of limitations which resulted in the ~~enactment~~recognition of ~~the U.S. Tax Cuts and Jobs Act (the “Tax Act”) as discussed below. The income taxes for the three months ended January 31, 2018 also includes the excess~~previously unrecognized tax benefits of ~~$11 million from stock based compensation.~~$8 million.

Our calculation of income tax expense for the three and nine months ended July 31, 2022 is dependent in part on forecasts of full year results. The impact of COVID-19 on the economic environment is uncertain and may change these forecasts, which could impact tax expense.

For the three and nine months ended ~~January~~July 31, ~~2017, the company's~~2021, our income tax expense was ~~$25~~$63 million with an effective tax rate of ~~13.0 percent.~~19.3 percent and $144 million with an effective tax rate of 15.8 percent, respectively. The income taxes for the nine months ended July 31, 2021 include the excess tax benefits from stock-based compensation of $24 million. For the three and nine months ended July 31, 2021, our effective tax rate and the resulting provision for income taxes were also impacted by the ~~three months ended January 31, 2017 included net discrete~~expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $2$8 million and $24 million, respectively.

million. The significant component of the net discrete tax benefit for the three months ended January 31, 2017 included a $11 million tax expense related to an employee pension settlement gain and $7 million of tax benefit for the settlement of an audit in Italy.

~~2017 U.S. Tax Reform - Tax Cuts and Jobs Act~~

ASC 740, Income Taxes, requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118") which allows companies to record provisional amounts during a measurement period not extending beyond one year from the Tax Act enactment date. As of January 31, 2018, the company has not completed the accounting for all the impacts of the Tax Act. During the quarter, the company recognized a provisional amount of $533 million which includes (1) an estimated provision of $480 million of U.S. transition tax and correlative items on deemed repatriated earnings of non-U.S. subsidiaries and (2) an estimated provision of $53 million associated with the impact of decreased U.S. corporate tax rate as described below.

~~Deemed Repatriation Transition Tax ("Transition Tax")~~: The Transition Tax is based on the company’s total unrepatriated post-1986 earnings and profits ("E&P") of its foreign subsidiaries and the amount of non-U.S. taxes paid on such earnings. Historically, the company permanently reinvested a significant portion of these post-1986 E&P outside the U.S. For the remaining portion, the company previously accrued deferred taxes. Since the Tax Act required all foreign earnings to be taxed currently, the company recorded a provisional income tax expense of $643 million for its one-time transition U.S. federal tax and a benefit of $163 million for the reversal of related deferred tax liabilities. The resulting $480 million net transition tax expense, reduced by existing tax credits, will be paid over 8 years in accordance with the election available under the Tax Act.These amounts represent the best estimate of all required calculations based on currently available information. The one-time transition tax is based in part on cash and illiquid asset amounts present on various comparable measurement dates, some of which are as of our future fiscal year end. As a result, the company’s calculation of the transition tax will change as the measurement dates occur and as federal and state tax authorities provide further guidance.

~~Reduction of U.S. federal corporate tax rate~~: The reduction of the corporate income tax rate requires companies to remeasure their deferred tax assets and liabilities as of the date of enactment. The provisional amount recorded in the three months ended January 31, 2018 for the remeasurement due to tax rate change is $53 million. We have not yet completed our accounting for the measurement of deferred taxes. To calculate the remeasurement of deferred taxes, we estimated when the existing deferred taxes will be settled or realized. These estimates may be affected by activities in the remaining quarters and other analysis related to the Tax Act, including, but not limited to, the impact of state conformity to the tax law change.

prescribed by SAB 118, the company will evaluate, among other factors, the need for cash within and outside the United States, legal entity capitalization requirements, cash controls imposed in foreign jurisdictions, withholding taxes and the availability to offset with foreign tax credits in determining its investment assertion on its accumulated foreign earnings.

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Segment Overview

In the first quarter of fiscal year 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers. Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment. Service revenue and cost of sales related to the previous acquisition of BioTek moved from our life sciences and applied markets business segment to our Agilent CrossLab business segment. Following this reorganization, we continue to have three business segments (life sciences and applied markets, diagnostics and genomics and Agilent CrossLab), each of which continues to comprise a reportable segment. We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022. Historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes. There was no change to our diagnostics and genomics business segment.

Life Sciences and Applied Markets

Our life sciences and applied markets business provides application-focused solutions that include instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular and cellular level. Key product categories include: liquid chromatography ("LC") systems and components; liquid chromatography mass spectrometry ("LCMS") systems; gas chromatography ("GC") systems and components; gas chromatography mass spectrometry ("GCMS") systems; inductively coupled plasma mass spectrometry ("ICP-MS") instruments; atomic absorption ("AA") instruments; microwave plasma-atomic emission spectrometry ~~(“MP-AES”~~("MP-AES") instruments; inductively coupled plasma optical emission spectrometry ("ICP-OES") instruments; raman spectroscopy; cell analysis plate based assays; flow cytometer; real-time cell analyzer; cell imaging systems; microplate reader; laboratory software for sample tracking; information management and ~~informatics systems;~~analytics; laboratory automation and robotic systems; dissolution testing; vacuum pumps and measurement technologies. Our consumables portfolio is designed to improve customer outcomes. Most of the portfolio is vendor neutral, meaning Agilent can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries to supplies. Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies.

Net Revenue


	Three Months Ended				Nine Months Ended				Year over Year Change
	July 31,				July 31,				Three	Nine
	2022		2021		2022		2021		Months	Months
	(in millions)

Net revenue	$	1,019	$	897	$	2,891	$	2,701	14%	7%

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months
(in millions)

Net revenue $ 618
$ 540
14%

Life sciences and applied markets business revenue for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 14 percent and 7 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and nine months ended July 31, 2022 had an overall unfavorable impact on revenue growth of 4 percentage points and 3 percentage points, respectively, when compared to the same periods last year.

Geographically, revenue increased 16 percent in the Americas with a 1 percentage point unfavorable currency impact, decreased 4 percent in Europe with an 11 percentage point unfavorable currency impact and increased 21 percent in Asia Pacific with a 5 percentage point unfavorable currency impact for the three months ended July 31, 2022 compared to the same period last year. For the three months ended July 31, 2022, revenue growth was driven by strong growth in liquid chromatography, spectroscopy products and consumables portfolio when compared to the same period last year.~~Foreign currency movements~~

Revenue for the ~~three~~nine months ended ~~January~~July 31, ~~2018 had an overall favorable~~2022 increased 13 percent in the Americas with no currency impact, ~~on revenue of 3~~was flat in Europe with a 6 percentage ~~points~~point unfavorable currency impact and increased 7 percent in Asia Pacific with a 2 percentage point unfavorable currency impact when compared to the same period last year. ~~Geographically,~~For the nine months ended July 31, 2022, revenue ~~increased 7 percent~~growth was driven by strong growth in liquid chromatography, spectroscopy products and consumables portfolio when compared to the Americas with no currency impact, increased 27 percent in Europe with a 9 percentage point favorable currency impact and increased 11 percent in Asia Pacific with a 1 percentage point favorable currency impact forsame period last year.

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For the three months ended ~~January~~July 31, ~~2018~~2022, revenue by end markets was mixed with pharmaceutical, chemical and energy, food and environmental and forensics delivering strong revenue growth while academia and government and diagnostics and clinical delivering modest revenue growth as compared to the same period last year. Revenue growth in ~~Europe~~the pharmaceutical end market was primarily driven by our liquid chromatography, cell analysis and consumables businesses. Revenue growth in chemical and energy was mainly driven by ~~strong growth~~strength in ~~the~~our spectroscopy, liquid chromatography and liquid chromatography mass spectrometry products while academia and government ~~chemical~~revenue growth was mainly led by spectroscopy, liquid chromatography mass spectrometry and ~~energy and food markets. During the three months ended January 31, 2018, LCMS~~liquid chromatography products ~~experienced robust growth, particularly in the academia and government markets. Other product areas that saw strong growth in the quarter were GCMS, GC and Spectroscopy.~~

~~For the three months ended January 31, 2018, many of our end markets showed solid growth~~as compared to the same period last year. Chemical and energy markets continued to show strong growth during the quarter. Academia and government markets growth was also strong, particularly in Asia and Europe where our customers saw increased funding to purchase our products. Pharmaceutical markets had nearly double-digit growth for the current quarter. Revenue growth in the food market was driven by our liquid chromatography and consumables businesses when compared to the same period last year. Environmental and forensics revenue growth was mainly led by spectroscopy, liquid chromatography and liquid chromatography mass spectrometry products when compared to the same period last year.

For the nine months ended July 31, 2022, revenue by end markets was mixed with pharmaceutical, chemical and energy markets and diagnostics and clinical delivering strong revenue growth, academia and government delivering modest revenue growth while food and environmental ~~markets were also strong~~and forensics revenue declined when compared to the same period last year. Revenue growth in the pharmaceutical market was primarily driven by our liquid chromatography, cell analysis and consumables businesses. Revenue growth in the chemical and energy market was mainly driven by strength in our spectroscopy, gas chromatography and consumables portfolio while diagnostics and clinical market growth was mainly led by ~~demand~~our cell analysis business as compared to the same period last year. The academia and government market revenue growth was mainly due to our liquid chromatography and liquid chromatography mass spectrometry business when compared to the same period last year. Revenue in ~~LCMS.~~the food market declined mainly due to weakness in gas chromatography mass spectrometry and gas chromatography product categories partially offset by consumables and cell analysis business when compared to the same period last year. Weakness in the environmental and forensics market was mainly driven by declines in gas chromatography mass spectrometry and gas chromatography products partially offset by spectroscopy when compared to the same period last year.

Looking forward, despite supply chain uncertainties and the adverse effects of the COVID-19 pandemic, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs. WeWhile we anticipate ~~strong sales funnels given~~volatility in our markets, we expect continued growth across most end markets in the long term from our new product introductions and acquisitions in the last couple of years as we continue to invest in expanding and improving our applications and solutions portfolio. ~~While we anticipate volatility in our markets, we expect continued growth across most end markets.~~

Operating Results


	Three Months Ended						Nine Months Ended						Year over Year Change
	July 31,						July 31,						Three	Nine
	2022			2021			2022			2021			Months	Months
(in millions, except margin data)
Gross margin	60.5		%	60.4		%	60.0		%	60.2		%	—	—
Research and development	$	73		$	67		$	219		$	201		8%	9%
Selling, general and administrative	$	233		$	225		$	696		$	685		4%	2%
Operating margin	30.5		%	27.9		%	28.4		%	27.4		%	3 ppts	1 ppt
Income from operations	$	311		$	250		$	821		$	741		24%	11%

Three Months Ended Year over Year Change

January 31, Three

2018
2017 Months

Gross margin
61.8 % 59.6 % 2 ppts
Operating margin
25.8 % 23.4 % 2 ppts

(in millions)

Research and development
$ 55
$ 50
10%
Selling, general and administrative
$ 168
$ 146
15%

Gross ~~margins~~margin for products and services for the three and nine months ended ~~January~~July 31, ~~2018, increased 2 percentage points~~2022, was relatively flat in both periods when compared to the same ~~period~~periods last year. ~~The increase in gross margins~~Gross margin for the three and nine months ended ~~January~~July 31, ~~2018~~2022 was ~~due to lower warranty~~impacted by higher materials and logistics costs ~~as well as improved pricing~~which were fully offset by price increases, higher sales volume and ~~lower material costs.~~favorable hedging gains.

Research and development expenses for the three and nine months ended ~~January~~July 31, ~~2018,~~2022, increased 108 percent and 9 percent, respectively, when compared to the same ~~period~~periods last year. ~~The increase in research~~Research and development expenses for the three and nine months ended ~~January~~July 31, ~~2018 was~~2022 increased due to higher wages and program ~~funding~~investments in ~~the product division as well as wage and variable pay increases and unfavorable currency related effects.~~our mass spectrometry business.

Selling, general and administrative expenses for the three and nine months ended ~~January~~July 31, ~~2018,~~2022, increased 154 percent and 2 percent, respectively, when compared to the same ~~period~~periods last year. ~~The increase in selling,~~Selling, general and administrative expenses for the three and nine months ended ~~January~~July 31, ~~2018 was~~2022, increased due ~~primarily~~ to ~~increased~~higher wages and marketing ~~and sales force investments~~expenses partially offset by favorable currency movements when compared to ~~drive top line growth as well as wage and variable pay increases, higher share-based compensation expenses, and unfavorable currency related effects.~~same period last year.

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Operating margin for ~~product~~products and services for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 23 percentage points and 1 percentage point, respectively, when compared to the same ~~period~~periods last year. ~~The increase in operating~~Operating margin for the three and nine months ended ~~January~~July 31, ~~2018~~2022 was ~~due to revenue growth~~impacted by higher sales volume and ~~improved gross margin.~~favorable currency movements partially offset by higher wages, material and logistics costs.

~~Income from Operations~~

Income from operations for the three and nine months ended ~~January~~July 31, ~~2018,~~2022, increased ~~$33~~$61 million or 24 percent and $80 million or 11 percent, respectively, on a corresponding revenue ~~increases~~increase of ~~$78 million.~~$122 million and $190 million, respectively.Income from operations for the three and nine months ended July 31, 2022 increased primarily due to higher sales volume.

Diagnostics and Genomics

Our diagnostics and genomics business includes the genomics, nucleic acid contract manufacturing and research and development, pathology, companion diagnostics, ~~and~~ reagent partnership and biomolecular analysis businesses.

Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue and liquid-based pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. ~~Finally,~~Fifth, the reagent partnership business is a provider of reagents used for turbidimetry and flow cytometry. Finally, our biomolecular analysis business provides complete workflow solutions, including instruments, consumables and software, for quality control analysis of nucleic acid samples. Samples are analyzed using quantitative and qualitative techniques to ensure accuracy in further genomics analysis techniques utilized in clinical and life science research applications.

Net Revenue


	Three Months Ended				Nine Months Ended				Year over Year Change
	July 31,				July 31,				Three	Nine
	2022		2021		2022		2021		Months	Months
	(in millions)

Net revenue	$	340	$	346	$	1,037	$	955	(2)%	9%

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months
(in millions)

Net revenue $ 185
$ 164
13%

Diagnostics and genomics business revenue for the three and nine months ended ~~January~~July 31, ~~2018~~2022 decreased 2 percent and increased 139 percent, respectively, when compared to the same periods last year.Foreign currency movements for the three and nine months ended July 31, 2022 had an overall unfavorable impact on revenue growth of 5 percentage points and 2 percentage points, respectively when compared to the same periods last year.

Geographically, revenue was flat in the Americas with no currency impact, decreased 7 percent in Europe with a 10 percentage point unfavorable currency impact and increased 2 percent in Asia Pacific with an 8 percentage point unfavorable currency impact for the three months ended July 31, 2022 compared to the same period last year. For the three months ended July 31, 2022, revenue in the Americas was driven by strong performance in our biomolecular analysis, genomics and reagent partnership portfolios and was offset by a decline in our companion diagnostics business. In Europe, the decline resulted from the COVID testing headwinds in our qPCR portfolio and unfavorable currency impact partially offset by revenue growth driven by our reagent partnership, pathology and companion diagnostics businesses. The growth in Asia Pacific was driven by our pathology and reagent partnership businesses.

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Revenue for the nine months ended July 31, 2022 increased 15 percent in the Americas with no currency impact, decreased 1 percent in Europe with a 6 percentage point unfavorable currency impact and increased 9 percent in Asia Pacific with a 5 percentage point unfavorable currency impact when compared to the same period last year.~~Foreign~~For the nine months ended July 31, 2022, the increase in the Americas was driven by strong performance in our nucleic acid solutions, biomolecular analysis, reagent partnership and genomics portfolios. In Europe, the unfavorable impact of currency ~~movements for~~on revenue was partially offset by revenue growth in our reagent partnership, pathology and companion diagnostics businesses. Revenue growth in Asia Pacific was driven by strong performance across our entire portfolio.

For the three months ended ~~January~~July 31, ~~2018 had an overall favorable impact on~~2022, revenue performance in the pharmaceutical market was led by strong revenue growth in our genomics and biomolecular analysis businesses with moderate growth in our nucleic acid solutions which was impacted by a planned facility shutdown. Our nucleic acid solutions factory in Frederick was shutdown for both routine maintenance and development of ~~4 percentage points~~future capacity for our Train B manufacturing line. For the three months ended July 31, 2022 strong revenue results in our clinical cancer testing and NGS businesses were partially offset by COVID testing headwinds in the qPCR portfolio and unfavorable currency impact. For the nine months ended July 31, 2022 we saw strong revenue growth in the pharmaceutical market led by our genomics, biomolecular analysis and nucleic acid solutions businesses. We also saw moderate revenue growth in diagnostics and clinical and academia and government markets led by our biomolecular analysis, pathology, genomics and reagent partnership businesses when compared to the same period last year. Geographically, revenue increased 17 percent in the Americas with no currency impact, increased 10 percent in Europe with a 7 percentage point favorable currency impact and increased 11 percent in Asia Pacific with a 2 percentage point favorable currency impact for the three months ended January 31, 2018 compared to the same period last year. Regionally, the performance in Americas was assisted by growth in sales in the genomics business (particularly target enrichment and arrays), continued strength in pathology business and reagent partnership business. Europe results were supported by growth in our genomics and pathology businesses. Asia Pacific, our relatively smaller region, increased mainly due to higher shipment volumes in China and Japan.

The 13 percent revenue growth in the three months ended January 31, 2018 was due to positive growth from almost all businesses and regions. This was led by good revenue performance in the pathology business which saw strength due to strong adoption of Agilent’s Dako OMNIS platform and strength in our PD-L1 assays. Good revenue performance in our next generation sequencing solution portfolio offering within the genomics business, was mainly driven by SureSelect, in our NGS target enrichment portfolio. Companion diagnostics business continued to see steady growth with our pharmaceutical partners. The end markets in diagnostics and clinical research remain strong and growing driven by an aging population and lifestyle.

Looking forward, we are optimistic about our long-term growth opportunities in ~~the diagnostics~~our end markets and continue to invest in expanding and improving our applications and solutions portfolio. We remain positive about our growth in ~~these~~our end markets as our ~~Dako~~product portfolio around OMNIS, ~~products,~~ PD-L1 assays and SureFISH ~~continue~~continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing ~~(target~~target enrichment ~~solutions)~~solutions continue to be adopted. Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, ~~to be strong. We are investing in building further capacity in~~and with our newly opened and planned extension of our nucleic acid ~~business~~solutions production facility in Frederick, Colorado, we are well positioned to ~~address~~serve more of the ~~demand for~~market demand. We will expand our capabilities in NGS-based cancer diagnostics and provide innovative technology to further serve the ~~oligos.~~needs of the fast-growing precision medicine market. We will continue to invest in research and development and seek to expand our position in developing countries and emerging markets.

Operating Results


	Three Months Ended						Nine Months Ended						Year over Year Change
	July 31,						July 31,						Three	Nine
	2022			2021			2022			2021			Months	Months
(in millions, except margin data)
Gross margin	54.0		%	53.5		%	54.3		%	52.9		%	1 ppt	1 ppt
Research and development	$	34		$	33		$	103		$	92		2%	11%
Selling, general and administrative	$	77		$	74		$	228		$	211		4%	8%
Operating margin	21.5		%	22.6		%	22.4		%	21.1		%	(1) ppt	1 ppt
Income from operations	$	73		$	78		$	232		$	202		(6)%	15%

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months

Gross margin 54.4 % 54.8 % —
Operating margin 11.7 % 14.3 % (3) ppts

(in millions)
Research and development $ 23
$ 20
18%
Selling, general and administrative $ 56
$ 47
20%

Gross ~~margins~~margin for products and services for the three and nine months ended ~~January~~July 31, ~~2018, was flat~~2022, increased 1 percentage point in both periods when compared to the same ~~period~~periods last year. Gross ~~margins performance was mainly driven~~margin for the three months ended July 31, 2022 increased due to favorable product mix and higher cash flow hedging gains partially offset by higher wages. Gross margin for the nine months ended July 31, 2022 increased due to higher sales volume ~~offset by wage~~offsetting the higher wages and ~~variable pay increases.~~logistics costs.

Research and development expenses for the three and nine months ended July 31, 2022, increased 2 percent and 11 percent, respectively, when compared to the same periods last year. Research and development expenses for the three months ended ~~January~~July 31, ~~2018,~~2022 increased 18primarily due to wages mostly offset by favorable currency movements. For the nine months ended July 31, 2022 research and development expenses increased primarily due to additional expenses related to the Resolution Bioscience acquisition.

Selling, general and administrative expenses for the three and nine months ended July 31, 2022, increased 4 percent and 8 percent, respectively, when compared to the same ~~period~~periods last year. The increase in research and development expenses for the three months ended January 31, 2018 was due to increase in wages and variable pay, unfavorable currency movements and increased spending around the development of clinical applications and solutions and additional research and development expenses related to the Multiplicom acquisition.

Selling, general and administrative expenses for the three months ended ~~January~~July 31, ~~2018~~2022 increased ~~20 percent~~due to higher wages. For the nine months ended July 31, 2022 selling general and administrative expenses increased due to higher wages and additional expenses related to the Resolution Bioscience acquisition partially offset by favorable currency movements.

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Operating margin for products and services for the three and nine months ended July 31, 2022 decreased 1 percentage point and increased 1 percentage point, respectively, when compared to the same period last year. The increase in selling, general and administrative expenses was due to higher infrastructure expenses, increase in wages and variable pay, higher share-based compensation expenses, unfavorable currency movements and spending increase caused by our acquisition of Multiplicom.

~~Operating margin for product and services for the three months ended January 31, 2018 decreased 3 percentage points when compared to the same period~~periods last year. The decrease in operating ~~margins~~margin for the three months ended July 31, 2022 was primarily due to higher operating expenses. The increase in operating margin for the ~~additional cost structure of the Multiplicom acquisition, higher research and development expenses and wage increases partially offset by the gains~~nine months ended July 31, 2022 resulted from higher revenue ~~volumes.~~growth and gross margins which offset the increase in wages, logistics costs and program investments.

Income from ~~Operations~~

operations for the three and nine months ended July 31, 2022 decreased $5 million or 6 percent and increased $30 million or 15 percent, respectively, on a corresponding revenue decrease of $6 million and an increase of $82 million, respectively. Income from operations for the three months ended ~~January~~July 31, ~~2018,~~2022 decreased ~~$1 million on a corresponding revenue increases of $21 million~~ due to ~~acquisition expenses,~~ higher ~~infrastructure expenses~~wages. Income from operations for the nine months ended July 31, 2022, increased due to higher revenue and ~~wage~~gross margins improvement partially offset by higher wages, logistics costs and ~~variable pay increases.~~program investments.

Agilent CrossLab

The Agilent CrossLab business spans the entire lab with its extensive ~~consumables and~~ services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning ~~Agilent~~we can serve and supply customers regardless of their instrument purchase choices. ~~Solutions range from chemistries and supplies to~~The services and software helping to connect the entire lab. Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies. Services include startup, operational,portfolio includes repairs, parts, maintenance, installations, training, ~~and~~ compliance support, software as a service, ~~as well as~~ asset management, consulting and ~~consultative~~various other custom services ~~that help increase customer productivity.~~to support the customers' laboratory operations. Custom ~~service and consumable bundles~~services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements.

Net Revenue


	Three Months Ended				Nine Months Ended				Year over Year Change
	July 31,				July 31,				Three	Nine
	2022		2021		2022		2021		Months	Months
	(in millions)

Net revenue	$	359	$	343	$	1,071	$	1,003	5%	7%

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months
(in millions)

Net revenue $ 408
$ 363
12%

Agilent CrossLab business revenue for the three and nine months ended ~~January~~July 31, ~~2018~~2022 increased 125 percent and 7 percent, respectively, when compared to the same ~~period~~periods last year. Foreign currency movements for the three and nine months ended ~~January~~July 31, ~~2018~~2022 had an overall ~~favorable~~unfavorable impact on revenue growth of 5 percentage points and 3 percentage points, respectively when compared to the same periods last year.

Geographically, revenue increased 13 percent in the Americas with no currency impact, was flat in Europe with an 11 percentage point unfavorable currency impact and was flat in Asia Pacific with a 7 percentage point unfavorable currency impact for the three months ended July 31, 2022 compared to the same period last year. ~~Geographically,~~For the three months ended July 31, 2022, revenue growth in all three regions was driven by contract repair services, compliance services, consultative services and relocation services.

Revenue for the nine months ended July 31, 2022 increased 611 percent in the Americas with no currency impact, increased 133 percent in Europe with a 97 percentage point ~~favorable~~unfavorable currency impact and increased 196 percent in Asia Pacific with a 34 percentage point ~~favorable~~unfavorable currency impact for the three months ended January 31, 2018 compared to the same period last year. The revenue growth in Asia Pacific was bolstered by strong revenue growth in China for a broad range of products and services.

Agilent CrossLab business saw positive revenue growth in all the key end markets in the three months ended January 31, 2018 compared to same period prior year. Key end markets for the Agilent CrossLab business include the pharmaceutical and biotechnology market, the chemical and energy market, and the food market. All three of these end markets produced strong growth in the three months ended January 31, 2018, driven by the success of the consumables portfolio and growth of the remarketed instruments business.

Looking forward, we anticipate that balanced strength in nearly all key end markets will continue to drive the growth in the near term. Geographically, we remain optimistic on the market growth and market penetration opportunities in China and the

~~emerging markets. Other factors for near term revenue growth include upcoming product launches from our consumables pipeline, as well as investment in our laboratory enterprise offerings.~~

~~Operating Results~~

Three Months Ended Year over Year Change
January 31, Three
2018 2017 Months

Gross margin 50.6 % 48.5 % 2 ppts
Operating margin 21.6 % 20.3 % 1 ppt

(in millions)
Research and development $ 14
$ 12
18%
Selling, general and administrative $ 104
$ 90
15%

~~Gross margins for products and services for the three months ended January 31, 2018, increased 2 percentage points~~ when compared to the same period last year. For the nine months ended July 31, 2022, revenue growth in all three regions was driven by contract repair services, compliance services, consultative services and relocation services.

For the three months ended July 31, 2022, we saw strong revenue growth from the pharmaceutical and chemical and energy markets when compared to the same period last year. For the nine months ended July 31, 2022, we saw strong revenue growth in the pharmaceutical, chemical and energy, food and environmental and forensics markets when compared to the same period last year.

Looking forward, Agilent CrossLab services are well positioned to continue their success in our key end markets by supporting a growing installed base of instruments. Digital and remote capabilities will continue to be a key factor in improving the service quality and the experience to customers. Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

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Operating Results


	Three Months Ended						Nine Months Ended						Year over Year Change
	July 31,						July 31,						Three	Nine
	2022			2021			2022			2021			Months	Months
(in millions, except margin data)
Gross margin	47.0		%	46.6		%	47.2		%	46.3		%	—	1 ppt
Research and development	$	8		$	9		$	23		$	26		(7)%	(8)%
Selling, general and administrative	$	72		$	67		$	216		$	209		7%	3%
Operating margin	24.6		%	24.4		%	24.8		%	22.9		%	—	2 ppts
Income from operations	$	88		$	84		$	266		$	229		5%	16%

Gross margin ~~improvement~~for the three and nine months ended July 31, 2022 was ~~primarily driven by the faster growth of the higher margin consumables business~~relatively flat and ~~remarketed instrument business relative~~increased 1 percentage point, respectively, when compared to the ~~lower~~same periods last year. Gross margin for the three and nine months ended July 31, 2022 was impacted by higher sales volume, targeted price increases and higher cash flow hedging gains that improved margins, which were partially offset by higher wages, service ~~business~~delivery costs for logistics and ~~lower inventory charges.~~parts.

Research and development expenses for the three and nine months ended ~~January~~July 31, ~~2018, increased 18~~2022 decreased 7 percent and 8 percent, respectively, when compared to the same ~~period~~periods last year. ~~The increase~~Research and development expenses for the three and nine months ended July 31, 2022 decreased mainly due to cost efficiencies in certain research and development ~~expenses was primarily due~~projects which led to ~~higher wages and variable pay, as well as higher infrastructure costs.~~lower expenditures.

Selling, general and administrative expenses for the three and nine months ended ~~January~~July 31, ~~2018,~~2022 increased 157 percent and 3 percent, respectively, when compared to the same ~~period~~periods last year. ~~The increase in selling,~~Selling, general and administrative expenses ~~was~~for the three and nine months ended July 31, 2022 increased primarily due to higher ~~orders driving higher selling costs, higher~~ wages and ~~variable pay, higher share-based compensation expenses and higher administrative costs.~~sales commissions partially offset by favorable currency movements.

Operating margin for ~~product~~products and services for the three and nine months ended ~~January~~July 31, ~~2018~~2022 was flat and increased 12 percentage ~~point~~points, respectively, when compared to the same ~~period~~periods last year. ~~The improvement was primarily~~Operating margin for the three and nine months ended July 31, 2022 increased mostly driven by ~~the faster growth of the~~ higher ~~margin consumables business~~sales volume with improved gross margins and ~~remarketed instrument business relative to the lower margin service business.~~higher cash flow hedging gains.

~~Income from Operations~~

Income from operations for the three and nine months ended ~~January~~July 31, ~~2018,~~2022 increased ~~$14~~$4 million or 5 percent and $37 million or 16 percent, respectively, on a corresponding revenue ~~increases~~increase of ~~$45 million.~~$16 million and $68 million, respectively. Income from operations for the three and nine months ended July 31, 2022 increased primarily due to higher sales volume.

FINANCIAL CONDITION

Liquidity and Capital Resources

~~Our financial position as of~~ ~~January 31, 2018~~ ~~consisted of cash and cash equivalents of $2,887 million as compared to $2,678 million as of October 31, 2017.~~

As of January 31, 2018, approximately $2,850 million of our cash and cash equivalents is held outside of the U.S. in our foreign subsidiaries. Most of the amounts held outside of the U.S. could be repatriated to the U.S. within a reasonable period of time. As a result of the Tax Act, our cash and cash equivalents are no longer subjected to U.S. federal tax on repatriation into the U.S. We utilize a variety of funding strategies to ensure that our worldwide cash is available in the locations in which it is needed.

As a result of the Tax Act, we are required to pay a one-time transition tax of $440 million on deferred foreign income not previously subject to U.S. federal income tax. The transition tax is payable, beginning in fiscal year 2019 over eight years with 8 percent due in each of the first five years, 15 percent in year six, 20 percent in year seven and 25 percent in year eight.

We believe our cash and cash equivalents, cash generated from operations, and ability to access capital markets and credit lines will satisfy, for at least the next twelve months and beyond, our liquidity requirements, both globally and domestically, including the following: working capital needs, capital expenditures, business acquisitions, stock repurchases, cash dividends, contractual obligations, commitments, principal and interest payments on debt, and other liquidity requirements associated with our operations.

Our financial position as of July 31, 2022 consisted of cash and cash equivalents of $1,071 million as compared to $1,484 million as of October 31, 2021.

Net Cash Provided by Operating Activities

Net cash inflow from operating activities was ~~$215~~$864 million for the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 compared to cash inflow of ~~$116~~$1,044 million for the same period in ~~2017. In~~2021. Cash flow for the ~~three~~nine months ended ~~January~~July 31, ~~2018, we paid approximately $69 million under our variable and incentive pay programs, as compared to a total~~2022 was impacted by the transitory impact of ~~$58 million paid during~~COVID-related shutdowns in China in the ~~same period~~second quarter of ~~2017.~~fiscal year 2022. Net cash paid for income taxes in the nine months ended July 31, 2022 was approximately ~~$32~~$217 million ~~and $27~~compared to income taxes paid of $164 million

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for the same period in ~~the three months ended January 31, 2018 and 2017, respectively. For the three months ended January 31, 2018, the net change in tax-related~~2021. Other assets and liabilities, ~~of $533 million was due to~~for the enactment of the U.S. Tax Cuts and Jobs Act and primarily consisted of an estimated provision of $480 million of U.S. transition tax on deemed repatriated earnings of non-U.S. subsidiaries as well as an estimated $53 million associated with the impact of the decreased U.S. corporate income tax rate. For the threenine months ended ~~January~~July 31, ~~2018, other assets and liabilities provided~~2022, had cash outflow of $33 million compared to cash outflow of $7 million for the same period in 2021.

In the nine months ended July 31, 2022, accounts receivable used cash of ~~$24~~$233 million compared to cash used of ~~$61~~$69 million for the same period in ~~2017.~~2021. Days’ sales outstanding as of July 31, 2022 and 2021 was 70 days and 64 days, respectively. The increase in accounts receivable related to the transitory impacts of shutdowns in China as well as an increase in unbilled accounts receivable. Cash ~~provided in~~used for inventory was $206 million for the ~~three~~nine months ended ~~January~~July 31, 2018 in other assets and liabilities was related to changes in the transaction taxes, deferred revenue and the employee pension settlement gain of $5 million. The usage of cash in the three months ended January 31, 2017 in other assets and liabilities was largely the result of income tax payments, transaction taxes, interest payments on senior notes and the employee pension settlement gain of $32 million.

~~In the three months ended~~ ~~January 31, 2018, accounts receivable used cash of $5 million~~2022 compared to cash used of ~~$31~~$115 million for the same period in ~~2017. Days’ sales outstanding increased due primarily to increased sales to 56~~2021. Inventory days on-hand was 117 days as of ~~January~~July 31, ~~2018~~ ~~from 55 days~~2022 compared to ~~a year ago. Accounts~~100 days as of July 31, 2021 mainly due to increased inventory levels to meet customer needs and to compensate for long lead time in ordering from our suppliers. In the nine months ended July 31, 2022, accounts payable ~~used~~provided cash of $3$110 million ~~for the three months ended~~ ~~January 31, 2018~~ compared to cash provided of ~~$9 million in the same period in 2017. Cash used for inventory was $34 million for the three months ended~~ ~~January 31, 2018~~ ~~compared to cash used of $26~~$46 million for the same period in ~~2017. Inventory days on-hand increased to 102 days as of~~ ~~January~~2021. The change in the employee compensation and benefits liability was $98 million for the nine months ended July 31, ~~2018~~2022 compared to ~~101 days as~~cash provided of ~~the end of~~$38 million for the same period ~~last year.~~in 2021. This was largely due to an increase in variable pay and incentive payments of $201 million in 2022 compared to $119 million in 2021.

We contributed approximately $6$13 million and $3$16 million to our defined benefit plans in the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017,~~2021, 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 ~~$17~~$6 million to our defined benefit plans during the remainder of ~~2018.~~2022.

Net Cash Used in Investing Activities

Net cash used in investing activities was ~~$67~~$228 million for the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 as compared to net cash used in investing activities of ~~$101 million.~~$690 million in the same period of 2021. Investments in property, plant and equipment were ~~$60~~$221 million for the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 compared to ~~$32~~$126 million in the same period of ~~2017.~~2021. The increase in our investments in property plant and equipment ~~in 2018 was related~~is primarily due to the ~~capacity~~ expansion ~~for~~of our ~~nucleic acid solutions facility.~~Frederick manufacturing line in Colorado site. We expect that total capital expenditures for the current year will be approximately ~~$200~~$300 million. In the ~~three~~nine months ended ~~January~~July 31, ~~2018, we invested $6~~2022, cash provided of $22 million inrelated to the sale of equity securities. In the nine months ended July 31, 2022, cash used of $18 million related to our acquisition of ~~businesses, net of cash acquired,~~advanced artificial intelligence technology compared to ~~$70~~cash used of $547 million primarily related to our acquisition of Resolution Bioscience in ~~the same period last year.~~2021.

Net Cash Used in Financing Activities

Net cash ~~provided by~~used in financing activities for the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 was ~~$37~~$1,031 million compared to net cash used in financing activities of ~~$58~~$372 million for the same period of ~~2017.~~2021.

Treasury ~~stock repurchases~~Stock Repurchases

~~On May 28, 2015, we announced that our board of directors had approved a new share repurchase program (the "2015 repurchase program"). The 2015~~Our 2021 repurchase program authorizes the purchase of up to ~~$1.14~~$2.0 billion of our common stock at the company's discretion ~~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.~~has no fixed termination date. During the ~~three~~nine months ended ~~January~~July 31, ~~2018,~~2022 and 2021 we repurchased ~~approximately 674,000~~and retired 7.331 million shares for ~~$47~~$1,004 million and 2.192 million shares for $287 million, respectively, under this authorization. As of ~~January~~July 31, 2018, we retired approximately 637,000 shares and the remaining 37,000 shares as of January 31, 2018 were retired in February 2018. During the three months ended January 31, 2017, we repurchased and retired approximately 2.5 million shares for $111 million, under this authorization. As of January 31, 2018,2022, we had remaining authorization to repurchase up to ~~$563~~approximately $573 million of our common stock under ~~this~~the 2021 repurchase program.

~~Dividends~~

During the ~~three~~nine months ended ~~January~~July 31, ~~2018,~~2021, we also repurchased and retired 3.05 million shares for $365 million under the 2019 repurchase program. Effective February 18, 2021, the 2019 repurchase program was terminated and was replaced by the 2021 share repurchase program. The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

Dividends

During the nine months ended July 31, 2022 and 2021, we paid cash dividends of ~~$0.149~~$0.630 per common share or ~~$48~~$188 million, and $0.582 per common share or $177 million, respectively, on the company's common stock. ~~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.~~

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

Credit Facilities and Short-Term Debt

On ~~September 15, 2014, Agilent~~March 13, 2019, we entered into a credit agreement with a group of financial institutions which, ~~provides~~as amended,

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provided for a ~~$400 million~~$1 billion five-year unsecured credit facility that will expire on ~~September 15, 2019.~~March 13, 2024 and incremental term loan facilities in an aggregate amount of up to $500 million. On ~~June 9, 2015,~~April 21, 2021, we entered into an incremental assumption agreement, pursuant to which the ~~commitments~~aggregate amount available for borrowing under the ~~existing~~revolving credit facility ~~were~~was increased ~~by $300 million~~to $1.35 billion, and ~~on July 14, 2017, the commitments under the existing credit facility were increased by an additional $300 million so that~~ the aggregate ~~commitments under the facility now total $1 billion. During the three months ended January 31, 2018, the company had borrowings of $274 million and repaid $39~~amount available for incremental facilities was refreshed to remain at $500 million. As of ~~January~~July 31, ~~2018, the~~2022, we had no borrowings outstanding ~~balance was $345 million~~ under the credit ~~facility.~~facility and no borrowings under the incremental facilities. We were in compliance with the covenants for the credit facility during the ~~three~~nine months ended ~~January~~July 31, ~~2018.~~2022.

~~Short-term debt and Long-term debt~~Commercial Paper

~~In October 2007,~~Under our U.S. commercial paper program, the company ~~issued an~~may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.35 billion with up to 397-day maturities. At any point in time, the company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the nine months ended July 31, 2022, we borrowed $940 million and repaid $760 million. As of July 31, 2022, we had borrowings of $180 million outstanding under our U.S. commercial paper program and had a weighted average annual interest rate of 2.43 percent.

Long-Term Debt

Term Loan

On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025. As of July 31, 2022, we had $600 million borrowings outstanding under the term loan facility and had a weighted average interest rate of 2.75 percent. Loans under the term loan agreement will bear interest, at our option, either at: (i) the alternate base rate, as defined in ~~senior notes ("2017 senior notes").~~ the term loan agreement, plus the applicable margin for such loans or (ii) adjusted term SOFR, as defined in the term loan agreement, plus the applicable margin for such loans. The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants.

On ~~October 20, 2014,~~May 4, 2022, we ~~settled~~used the ~~redemption of $500 million of~~proceeds from the term loan and repaid the $600 million outstanding aggregate principal amount of our ~~2017~~2023 senior ~~notes.~~notes due July 15, 2023. The total redemption price of approximately $609 million was computed in accordance with the terms of the 2023 senior notes as the present value of the remaining ~~$100~~scheduled payments of principal and unpaid interest on the notes being redeemed. In May 2022, we recorded a loss on extinguishment of debt of $9 million in ~~senior notes matured~~other income (expense), net in the condensed consolidated statement of operations. In addition, $7 million of accrued interest, up to but not including the applicable redemption date, was paid.

We may, from time to time, retire certain outstanding debt of ours through open market cash purchases, privately-negotiated transactions or otherwise. Such transactions, if any, will depend on ~~November 1, 2017~~prevailing market conditions, our liquidity requirements, contractual restrictions and ~~were paid in full.~~other factors.

There have been no other changes to the principal, maturity, interest rates and interest payment terms of the Agilent outstanding senior notes in the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 as compared to the senior notes as described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2017.~~2021.

Other

~~As of January 31, 2018,~~Our commitments for indirect material and services increased by $62 million from $83 million as reported in our ~~contractual obligations reported under “other purchase commitments” were approximately $47 million, an increase of approximately $7 million in~~Annual Report on Form 10-K for the ~~first three months of~~ fiscal year ~~2018, primarily due~~ended October 31, 2021. These commitments are related to a variety of suppliers including IT support service providers. Our commitments to contract manufacturers and suppliers increased by $213 million from $901 million as reported in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. These commitments are related to a variety of suppliers, and we use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates. These open purchase orders with our suppliers have not yet been received and our agreements usually provide us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the ~~new contracts that were executed during the quarter.~~firm orders being placed. There were no other substantial changes from our ~~2017~~ Annual Report on Form 10-K for the fiscal year ended October 31, 2021 to our contractual commitments in the first ~~three~~nine months of fiscal ~~2018. We have contractual commitments for non-cancelable operating leases.~~year 2022. We have no other material non-cancelable guarantees or commitments.

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Other long-term liabilities as of ~~January~~July 31, ~~2018~~2022 and October 31, ~~2017~~2021 include ~~$611~~$220 million and ~~$131~~$241 million, respectively, related to long-term income tax liabilities. Of these amounts, ~~$222~~$103 million and ~~$131~~$117 million related to uncertain tax positions ~~of continuing operations~~ as of ~~January~~July 31, ~~2018~~2022 and October 31, ~~2017,~~2021, 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. As of July 31, 2022 the remaining $117 million in other long-term liabilities relates to the U.S. transition tax payment which is due in installments over the next four years.

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 and equity 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 mainly 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 may also hedge equity balances denominated in foreign currency on a long-term basis. 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 5155 percent and 53 percent of our revenue was generated in U.S. dollars during the ~~three~~nine months ended ~~January~~July 31, ~~2018~~2022 and ~~2017,~~2021, respectively. The ~~favorable effects~~overall unfavorable effect of changes in foreign currency exchange rates, principally as a result of the ~~weakening~~strength of the U.S. dollar, has ~~increased~~

decreased revenue by ~~approximately 4~~3 percentage points in the ~~three~~nine months ended ~~January~~July 31, ~~2018.~~2022. We calculate the impact of movements in our foreign currency exchange rates ~~movements~~ by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year ~~period~~ to both the applicable current and prior year periods.

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~~July 31, ~~2018~~,2022, the analysis indicated that these hypothetical market movements would not have a material effect on our condensed consolidated financial position, results of operations, statement of comprehensive income 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~~July 31, ~~2018~~,2022, 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.

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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 the Securities Exchange Act of 1934 (the "Exchange Act") Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective at ensuring that information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding such required disclosure to the SEC.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~January~~July 31, ~~2018~~2022 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, real estate, environmental and employment matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are probable orand 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~~Business and ~~Other Factors That May Affect Future Results~~Strategic Risks

The COVID-19 pandemic has adversely impacted, and continues to pose risks to, certain elements of our business, results of operations and financial condition, the nature and extent of which are highly uncertain and unpredictable.

Our global operations expose us to risks associated with public health crises, including epidemics and pandemics such as COVID-19. The global spread of COVID-19 had, and may continue to have, an adverse impact on our operations, sales and delivery and supply chains. Many countries including the United States implemented measures such as quarantine, shelter-in-place, curfew, travel and activity restrictions and similar isolation measures, including government orders and other restrictions on the conduct of business operations. Due to these measures, we experienced significant and unpredictable reductions or increases in demand for certain of our products. Moreover, these measures caused delays in installations and significantly impacted our ability to service our customers on site. The COVID-19 pandemic also impacted our supply chain as we experienced disruptions or delays in shipments of certain materials or components of our products. While many of our customers have returned to work and economic activity continues to ramp up, we are unable to accurately predict the full extent and duration of the impact of the COVID-19 pandemic on our business and operations due to numerous uncertainties, including the duration and severity of the pandemic, the efficacy and distribution of vaccines, containment measures and additional waves of infections. As COVID-19 conditions improved, there have been increases in demand for certain of our products, which posed challenges to our supply chain. If there are supply shortages or delays and we are not able to meet increasing product demand, our results would be adversely affected.

Additionally, the COVID-19 pandemic caused significant volatility in U.S. and international markets. The impact of the pandemic may increase the possibility of uncertainty in the global financial markets, high inflation and extended economic downturn, which could reduce our ability to incur debt or access capital and impact our results and financial condition even after local conditions improve. There are no assurances that the credit markets or the capital markets will be available to us in the future or that the lenders participating in our credit facilities will be able to provide financing in accordance with their contractual obligations.

To the extent COVID-19 conditions improve, the duration and sustainability of any such improvements will be uncertain and continuing adverse impacts and/or the degree of improvement may vary dramatically by geography and by business. The actions we take in response to any improvements in conditions, such as our return-to-office plans, may also vary widely by geography and by business and will likely be made with incomplete information; pose the risk that such actions may prove to be premature, incorrect or insufficient; and could have a material, adverse impact on our business and results of operations.

Notwithstanding legal and timing uncertainties relating to federal regulations, we have implemented a mandatory vaccination policy subject to state and local legal requirements for U.S., Puerto Rico and Canada based covered employees, subject to approved exemptions. The implementation of these policies may impact our ability to retain current employees and attract new employees and result in labor disruptions. Further, implementation could also have similar consequences for our subcontractors, which may impact their ability to deliver the goods and services we need from them.

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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. In addition, our 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 as customer spending policies and budget allocations, particularly for capital items, may change. 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 may become obsolete, and our operating results may 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. Without the timely introduction of new products, services and enhancements, our products and services may become technologically obsolete over time, in which case our revenue and operating results could 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;

•appropriately allocate our research and development spending to products and services with higher growth prospects;

•successfully commercialize new technologies in a timely manner;

•manufacture and deliver new 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.

In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest in research and development of products and services that do not lead to significant revenue, which would adversely affect our profitability. Even if we successfully innovate and develop new and enhanced products and services, we may incur substantial costs in doing so, and our operating results may suffer. In addition, promising new products may fail to reach the market or realize only limited commercial success because of real or perceived concerns of our customers. Furthermore, as we collaborate with pharmaceutical customers to develop drugs such as companion diagnostics assays or ~~providing~~provide drug components like active pharmaceutical ingredients, we face risks that those drug programs may be cancelled upon clinical trial failures.

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 United States. Slower global economic growth, inflationary pressures, instability 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~~sales 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 experienced 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 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. Many factors, including public policy spending priorities, available resources, mergers and consolidations, ~~spending priorities,~~ institutional and governmental budgetary policies and spending priorities, 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 revenue from customers that rely on government funding or research may vary significantly due to factors that can be difficult to forecast, including changes in 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.

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 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.

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 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 favorable effects~~Foreign currency movements for the nine months ended July 31, 2022 had an overall unfavorable impact on revenue of ~~changes~~approximately 3 percentage points when compared to the same period last year. When movements in foreign currency exchange rates ~~has increased revenues~~have a negative impact on revenue, they will also have a positive impact by ~~approximately 4 percentage points in the three months ended January 31, 2018.~~reducing our costs and expenses. In addition, many of our employees, contract manufacturers, suppliers, job functions, outsourcing activities and manufacturing facilities are located outside the 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;

•ongoing instability or changes in a specific country's or region's political, economic or other ~~conditions;~~conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts, including uncertainties and instability in economic and market conditions caused by the COVID-19 pandemic and the Ukraine/Russia conflict;

•changes in diplomatic and trade relationships, as well as, new tariffs, trade protection measures, ~~and~~ import or export licensing ~~requirements;~~requirements, new or different customs duties, trade embargoes and sanctions and other trade

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barriers;

•tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on U.S. goods, including the tariffs enacted by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods;

•negative consequences from changes in or differing interpretations of laws and regulations, including those related to tax ~~laws;~~and import/export;

•difficulty in staffing and managing widespread operations;

•differing labor regulations;

•differing protection of intellectual property;

•unexpected changes in regulatory requirements; ~~and~~

•geopolitical uncertainty or turmoil, ~~including~~ terrorism and ~~war.~~war; and

•impact of public health crises, including pandemics and epidemics, such as COVID-19 on the global economy.

We ~~centralized most~~sell our products into many countries and we also source many components and materials for our products from and manufacture our products in various countries. Future tariffs and tariffs already implemented could have negative impact on our business, results of operations and financial condition. It may be time-consuming and expensive for us to alter our business operations in order to adapt to any such change. Further, additional tariffs, the scope and duration of which, if implemented, remains uncertain, which have been proposed or threatened and the potential escalation of a trade war and retaliatory measures could have a material adverse effect on our business, results of operations and financial condition.

Most of our accounting and tax processes ~~to two locations: India and Malaysia. These processes include~~including general accounting, cost accounting, accounts payable, accounts ~~receivables~~receivable and tax ~~functions.~~functions are centralized at locations in India and Malaysia. If economical, political, health or other 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.

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 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. For expenses beyond that twelve-month period, our hedging strategy does not mitigate our exposure. In addition, our currency hedging programs involve ~~third party~~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 operating results and financial condition.

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

~~Our future success depends partly on the continued service~~Table 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.Contents

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. Acquired businesses may also expose us to new risks and new markets, and we may have difficulty addressing these risks in a cost effective and timely manner. 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, 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 ~~models,~~model, business infrastructure and sales and distribution ~~methodologies~~methodology 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 key customers, increased exposure to certain governmental regulations and compliance requirements and increased costs and use of 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.~~such transactions.

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 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 and other indemnification obligations. 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.

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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Regulatory, Legal and Compliance Risks

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 and continue to enhance our controls. However, we cannot be certain 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.

Our customers and we are subject to various governmental ~~regulations, compliance~~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 controls, trade restrictions and anti-competition. In addition, asas a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal, sensitive and/or patient health data in the course of our business. Global privacy laws, including the EU's General Data Protection Regulation ("GDPR”), Brazil’s Lei Geral de Protecao de Dados, and the California Consumer Privacy Act, apply to our activities involving the processing of personal data, both in relation to our product and service offerings and the management of our workforce. The global proliferation of privacy laws, with governmental authorities around the world passing or considering passing legislative and regulatory proposals concerning privacy and data protection, continues to result in new requirements regarding the handling of personal data, with many such laws imposing significant penalties for non-compliance (including possible fines of up to four percent of total company revenue under the GDPR). Each of these privacy, security and data protection laws and regulations could impose significant limitations and increase our cost of providing our products and services where we process end user personal data and could harm our results of operations and expose us to significant fines, penalties and other damages.

We must also 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 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.

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 operating results and business would suffer.

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.

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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 and services are subject to regulation by the FDA, the U.S. Department of Health and Human Services, the Centers for Medicare & Medicaid Services and certain similar foreign regulatory agencies. In addition, a number of our products and services may 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 and service-related activities, from quality management, design and development to labeling, manufacturing, promotion, sales and distribution. In addition, we are subject to inspections by these and other regulatory authorities. If we or any of our suppliers, distributors or ~~distributors~~customers 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,~~letters; adverse publicity affecting both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil or criminal penalties; import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of operating restrictions; suspension or revocation of our license to operate, 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. In addition, the global regulatory environment has become increasingly stringent for our products and services. For example, the EU is going to enforce new requirements, known as the EU In Vitro Diagnostic Regulation (the “EU IVDR”), which imposes stricter requirements for the marketing and sale of in vitro diagnostics in the European Union.These new regulations are more stringent in a variety of areas, including clinical requirements, quality systems and post-market surveillance activities. The new EU IVDR requirements became effective starting in May 2022. Failure to meet these requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

Some of our products are subject to 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 under similar laws. The Toxic Substances Control Act regulations govern, among other things, the testing, manufacture, processing and distribution of chemicals, the testing of regulated chemicals for their effects on human health and safety and the import and export of chemicals. The Toxic Substances Control Act prohibits persons from manufacturing any chemical in the United States that has not been reviewed by the 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 subject to civil penalties, criminal prosecution and, in some cases, 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 revenue from direct and indirect sales to U.S., federal, 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, increased pricing pressure 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.

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Our reputation, ability to do business and financial statements may be harmed by improper conduct by any of our employees, agents or business partners.

We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices and workplace behavior, export and import compliance, money laundering and data privacy. In particular, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced governmental corruption to some degree. Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions, and related shareholder lawsuits could lead to substantial civil and criminal, monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees. In addition, the government may seek to hold us liable as a successor for violations committed by companies in which we invest or that we acquire. We also rely on our suppliers to adhere to our supplier standards of conduct, and material violations of such standards of conduct could occur that could have a material effect on our business, reputation and financial statements.

~~Our retirement~~Environmental contamination from past and ~~post retirement pension plans~~ongoing operations could subject us to substantial liabilities.

Certain properties we have previously owned or leased are undergoing remediation for subsurface contamination. Although we are indemnified for liability relating to the required remediation at some of those properties, we may be subject to liability if these indemnification obligations are not fulfilled. In other cases, we have agreed to indemnify the current owners of certain properties for liabilities related to contamination, including companies with which we have previously been affiliated such as HP, Inc., Hewlett-Packard Enterprise (formerly Hewlett-Packard Company) and Siemens Healthineers (formerly Varian Medical Systems, Inc.) Further, other properties we have previously owned or leased at which we have operated in the past, or for which we have otherwise contractually assumed or provided indemnities for certain actual or contingent environmental liabilities, may or do require remediation. While we are not aware of any material liabilities associated with any potential environmental contamination at any of those properties or facilities, we may be exposed to material liability if environmental contamination at material levels is found to exist. In addition, in connection with the acquisition of certain companies, we have assumed other costs and potential or contingent liabilities for environmental matters. Any significant costs or liabilities could have an adverse effect on results of operations.

We are subject to ~~financial market~~environmental laws and regulations that expose us to a number of risks ~~that could adversely affect our future results of operations~~ and ~~cash flows.~~

We have significant retirement and post retirement pension 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~~significant liabilities and costs.

Our current and historical manufacturing and research and development processes and facilities are subject to various foreign, federal, state and local environment protection and health and safety laws and regulations. As a result, we may become subject to liabilities for environmental contamination, and these liabilities may be substantial. Although our policy is to apply strict standards for environmental protection and health and safety at our sites inside and outside the United States, we may not be aware of all conditions that could subject us to liability. Further, in the event that any future climate change legislation would require that stricter standards be imposed by domestic or international environmental regulatory authorities, we may be required to make certain changes and adaptations to our manufacturing processes and facilities. We cannot predict how changes will affect our business ~~combinations~~operations or the cost of compliance to us, our customers or our suppliers. Failure to comply with these environmental protection and health and safety laws and regulations could result in ~~stronger competitors, which could have a material adverse effect~~civil, criminal, regulatory, administrative or contractual sanction, including fines, penalties or suspensions, restrictions on our ~~business,~~operations and reputational damage. If we have any violations of, or incur liabilities pursuant to these laws or regulations, our financial condition and operating results could be adversely affected.

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.

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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 or can be expanded to cover new products on favorable terms or at all.

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, 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 with a significant competitive advantage.

We may need to spend significant resources monitoring and enforcing our intellectual property rights, and we may not be aware of or able to detect or prove 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 may allow them to compete with us using that intellectual property.

We are subject to evolving corporate governance and public disclosure expectations and regulations that impact compliance costs and risks of noncompliance.

We are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC and NYSE, as well as evolving investor expectations around corporate governance and environmental and social practices and disclosures. These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by the U.S. and foreign governments, making compliance more difficult and uncertain. The increase in costs to comply with such evolving expectations, rules and regulations, as well as any risk of noncompliance, could adversely impact us.

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.

We are subject to the rules of the 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 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. Our ongoing implementation of these rules 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 ~~compete successfully~~sufficiently verify the origins of the relevant minerals used in ~~increasingly consolidated industries and cannot predict with certainty how industry consolidation will affect~~ our ~~competitors or us.~~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.

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Operational Risks

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,~~consolidated, and may ~~continue to~~further 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 may exceed our production requirements. If during an economic downturn we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our gross margins and operating results. 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 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.

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~~manage 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 revenue and unexecuted efficiencies and impact our results of operations and our stock price.

~~Environmental contamination from past and ongoing~~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 us to ~~substantial liabilities.~~

~~Certain properties we have previously owned are undergoing remediation for subsurface contaminations. Although we are indemnified for any liability relating~~catastrophic loss due to fire, flood, terrorism, public health crises, increasing severity or frequency of extreme weather events, or other climate-change related risks, including resource scarcity or rationing that may be caused by extreme weather conditions. For example, in the ~~required remediation, we may~~second quarter of fiscal year 2022, the outbreak of COVID-19 in China led to a mandated shutdown of our facilities in Shanghai, which adversely impacted our business and results, and impacted our supply chain. In addition, several of our facilities could be subject to ~~liability if these indemnification obligations~~a catastrophic loss caused by earthquake due to their locations. Our production facilities, headquarters and laboratories in California, and our production facilities in Japan, are ~~not fulfilled. Further, other properties we have previously owned or facilities we have operated~~all located in the past, may be contaminated based on our operations. In some cases, we have agreed to indemnify the current owners of certain properties for any liabilities related to such contamination, including companies that we used to be affiliatedareas with such as HP, Inc., Hewlett-Packard Enterprise (formerly Hewlett-Packard Company) and Varian Medical Systems, Inc. While we are not aware of any material liabilities associated with any potential environmental contamination atabove-average seismic activity. If any of ~~those properties or~~our facilities ~~we may be exposed~~were to ~~material liability if such environmental contamination is found to exist. In addition, in connection with the acquisition of certain companies, we have assumed the costs~~experience a catastrophic loss, it could disrupt our operations, delay production, shipments and ~~potential liabilities for environmental matters. Any significant costs or liabilities could have an adverse effect on results of operations.~~

~~Our current~~revenue and historical manufacturing processes and operations involve, or have involved, the use of substances regulated under various foreign, federal, state and local environment protection and health and safety laws and regulations. As a result, we may become subject to liabilities for environmental contamination and these liabilities may be substantial. Although our policy is to apply strict standards for environmental protection and health and safety at our sites inside and outside the United States, we may not be aware of all conditions that could subject us to liability. Failure to comply with these environmental protection and health and safety laws and regulations could result in ~~civil, criminal, regulatory, administrative~~large expenses to repair or ~~contractual sanction, including~~

~~fines, penalties or suspensions.~~replace the facility. If such a disruption were to occur, we ~~have any violations of, or incur liabilities pursuant to these laws or regulations,~~could breach agreements, our ~~financial condition~~reputation could be harmed, and our business and operating results could be adversely affected.

~~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.~~

We are subject to the 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 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, because we have consolidated 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 or can be expanded to cover new products on favorable terms or at all.

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

Our pending patent, 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 with a significant competitive advantage.

~~We may need to spend significant resources monitoring our intellectual property rights~~manufacturing facilities and we may not ~~be aware~~have redundant manufacturing capability readily available, 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

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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 ~~detect~~obtain third-party insurance. If our third-party insurance coverage is adversely affected or ~~prove infringement by third parties. Our competitive position~~to the extent we have elected to self-insure, we may be at a greater risk that our financial condition will be harmed by a catastrophic loss.

If we experience a significant disruption in, or breach in security of, our information technology systems, or if we ~~cannot detect infringement~~fail to implement new systems and ~~enforce~~software successfully, our ~~intellectual property rights quickly or at all. In some circumstances, we may choose~~business could be adversely affected.

We rely on several centralized information technology systems throughout our company to ~~not pursue enforcement because an infringer has a dominant intellectual property position or for~~provide products and services, keep financial records, process orders, manage inventory, process shipments to customers and operate 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 themcritical functions. Our information technology systems may be ~~unavailable~~susceptible to damage, disruptions or ~~limited~~shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. For example, in ~~some countries which~~December 2020 it was widely reported that SolarWinds, an information technology company, was the subject of a cyberattack that created security vulnerabilities for thousands of its clients. We identified an impacted SolarWinds server and promptly took steps to contain and remediate the incidents. While we believe that there were no disruptions to our operations as a result of this attack, other similar attacks could ~~make~~have a significant negative impact on our systems and operations. 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 ~~easier for competitors to capture market share and~~ could result in ~~lost revenues. Furthermore, some~~the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, security breaches of our ~~intellectual property is licensed~~information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to ~~others~~us or to our employees, partners, customers or suppliers, which ~~may allow them~~could result in our suffering significant financial or reputational damage.

Financial and Tax Risks

Our retirement and post retirement pension plans are subject to ~~compete with us using~~financial market risks that ~~intellectual property.~~could adversely affect our future results of operations and cash flows.

We have significant retirement and post retirement pension 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.

Changes in tax laws, unfavorable resolution of tax examinations, or exposure to additional tax liabilities could have a material adverse effect on our results of operations, financial condition and liquidity.

We are subject to 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 periodically. Any implementation of tax laws that fundamentally change the taxation of corporations in the U.S. or Singapore could materially impact our effective tax rate and could have a significant adverse impact on our financial results.

The 2017 United States Tax Cut and Jobs Act (“Tax Act”) significantly changed the taxation of U.S. based multinational corporations. Our compliance with the Tax Act will require the use of estimates in our financial statements and exercise of significant judgment in accounting for its provisions. The implementation of the Tax Act will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. The legislation could be subject to potential amendments and technical corrections, any of which could materially lessen or increase certain adverse impacts of the legislation. As regulations and guidance evolve with respect to the Tax Act, and as we gather information and perform more analysis, our results may differ from previous estimates and may materially affect our financial position.

We are also subject to examinations of our tax returns by tax authorities in various jurisdictions around the world. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of our provision for taxes. These assessments can require a high degree of judgment and 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 financial results and condition.

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

We benefit from tax incentives extended to our foreign subsidiaries to encourage investment or employment. ~~Several jurisdictions have~~Singapore has granted us 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. Our taxes could increase if the incentives are not renewed upon expiration. If we cannot or do 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.

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~~are party to a $1.35 billion five-year unsecured credit facility that will expire on March 13, 2024 and a $600 million term loan facility that matures on April 15, 2025. Furthermore, we are permitted pursuant to the credit agreement to establish incremental facilities of up to $500 million. As of July 31, 2022, we had no borrowings outstanding under the credit facility or the incremental facilities. On June 18, 2021, we increased the maximum amount of our commercial paper program to $1.35 billion. As of July 31, 2022, we had borrowings of $180 million outstanding under our U.S. commercial paper program. As of July 31, 2022 we had outstanding an aggregate principal amount of ~~$1.8~~$2.1 billion in senior unsecured 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 millionnotes and on July 14, 2017, the commitments under the existing credit facility were increased by an additional $300 million so that the aggregate commitments under the facility now total $1 billion. As of January 31, 2018, we had $345$600 million outstanding under the ~~credit~~term loan 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 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 and our term loan facility each imposes restrictions on us, including restrictions on our ability to create liens on our assets and engage in certain types of sale and leaseback transactions 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~~indentures governing our senior notes ~~contains~~contain 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 or noteholders, 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 laboratories in California, and our production facilities in Japan, are all located in areas with above-average seismic activity. If any of 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, because we have consolidated our manufacturing facilities and we may not have redundant manufacturing capability readily available, 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.

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, 2018, we had cash and cash equivalents of approximately $2.9 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 operating 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 cannot assure that we will continue to pay dividends on our common stock.

Since the first quarter of 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.

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 July 31, 2022, we had cash and cash equivalents of approximately $1.1 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 operating results and financial condition.

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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~~company’s purchases, based on trade date, of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended ~~January~~July 31, ~~2018~~.2022.


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)
2021 Repurchase Program
May 1, 2022 through May 31, 2022	341,451	$	123.27	341,451	$	854
June 1, 2022 through June 30, 2022	1,248,780	$	120.20	1,248,780	$	704
July 1, 2022 through July 31, 2022	1,082,883	$	121.08	1,082,883	$	573
Total	2,673,114	$	120.95	2,673,114	$	573

(1)On February 16, 2021 we announced that our board of directors had approved a new share repurchase program (the "2021 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2021 repurchase program authorizes the purchase of up to $2.0 billion of our common stock at the company's discretion and has no fixed termination date. The 2021 repurchase program which became effective on February 18, 2021, replaced and terminated the 2019 repurchase program on that date. The 2021 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. As of July 31, 2022, all repurchased shares to date have been retired.

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

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, 2017 through November 30, 2017
231

$ 68.46

231

$ 594
December 1, 2017 through December 31, 2017
225

$ 67.18

225

$ 579
January 1, 2018 through January 31, 2018
218

$ 71.79

218

$ 563
Total
674

$ 69.11

674

$ 563

Table of Contents

~~(1)~~

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 at the company's discretion 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. As of January 31, 2018, all repurchased shares except for approximately 37,000 shares have been retired.


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

ITEM 6. EXHIBITS

(a)Exhibits:



Exhibit
Number		Description

~~11.1~~31.1		~~See Note 5, “Net Income Per Share”, to our Condensed Consolidated Financial Statements.~~

~~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.~~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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

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 5, 2018~~August 31, 2022	By:	/s/ ~~Didier Hirsch~~Robert W. McMahon
			~~Didier Hirsch~~Robert W. McMahon
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)


Dated:	~~March 5, 2018~~August 31, 2022	By:	/s/ Rodney Gonsalves
			Rodney Gonsalves
			Vice President, Corporate Controllership
			(Principal Accounting Officer)

5263



	January 31, 2018			October 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	2,887		$	2,678
Accounts receivable, net	751			724
Inventory	608			575
Other current assets	151			192
Total current assets	4,397			4,169
Property, plant and equipment, net	792			757
Goodwill	2,633			2,607
Other intangible assets, net	341			361
Long-term investments	140			138
Other assets	395			394
Total assets	$	8,698		$	8,426
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	292		$	305
Employee compensation and benefits	221			276
Deferred revenue	321			291
Short-term debt	345			210
Other accrued liabilities	182			181
Total current liabilities	1,361			1,263
Long-term debt	1,800			1,801
Retirement and post-retirement benefits	241			234
Other long-term liabilities	770			293
Total liabilities	4,172			3,591
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; 323 million shares at January 31, 2018 and 322 million shares at October 31, 2017 issued	3			3
Treasury stock at cost; 37 thousand shares at January 31, 2018 and zero shares at October 31, 2017	(3		)	—
Additional paid-in-capital	5,320			5,300
Accumulated deficit	(529		)	(126		)
Accumulated other comprehensive loss	(269		)	(346		)
Total stockholders' equity	4,522			4,831
Non-controlling interest	4			4
Total equity	4,526			4,835
Total liabilities and equity	$	8,698		$	8,426



	Purchased Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(in millions)
As of October 31, 2017
Purchased technology	$	855	$	646	$	209
Trademark/Tradename	149		73		76
Customer relationships	151		112		39
Third-party technology and licenses	27		14		13
Total amortizable intangible assets	1,182		845		337
In-Process R&D	24		—		24
Total	$	1,206	$	845	$	361
As of January 31, 2018
Purchased technology	$	863	$	665	$	198
Trademark/Tradename	149		76		73
Customer relationships	153		119		34
Third-party technology and licenses	27		16		11
Total amortizable intangible assets	1,192		876		316
In-Process R&D	25		—		25
Total	$	1,217	$	876	$	341



Estimated future amortization expense:
(in millions)
Remainder of 2018	$	73
2019	$	71
2020	$	56
2021	$	42
2022	$	32
2023	$	21
Thereafter	$	21



	Derivatives Designated as Cash Flow Hedges			Derivatives Not Designated as Hedging Instruments
	Forward Contracts USD			Forward Contracts USD
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	(80	)	$	54
British Pound	(47		)	11
Canadian Dollar	(36		)	9
Australian Dollar	5			16
Malaysian Ringgit	—			(2		)
Japanese Yen	(54		)	(17		)
Danish Krone	—			18
Korean Won	(39		)	(2		)
Singapore Dollar	14			2
Swiss Franc	—			29
Other	—			(18		)
Totals	$	(237	)	$	100



	January 31, 2018						October 31, 2017
	Amortized Principal		Swap		Total		Amortized Principal		Swap		Total
	(in millions)
2020 Senior Notes	499		10		509		499		11		510
2022 Senior Notes	398		—		398		398		—		398
2023 Senior Notes	596		—		596		596		—		596
2026 Senior Notes	297		—		297		297		—		297
Total	$	1,790	$	10	$	1,800	$	1,790	$	11	$	1,801



				Net defined benefit pension cost and post retirement plan costs
Three Months Ended January 31, 2018	Foreign currency translation			Prior service credits			Actuarial Losses			Unrealized gains (losses) on derivatives			Total
	(in millions)
As of October 31, 2017	$	(156	)	$	140		$	(328	)	$	(2	)	$	(346	)

Other comprehensive income (loss) before reclassifications	79			—			(1		)	(10		)	68

Amounts reclassified out of accumulated other comprehensive income (loss)	—			(2		)	9			—			7

Tax (expense) benefit	—			1			(2		)	3			2

Other comprehensive income (loss)	79			(1		)	6			(7		)	77

As of January 31, 2018	$	(77	)	$	139		$	(322	)	$	(9	)	$	(269	)