Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2020 | Aug. 26, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Central Index Key | 0001090872 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --10-31 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 31, 2020 | |
Entity File Number | 001-15405 | |
Entity Registrant Name | AGILENT TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0518772 | |
Entity Address, Address Line One | 5301 Stevens Creek Blvd., | |
Entity Address, City or Town | Santa Clara, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95051 | |
City Area Code | (800) | |
Local Phone Number | 227-9770 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | A | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 308,309,635 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net revenue: | ||||
Net revenue | $ 1,261 | $ 1,274 | $ 3,856 | $ 3,796 |
Costs and expenses: | ||||
Cost of revenue | 592 | 582 | 1,807 | 1,728 |
Research and development | 92 | 101 | 393 | 302 |
Selling, general and administrative | 347 | 366 | 1,109 | 1,075 |
Total costs and expenses | 1,031 | 1,049 | 3,309 | 3,105 |
Income from operations | 230 | 225 | 547 | 691 |
Interest income | 1 | 10 | 7 | 30 |
Interest expense | (19) | (18) | (59) | (53) |
Other income (expense), net | 7 | 5 | 64 | 20 |
Income before taxes | 219 | 222 | 559 | 688 |
Provision (benefit) for income taxes | 20 | 31 | 62 | (189) |
Net income | $ 199 | $ 191 | $ 497 | $ 877 |
Net income per share | ||||
Basic | $ 0.64 | $ 0.61 | $ 1.61 | $ 2.78 |
Diluted | $ 0.64 | $ 0.60 | $ 1.59 | $ 2.74 |
Weighted average shares used in computing net income per share: | ||||
Basic | 309 | 312 | 309 | 316 |
Diluted | 312 | 316 | 312 | 320 |
Product | ||||
Net revenue: | ||||
Net revenue | $ 932 | $ 949 | $ 2,878 | $ 2,850 |
Costs and expenses: | ||||
Cost of revenue | 422 | 411 | 1,293 | 1,225 |
Service, Other | ||||
Net revenue: | ||||
Net revenue | 329 | 325 | 978 | 946 |
Costs and expenses: | ||||
Cost of revenue | $ 170 | $ 171 | $ 514 | $ 503 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net income | $ 199 | $ 191 | $ 497 | $ 877 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on derivative instruments, net of tax expense (benefit) of $(2), $1, $(2) and $0 | (7) | 3 | (4) | 2 |
Amounts reclassified into earnings related to derivative instruments, net of tax expense (benefit) of $0, $(1), $0 and $(2) | (1) | 0 | (2) | (4) |
Foreign currency translation, net of tax expense (benefit) of $0, $(1), $0 and $(10) | 60 | (12) | 20 | 1 |
Net defined benefit pension cost and post retirement plan costs: | ||||
Change in actuarial net loss, net of tax expense of $4, $5, $9 and $11 | 10 | 5 | 28 | 17 |
Change in net prior service benefit, net of tax expense (benefit) of $(1), $0, $(1) and $(1) | 0 | (2) | (4) | (5) |
Other comprehensive income (loss) | 62 | (6) | 38 | 11 |
Total comprehensive income | $ 261 | $ 185 | $ 535 | $ 888 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Other comprehensive income (loss), tax, parenthetical disclosures | ||||
Unrealized gain (loss) on derivative instruments, tax | $ (2) | $ 1 | $ (2) | $ 0 |
Amounts reclassified into earnings related to derivative instruments, tax | 0 | (1) | 0 | (2) |
Foreign currency translation, tax | 0 | (1) | 0 | (10) |
Net defined benefit pension cost and post retirement plan costs, tax | ||||
Change in actuarial net loss, tax | 4 | 5 | 9 | 11 |
Change in net prior service benefit, tax | $ (1) | $ 0 | $ (1) | $ (1) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,358 | $ 1,382 |
Accounts receivable, net | 930 | 930 |
Inventory | 746 | 679 |
Other current assets | 211 | 198 |
Total current assets | 3,245 | 3,189 |
Property, plant and equipment, net | 846 | 850 |
Goodwill | 3,606 | 3,593 |
Other intangible assets, net | 876 | 1,107 |
Long-term investments | 148 | 102 |
Other assets | 825 | 611 |
Total assets | 9,546 | 9,452 |
Current liabilities: | ||
Accounts payable | 311 | 354 |
Employee compensation and benefits | 306 | 334 |
Deferred revenue | 397 | 336 |
Short-term debt | 40 | 616 |
Other accrued liabilities | 260 | 440 |
Total current liabilities | 1,314 | 2,080 |
Long-term debt | 2,283 | 1,791 |
Retirement and post-retirement benefits | 355 | 360 |
Other long-term liabilities | 613 | 473 |
Total liabilities | 4,565 | 4,704 |
Commitments and Contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 2 billion shares authorized; 309 million shares at July 31, 2020 and 309 million shares at October 31, 2019, issued and outstanding | 3 | 3 |
Additional paid-in-capital | 5,324 | 5,277 |
Retained earnings (accumulated deficit) | 130 | (18) |
Accumulated other comprehensive loss | (476) | (514) |
Total stockholder's equity | 4,981 | 4,748 |
Total liabilities and equity | $ 9,546 | $ 9,452 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Jul. 31, 2020 | Oct. 31, 2019 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Preferred stock, issued and outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued and outstanding (in shares) | 309,000,000 | 309,000,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Repayments Of Short Term Loan And Credit facility | $ 1,413 | $ 0 |
Cash flows from operating activities | ||
Net income | 497 | 877 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 232 | 162 |
Share-based compensation | 63 | 57 |
Deferred taxes | (1) | (267) |
Excess and obsolete inventory related charges | 18 | 12 |
Unrealized gain on equity securities | (26) | (1) |
Asset Impairment Charges | 99 | 0 |
Other non-cash expense, net | 6 | 5 |
Changes in assets and liabilities: | ||
Accounts receivable | 1 | (58) |
Inventory | (86) | (31) |
Accounts payable | (35) | 0 |
Employee compensation and benefits | (32) | (35) |
Other assets and liabilities | (192) | (14) |
Net cash provided by operating activities | 544 | 707 |
Cash flows from Investing activities: | ||
Investments in property, plant and equipment | (92) | (125) |
Proceeds from Sale of Property, Plant, and Equipment | 1 | 0 |
Payment to acquire fair value investments | 20 | 21 |
Payments in exchange for convertible note | (9) | (2) |
Payments to Acquire Intangible Assets | 0 | 1 |
Acquisitions of businesses and intangible assets, net of cash acquired | 0 | (248) |
Net cash used in investing activities | (120) | (397) |
Cash flows from financing activities: | ||
Issuance of common stock under employee stock plans | 56 | 52 |
Payment of taxes related to net share settlement of equity awards | (34) | (15) |
Payment of dividends | (167) | (155) |
Purchase of non-controlling interest | 0 | 4 |
Issuance of senior notes | 499 | 0 |
Debt Issuance Costs | 4 | 0 |
Proceeds from revolving credit facility | 798 | 0 |
Proceeds from Commercial Paper | 240 | 0 |
Repayments of Commercial Paper | (200) | 0 |
Repayment of finance lease | (4) | 0 |
Treasury stock repurchases | (219) | (674) |
Net cash used in financing activities | (448) | (796) |
Effect of exchange rate movements | 0 | 3 |
Net decrease in cash, cash equivalents and restricted cash | (24) | (483) |
Cash, cash equivalents and restricted cash at beginning of period | 1,388 | 2,254 |
Cash, cash equivalents and restricted cash at end of period | 1,364 | 1,771 |
Supplemental cash flow information: | ||
Income tax paid, net | 325 | 108 |
Interest payments | 53 | 61 |
Non-cash changes in investments in property, plant and equipment - increase (decrease) | $ (8) | $ (26) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Total Stockholder's Equity | Non-controlling Interest | Revision of Prior Period Adjustment, Accounting Standards Update | Revision of Prior Period Adjustment, Accounting Standards UpdateRetained Earnings (Accumulated Deficit) | Revision of Prior Period Adjustment, Accounting Standards UpdateAccumulated Other Comprehensive Loss | Revision of Prior Period Adjustment, Accounting Standards UpdateTotal Stockholder's Equity |
Beginning Treasury Stock, Shares at Oct. 31, 2018 | 0 | |||||||||||
Beginning Treasury Stock, Value at Oct. 31, 2018 | $ 0 | |||||||||||
Beginning Balance (in Shares) at Oct. 31, 2018 | 317,715 | |||||||||||
Beginning Balance at Oct. 31, 2018 | $ 4,571 | $ 3 | $ 5,308 | $ (336) | $ (408) | $ 4,567 | $ 4 | $ 26 | $ 33 | $ (7) | $ 26 | |
Components of comprehensive income, net of tax | ||||||||||||
Net income | 877 | 877 | 877 | |||||||||
Other comprehensive income (loss) | 11 | 11 | 11 | |||||||||
Total comprehensive income, net of tax | 888 | 888 | ||||||||||
Purchase of non-controlling interest increase (decrease) | (4) | (4) | ||||||||||
Cash dividends declared | (155) | (155) | (155) | |||||||||
Share-based awards issued, net of tax (in shares) | 1,652 | |||||||||||
Share-based awards issued | 37 | 37 | 37 | |||||||||
Repurchase of common stock (in shares) | (9,770) | |||||||||||
Treasury Stock, Value, Acquired, Cost Method | (674) | $ (674) | (674) | |||||||||
Retirement of treasury shares (in shares) | (9,770) | (9,770) | ||||||||||
Retirement of treasury shares | 0 | $ 0 | (133) | $ (674) | (541) | 0 | ||||||
Share-based compensation | 58 | 58 | 58 | |||||||||
Ending Treasury Stock, Shares at Jul. 31, 2019 | 0 | |||||||||||
Ending Treasury Stock, Value at Jul. 31, 2019 | $ 0 | |||||||||||
Ending Balance (in Shares) at Jul. 31, 2019 | 309,597 | |||||||||||
Ending Balance at Jul. 31, 2019 | 4,747 | $ 3 | 5,270 | (122) | (404) | 4,747 | 0 | |||||
Beginning Treasury Stock, Shares at Apr. 30, 2019 | (9) | |||||||||||
Beginning Treasury Stock, Value at Apr. 30, 2019 | $ (1) | |||||||||||
Beginning Balance (in Shares) at Apr. 30, 2019 | 317,285 | |||||||||||
Beginning Balance at Apr. 30, 2019 | 5,125 | $ 3 | 5,343 | 178 | (398) | 5,125 | 0 | |||||
Components of comprehensive income, net of tax | ||||||||||||
Net income | 191 | 191 | 191 | |||||||||
Other comprehensive income (loss) | (6) | (6) | (6) | |||||||||
Total comprehensive income, net of tax | 185 | 185 | ||||||||||
Cash dividends declared | (51) | (51) | (51) | |||||||||
Share-based awards issued, net of tax (in shares) | 325 | |||||||||||
Share-based awards issued | 19 | 19 | 19 | |||||||||
Repurchase of common stock (in shares) | (8,004) | |||||||||||
Treasury Stock, Value, Acquired, Cost Method | (549) | $ (549) | (549) | |||||||||
Retirement of treasury shares (in shares) | (8,013) | (8,013) | ||||||||||
Retirement of treasury shares | 0 | $ 0 | (110) | $ (550) | (440) | 0 | ||||||
Share-based compensation | 18 | 18 | 18 | |||||||||
Ending Treasury Stock, Shares at Jul. 31, 2019 | 0 | |||||||||||
Ending Treasury Stock, Value at Jul. 31, 2019 | $ 0 | |||||||||||
Ending Balance (in Shares) at Jul. 31, 2019 | 309,597 | |||||||||||
Ending Balance at Jul. 31, 2019 | 4,747 | $ 3 | 5,270 | (122) | (404) | 4,747 | 0 | |||||
Beginning Treasury Stock, Shares at Oct. 31, 2019 | 0 | |||||||||||
Beginning Treasury Stock, Value at Oct. 31, 2019 | $ 0 | |||||||||||
Beginning Balance (in Shares) at Oct. 31, 2019 | 309,071 | |||||||||||
Beginning Balance at Oct. 31, 2019 | 4,748 | $ 3 | 5,277 | (18) | (514) | 4,748 | 0 | |||||
Components of comprehensive income, net of tax | ||||||||||||
Net income | 497 | 497 | 497 | |||||||||
Other comprehensive income (loss) | 38 | 38 | 38 | |||||||||
Total comprehensive income, net of tax | 535 | 535 | ||||||||||
Cash dividends declared | (167) | (167) | (167) | |||||||||
Share-based awards issued, net of tax (in shares) | 2,258 | |||||||||||
Share-based awards issued | 21 | 21 | 21 | |||||||||
Repurchase of common stock (in shares) | (2,751) | |||||||||||
Treasury Stock, Value, Acquired, Cost Method | (219) | $ (219) | (219) | |||||||||
Retirement of treasury shares (in shares) | (2,751) | (2,751) | ||||||||||
Retirement of treasury shares | 0 | $ 0 | (37) | $ (219) | (182) | 0 | ||||||
Share-based compensation | 63 | 63 | 63 | |||||||||
Ending Treasury Stock, Shares at Jul. 31, 2020 | 0 | |||||||||||
Ending Treasury Stock, Value at Jul. 31, 2020 | $ 0 | |||||||||||
Ending Balance (in Shares) at Jul. 31, 2020 | 308,578 | |||||||||||
Ending Balance at Jul. 31, 2020 | 4,981 | $ 3 | 5,324 | 130 | (476) | 4,981 | 0 | |||||
Beginning Treasury Stock, Shares at Apr. 30, 2020 | 0 | |||||||||||
Beginning Treasury Stock, Value at Apr. 30, 2020 | $ 0 | |||||||||||
Beginning Balance (in Shares) at Apr. 30, 2020 | 308,443 | |||||||||||
Beginning Balance at Apr. 30, 2020 | 4,768 | $ 3 | 5,288 | 15 | (538) | 4,768 | 0 | |||||
Components of comprehensive income, net of tax | ||||||||||||
Net income | 199 | 199 | 199 | |||||||||
Other comprehensive income (loss) | 62 | 62 | 62 | |||||||||
Total comprehensive income, net of tax | 261 | 261 | ||||||||||
Cash dividends declared | (56) | (56) | (56) | |||||||||
Share-based awards issued, net of tax (in shares) | 497 | |||||||||||
Share-based awards issued | 22 | 22 | 22 | |||||||||
Repurchase of common stock (in shares) | (362) | |||||||||||
Treasury Stock, Value, Acquired, Cost Method | (33) | $ (33) | 33 | |||||||||
Retirement of treasury shares (in shares) | (362) | (362) | ||||||||||
Retirement of treasury shares | 0 | $ 0 | (5) | $ (33) | (28) | 0 | ||||||
Share-based compensation | 19 | 19 | 19 | |||||||||
Ending Treasury Stock, Shares at Jul. 31, 2020 | 0 | |||||||||||
Ending Treasury Stock, Value at Jul. 31, 2020 | $ 0 | |||||||||||
Ending Balance (in Shares) at Jul. 31, 2020 | 308,578 | |||||||||||
Ending Balance at Jul. 31, 2020 | $ 4,981 | $ 3 | $ 5,324 | $ 130 | $ (476) | $ 4,981 | $ 0 |
CONDENSED CONSOLIDATE STATEMENT
CONDENSED CONSOLIDATE STATEMENT OF EQUITY - (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Tax related to shares issued | $ 1 | $ 34 | $ 1 | $ 15 |
Common Stock, Dividends, Per Share, Declared | $ 0.180 | $ 0.164 | $ 0.540 | $ 0.492 |
OVERVIEW, BASIS OF PRESENTATION
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview. Agilent Technologies, Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters. Basis of Presentation . We have prepared the accompanying financial data for the three and nine months ended July 31, 2020 and 2019 pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The October 31, 2019 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, 2019 . 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 July 31, 2020 and October 31, 2019 , condensed consolidated statement of comprehensive income (loss) for the three and nine months ended July 31, 2020 and 2019 , condensed consolidated statement of operations for the three and nine months ended July 31, 2020 and 2019 , condensed consolidated statement of cash flows for the nine months ended July 31, 2020 and 2019 and condensed consolidated statement of equity for the three and nine months ended July 31, 2020 and 2019 . 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, retirement and post-retirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes. Risks and Uncertainties. We are subject to risks common to companies in the analytical instrument industry, such as global economic and financial market conditions, fluctuations in foreign currency exchange rates and fluctuations in customer demand, among others. 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. In March 2020, the World Health Organization declared COVID-19 a pandemic and recommended containment and mitigation measures worldwide. As a result, hospitals and testing laboratories have halted certain elective medical procedures, which had an adverse effect on our customers' business. In the third quarter, revenue from the academia and government markets improved sequentially but continues to be negatively affected by delays in installations due to continued laboratory closures in the Americas and, to a lesser extent, in Europe. Revenue from the chemical and energy markets has also been negatively impacted by the global slowdown in economic activity associated with measures put in place to slow the pandemic. Revenue from the diagnostics and clinical markets declined due to continued reduction in demand for non-COVID testing, although we did see some gradual improvement within the third quarter. The revenue decline was also due to limited access to customer laboratories in the genomics research markets. The COVID-19 pandemic has caused significant volatility and uncertainty in U.S. and international markets, which could result in a prolonged economic downturn that could disrupt our business. Variable Interest Entities. We make a determination upon entering into an arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). The company evaluates its investments in privately held companies on an ongoing basis. We have determined that as of July 31, 2020 and October 31, 2019 , there were no VIE's required to be consolidated in the company’s consolidated financial statements because we do not have a controlling financial interest in any of the VIE’s that we have invested in nor are we the primary beneficiary. We account for these investments under either the equity method or as equity investments without readily determinable fair value, depending on the circumstances. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, based on changes in facts and circumstances including changes in contractual arrangements and capital structure. As of July 31, 2020 and October 31, 2019 , the total carrying value of investments and loans in privately held companies considered as VIE’s was $65 million and $29 million respectively. The maximum exposure is equal to the carrying value 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. Fair Value of Financial Instruments. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments 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 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 our senior notes, calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately $197 million and $62 million as of July 31, 2020 and October 31, 2019 , respectively. The change in the fair value over carrying value in the nine months ended July 31, 2020 is primarily due to decreased market interest rates. 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 11, "Fair Value Measurements" for additional information on the fair value of financial instruments. 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 2020 2019 (in millions) Cash and cash equivalents $ 1,358 $ 1,382 Restricted cash included in other assets 6 6 Total cash, cash equivalents and restricted cash $ 1,364 $ 1,388 Leases. We determine whether an arrangement is, or contains, a lease at inception. Prior to November 1, 2019, for leases where we are the lessee, we accounted for operating lease payments by charging them to expense as incurred. At the beginning of fiscal 2020, the company adopted new lease accounting guidance issued by the Financial Accounting Standards Board ("FASB"). The most significant change requires lessees to record the present value of operating lease payments as right-of-use ("ROU") and lease liabilities on the condensed consolidated balance sheet. Where we are the lessee, ROU assets represent the company’s right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of operating lease liabilities as either current or non-current is based on the expected timing of payments due under our obligations. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, we have used a number of factors including the parent's credit rating, the lease term and the currency swap rate. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense for operating leases with an initial term of more than twelve months is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components. We have elected to account for these payments as a single lease component. A portion of our revenue relates to lease arrangements where Agilent is the lessor. Standalone lease arrangements are outside the scope of Accounting Standard Codification ("ASC") Topic 606, Revenue Contracts with Customers, and are therefore accounted for in accordance with ASC Topic 842, Leases. Each of these contracts is evaluated as a lease arrangement, either as an operating lease or a sales-type capital lease using the current lease classification guidance. See also Note 2, "New Accounting Pronouncements" and Note 9, "Leases" for additional information about the company’s leases. |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Not Yet Adopted There were no changes to the new accounting pronouncements not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2019 except for the following: In December 2019, the FASB issued new guidance to simplify the accounting for income taxes. This guidance eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The guidance also improves consistent application by clarifying and amending existing guidance related to aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step up in the tax basis of goodwill. The new guidance is effective for us beginning November 1, 2021, and for interim periods within that year. Early adoption is permitted. We do not expect that the adoption of this standard will have a material impact on our condensed consolidated financial statements and disclosures. 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 helps clarify which guidance should be applied in certain situations which should increase relevance and comparability of financial statement information. This guidance is effective for us beginning November 1, 2021, and for interim periods within that year. Early adoption is permitted. We do not expect that the adoption of this standard will have a material impact on our condensed consolidated financial statements and disclosures. In March 2020, the FASB issued an update for facilitation of the effects of reference rate reform on financial reporting. This new update provides the guidance needed to ease the process of migrating away from London Inter-bank Offered Rate (" LIBOR") and other interbank offered rates to new reference rates. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are evaluating the impact of this guidance on our condensed consolidated financial statements and disclosures. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), which requires lessees to record most leases on the balance sheet as lease liabilities, initially measured at the present value of future lease payments, with a corresponding right-of-use asset. The accounting applied by a lessor is largely unchanged from that applied under the prior accounting standard. On November 1, 2019, we adopted the new accounting guidance using the modified retrospective method, by applying the transition approach, for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning November 1, 2019 are presented under the new accounting standard, while prior period amounts have not been restated. The standard had a significant impact on the opening condensed consolidated balance sheet as of November 1, 2019, but did not have a significant impact on the condensed consolidated statement of operations or condensed consolidated statement of cash flows for the nine months ended July 31, 2020 when compared to the same period in 2019. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. For leases that commenced before the effective date of the new accounting standard, we elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. We also elected to exclude leases with a term of 12 months or less in the ROU assets and lease liabilities. Adoption of the new guidance impacted the condensed consolidated balance sheet as follows: October 31, 2019 Impact of Adopting November 1, 2019 As Reported Lease Guidance As Adopted (in millions) Other assets $ 611 $ 192 $ 803 Other accrued liabilities $ 440 $ 48 $ 488 Other long-term liabilities $ 473 $ 144 $ 617 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. |
ACQUISITIONS (Notes)
ACQUISITIONS (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions Disclosure | ACQUISITIONS Acquisition of BioTek and ACEA On August 23, 2019 we completed the acquisition of privately-owned Lionheart Technologies LLC ("BioTek"), a leader in the design, manufacture and distribution of innovative life science instrumentation for $1.17 billion , under the merger agreement. As a result of the acquisition, BioTek has become a wholly owned subsidiary of Agilent. Accordingly, the results of BioTek are included in Agilent's condensed consolidated financial statements from the acquisition date. The acquisition of BioTek and its portfolio is another step to expand our position in the cell analysis market. The consideration paid was $1.17 billion . Agilent funded the acquisition using existing cash of $470 million and debt of $700 million . The BioTek acquisition was accounted for in accordance with the authoritative accounting guidance. The acquired assets and assumed liabilities were recorded by Agilent at their estimated fair values. Agilent determined the estimated fair values with the assistance of appraisals or valuations performed by third-party specialists, discounted cash flow analyses, and estimates made by management. We expect to realize revenue synergies, leverage and expand the existing sales channels and product development resources, and utilize the assembled workforce. These factors, among others, contributed to a purchase price in excess of the estimated fair value of BioTek’s net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction. Goodwill acquired was allocated to our operating segments and reporting units as a part of the purchase price allocation. All goodwill was allocated to the life sciences and applied markets reporting unit. Agilent’s acquisition of BioTek is treated as an asset purchase for tax purposes. The tax basis of the acquired assets equals the fair market value on acquisition date. The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of August 23, 2019 (in millions): Cash and cash equivalents $ 10 Accounts receivable 28 Inventories 21 Other current assets 2 Property, plant and equipment 8 Intangible assets 641 Goodwill 483 Total assets acquired 1,193 Accounts payable (4 ) Deferred revenue (5 ) Employee compensation and benefits (7 ) Other accrued liabilities (2 ) Long-term debt (4 ) Net assets acquired $ 1,171 The fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and other accrued liabilities were generally determined using historical carrying values given the short-term nature of these assets and liabilities. The fair values for acquired intangible assets and deferred revenue were determined with the input from third party valuation specialists. The fair values of certain other assets, inventory, property, plant and equipment, investments, long-term debt, and certain other long-term liabilities were determined internally using historical carrying values and estimates made by management. Valuations of intangible assets acquired The components of intangible assets acquired in connection with the BioTek acquisition were as follows (in millions): Fair Value Estimated Useful Life Developed product technology $ 387 5-13 years Customer relationships 202 3-8 years Backlog 5 2 months Tradenames and trademarks 43 10 years Total intangible assets subject to amortization 637 In-process research and development 4 Total intangible assets $ 641 As noted above, the intangible assets, including in-process research and development, were valued with input from valuation specialists. Agilent used variations of the income approach in determining the fair value of intangible assets acquired in the BioTek acquisition. Specifically, the developed product technology and in-process research and development were valued using the multi-period excess earnings method under the income approach by discounting forecasted cash flows directly related to the products expecting to result from the projects, net of returns on contributory assets. The company utilized the incremental cash flow method for determining the fair value of the customer relationships acquired and the relief from royalty method to determine the fair value of the tradename. Order backlog was valued on a direct cash flow basis. The primary in-process research and development project acquired relates to a next version of a product which was subsequently released to customers in 2020. Acquisition and integration costs directly related to the BioTek acquisition totaled $3 million and $9 million for the three and nine months ended July 31, 2020 , respectively, and were recorded in selling, general and administrative expenses. On November 14, 2018, we acquired 100 percent of the stock of ACEA Biosciences (“ACEA”), a developer of cell analysis tools, for $250 million . The financial results of ACEA have been included in our financial results from the acquisition date. The following represents the unaudited proforma operating results as if BioTek and ACEA had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2018 (in millions, except per share amounts): Three Months Ended July 31, Nine Months Ended July 31, 2019 2019 Net revenue $ 1,319 $ 3,930 Net income $ 174 $ 816 Net income per share — basic $ 0.56 $ 2.58 Net income per share — diluted $ 0.55 $ 2.55 The unaudited proforma financial information assumes that the companies were combined as of November 1, 2017 and includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, the impact on cost of sales due to the respective estimated fair value adjustments to inventory, changes to interest income for cash used in the acquisition, interest expense and currency losses associated with debt paid in connection with the acquisition and acquisition related transaction costs and tax related effects. The proforma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2018. The unaudited proforma financial information for the three and nine months ended July 31, 2019 combines the historical results of Agilent (which includes ACEA after the acquisition date), the first two weeks of fiscal year 2019 for ACEA, and BioTek for the three and nine months ended July 31, 2019 . |
REVENUE (Notes)
REVENUE (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | REVENUE The following table presents the company’s total revenue and segment revenue disaggregated by geographical region: Three Months Ended July 31, 2020 2019 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 $ 174 $ 156 $ 121 $ 451 $ 160 $ 167 $ 138 $ 465 Europe 111 127 84 322 118 130 91 339 Asia Pacific 272 180 36 488 266 170 34 470 Total $ 557 $ 463 $ 241 $ 1,261 $ 544 $ 467 $ 263 $ 1,274 Nine Months Ended July 31, 2020 2019 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 $ 553 $ 484 $ 365 $ 1,402 $ 473 $ 491 $ 367 $ 1,331 Europe 389 391 268 1,048 407 390 279 1,076 Asia Pacific 779 507 120 1,406 800 483 106 1,389 Total $ 1,721 $ 1,382 $ 753 $ 3,856 $ 1,680 $ 1,364 $ 752 $ 3,796 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, 2020 2019 2020 2019 (in millions) Revenue by End Markets Pharmaceutical and Biopharmaceutical $ 440 $ 416 $ 1,263 $ 1,178 Chemical and Energy 260 291 839 899 Diagnostics and Clinical 178 198 572 578 Food 123 116 367 359 Academia and Government 119 103 375 333 Environmental and Forensics 141 150 440 449 Total $ 1,261 $ 1,274 $ 3,856 $ 3,796 Revenue by Type Instrumentation $ 526 $ 505 $ 1,610 $ 1,563 Non-instrumentation and other 735 769 2,246 2,233 Total $ 1,261 $ 1,274 $ 3,856 $ 3,796 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, 2020 and October 31, 2019 were $150 million and $110 million , respectively. The increase in unbilled receivables during the nine months ended July 31, 2020 is a result of recognition of revenue upon the transfer of the control to the customer. 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, 2020 : Contract Liabilities (in millions) Ending balance as of October 31, 2019 $ 386 Net revenue deferred in the period 331 Revenue recognized that was included in the contract liability balance at the beginning of the period (273 ) Change in deferrals from customer cash advances, net of revenue recognized 3 Currency translation and other adjustments 4 Ending balance as of July 31, 2020 $ 451 During the nine months ended July 31, 2019 revenue recognized that was included in the contract liability balance at October 31, 2018 was $230 million . 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, 2020 and are 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, 2020 , was $217 million , the majority of which is expected to be recognized over the next 12 months |
SHARE-BASED COMPENSATION (Notes
SHARE-BASED COMPENSATION (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Agilent accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors including restricted stock units, employee stock purchases made under our employee stock purchase plan and performance share awards granted to selected members of our senior management under the long-term performance plan (“LTPP”) based on estimated fair values. Effective May 1, 2020, we adopted the Agilent Technologies, Inc. 2020 Employee Stock Purchase Plan (“ESPP”), which replaced our existing Employee Stock Purchase Plan. The ESPP allows eligible employees to contribute up to ten percent of their base compensation to purchase shares of our common stock at 85 percent of the closing market price at purchase date. There are 31 million shares authorized for issuance in connection with the ESPP. Participants in the LTPP are entitled to receive shares of the company's stock after the end of a three-year period, if specified performance targets are met. Certain LTPP awards are generally designed to meet the criteria of a performance award with the performance metrics and peer group comparison based on the Total Stockholders’ Return (“TSR”) set at the beginning of the performance period. Effective November 1, 2015, the Compensation Committee of the Board of Directors approved another type of performance stock award for the company's executive officers and other key employees. Participants in this program are also entitled to receive shares of the company's stock after the end of a three-year period if specified performance targets over the three-year period are met. The performance target for grants made beginning 2017 and later were based on Earnings Per Share ("EPS"). The performance targets for the LTPP-EPS grants for year 2 and year 3 of the performance period 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 0 percent to 200 percent of the target award. 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 4 years from the date of grant. The impact on our results for share-based compensation was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Cost of products and services $ 5 $ 4 $ 16 $ 13 Research and development 2 2 7 6 Selling, general and administrative 12 12 41 39 Total share-based compensation expense $ 19 $ 18 $ 64 $ 58 At July 31, 2020 and October 31, 2019 , there was no share-based compensation capitalized within inventory. The following assumptions were used to estimate the fair value of awards granted. Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 LTPP: Volatility of Agilent shares 23% 22% 23% 22% Volatility of selected peer-company shares 15%-44% 15%-66% 15%-44% 15%-66% Pair-wise correlation with selected peers 29% 30% 29% 30% Post-vest holding restriction discount for all executive awards 5.3% 5.0% 5.3% 5.0% Shares granted under the LTPP (TSR) were valued using a Monte Carlo 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 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. The estimated fair value of restricted stock units and LTPP (EPS) awards is determined based on the market price of Agilent’s common stock on the date of grant adjusted for expected dividend yield. The compensation cost for LTPP (EPS) reflects the cost of awards that are probable to vest at the end of the performance period. |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three and nine months ended July 31, 2020 , the company's income tax expense was $20 million with an effective tax rate of 9.1 percent and $62 million with an effective tax rate of 11.1 percent , respectively. For the three and nine months ended July 31, 2020 , our effective tax rate and the resulting provision for income taxes were impacted by the expiration of the U.S. statute of limitations in July 2020 for fiscal year 2016, which resulted in the recognition of previously unrecognized tax benefits of $16 million . For the nine months ended July 31, 2020 , our effective tax rate and the resulting provision for income taxes were also impacted by the excess tax benefits from stock-based compensation of $15 million . Our calculation of income tax expense for the three and nine months ended July 31, 2020 is dependent in part on forecasts of full year results. The impact of the COVID-19 outbreak on the economic environment is uncertain and may change these forecasts, which could impact tax expense. For the three and nine months ended July 31, 2019 , the company's income tax expense was $31 million with an effective tax rate of 14.0 percent and an income tax benefit of $189 million with an effective tax rate of (27.5) percent , respectively. For the nine months ended July 31, 2019 , our effective tax rate and the resulting provision for income taxes were significantly impacted by a discrete benefit of $299 million related to the extension of the company’s tax incentive in Singapore. In the U.S., tax years remain open back to the year 2017 for federal income tax purposes and the year 2015 for significant states. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2009. 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. 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. The company will continue to assess the impact of further guidance from federal and state tax authorities on its business and consolidated financial statements. Any future adjustments will be recognized as discrete income tax expense or benefit in the period the adjustments are determined. |
NET INCOME PER SHARE (Notes)
NET INCOME PER SHARE (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Numerator: Net income $ 199 $ 191 $ 497 $ 877 Denominator: Basic weighted-average shares 309 312 309 316 Potential common shares— stock options and other employee stock plans 3 4 3 4 Diluted weighted-average shares 312 316 312 320 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 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 July 31, 2020 and 2019 |
INVENTORY (Notes)
INVENTORY (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Inventory, Net [Abstract] | |
INVENTORY | INVENTORY July 31, October 31, (in millions) Finished goods $ 436 $ 416 Purchased parts and fabricated assemblies 310 263 Inventory $ 746 $ 679 |
LEASES (Notes)
LEASES (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES As a lessee, we have various non-cancelable operating lease agreements for office space, warehouses, distribution centers, research and development facilities, manufacturing and production locations as well as vehicles, personal computers and other equipment. Our real estate leases have remaining lease terms of one to thirty years, which represent the non-cancelable periods of the leases and include extension options that we determined are reasonably certain to be exercised. We exclude options that are not reasonably certain to be exercised from our lease terms, ranging from six months to twenty years. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance. We often receive incentives from our landlords, such as rent abatement periods, which effectively reduce the total lease payments owed for these leases. Vehicle, personal computer and other equipment operating leases have terms between three and five years. Prior to the adoption of the new lease accounting standard, future minimum lease payments as of October 31, 2019 and previously disclosed in the company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019 under non- cancelable leases with initial terms exceeding twelve months were as follows: Operating Leases (in millions) 2020 $ 52 2021 41 2022 29 2023 21 2024 14 Thereafter 56 Total future minimum lease payments $ 213 The components of lease cost for operating leases were as follows : Three Months Ended Nine Months Ended July 31, 2020 July 31, 2020 (in millions) Operating lease cost $ 14 $ 45 Short-term lease cost — 1 Variable lease cost (a) 4 11 Sublease income (4 ) (11 ) Total lease cost $ 14 $ 46 (a) Variable lease cost includes cancelable leases, non-fixed maintenance costs and non-recoverable transaction taxes. Supplemental cash flow information related to leases was as follows: Nine Months Ended July 31, 2020 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 44 Non-cash right of use assets obtained in exchange for operating lease obligations $ 31 Supplemental balance sheet information related to leases was as follows: Financial Statement Line Item July 31, 2020 (in millions, except lease term and discount rate) Assets: Operating lease: Right of use asset Other assets $ 183 Liabilities: Current Operating lease liabilities Other accrued liabilities $ 52 Long-Term Operating lease liabilities Other long-term liabilities $ 133 Weighted average remaining lease term in years Operating leases 7.9 years Weighted average discount rate Operating leases 2.0 % Future minimum rents payable as of July 31, 2020 under non-cancelable leases with initial terms exceeding one year reconcile to lease liabilities included in the condensed consolidated balance sheet as follows: Operating Leases (in millions) Remainder of 2020 $ 15 2021 52 2022 39 2023 26 2024 15 2025 9 Thereafter 48 Total undiscounted future minimum lease payments $ 204 Less: amount of lease payments representing interest (19 ) Present value of future minimum lease payments $ 185 Less: current liabilities (52 ) Long-term lease liabilities $ 133 As of July 31, 2020 , we had no additional significant operating or finance leases that had not yet commenced. As a lessor, we have contracts for equipment leased to customers in connection with our diagnostics business which include both operating-type lease and sales-type lease arrangements. We account for the non-lease component under the revenue recognition rules and the lease component under the leasing guidance. Equipment lease revenue for operating lease agreements is recognized as visualization kits and reagents are shipped over the life of the lease, and the cost of customer leased equipment is recorded within property, plant and equipment, net in the condensed consolidated balance sheet and depreciated over the equipment’s estimated useful life. For an arrangement that has been classified as a sales-type lease, revenue is recognized when the transfer of control of the underlying leased asset has occurred and the net investment lease recorded which is calculated at the present value of the remaining lease payments due from the lessee. Revenue allocated to the lease income for both finance/sales-type lease and operating lease rental arrangements represents less than one percent of total net revenue in the three and nine months ended July 31, 2020 . As of July 31, 2020 , the original cost and net book value of operating leased assets was $46 million and $13 million , respectively. As of July 31, 2020 , lease receivables related to sales-type leases were $41 million |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents goodwill balances and the movements for each of our reportable segments during the nine months ended July 31, 2020 : Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Goodwill as of October 31, 2019 $ 1,438 $ 1,594 $ 561 $ 3,593 Foreign currency translation impact 5 6 2 13 Goodwill as of July 31, 2020 $ 1,443 $ 1,600 $ 563 $ 3,606 The components of other intangible assets as of July 31, 2020 and October 31, 2019 are shown in the table below: Purchased Other Intangible Assets Gross Carrying Amount Accumulated Amortization Net Book Value (in millions) As of October 31, 2019 Purchased technology $ 1,413 $ 763 $ 650 Backlog 5 5 — Trademark/Tradename 196 102 94 Customer relationships 329 87 242 Third-party technology and licenses 28 22 6 Total amortizable intangible assets 1,971 979 992 In-Process R&D 115 — 115 Total $ 2,086 $ 979 $ 1,107 As of July 31, 2020 Purchased technology $ 1,419 $ 839 $ 580 Trademark/Tradename 196 113 83 Customer relationships 330 142 188 Third-party technology and licenses 28 24 4 Total amortizable intangible assets 1,973 1,118 855 In-Process R&D 21 — 21 Total $ 1,994 $ 1,118 $ 876 During the nine months ended July 31, 2020 , there were no additions to goodwill and there were no additions to other intangible assets. During the nine months ended July 31, 2020 , other intangible assets decreased $1 million due to the impact of foreign currency translation. In general, for United States 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. During the three and nine months ended July 31, 2020 , we did not identify any triggering events or circumstances, including events due to COVID-19, which would indicate an impairment of goodwill. During the nine months ended July 31, 2020 , we recorded an impairment of in-process research and development of $90 million related to the shut-down of our sequencer development program in our diagnostics and genomics segment. There were no indicators of impairments of indefinite-lived intangible assets or goodwill during the three and nine months ended July 31, 2019 , respectively. Amortization expense of intangible assets was $45 million and $140 million for the three and nine months ended July 31, 2020 , respectively. Amortization expense of intangible assets was $27 million and $82 million for the three and nine months ended July 31, 2019 , respectively. Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year 2020 and for each of the five succeeding fiscal years and thereafter is estimated below: Estimated future amortization expense: (in millions) Remainder of 2020 $ 45 2021 $ 172 2022 $ 150 2023 $ 107 2024 $ 86 2025 $ 68 Thereafter $ 227 |
FAIR VALUE MEASUREMENTS (Notes)
FAIR VALUE MEASUREMENTS (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The guidance establishes a fair value hierarchy that prioritizes 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. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2020 were as follows: Fair Value Measurement at July 31, 2020 Using July 31, 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) $ 715 $ 715 $ — $ — Derivative instruments (foreign exchange contracts) 13 — 13 — Long-term Trading securities 29 29 — — Other investments 25 — 25 — Total assets measured at fair value $ 782 $ 744 $ 38 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 22 $ — $ 22 $ — Long-term Deferred compensation liability 29 — 29 — Total liabilities measured at fair value $ 51 $ — $ 51 $ — Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2019 were as follows: Fair Value Measurement at October 31, 2019 Using October 31, 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) $ 784 $ 784 $ — $ — Derivative instruments (foreign exchange contracts) 12 — 12 — Long-term Trading securities 30 30 — — Other investments 25 — 25 — Total assets measured at fair value $ 851 $ 814 $ 37 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 6 $ — $ 6 $ — Long-term Deferred compensation liability 30 — 30 — Total liabilities measured at fair value $ 36 $ — $ 36 $ — Our money market funds and trading securities 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. 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. It has 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 is 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. Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive loss within stockholders' equity. Realized gains and losses from the sale of these instruments are recorded in net income. Impairment of Investments. There were no impairments of investments for the three and nine months ended July 31, 2020 and 2019 . Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis For the three months ended July 31, 2020 , there were no impairments of long-lived assets held and used. For the nine months ended July 31, 2020 long-lived assets held and used with a carrying amount of $98 million were written down to fair value of zero , resulting in an impairment of $98 million related to the shut-down of our sequencer development program in our diagnostics and genomics segment. For the three and nine months ended July 31, 2019 , there were no impairments of long-lived assets held and used. For the three and nine months ended July 31, 2020 and 2019 , there were no impairments of long-lived assets held for sale. For the three and nine months ended July 31, 2020 and 2019 , there were no impairments of non-marketable securities. For the three months ended July 31, 2020 and 2019 , a net unrealized loss of $1 million and zero , respectively, was included in net income as an adjustment to the carrying value of non-marketable equity securities without readily determinable fair value based on an observable market transaction. For the nine months ended July 31, 2020 and 2019 , a net unrealized gain of $26 million and $1 million , respectively, was included in net income as an adjustment to the carrying value of non-marketable equity securities without readily determinable fair value based on an observable market transaction. As of July 31, 2020 and October 31, 2019 , the carrying amount of non-marketable equity securities without readily determinable fair values was $94 million and $47 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 to adjust for impairments and observable price changes (orderly transactions for the identical or a similar security from the same issuer) as and when it occurs. |
DERIVATIVES (Notes)
DERIVATIVES (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. Cash Flow Hedges We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance and are assessed for effectiveness against the underlying exposure every reporting period. For open contracts as of July 31, 2020 , changes in the time value of the foreign exchange contract are excluded from the assessment of hedge effectiveness and are recognized in 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). 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) in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense) 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 cost of sales over the life of the option contract. For the three and nine months ended July 31, 2020 and 2019 , ineffectiveness and gains and losses recognized in other income (expense) 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 July 31, 2020 was $1 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 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 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 July 31, 2020 was $6 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 in accumulated other comprehensive income 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, 2020 was $5 million . Net Investment Hedges Starting in 2020, 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. As of July 31, 2020 , we have 3 open forward contracts to sell euros to buy USD maturing in the fourth quarter, and these are designated as a net investment hedge of the U.S. parent's interest in foreign subsidiaries denominated in euro functional currency. In the three and nine months ended July 31, 2020 , the change in fair value of the net investment hedge resulted in a net loss of $7 million and $6 million , respectively, recognized in accumulated other comprehensive income. For the three and nine months ended July 31, 2020 , 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) 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 July 31, 2020 , was $11 million . The credit-risk-related contingent features underlying these agreements had not been triggered as of July 31, 2020 . There were 261 foreign exchange forward contracts open as of July 31, 2020 and designated as cash flow hedges. There were 191 foreign exchange forward contracts open as of July 31, 2020 and not designated as hedging instruments. There were 3 foreign exchange forward contracts open as of July 31, 2020 and designated as a net investment hedge. The aggregated notional amounts by currency and designation as of July 31, 2020 were as follows: Derivatives Designated as Cash Flow Hedges Derivatives Designated as Derivatives Not Designated as Hedging Instruments Forward Contracts USD Forward Forward Contracts USD Currency Buy/(Sell) Buy/(Sell) Buy/(Sell) (in millions) Euro $ (48 ) $ (90 ) $ 107 British Pound (44 ) — 6 Canadian Dollar (40 ) — 30 Japanese Yen (88 ) — 12 Korean Won (60 ) — (37 ) Singapore Dollar 15 — 20 Chinese Yuan Renminbi (77 ) — (64 ) Swedish Krona — — (9 ) Taiwan Dollar — — (10 ) Indian Rupee — — (9 ) Other 4 — 4 Totals $ (338 ) $ (90 ) $ 50 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 consolidated balance sheet as of July 31, 2020 and October 31, 2019 were as follows: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet Location July 31, October 31, 2019 Balance Sheet Location July 31, October 31, (in millions) Derivatives designated as hedging instruments: Cash flow hedges Foreign exchange contracts Other current assets $ 1 $ 3 Other accrued liabilities $ 10 $ 2 Net investment hedges Foreign exchange contracts Other current assets $ — $ — Other accrued liabilities $ 5 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ 12 $ 9 Other accrued liabilities $ 7 $ 4 Total derivatives $ 13 $ 12 $ 22 $ 6 The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain (loss) recognized in accumulated other comprehensive loss $ (9 ) $ 4 $ (6 ) $ 2 Loss reclassified from accumulated other comprehensive loss into interest expense $ — $ — $ (1 ) $ — Gain reclassified from accumulated other comprehensive loss into cost of sales $ 1 $ 1 $ 3 $ 6 Gain (loss) on time value of forward contracts recorded in cost of sales $ — $ (1 ) $ 2 $ 1 Net Investment Hedges Foreign exchange contracts: Loss recognized in accumulated other comprehensive loss $ (7 ) $ — $ (6 ) $ — Derivatives not designated as hedging instruments: Gain (loss) recognized in other income (expense) $ 9 $ — $ 6 $ (2 ) At July 31, 2020 , the estimated amount of existing net loss that is expected to be reclassified from accumulated other comprehensive loss to cost of sales within the next twelve months is $5 million |
RETIREMENT PLANS AND POST RETIR
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS | RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS Components of net periodic costs (benefits). For the three and nine months ended July 31, 2020 and 2019 , our net pension and post retirement benefit costs (benefits) were comprised of the following: Three Months Ended July 31, U.S. Non-U.S. U.S. Post Retirement Benefit Plans 2020 2019 2020 2019 2020 2019 (in millions) Service cost—benefits earned during the period $ — $ — $ 6 $ 6 $ 1 $ — Interest cost on benefit obligation 4 5 2 3 — 1 Expected return on plan assets (7 ) (7 ) (11 ) (11 ) (2 ) (1 ) Amortization: Actuarial losses — — 12 9 1 1 Prior service credits — — — — (1 ) (2 ) Total net plan costs (benefits) $ (3 ) $ (2 ) $ 9 $ 7 $ (1 ) $ (1 ) Nine Months Ended July 31, U.S. Non-U.S. U.S. Post Retirement 2020 2019 2020 2019 2020 2019 (in millions) Service cost—benefits earned during the period $ — $ — $ 18 $ 16 $ 1 $ — Interest cost on benefit obligation 12 15 6 9 2 2 Expected return on plan assets (22 ) (21 ) (35 ) (33 ) (5 ) (3 ) Amortization: Actuarial losses 2 — 36 27 3 3 Prior service credits — — — — (5 ) (6 ) Total net plan costs (benefits) $ (8 ) $ (6 ) $ 25 $ 19 $ (4 ) $ (4 ) The service cost component is recorded in cost of sales and operating expenses in the condensed consolidated statement of operations. All other cost components are recorded in other income (expense), net in the condensed consolidated statement of operations. We made no contributions to our U.S. defined benefit plans during the three and nine months ended July 31, 2020 , respectively. We contributed $9 million and $28 million to our non-U.S. defined benefit plans during the three and nine months ended July 31, 2020 , respectively. We made no contributions to our U.S. defined benefit plans during the three and nine months ended July 31, 2019 , respectively. We contributed $5 million and $16 million to our non-U.S. defined benefit plans during the three and nine months ended July 31, 2019 , respectively. We do not expect to contribute to our U.S. defined benefit plans during the remainder of 2020 and we expect to contribute $9 million to our non-U.S. defined benefit plans during the remainder of 2020 . |
WARRANTIES AND CONTINGENCIES (N
WARRANTIES AND CONTINGENCIES (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
WARRANTIES AND CONTINGENCIES | WARRANTIES AND CONTINGENCIES Warranties We accrue for standard warranty costs based on historical trends in warranty charges as a percentage of net product shipments. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time products are sold. 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. A summary of the standard warranty accrual activity is shown in the table below: Nine Months Ended July 31, 2020 2019 (in millions) Beginning balance as of November 1, $ 32 $ 35 Accruals for warranties including change in estimate 36 40 Settlements made during the period (37 ) (43 ) Ending balance as of July 31, $ 31 $ 32 Accruals for warranties due within one year $ 31 $ 32 Bank Guarantees Guarantees consist primarily of outstanding standby letters of credit and bank guarantees and were approximately $41 million as of July 31, 2020 and $40 million as of October 31, 2019 . 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, consolidated financial condition, results of operations or cash flows. |
SHORT-TERM DEBT (Notes)
SHORT-TERM DEBT (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Short-term Debt [Abstract] | |
SHORT-TERM DEBT | SHORT-TERM DEBT Credit Facilities On March 13, 2019 , we entered into a credit agreement with a group of financial institutions which provided for a $1 billion five -year unsecured credit facility that will expire on March 13, 2024 . During the nine months ended July 31, 2020 , we borrowed $798 million and repaid $913 million under the credit facility. As of July 31, 2020 , we had no borrowings outstanding under the credit facility. On August 7, 2019, we entered into an amendment to the credit agreement, which provided for a $500 million short-term loan facility that was used in full to complete the BioTek acquisition and which was repaid in full as of July 31, 2020 . On October 21, 2019, we entered into a second amendment to the credit agreement, which refreshed the amount available for additional incremental term loan facilities under the credit agreement to permit additional incremental facilities of up to $500 million . We had no borrowings under the additional incremental loan facilities as of July 31, 2020 . On April 17, 2020, we entered into a third amendment to the credit agreement which provides the company with the option to request the consent of the applicable class of lenders to extend the maturity date of revolving borrowings and swingline loans for an additional period of one year and of the 2019 incremental term loans for an additional period of up to 364 days. We were in compliance with the covenants for the credit facility during the nine months ended July 31, 2020 . Commercial Paper In May 2020, we established a U.S. commercial paper program, under which the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.0 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. As of July 31, 2020 , borrowings outstanding under our U.S. commercial paper program had a weighted average annual interest rate of 0.23 percent and a weighted average remaining maturity of approximately 3 days . We had borrowings of $40 million outstanding under the U.S. commercial paper program as of July 31, 2020 . |
LONG-TERM DEBT (Notes)
LONG-TERM DEBT (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Senior Notes The following table summarizes the company’s long-term senior notes: July 31, 2020 October 31, 2019 Amortized Principal Amortized Principal (in millions) 2022 Senior Notes $ 399 $ 399 2023 Senior Notes 598 597 2026 Senior Notes 298 298 2029 Senior Notes 493 492 2030 Senior Notes 495 — Total $ 2,283 $ 1,786 2030 Senior Notes On June 4, 2020 , we issued an aggregate principal amount of $500 million in senior notes ("2030 senior notes"). The 2030 senior notes were issued at 99.812% of their principal amount. The 2030 senior notes will mature on June 4, 2030 , and bear interest at a fixed rate of 2.10% per annum. The interest is payable semi-annually on June 4th and December 4th of each year and payments commence on December 4, 2020 . All outstanding notes listed above are unsecured and rank equally in right of payment with all of Agilent’s other senior unsecured indebtedness. Other than the issuance of the 2030 senior notes 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 nine months ended July 31, 2020 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2019 |
STOCKHOLDERS' EQUITY (Notes)
STOCKHOLDERS' EQUITY (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS EQUITY | STOCKHOLDERS' EQUITY Stock Repurchase Program On November 19, 2018 we announced that our board of directors had approved a new share repurchase program (the "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 2019 repurchase program authorizes the purchase of up to $1.75 billion of our common stock at the company's discretion and has no fixed termination date. The 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 three months ended July 31, 2020 , we resumed stock repurchases after suspending them on March 23, 2020. During the three and nine months ended July 31, 2020 , we repurchased and retired approximately 362,000 shares for $33 million and 2.8 million shares for $219 million , respectively, under this authorization. During the three and nine months ended July 31, 2019 , we repurchased and retired approximately 8.0 million shares for $549 million and 9.8 million shares for $674 million , respectively, under this authorization. As of July 31, 2020 , we had remaining authorization to repurchase up to $808 million of our common stock under this program. Cash Dividends on Shares of Common Stock During the three and nine months ended July 31, 2020 , we paid cash dividends of $0.18 per common share or $56 million and $0.540 per common share or $167 million , respectively, on the company's common stock. During the three and nine months ended July 31, 2019 , we paid cash dividends of $0.164 per common share or $51 million and $0.492 per common share or $155 million , respectively, on the company's common stock. 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, 2020 Foreign currency translation Prior service credits Actuarial Losses Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2020 $ (244 ) $ 127 $ (419 ) $ (2 ) $ (538 ) Other comprehensive income (loss) before reclassifications 60 — — (9 ) 51 Amounts reclassified out of accumulated other comprehensive income (loss) — (1 ) 14 (1 ) 12 Tax (expense) benefit — 1 (4 ) 2 (1 ) Other comprehensive income (loss) 60 — 10 (8 ) 62 As of July 31, 2020 $ (184 ) $ 127 $ (409 ) $ (10 ) $ (476 ) Nine Months Ended July 31, 2020 As of October 31, 2019 $ (204 ) $ 131 $ (437 ) $ (4 ) $ (514 ) Other comprehensive income (loss) before reclassifications 20 — (5 ) (6 ) 9 Amounts reclassified out of accumulated other comprehensive income (loss) — (5 ) 42 (2 ) 35 Tax (expense) benefit — 1 (9 ) 2 (6 ) Other comprehensive income (loss) 20 (4 ) 28 (6 ) 38 As of July 31, 2020 $ (184 ) $ 127 $ (409 ) $ (10 ) $ (476 ) Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended July 31, 2020 and 2019 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, 2020 2019 2020 2019 Unrealized gain on derivatives $ 1 $ 1 $ 3 $ 6 Cost of products — — (1 ) — Interest expense 1 1 2 6 Total before income tax — (1 ) — (2 ) Provision for income tax 1 — 2 4 Total net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (14 ) (10 ) (42 ) (30 ) Prior service benefit 1 2 5 6 (13 ) (8 ) (37 ) (24 ) Total before income tax 3 5 11 10 Benefit for income tax (10 ) (3 ) (26 ) (14 ) Total net of income tax Total reclassifications for the period $ (9 ) $ (3 ) $ (24 ) $ (10 ) 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 (see Note 13, "Retirement Plans and Post Retirement Pension Plans"). |
SEGMENT INFORMATION (Notes)
SEGMENT INFORMATION (Notes) | 9 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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. Agilent has three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business each of which comprises 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. 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") 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 analytics; laboratory automation and robotic systems; dissolution testing; vacuum pumps and measurement technologies. Our diagnostics and genomics business is comprised of 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 API in an emerging class of drugs that utilize nucleic acid molecules for disease therapy. Third, our pathology solutions business is focused on product offerings for cancer diagnostics and anatomic pathology workflows. The broad portfolio of offerings includes immunohistochemistry ("IHC"), in situ hybridization ("ISH"), hematoxylin and eosin ("H&E") staining and special staining. Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. 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. Most of the portfolio is vendor neutral, meaning Agilent can serve and supply customers regardless of their instrument purchase choices. Solutions range from chemistries and supplies to 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, training and compliance support, software as a service, as well as asset management and consultative services that help increase customer productivity. Custom service and consumable bundles 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. 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 amortization and impairment of acquisition-related intangible assets, transformational initiatives expenses, acquisition and integration costs, some nucleic acid solutions division ("NASD") site costs, special compliance 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 and in-sourcing or outsourcing of activities. 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 transformational initiatives, acquisition and integration costs, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization, impairment of acquisition-related intangibles and other items as noted in the reconciliations below: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Net Revenue: Life Sciences and Applied Markets $ 557 $ 544 $ 1,721 $ 1,680 Diagnostics and Genomics 241 263 753 752 Agilent CrossLab 463 467 1,382 1,364 Total net revenue $ 1,261 $ 1,274 $ 3,856 $ 3,796 Segment Income From Operations: Life Sciences and Applied Markets $ 126 $ 118 $ 382 $ 384 Diagnostics and Genomics 41 50 132 132 Agilent CrossLab 132 122 373 342 Total segment income from operations $ 299 $ 290 $ 887 $ 858 The following table reconciles segment income from operations to Agilent’s total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Total segment income from operations $ 299 $ 290 $ 887 $ 858 Transformational initiatives (13 ) (11 ) (41 ) (25 ) Amortization of intangible assets related to business combinations (45 ) (25 ) (139 ) (79 ) Acquisition and integration costs (9 ) (12 ) (33 ) (32 ) Asset impairment — — (99 ) — Acceleration of share-based compensation expense (1 ) — (1 ) — NASD site costs — (6 ) — (12 ) Special compliance costs — (1 ) — (2 ) Other (1) (1 ) (10 ) (27 ) (17 ) Interest income 1 10 7 30 Interest expense (19 ) (18 ) (59 ) (53 ) Other income (expense), net (2) 7 5 64 20 Income before taxes, as reported $ 219 $ 222 $ 559 $ 688 (1) The other category primarily includes the legal costs related to a claim we pursued against Twist Bioscience Corporation in addition to other miscellaneous adjustments. (2) Other income (expense), net for the nine months ended July 31, 2020 includes the settlement of the legal claim against Twist Bioscience Corporation. 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 deferred tax assets and other assets. July 31, October 31, (in millions) Segment Assets: Life Sciences and Applied Markets $ 3,121 $ 3,202 Diagnostics and Genomics 2,518 2,620 Agilent CrossLab 1,361 1,331 Total segment assets $ 7,000 $ 7,153 |
OVERVIEW, BASIS OF PRESENTATI_2
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Overview and Basis of Presentation | Overview. Agilent Technologies, Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters. Basis of Presentation . We have prepared the accompanying financial data for the three and nine months ended July 31, 2020 and 2019 pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The October 31, 2019 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, 2019 . 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 July 31, 2020 and October 31, 2019 , condensed consolidated statement of comprehensive income (loss) for the three and nine months ended July 31, 2020 and 2019 , condensed consolidated statement of operations for the three and nine months ended July 31, 2020 and 2019 , condensed consolidated statement of cash flows for the nine months ended July 31, 2020 and 2019 and condensed consolidated statement of equity for the three and nine months ended July 31, 2020 and 2019 . |
Use of Estimates | 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, retirement and post-retirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes. |
Risk and Uncertainties policy | Risks and Uncertainties. We are subject to risks common to companies in the analytical instrument industry, such as global economic and financial market conditions, fluctuations in foreign currency exchange rates and fluctuations in customer demand, among others. 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. In March 2020, the World Health Organization declared COVID-19 a pandemic and recommended containment and mitigation measures worldwide. As a result, hospitals and testing laboratories have halted certain elective medical procedures, which had an adverse effect on our customers' business. In the third quarter, revenue from the academia and government markets improved sequentially but continues to be negatively affected by delays in installations due to continued laboratory closures in the Americas and, to a lesser extent, in Europe. Revenue from the chemical and energy markets has also been negatively impacted by the global slowdown in economic activity associated with measures put in place to slow the pandemic. Revenue from the diagnostics and clinical markets declined due to continued reduction in demand for non-COVID testing, although we did see some gradual improvement within the third quarter. The revenue decline was also due to limited access to customer laboratories in the genomics research markets. The COVID-19 pandemic has caused significant volatility and uncertainty in U.S. and international markets, which could result in a prolonged economic downturn that could disrupt our business. |
Variable Interest Entity | Variable Interest Entities. We make a determination upon entering into an arrangement whether an entity in which we have made an investment is considered a Variable Interest Entity (“VIE”). The company evaluates its investments in privately held companies on an ongoing basis. We have determined that as of July 31, 2020 and October 31, 2019 , there were no VIE's required to be consolidated in the company’s consolidated financial statements because we do not have a controlling financial interest in any of the VIE’s that we have invested in nor are we the primary beneficiary. We account for these investments under either the equity method or as equity investments without readily determinable fair value, depending on the circumstances. We periodically reassess whether we are the primary beneficiary of a VIE. The reassessment process considers whether we have acquired the power to direct the most significant activities of the VIE through changes in governing documents or other circumstances. We also reconsider whether entities previously determined not to be VIEs have become VIEs, based on changes in facts and circumstances including changes in contractual arrangements and capital structure. As of July 31, 2020 and October 31, 2019 , the total carrying value of investments and loans in privately held companies considered as VIE’s was $65 million and $29 million respectively. The maximum exposure is equal to the carrying value 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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and other accrued liabilities approximate fair value because of their short maturities. The fair value of long-term equity investments 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 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 our senior notes, calculated from quoted prices which are primarily Level 1 inputs under the accounting guidance fair value hierarchy, exceeds the carrying value by approximately $197 million and $62 million as of July 31, 2020 and October 31, 2019 , respectively. The change in the fair value over carrying value in the nine months ended July 31, 2020 is primarily due to decreased market interest rates. 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 11, "Fair Value Measurements" for additional information on the fair value of financial instruments. |
Lessee, Leases | Leases. We determine whether an arrangement is, or contains, a lease at inception. Prior to November 1, 2019, for leases where we are the lessee, we accounted for operating lease payments by charging them to expense as incurred. At the beginning of fiscal 2020, the company adopted new lease accounting guidance issued by the Financial Accounting Standards Board ("FASB"). The most significant change requires lessees to record the present value of operating lease payments as right-of-use ("ROU") and lease liabilities on the condensed consolidated balance sheet. Where we are the lessee, ROU assets represent the company’s right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments based on the present value of lease payments over the lease term. Classification of operating lease liabilities as either current or non-current is based on the expected timing of payments due under our obligations. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment. In order to determine the appropriate incremental borrowing rates, we have used a number of factors including the parent's credit rating, the lease term and the currency swap rate. The ROU asset also consists of any lease incentives received. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense for operating leases with an initial term of more than twelve months is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components. We have elected to account for these payments as a single lease component. A portion of our revenue relates to lease arrangements where Agilent is the lessor. Standalone lease arrangements are outside the scope of Accounting Standard Codification ("ASC") Topic 606, Revenue Contracts with Customers, and are therefore accounted for in accordance with ASC Topic 842, Leases. Each of these contracts is evaluated as a lease arrangement, either as an operating lease or a sales-type capital lease using the current lease classification guidance. See also Note 2, "New Accounting Pronouncements" and Note 9, "Leases" for additional information about the company’s leases. |
OVERVIEW, BASIS OF PRESENTATI_3
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Restricted Cash [Abstract] | |
Restrictions on Cash and Cash Equivalents | 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 2020 2019 (in millions) Cash and cash equivalents $ 1,358 $ 1,382 Restricted cash included in other assets 6 6 Total cash, cash equivalents and restricted cash $ 1,364 $ 1,388 |
NEW ACCOUNTING PRONOUNCEMENTS_2
NEW ACCOUNTING PRONOUNCEMENTS (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Schedule of Prospective Adoption of New Accounting Pronouncements | Adoption of the new guidance impacted the condensed consolidated balance sheet as follows: October 31, 2019 Impact of Adopting November 1, 2019 As Reported Lease Guidance As Adopted (in millions) Other assets $ 611 $ 192 $ 803 Other accrued liabilities $ 440 $ 48 $ 488 Other long-term liabilities $ 473 $ 144 $ 617 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of August 23, 2019 (in millions): Cash and cash equivalents $ 10 Accounts receivable 28 Inventories 21 Other current assets 2 Property, plant and equipment 8 Intangible assets 641 Goodwill 483 Total assets acquired 1,193 Accounts payable (4 ) Deferred revenue (5 ) Employee compensation and benefits (7 ) Other accrued liabilities (2 ) Long-term debt (4 ) Net assets acquired $ 1,171 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The components of intangible assets acquired in connection with the BioTek acquisition were as follows (in millions): Fair Value Estimated Useful Life Developed product technology $ 387 5-13 years Customer relationships 202 3-8 years Backlog 5 2 months Tradenames and trademarks 43 10 years Total intangible assets subject to amortization 637 In-process research and development 4 Total intangible assets $ 641 |
Pro Forma Information | The following represents the unaudited proforma operating results as if BioTek and ACEA had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2018 (in millions, except per share amounts): Three Months Ended July 31, Nine Months Ended July 31, 2019 2019 Net revenue $ 1,319 $ 3,930 Net income $ 174 $ 816 Net income per share — basic $ 0.56 $ 2.58 Net income per share — diluted $ 0.55 $ 2.55 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the company’s total revenue and segment revenue disaggregated by geographical region: Three Months Ended July 31, 2020 2019 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 $ 174 $ 156 $ 121 $ 451 $ 160 $ 167 $ 138 $ 465 Europe 111 127 84 322 118 130 91 339 Asia Pacific 272 180 36 488 266 170 34 470 Total $ 557 $ 463 $ 241 $ 1,261 $ 544 $ 467 $ 263 $ 1,274 Nine Months Ended July 31, 2020 2019 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 $ 553 $ 484 $ 365 $ 1,402 $ 473 $ 491 $ 367 $ 1,331 Europe 389 391 268 1,048 407 390 279 1,076 Asia Pacific 779 507 120 1,406 800 483 106 1,389 Total $ 1,721 $ 1,382 $ 753 $ 3,856 $ 1,680 $ 1,364 $ 752 $ 3,796 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, 2020 2019 2020 2019 (in millions) Revenue by End Markets Pharmaceutical and Biopharmaceutical $ 440 $ 416 $ 1,263 $ 1,178 Chemical and Energy 260 291 839 899 Diagnostics and Clinical 178 198 572 578 Food 123 116 367 359 Academia and Government 119 103 375 333 Environmental and Forensics 141 150 440 449 Total $ 1,261 $ 1,274 $ 3,856 $ 3,796 Revenue by Type Instrumentation $ 526 $ 505 $ 1,610 $ 1,563 Non-instrumentation and other 735 769 2,246 2,233 Total $ 1,261 $ 1,274 $ 3,856 $ 3,796 |
Contract Liabilities and Changes in Balances | The following table provides information about contract liabilities (deferred revenue) and the significant changes in the balances during the nine months ended July 31, 2020 : Contract Liabilities (in millions) Ending balance as of October 31, 2019 $ 386 Net revenue deferred in the period 331 Revenue recognized that was included in the contract liability balance at the beginning of the period (273 ) Change in deferrals from customer cash advances, net of revenue recognized 3 Currency translation and other adjustments 4 Ending balance as of July 31, 2020 $ 451 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Allocated share-based compensation expense disclosure | The impact on our results for share-based compensation was as follows: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Cost of products and services $ 5 $ 4 $ 16 $ 13 Research and development 2 2 7 6 Selling, general and administrative 12 12 41 39 Total share-based compensation expense $ 19 $ 18 $ 64 $ 58 |
Assumptions used to estimate fair value for LTPP | The following assumptions were used to estimate the fair value of awards granted. Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 LTPP: Volatility of Agilent shares 23% 22% 23% 22% Volatility of selected peer-company shares 15%-44% 15%-66% 15%-44% 15%-66% Pair-wise correlation with selected peers 29% 30% 29% 30% Post-vest holding restriction discount for all executive awards 5.3% 5.0% 5.3% 5.0% |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of the numerators and denominators of the basic and diluted net income per share | The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Numerator: Net income $ 199 $ 191 $ 497 $ 877 Denominator: Basic weighted-average shares 309 312 309 316 Potential common shares— stock options and other employee stock plans 3 4 3 4 Diluted weighted-average shares 312 316 312 320 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Inventory, Net [Abstract] | |
INVENTORY | INVENTORY July 31, October 31, (in millions) Finished goods $ 436 $ 416 Purchased parts and fabricated assemblies 310 263 Inventory $ 746 $ 679 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Prior to the adoption of the new lease accounting standard, future minimum lease payments as of October 31, 2019 and previously disclosed in the company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019 under non- cancelable leases with initial terms exceeding twelve months were as follows: Operating Leases (in millions) 2020 $ 52 2021 41 2022 29 2023 21 2024 14 Thereafter 56 Total future minimum lease payments $ 213 |
Lease Cost | Supplemental cash flow information related to leases was as follows: Nine Months Ended July 31, 2020 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 44 Non-cash right of use assets obtained in exchange for operating lease obligations $ 31 The components of lease cost for operating leases were as follows : Three Months Ended Nine Months Ended July 31, 2020 July 31, 2020 (in millions) Operating lease cost $ 14 $ 45 Short-term lease cost — 1 Variable lease cost (a) 4 11 Sublease income (4 ) (11 ) Total lease cost $ 14 $ 46 (a) Variable lease cost includes cancelable leases, non-fixed maintenance costs and non-recoverable transaction taxes. |
Lessee, Lease Assets and Liabilities | Supplemental balance sheet information related to leases was as follows: Financial Statement Line Item July 31, 2020 (in millions, except lease term and discount rate) Assets: Operating lease: Right of use asset Other assets $ 183 Liabilities: Current Operating lease liabilities Other accrued liabilities $ 52 Long-Term Operating lease liabilities Other long-term liabilities $ 133 Weighted average remaining lease term in years Operating leases 7.9 years Weighted average discount rate Operating leases 2.0 % |
Lessee, Operating Lease, Liability, Maturity | Future minimum rents payable as of July 31, 2020 under non-cancelable leases with initial terms exceeding one year reconcile to lease liabilities included in the condensed consolidated balance sheet as follows: Operating Leases (in millions) Remainder of 2020 $ 15 2021 52 2022 39 2023 26 2024 15 2025 9 Thereafter 48 Total undiscounted future minimum lease payments $ 204 Less: amount of lease payments representing interest (19 ) Present value of future minimum lease payments $ 185 Less: current liabilities (52 ) Long-term lease liabilities $ 133 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill balances and movements for each reportable segment during the period | The following table presents goodwill balances and the movements for each of our reportable segments during the nine months ended July 31, 2020 : Life Sciences and Applied Markets Diagnostics and Genomics Agilent CrossLab Total (in millions) Goodwill as of October 31, 2019 $ 1,438 $ 1,594 $ 561 $ 3,593 Foreign currency translation impact 5 6 2 13 Goodwill as of July 31, 2020 $ 1,443 $ 1,600 $ 563 $ 3,606 |
Components of other intangible assets during the period | The components of other intangible assets as of July 31, 2020 and October 31, 2019 are shown in the table below: Purchased Other Intangible Assets Gross Carrying Amount Accumulated Amortization Net Book Value (in millions) As of October 31, 2019 Purchased technology $ 1,413 $ 763 $ 650 Backlog 5 5 — Trademark/Tradename 196 102 94 Customer relationships 329 87 242 Third-party technology and licenses 28 22 6 Total amortizable intangible assets 1,971 979 992 In-Process R&D 115 — 115 Total $ 2,086 $ 979 $ 1,107 As of July 31, 2020 Purchased technology $ 1,419 $ 839 $ 580 Trademark/Tradename 196 113 83 Customer relationships 330 142 188 Third-party technology and licenses 28 24 4 Total amortizable intangible assets 1,973 1,118 855 In-Process R&D 21 — 21 Total $ 1,994 $ 1,118 $ 876 |
Schedule of estimated future amortization expense of finite-lived intangible assets | Future amortization expense related to existing finite-lived purchased intangible assets for the remainder of fiscal year 2020 and for each of the five succeeding fiscal years and thereafter is estimated below: Estimated future amortization expense: (in millions) Remainder of 2020 $ 45 2021 $ 172 2022 $ 150 2023 $ 107 2024 $ 86 2025 $ 68 Thereafter $ 227 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets And Liabilities Measured On Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2020 were as follows: Fair Value Measurement at July 31, 2020 Using July 31, 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) $ 715 $ 715 $ — $ — Derivative instruments (foreign exchange contracts) 13 — 13 — Long-term Trading securities 29 29 — — Other investments 25 — 25 — Total assets measured at fair value $ 782 $ 744 $ 38 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 22 $ — $ 22 $ — Long-term Deferred compensation liability 29 — 29 — Total liabilities measured at fair value $ 51 $ — $ 51 $ — Financial assets and liabilities measured at fair value on a recurring basis as of October 31, 2019 were as follows: Fair Value Measurement at October 31, 2019 Using October 31, 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) $ 784 $ 784 $ — $ — Derivative instruments (foreign exchange contracts) 12 — 12 — Long-term Trading securities 30 30 — — Other investments 25 — 25 — Total assets measured at fair value $ 851 $ 814 $ 37 $ — Liabilities: Short-term Derivative instruments (foreign exchange contracts) $ 6 $ — $ 6 $ — Long-term Deferred compensation liability 30 — 30 — Total liabilities measured at fair value $ 36 $ — $ 36 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Aggregated notional amounts by currency and designation | The aggregated notional amounts by currency and designation as of July 31, 2020 were as follows: Derivatives Designated as Cash Flow Hedges Derivatives Designated as Derivatives Not Designated as Hedging Instruments Forward Contracts USD Forward Forward Contracts USD Currency Buy/(Sell) Buy/(Sell) Buy/(Sell) (in millions) Euro $ (48 ) $ (90 ) $ 107 British Pound (44 ) — 6 Canadian Dollar (40 ) — 30 Japanese Yen (88 ) — 12 Korean Won (60 ) — (37 ) Singapore Dollar 15 — 20 Chinese Yuan Renminbi (77 ) — (64 ) Swedish Krona — — (9 ) Taiwan Dollar — — (10 ) Indian Rupee — — (9 ) Other 4 — 4 Totals $ (338 ) $ (90 ) $ 50 |
Gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet | Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet as of July 31, 2020 and October 31, 2019 were as follows: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet Location July 31, October 31, 2019 Balance Sheet Location July 31, October 31, (in millions) Derivatives designated as hedging instruments: Cash flow hedges Foreign exchange contracts Other current assets $ 1 $ 3 Other accrued liabilities $ 10 $ 2 Net investment hedges Foreign exchange contracts Other current assets $ — $ — Other accrued liabilities $ 5 $ — Derivatives not designated as hedging instruments: Foreign exchange contracts Other current assets $ 12 $ 9 Other accrued liabilities $ 7 $ 4 Total derivatives $ 13 $ 12 $ 22 $ 6 |
Effect of derivative instruments for foreign exchange contracts in the consolidated statement of operations | The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our consolidated statement of operations were as follows: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Derivatives designated as hedging instruments: Cash Flow Hedges Foreign exchange contracts: Gain (loss) recognized in accumulated other comprehensive loss $ (9 ) $ 4 $ (6 ) $ 2 Loss reclassified from accumulated other comprehensive loss into interest expense $ — $ — $ (1 ) $ — Gain reclassified from accumulated other comprehensive loss into cost of sales $ 1 $ 1 $ 3 $ 6 Gain (loss) on time value of forward contracts recorded in cost of sales $ — $ (1 ) $ 2 $ 1 Net Investment Hedges Foreign exchange contracts: Loss recognized in accumulated other comprehensive loss $ (7 ) $ — $ (6 ) $ — Derivatives not designated as hedging instruments: Gain (loss) recognized in other income (expense) $ 9 $ — $ 6 $ (2 ) |
RETIREMENT PLANS AND POST RET_2
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |
Schedule of net pension and post-retirement benefit costs | Components of net periodic costs (benefits). For the three and nine months ended July 31, 2020 and 2019 , our net pension and post retirement benefit costs (benefits) were comprised of the following: Three Months Ended July 31, U.S. Non-U.S. U.S. Post Retirement Benefit Plans 2020 2019 2020 2019 2020 2019 (in millions) Service cost—benefits earned during the period $ — $ — $ 6 $ 6 $ 1 $ — Interest cost on benefit obligation 4 5 2 3 — 1 Expected return on plan assets (7 ) (7 ) (11 ) (11 ) (2 ) (1 ) Amortization: Actuarial losses — — 12 9 1 1 Prior service credits — — — — (1 ) (2 ) Total net plan costs (benefits) $ (3 ) $ (2 ) $ 9 $ 7 $ (1 ) $ (1 ) Nine Months Ended July 31, U.S. Non-U.S. U.S. Post Retirement 2020 2019 2020 2019 2020 2019 (in millions) Service cost—benefits earned during the period $ — $ — $ 18 $ 16 $ 1 $ — Interest cost on benefit obligation 12 15 6 9 2 2 Expected return on plan assets (22 ) (21 ) (35 ) (33 ) (5 ) (3 ) Amortization: Actuarial losses 2 — 36 27 3 3 Prior service credits — — — — (5 ) (6 ) Total net plan costs (benefits) $ (8 ) $ (6 ) $ 25 $ 19 $ (4 ) $ (4 ) The service cost component is recorded in cost of sales and operating expenses in the condensed consolidated statement of operations. All other cost components are recorded in other income (expense), net in the condensed consolidated statement of operations. |
WARRANTIES AND CONTINGENCIES (T
WARRANTIES AND CONTINGENCIES (Table) | 9 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard warranty | A summary of the standard warranty accrual activity is shown in the table below: Nine Months Ended July 31, 2020 2019 (in millions) Beginning balance as of November 1, $ 32 $ 35 Accruals for warranties including change in estimate 36 40 Settlements made during the period (37 ) (43 ) Ending balance as of July 31, $ 31 $ 32 Accruals for warranties due within one year $ 31 $ 32 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Notes and Related Interest Rate Swaps | The following table summarizes the company’s long-term senior notes: July 31, 2020 October 31, 2019 Amortized Principal Amortized Principal (in millions) 2022 Senior Notes $ 399 $ 399 2023 Senior Notes 598 597 2026 Senior Notes 298 298 2029 Senior Notes 493 492 2030 Senior Notes 495 — Total $ 2,283 $ 1,786 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Schedule of 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, 2020 Foreign currency translation Prior service credits Actuarial Losses Unrealized gains (losses) on derivatives Total (in millions) As of April 30, 2020 $ (244 ) $ 127 $ (419 ) $ (2 ) $ (538 ) Other comprehensive income (loss) before reclassifications 60 — — (9 ) 51 Amounts reclassified out of accumulated other comprehensive income (loss) — (1 ) 14 (1 ) 12 Tax (expense) benefit — 1 (4 ) 2 (1 ) Other comprehensive income (loss) 60 — 10 (8 ) 62 As of July 31, 2020 $ (184 ) $ 127 $ (409 ) $ (10 ) $ (476 ) Nine Months Ended July 31, 2020 As of October 31, 2019 $ (204 ) $ 131 $ (437 ) $ (4 ) $ (514 ) Other comprehensive income (loss) before reclassifications 20 — (5 ) (6 ) 9 Amounts reclassified out of accumulated other comprehensive income (loss) — (5 ) 42 (2 ) 35 Tax (expense) benefit — 1 (9 ) 2 (6 ) Other comprehensive income (loss) 20 (4 ) 28 (6 ) 38 As of July 31, 2020 $ (184 ) $ 127 $ (409 ) $ (10 ) $ (476 ) |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended July 31, 2020 and 2019 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, 2020 2019 2020 2019 Unrealized gain on derivatives $ 1 $ 1 $ 3 $ 6 Cost of products — — (1 ) — Interest expense 1 1 2 6 Total before income tax — (1 ) — (2 ) Provision for income tax 1 — 2 4 Total net of income tax Net defined benefit pension cost and post retirement plan costs: Actuarial net loss (14 ) (10 ) (42 ) (30 ) Prior service benefit 1 2 5 6 (13 ) (8 ) (37 ) (24 ) Total before income tax 3 5 11 10 Benefit for income tax (10 ) (3 ) (26 ) (14 ) Total net of income tax Total reclassifications for the period $ (9 ) $ (3 ) $ (24 ) $ (10 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Profitability and Segment Assets | 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 deferred tax assets and other assets. July 31, October 31, (in millions) Segment Assets: Life Sciences and Applied Markets $ 3,121 $ 3,202 Diagnostics and Genomics 2,518 2,620 Agilent CrossLab 1,361 1,331 Total segment assets $ 7,000 $ 7,153 The profitability of each of the segments is measured after excluding transformational initiatives, acquisition and integration costs, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization, impairment of acquisition-related intangibles and other items as noted in the reconciliations below: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Net Revenue: Life Sciences and Applied Markets $ 557 $ 544 $ 1,721 $ 1,680 Diagnostics and Genomics 241 263 753 752 Agilent CrossLab 463 467 1,382 1,364 Total net revenue $ 1,261 $ 1,274 $ 3,856 $ 3,796 Segment Income From Operations: Life Sciences and Applied Markets $ 126 $ 118 $ 382 $ 384 Diagnostics and Genomics 41 50 132 132 Agilent CrossLab 132 122 373 342 Total segment income from operations $ 299 $ 290 $ 887 $ 858 |
Reconciliation of segment results to total enterprise results | The following table reconciles segment income from operations to Agilent’s total enterprise income before taxes: Three Months Ended Nine Months Ended July 31, July 31, 2020 2019 2020 2019 (in millions) Total segment income from operations $ 299 $ 290 $ 887 $ 858 Transformational initiatives (13 ) (11 ) (41 ) (25 ) Amortization of intangible assets related to business combinations (45 ) (25 ) (139 ) (79 ) Acquisition and integration costs (9 ) (12 ) (33 ) (32 ) Asset impairment — — (99 ) — Acceleration of share-based compensation expense (1 ) — (1 ) — NASD site costs — (6 ) — (12 ) Special compliance costs — (1 ) — (2 ) Other (1) (1 ) (10 ) (27 ) (17 ) Interest income 1 10 7 30 Interest expense (19 ) (18 ) (59 ) (53 ) Other income (expense), net (2) 7 5 64 20 Income before taxes, as reported $ 219 $ 222 $ 559 $ 688 (1) The other category primarily includes the legal costs related to a claim we pursued against Twist Bioscience Corporation in addition to other miscellaneous adjustments. (2) Other income (expense), net for the nine months ended July 31, 2020 includes the settlement of the legal claim against Twist Bioscience Corporation. |
OVERVIEW, BASIS OF PRESENTATI_4
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Oct. 31, 2018 |
Variable Interest Entity [Line Items] | ||||
Assets | $ 9,546 | $ 9,452 | ||
Fair Value of Financial Instruments | ||||
Fair value of senior notes in excess of carrying value | 197 | 62 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | ||||
Cash and cash equivalents | 1,358 | 1,382 | ||
Restricted Cash | 6 | 6 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 1,364 | 1,388 | $ 1,771 | $ 2,254 |
Variable Interest Entity, Not Primary Beneficiary [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Assets | $ 65 | $ 29 |
NEW ACCOUNTING PRONOUNCEMENTS-
NEW ACCOUNTING PRONOUNCEMENTS- Initial Adoption (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 |
Assets | |||
Other assets | $ 825 | $ 803 | $ 611 |
Liabilities | |||
Other accrued liabilities | 260 | 488 | 440 |
Other long-term liabilities | $ 613 | 617 | $ 473 |
Impact of Adopting Accounting Standards Update 2016-02 - Leases | |||
Assets | |||
Other assets | 192 | ||
Liabilities | |||
Other accrued liabilities | 48 | ||
Other long-term liabilities | $ 144 |
ACQUISITIONS - Text (Details)
ACQUISITIONS - Text (Details) - USD ($) $ in Millions | Aug. 23, 2019 | Nov. 14, 2018 | Jul. 31, 2020 | Jul. 31, 2020 |
BioTek | ||||
Business Acquisition [Line Items] | ||||
Purchase Price | $ 1,170 | |||
Cash Payment to Acquire Businesses | 470 | |||
Payment to Acquire Business with Debt | $ 700 | |||
Acquisition and Integration Costs | $ 3 | $ 9 | ||
ACEA Biosciences, Inc. | ||||
Business Acquisition [Line Items] | ||||
Purchase Price | $ 250 |
ACQUISITIONS - Assets and Liabi
ACQUISITIONS - Assets and Liabilities Assumed (Details) - USD ($) $ in Millions | Aug. 23, 2019 | Jul. 31, 2020 |
Business Acquisition [Line Items] | ||
Goodwill arising from acquisitions | $ 0 | |
BioTek | ||
Business Acquisition [Line Items] | ||
Cash and Cash and Equivalents acquired | $ 10 | |
Accounts Receivable acquired | 28 | |
Inventories acquired | 21 | |
Other Current Assets acquired | 2 | |
Property, Plant, and Equipment acquired | 8 | |
Intangible Assets acquired | 641 | |
Goodwill arising from acquisitions | 483 | |
Total Assets acquired | 1,193 | |
Accounts Payable assumed | 4 | |
Deferred Revenue assumed | 5 | |
Employee compensation and benefits assumed | 7 | |
Other Accrued Liabilities assumed | 2 | |
Long-term Debt assumed | 4 | |
Net Assets Acquired | $ 1,171 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Assets Acquired (Details) - USD ($) $ in Millions | Aug. 23, 2019 | Jul. 31, 2020 | Oct. 31, 2019 |
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 1,994 | $ 2,086 | |
BioTek | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 637 | ||
In-Process R&D | 4 | ||
Total Intangible Assets, Gross (Excluding Goodwill) | 641 | ||
Developed Product Technology | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | 1,419 | 1,413 | |
Developed Product Technology | BioTek | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | 387 | ||
Customer Relationships | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 330 | 329 | |
Customer Relationships | BioTek | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | 202 | ||
Backlog | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 5 | ||
Backlog | BioTek | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 5 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 months | ||
Trademarks and Trade Names | BioTek | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 43 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||
Minimum | Developed Product Technology | BioTek | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||
Minimum | Customer Relationships | BioTek | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||
Maximum | Developed Product Technology | BioTek | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | ||
Maximum | Customer Relationships | BioTek | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years |
ACQUISITIONS - Proforma Operati
ACQUISITIONS - Proforma Operating Results (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 31, 2019 | Jul. 31, 2020 | |
Business Acquisition [Line Items] | ||
Pro Forma Revenue | $ 1,319 | $ 3,930 |
Pro Forma Net Income | $ 174 | $ 816 |
Pro Forma Earnings Per Share, Basic | $ 0.56 | $ 2.58 |
Pro Forma Earnings Per Share, Diluted | $ 0.55 | $ 2.55 |
REVENUE- Revenue by Region (Det
REVENUE- Revenue by Region (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net revenue | $ 1,261 | $ 1,274 | $ 3,856 | $ 3,796 |
Life Sciences and Applied Markets | ||||
Net revenue | 557 | 544 | 1,721 | 1,680 |
Agilent CrossLab | ||||
Net revenue | 463 | 467 | 1,382 | 1,364 |
Diagnostics and Genomics | ||||
Net revenue | 241 | 263 | 753 | 752 |
Americas | ||||
Net revenue | 451 | 465 | 1,402 | 1,331 |
Americas | Life Sciences and Applied Markets | ||||
Net revenue | 174 | 160 | 553 | 473 |
Americas | Agilent CrossLab | ||||
Net revenue | 156 | 167 | 484 | 491 |
Americas | Diagnostics and Genomics | ||||
Net revenue | 121 | 138 | 365 | 367 |
Europe | ||||
Net revenue | 322 | 339 | 1,048 | 1,076 |
Europe | Life Sciences and Applied Markets | ||||
Net revenue | 111 | 118 | 389 | 407 |
Europe | Agilent CrossLab | ||||
Net revenue | 127 | 130 | 391 | 390 |
Europe | Diagnostics and Genomics | ||||
Net revenue | 84 | 91 | 268 | 279 |
Asia Pacific | ||||
Net revenue | 488 | 470 | 1,406 | 1,389 |
Asia Pacific | Life Sciences and Applied Markets | ||||
Net revenue | 272 | 266 | 779 | 800 |
Asia Pacific | Agilent CrossLab | ||||
Net revenue | 180 | 170 | 507 | 483 |
Asia Pacific | Diagnostics and Genomics | ||||
Net revenue | $ 36 | $ 34 | $ 120 | $ 106 |
REVENUE - Revenue by End Market
REVENUE - Revenue by End Markets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net revenue | $ 1,261 | $ 1,274 | $ 3,856 | $ 3,796 |
Pharmaceutical and Biopharmaceutical | ||||
Net revenue | 440 | 416 | 1,263 | 1,178 |
Chemical and Energy | ||||
Net revenue | 260 | 291 | 839 | 899 |
Diagnostics and Clinical | ||||
Net revenue | 178 | 198 | 572 | 578 |
Food | ||||
Net revenue | 123 | 116 | 367 | 359 |
Academia and Government | ||||
Net revenue | 119 | 103 | 375 | 333 |
Environmental and Forensics | ||||
Net revenue | $ 141 | $ 150 | $ 440 | $ 449 |
REVENUE - Revenue by Type (Deta
REVENUE - Revenue by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Net revenue | $ 1,261 | $ 1,274 | $ 3,856 | $ 3,796 |
Instrumentation | ||||
Net revenue | 526 | 505 | 1,610 | 1,563 |
Non-Instrumentation and Other | ||||
Net revenue | $ 735 | $ 769 | $ 2,246 | $ 2,233 |
REVENUE - Contract Assets and L
REVENUE - Contract Assets and Liability (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Contract Asset | |||
Contract Assets (Unbilled Accounts Receivable) | $ 150 | $ 110 | |
Contract Liability | |||
Contract liability ending balance as of October 31, 2019 | 386 | ||
Net revenue deferred in the period | 331 | ||
Revenue recognized that was included in the contract liability balance at the beginning of the period | (273) | $ (230) | |
Change in deferrals from customer cash advances, net of revenue recognized | 3 | ||
Currency Translation and Other Adjustment | 4 | ||
Contract liability ending balance as of April 30, 2020 | $ 451 |
REVENUE - Remaining Performance
REVENUE - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-30 $ in Millions | Jul. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected timing of satisfaction period | 12 years |
Remaining performance obligation amount | $ 217 |
SHARE-BASED COMPENSATION Alloca
SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 19 | $ 18 | $ 64 | $ 58 |
Cost of Products and Services | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 5 | 4 | 16 | 13 |
Research and Development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | 2 | 2 | 7 | 6 |
Selling, General and Administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Share-based compensation expense | $ 12 | $ 12 | $ 41 | $ 39 |
SHARE-BASED COMPENSATION Fair V
SHARE-BASED COMPENSATION Fair Value Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
ESPP plan purchase price (in hundredths) | 85.00% | 85.00% | 85.00% | 85.00% |
LTPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Volatility of Agilent shares | 23.00% | 22.00% | 23.00% | 22.00% |
Volatility of selected peer-company shares - Minimum | 15.00% | 15.00% | 15.00% | 15.00% |
Volatility of selected peer-company shares - Maximum | 44.00% | 66.00% | 44.00% | 66.00% |
Pair-wise correlation with selected peers (in hundredths) | 29.00% | 30.00% | 29.00% | 30.00% |
LTPP & RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Discount for post-vesting restrictions | 5.30% | 5.00% | 5.30% | 5.00% |
SHARE-BASED COMPENSATION Text
SHARE-BASED COMPENSATION Text (Details) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended |
Jul. 31, 2020 | Oct. 31, 2019 | |
Inventory | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based compensation capitalized in inventory | $ 0 | $ 0 |
Employee Stock [ESPP] | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of Common shares available for future issuance | 31 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting percentage | 25.00% | |
Vesting Period | 4 years | |
Minimum | Performance Shares [LTPP] | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting percentage | 0.00% | |
Maximum | Performance Shares [LTPP] | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting percentage | 200.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure | ||||
Provision (benefit) for income taxes | $ 20 | $ 31 | $ 62 | $ (189) |
Effective income tax rate | 9.10% | 14.00% | 11.10% | (27.50%) |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | $ 16 | $ 16 | ||
Discrete tax expense (benefit) | $ 299 | |||
Excess tax benefit from stock based compensation | $ 15 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Numerator: | ||||
Net income | $ 199 | $ 191 | $ 497 | $ 877 |
Denominators: | ||||
Basic weighted-average shares (in shares) | 309 | 312 | 309 | 316 |
Potential common shares - stock options and other employee stock plans (in shares) | 3 | 4 | 3 | 4 |
Diluted weighted average shares (in shares) | 312 | 316 | 312 | 320 |
Anti-dilutive shares excluded from computation of dilutive earnings per share (in shares) | 0 | 0 | 0 | 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Inventory, Net [Abstract] | ||
Finished goods | $ 436 | $ 416 |
Purchased parts and fabricated assemblies | 310 | 263 |
Inventory | $ 746 | $ 679 |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) $ in Millions | Oct. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 52 |
2021 | 41 |
2022 | 29 |
2023 | 21 |
2024 | 14 |
2025 and thereafter | 56 |
Total future minimum lease payments | $ 213 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 31, 2020 | Jul. 31, 2020 | |
Leases [Abstract] | ||
Operating Lease Cost | $ 14 | $ 45 |
Short-term Lease Cost | 0 | 1 |
Variable Lease Cost | 4 | 11 |
Sublease Income | (4) | (11) |
Total Lease Cost | $ 14 | $ 46 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flows Information (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease payments | $ 44 |
Non-Cash Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 31 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) $ in Millions | Jul. 31, 2020USD ($) |
Operating lease liability, Current | $ 52 |
Operating lease liability, Noncurrent | $ 133 |
Weighted average remaining lease term (in years) - Operating leases | 7 years 11 months |
Weighted average discount rate - Operating leases | 2.00% |
Other assets | |
Right-of-Use Asset | $ 183 |
Other accrued liabilities | |
Operating lease liability, Current | 52 |
Other long-term liabilities | |
Operating lease liability, Noncurrent | $ 133 |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) $ in Millions | Jul. 31, 2020USD ($) |
Leases [Abstract] | |
Operating lease payments due in remainder of 2020 | $ 15 |
Operating lease payments due in 2021 | 52 |
Operating lease payments due in 2022 | 39 |
Operating lease payments due in 2023 | 26 |
Operating lease payments due in 2024 | 15 |
Operating lease payments due in 2025 | 9 |
Operating lease payments due thereafter | 48 |
Total undiscounted future minimum lease payments | 204 |
Amount of lease payments representing interest | (19) |
Present value of future minimum lease payments | 185 |
Current liabilities | (52) |
Long-term lease liabilities | $ 133 |
LEASES - Text (Details)
LEASES - Text (Details) $ in Millions | Jul. 31, 2020USD ($) |
Leases [Abstract] | |
Operating Leased assets - original cost | $ 46 |
Operating leased assets, net book value | 13 |
Sales-type Lease, Lease Receivable | $ 41 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions | 9 Months Ended |
Jul. 31, 2020USD ($) | |
Goodwill Roll Forward | |
Goodwill beginning balance | $ 3,593 |
Foreign currency translation impact | 13 |
Goodwill ending balance | 3,606 |
Life Sciences and Applied Markets | |
Goodwill Roll Forward | |
Goodwill beginning balance | 1,438 |
Foreign currency translation impact | 5 |
Goodwill ending balance | 1,443 |
Diagnostics and Genomics | |
Goodwill Roll Forward | |
Goodwill beginning balance | 1,594 |
Foreign currency translation impact | 6 |
Goodwill ending balance | 1,600 |
Agilent CrossLab | |
Goodwill Roll Forward | |
Goodwill beginning balance | 561 |
Foreign currency translation impact | 2 |
Goodwill ending balance | $ 563 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | $ 1,994 | $ 2,086 |
Accumulated Amortization | 1,118 | 979 |
Net Book Value | 876 | 1,107 |
Purchased Technology | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 1,419 | 1,413 |
Accumulated Amortization | 839 | 763 |
Net Book Value | 580 | 650 |
Backlog | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 5 | |
Accumulated Amortization | 5 | |
Net Book Value | 0 | |
Trademark/Tradenames | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 196 | 196 |
Accumulated Amortization | 113 | 102 |
Net Book Value | 83 | 94 |
Customer Relationships | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 330 | 329 |
Accumulated Amortization | 142 | 87 |
Net Book Value | 188 | 242 |
Third-Party Technology and Licenses | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 28 | 28 |
Accumulated Amortization | 24 | 22 |
Net Book Value | 4 | 6 |
Total amortizable intangible assets | ||
Finite-Lived Intangible Assets, Net | ||
Gross Carrying Amount | 1,973 | 1,971 |
Accumulated Amortization | 1,118 | 979 |
Net Book Value | 855 | 992 |
In-Process R&D | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ||
In-Process R&D | $ 21 | $ 115 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Finite-Lived Intangible Assets | ||||
Additions to goodwill | $ 0 | |||
Addition to other intangible assets | 0 | |||
Foreign currency translation impact on other intangible assets | (1) | |||
Impairment of IPR&D | $ 0 | $ 0 | 90 | $ 0 |
Goodwill impairment | 0 | 0 | 0 | 0 |
Amortization of intangible assets during the period | $ 45 | $ 27 | $ 140 | $ 82 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Future Amortization (Details) $ in Millions | Jul. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2020 | $ 45 |
2021 | 172 |
2022 | 150 |
2023 | 107 |
2024 | 86 |
2025 | 68 |
Thereafter | $ 227 |
FAIR VALUE MEASUREMENTS, Fair v
FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Assets Short - term | ||
Cash equivalents (money market funds) | $ 715 | $ 784 |
Derivative instruments (foreign exchange contracts) | 13 | 12 |
Assets, Long-term | ||
Trading securities | 29 | 30 |
Other investments | 25 | 25 |
Total assets measured at fair value | 782 | 851 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 22 | 6 |
Liabilities Long-term | ||
Deferred compensation liability | 29 | 30 |
Total liabilities measured at fair value | 51 | 36 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 715 | 784 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term | ||
Trading securities | 29 | 30 |
Other investments | 0 | 0 |
Total assets measured at fair value | 744 | 814 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 13 | 12 |
Assets, Long-term | ||
Trading securities | 0 | 0 |
Other investments | 25 | 25 |
Total assets measured at fair value | 38 | 37 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 22 | 6 |
Liabilities Long-term | ||
Deferred compensation liability | 29 | 30 |
Total liabilities measured at fair value | 51 | 36 |
Significant Unobservable Inputs (Level 3) | ||
Assets Short - term | ||
Cash equivalents (money market funds) | 0 | 0 |
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Assets, Long-term | ||
Trading securities | 0 | 0 |
Other investments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities, Short-term | ||
Derivative instruments (foreign exchange contracts) | 0 | 0 |
Liabilities Long-term | ||
Deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS, Fair_2
FAIR VALUE MEASUREMENTS, Fair value measures and impairments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Long-Lived Assets | |||||
Carrying value of impaired long-lived assets held for use | $ 98 | $ 98 | |||
Fair value of impaired long-lived assets held for use | 0 | 0 | |||
Impairment of Long-Lived Assets Held-for-use | 0 | $ 0 | 98 | $ 0 | |
Impairment of Long-Lived assets Held for sale | 0 | 0 | 0 | 0 | |
Investments | |||||
Impairment of Investments | 0 | 0 | 0 | 0 | |
Non-Marketable Equity Securities without Readily Determinable Fair Value | |||||
Impairment of non-marketable securities | 0 | 0 | |||
Unrealized Gain on non-marketable equity securities | (1) | $ 0 | 26 | $ 1 | |
Non-marketable equity securities carrying amount | $ 94 | $ 94 | $ 47 |
DERIVATIVES- Text (Details)
DERIVATIVES- Text (Details) $ in Millions | Sep. 15, 2016USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Aug. 16, 2019USD ($) | Feb. 01, 2016USD ($)contracts | Jul. 01, 2012USD ($) |
Derivative Instruments and Hedging Activities Disclosure | ||||||||
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position | $ 11 | $ 11 | ||||||
Senior Notes 2022 | Treasury Lock [Member] | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Terminated Derivative Contracts | ||||||||
Derivative, Notional Amount | $ 400 | |||||||
Remaining gain (loss) to be amortized on derivative | 1 | 1 | ||||||
Senior Notes 2026 | Interest Rate Swap | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Terminated Derivative Contracts | ||||||||
Number of interest rate swap contracts terminated | contracts | 3 | |||||||
Derivative, Notional Amount | $ 300 | |||||||
Interest rate swap payments | $ 10 | |||||||
Remaining gain (loss) to be amortized on derivative | 6 | 6 | ||||||
Senior Notes 2029 | Treasury Lock [Member] | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Terminated Derivative Contracts | ||||||||
Derivative, Notional Amount | $ 250 | |||||||
Remaining gain (loss) to be amortized on derivative | 5 | 5 | ||||||
Accumulated Other Comprehensive Income (Loss) | Foreign Exchange Contracts | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Net Investment Hedge | ||||||||
Gain (loss) recognized in accumulated other comprehensive loss | (9) | $ 4 | (6) | $ 2 | ||||
Accumulated Other Comprehensive Income (Loss) | Foreign Exchange Contracts | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | ||||||||
Net Investment Hedge | ||||||||
Gain (loss) recognized in accumulated other comprehensive loss | $ (7) | $ 0 | $ (6) | $ 0 |
DERIVATIVES- Foreign Exchange F
DERIVATIVES- Foreign Exchange Forward Contracts (Details) $ in Millions | Jul. 31, 2020USD ($)contracts |
Foreign Exchange Forward | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | |
Derivative | |
Number of foreign exchange forward contracts (in units) | contracts | 261 |
Foreign Exchange Forward | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | |
Derivative | |
Number of foreign exchange forward contracts (in units) | contracts | 3 |
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Number of foreign exchange forward contracts (in units) | contracts | 191 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | |
Derivative | |
Derivative, Notional Amount | $ 338 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Euro | |
Derivative | |
Derivative, Notional Amount | 48 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | British Pound | |
Derivative | |
Derivative, Notional Amount | 44 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Canadian Dollar | |
Derivative | |
Derivative, Notional Amount | 40 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Japanese Yen | |
Derivative | |
Derivative, Notional Amount | 88 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Korean Won | |
Derivative | |
Derivative, Notional Amount | 60 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Chinese Yuan Renminbi | |
Derivative | |
Derivative, Notional Amount | 77 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Swedish Krona | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Taiwan, New Dollars | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | India, Rupees | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | |
Derivative | |
Derivative, Notional Amount | 90 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Euro | |
Derivative | |
Derivative, Notional Amount | 90 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | British Pound | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Canadian Dollar | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Japanese Yen | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Korean Won | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Chinese Yuan Renminbi | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Swedish Krona | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Taiwan, New Dollars | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | India, Rupees | |
Derivative | |
Derivative, Notional Amount | 0 |
Sell | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Korean Won | |
Derivative | |
Derivative, Notional Amount | 37 |
Sell | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Chinese Yuan Renminbi | |
Derivative | |
Derivative, Notional Amount | 64 |
Sell | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Swedish Krona | |
Derivative | |
Derivative, Notional Amount | 9 |
Sell | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Taiwan, New Dollars | |
Derivative | |
Derivative, Notional Amount | 10 |
Sell | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | India, Rupees | |
Derivative | |
Derivative, Notional Amount | 9 |
Buy | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Singapore Dollar | |
Derivative | |
Derivative, Notional Amount | 15 |
Buy | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Other | |
Derivative | |
Derivative, Notional Amount | 4 |
Buy | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Singapore Dollar | |
Derivative | |
Derivative, Notional Amount | 0 |
Buy | Forward Contracts USD | Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Other | |
Derivative | |
Derivative, Notional Amount | 0 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | |
Derivative | |
Derivative, Notional Amount | 50 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Euro | |
Derivative | |
Derivative, Notional Amount | 107 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | British Pound | |
Derivative | |
Derivative, Notional Amount | 6 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Canadian Dollar | |
Derivative | |
Derivative, Notional Amount | 30 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Japanese Yen | |
Derivative | |
Derivative, Notional Amount | 12 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Singapore Dollar | |
Derivative | |
Derivative, Notional Amount | 20 |
Buy | Forward Contracts USD | Derivatives Not Designated as Hedging Instruments | Other | |
Derivative | |
Derivative, Notional Amount | $ 4 |
DERIVATIVES, Fair value of deri
DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Derivative Fair Value by Balance Sheet Location | ||
Derivatives asset fair value | $ 13 | $ 12 |
Derivatives liabilities fair value | 22 | 6 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives asset fair value | 1 | 3 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Accrued Liabilities | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives liabilities fair value | 10 | 2 |
Derivatives Designated as Hedging Instruments | Net Investment Hedging [Member] | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives asset fair value | 0 | 0 |
Derivatives Designated as Hedging Instruments | Net Investment Hedging [Member] | Foreign Exchange Contracts | Other Accrued Liabilities | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives liabilities fair value | 5 | 0 |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Assets | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives asset fair value | 12 | 9 |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Accrued Liabilities | ||
Derivative Fair Value by Balance Sheet Location | ||
Derivatives liabilities fair value | $ 7 | $ 4 |
DERIVATIVES, Effect of derivati
DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Derivative | ||||
Loss reclassified from accumulated other comprehensive income (loss) into cost of sales | $ 1 | $ 1 | $ 2 | $ 6 |
Interest Expense | ||||
Derivative | ||||
Loss reclassified from accumulated other comprehensive income (loss) into cost of sales | 0 | 0 | (1) | 0 |
Cost of Products and Services | ||||
Derivative | ||||
Loss reclassified from accumulated other comprehensive income (loss) into cost of sales | 1 | 1 | 3 | 6 |
Cash Flow Hedging | Cost of Products and Services | ||||
Derivative | ||||
Cash flow hedge net gain to be reclassified within next Twelve Months | (5) | |||
Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | ||||
Derivative | ||||
Gain (loss) recognized in accumulated other comprehensive loss | (9) | 4 | (6) | 2 |
Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contracts | Interest Expense | ||||
Derivative | ||||
Loss reclassified from accumulated other comprehensive income (loss) into cost of sales | 0 | 0 | (1) | 0 |
Derivatives Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Contracts | Cost of Products and Services | ||||
Derivative | ||||
Loss reclassified from accumulated other comprehensive income (loss) into cost of sales | 1 | 1 | 3 | 6 |
Gain recognized in cost of sales | 0 | (1) | 2 | 1 |
Derivatives Designated as Hedging Instrument | Net Investment Hedging [Member] | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss) | ||||
Derivative | ||||
Gain (loss) recognized in accumulated other comprehensive loss | (7) | 0 | (6) | 0 |
Derivatives Not Designated as Hedging Instruments | Other income (expense) | ||||
Derivative | ||||
Gain recognized in cost of sales | $ 9 | $ 0 | $ 6 | $ (2) |
RETIREMENT PLANS AND POST RET_3
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS- Components of net periodic costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Pension Plan | United States | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost on benefit obligation | 4 | 5 | 12 | 15 |
Expected return on plan assets | (7) | (7) | (22) | (21) |
Amortization: | ||||
Actuarial losses | 0 | 0 | 2 | 0 |
Prior service credits | 0 | 0 | 0 | 0 |
Total net plan costs (benefits) | (3) | (2) | (8) | (6) |
Pension Plan | Foreign Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | 6 | 6 | 18 | 16 |
Interest cost on benefit obligation | 2 | 3 | 6 | 9 |
Expected return on plan assets | (11) | (11) | (35) | (33) |
Amortization: | ||||
Actuarial losses | 12 | 9 | 36 | 27 |
Prior service credits | 0 | 0 | 0 | 0 |
Total net plan costs (benefits) | 9 | 7 | 25 | 19 |
Other Postretirement Benefits Plan | United States | ||||
Defined Benefit Plan, Net Periodic Benefit Cost | ||||
Service cost - benefits earned during the period | 1 | 0 | 1 | 0 |
Interest cost on benefit obligation | 0 | 1 | 2 | 2 |
Expected return on plan assets | (2) | (1) | (5) | (3) |
Amortization: | ||||
Actuarial losses | 1 | 1 | 3 | 3 |
Prior service credits | (1) | (2) | (5) | (6) |
Total net plan costs (benefits) | $ (1) | $ (1) | $ (4) | $ (4) |
RETIREMENT PLANS AND POST RET_4
RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
United States | ||||
Defined Benefit Plan Disclosure | ||||
Employer Contributions | $ 0 | $ 0 | $ 0 | $ 0 |
Expected future employer contributions | 0 | 0 | ||
Foreign Plan | ||||
Defined Benefit Plan Disclosure | ||||
Employer Contributions | 9 | $ 5 | 28 | $ 16 |
Expected future employer contributions | $ 9 | $ 9 |
WARRANTIES AND CONTINGENCIES (D
WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Movement in Standard Product Warranty Accrual | |||
Beginning balance | $ 32 | $ 35 | |
Accruals for warranties including change in estimate | 36 | 40 | |
Settlements made during the period | (37) | (43) | |
Ending balance at end of period | 31 | 32 | |
Standard Product Warranty Disclosure | |||
Accruals for warranties due within one year | 31 | $ 32 | |
Guarantees | |||
Guarantees | $ 41 | $ 40 |
SHORT-TERM DEBT - Credit Facili
SHORT-TERM DEBT - Credit Facility (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Mar. 13, 2019 | Jul. 31, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | May 26, 2020 |
Short-term Debt | ||||||
Proceeds from Lines of Credit | $ 798 | $ 0 | ||||
Revolving Credit Facility | ||||||
Short-term Debt | ||||||
Initiation date of credit facility | Mar. 13, 2019 | |||||
Maximum borrowing capacity of credit facility | $ 1,000 | |||||
Credit faciity terms (in years) | five | |||||
Expiration date of credit facility | Mar. 13, 2024 | |||||
Proceeds from Lines of Credit | $ 798 | |||||
Repayments of revolving credit facility | 913 | |||||
Amount outstanding on credit facility | $ 0 | 0 | 0 | |||
Revolving Credit Facility | Incremental Short-Term Loan Facility | ||||||
Short-term Debt | ||||||
Maximum borrowing capacity of credit facility | 500 | 500 | 500 | |||
Repayments of Short-term Debt | 500 | |||||
Revolving Credit Facility | Additional Incremental Short-Term Loan Facility | ||||||
Short-term Debt | ||||||
Maximum borrowing capacity of credit facility | 500 | 500 | 500 | |||
Amount outstanding on credit facility | 0 | 0 | 0 | |||
Commercial Paper | ||||||
Short-term Debt | ||||||
Maximum borrowing capacity of credit facility | $ 1,000 | |||||
Amount outstanding on credit facility | $ 40 | $ 40 | $ 40 | |||
Weighted Average Interest Rate, at Point in Time | 0.23% | 0.23% | 0.23% | |||
Weighted Average Maturity Date at Point in Time | 3 years |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Jun. 04, 2020 | Jul. 31, 2020 | Oct. 31, 2019 |
Debt Instrument | |||
Long-term debt | $ 2,283 | $ 1,786 | |
Senior Notes 2022 | |||
Debt Instrument | |||
Long-term debt | 399 | 399 | |
Senior Notes 2023 | |||
Debt Instrument | |||
Long-term debt | 598 | 597 | |
Senior Notes 2026 | |||
Debt Instrument | |||
Long-term debt | 298 | 298 | |
Senior Notes 2029 | |||
Debt Instrument | |||
Long-term debt | 493 | 492 | |
Senior Notes 2030 | |||
Debt Instrument | |||
Long-term debt | $ 495 | $ 0 | |
2030 Senior Notes | |||
Issuance date of debt | Jun. 4, 2020 | ||
Aggregate face amount of debt | $ 500 | ||
Percentage of principle amount redeemed | 99.812% | ||
Maturity date of debt | Jun. 4, 2030 | ||
Fixed interest rate per annum | 2.10% | ||
Debt interest payment frequency | semi-annually | ||
Date interest payment commenced | Dec. 4, 2020 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchase Program (Details) - 2019 Repurchase Program [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Nov. 19, 2018 | |
Share repurchase program | |||||
Share repurchase program authorized amount | $ 1,750 | ||||
Shares repurchased and retired during period, (Shares) | 362,000 | 8,000,000 | 2,800,000 | 9,800,000 | |
Shares repurchased and retired during period, (Value) | $ 33 | $ 549 | $ 219 | $ 674 | |
Remaining authorized repurchase amount under share repurchase program | $ 808 | $ 808 |
STOCKHOLDER"S EQUITY - Dividend
STOCKHOLDER"S EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Dividends Paid | ||||
Cash dividends paid per common share | $ 0.18 | $ 0.164 | $ 0.540 | $ 0.492 |
Aggregate amount of cash dividends paid | $ 56 | $ 51 | $ 167 | $ 155 |
Dividends Declared | ||||
Dividends Declared per share | $ 0.180 | $ 0.164 | $ 0.540 | $ 0.492 |
Aggregate Dividends declared (Cash) | $ 56 | $ 51 | $ 167 | $ 155 |
STOCKHOLDER'S EQUITY - Accumula
STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Beginning Balance | $ (538) | $ (514) | ||
Other comprehensive income (loss) before reclassifications | 51 | 9 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 12 | 35 | ||
Tax expense (benefit) | (1) | (6) | ||
Other comprehensive income (loss) | 62 | $ (6) | 38 | $ 11 |
Ending Balance | (476) | (476) | ||
Foreign Currency Translation | ||||
Beginning Balance | (244) | (204) | ||
Other comprehensive income (loss) before reclassifications | 60 | 20 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | 0 | ||
Tax expense (benefit) | 0 | 0 | ||
Other comprehensive income (loss) | 60 | 20 | ||
Ending Balance | (184) | (184) | ||
Prior Service Credits | ||||
Beginning Balance | 127 | 131 | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (1) | (5) | ||
Tax expense (benefit) | 1 | 1 | ||
Other comprehensive income (loss) | 0 | (4) | ||
Ending Balance | 127 | 127 | ||
Actuarial Losses | ||||
Beginning Balance | (419) | (437) | ||
Other comprehensive income (loss) before reclassifications | 0 | (5) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 14 | 42 | ||
Tax expense (benefit) | (4) | (9) | ||
Other comprehensive income (loss) | 10 | 28 | ||
Ending Balance | (409) | (409) | ||
Unrealized Gains (Losses) on Derivatives | ||||
Beginning Balance | (2) | (4) | ||
Other comprehensive income (loss) before reclassifications | (9) | (6) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (1) | (2) | ||
Tax expense (benefit) | 2 | 2 | ||
Other comprehensive income (loss) | (8) | (6) | ||
Ending Balance | $ (10) | $ (10) |
STOCKHOLDERS' EQUITY - Reclassi
STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||
Unrealized gain (loss) on derivatives | $ 1 | $ 1 | $ 2 | $ 6 |
Reclassification of (gains) and losses into earnings related to derivative instruments, tax | 0 | (1) | 0 | (2) |
Unrealized gains and (losses) on derivatives reclassified to cost of products, net of tax | 1 | 0 | 2 | 4 |
Actuarial net loss | (14) | (10) | (42) | (30) |
Prior service benefit | 1 | 2 | 5 | 6 |
Actuarial net loss and prior service benefit reclassified, before tax | (13) | (8) | (37) | (24) |
Tax on actuarial net loss and prior service benefit reclassified | 3 | 5 | 11 | 10 |
Actuarial net loss and prior service benefit reclassified, net of tax | (10) | (3) | (26) | (14) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (9) | (3) | (24) | (10) |
Cost of Products and Services | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||
Unrealized gain (loss) on derivatives | 1 | 1 | 3 | 6 |
Interest Expense | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||
Unrealized gain (loss) on derivatives | $ 0 | $ 0 | $ (1) | $ 0 |
SEGMENT INFORMATION - Profitabi
SEGMENT INFORMATION - Profitability (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | |
Segment Reporting Information | ||||
Number of operating segments | 3 | |||
Segment Reporting Information | ||||
Net revenue | $ 1,261 | $ 1,274 | $ 3,856 | $ 3,796 |
Income from operations | 230 | 225 | 547 | 691 |
Life Sciences and Applied Markets | ||||
Segment Reporting Information | ||||
Net revenue | 557 | 544 | 1,721 | 1,680 |
Income from operations | 126 | 118 | 382 | 384 |
Diagnostics and Genomics | ||||
Segment Reporting Information | ||||
Net revenue | 241 | 263 | 753 | 752 |
Income from operations | 41 | 50 | 132 | 132 |
Agilent CrossLab | ||||
Segment Reporting Information | ||||
Net revenue | 463 | 467 | 1,382 | 1,364 |
Income from operations | 132 | 122 | 373 | 342 |
Segment Total | ||||
Segment Reporting Information | ||||
Net revenue | 1,261 | 1,274 | 3,856 | 3,796 |
Income from operations | $ 299 | $ 290 | $ 887 | $ 858 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Reportable Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Reconciliation of Operating Profit from Segments to Consolidated | ||||
Total reportable segment's income from operations | $ 299 | $ 290 | $ 887 | $ 858 |
Transformational initiatives | (13) | (11) | (41) | (25) |
Amortization of intangible assets related to business combinations | (45) | (25) | (139) | (79) |
Acquisition and integration costs | (9) | (12) | (33) | (32) |
Asset Impairment Charges | 0 | 0 | (99) | 0 |
Acceleration of sharebased compensation expense related to workforce reduction | (1) | 0 | (1) | 0 |
NASD site costs | 0 | (6) | 0 | (12) |
Special compliance costs | 0 | (1) | 0 | (2) |
Other | (1) | (10) | (27) | (17) |
Interest income | 1 | 10 | 7 | 30 |
Interest expense | (19) | (18) | (59) | (53) |
Other income (expense), net | 7 | 5 | 64 | 20 |
Income before taxes, as reported | $ 219 | $ 222 | $ 559 | $ 688 |
SEGMENT INFORMATION - Segment A
SEGMENT INFORMATION - Segment Assets (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Oct. 31, 2019 |
Segment Reporting Information | ||
Assets | $ 9,546 | $ 9,452 |
Life Sciences and Applied Markets | ||
Segment Reporting Information | ||
Assets | 3,121 | 3,202 |
Diagnostics and Genomics | ||
Segment Reporting Information | ||
Assets | 2,518 | 2,620 |
Agilent CrossLab | ||
Segment Reporting Information | ||
Assets | 1,361 | 1,331 |
Segment Total | ||
Segment Reporting Information | ||
Assets | $ 7,000 | $ 7,153 |