Agilent Technologies (A) 10-K risk factor changes: FY2019 vs FY2018

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

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

Furthermore, as we collaborate with pharmaceutical customers to develop drugs such as companion diagnostics assays or [removed: providing] [added: provide] drug components like active pharmaceutical ingredients, we face risks that those drug programs may be cancelled upon clinical trial failures.

[removed: General] [added: General] economic conditions may adversely affect our operating results and financial [removed: condition.][added: condition.]

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

In the [removed: past] [added: past,] we have experienced a shortage of parts for some of our products.

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

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

The [removed: favorable] [added: unfavorable] effects of changes in foreign currency exchange rates [removed: has increased] [added: have decreased] revenues by approximately 2 percentage points in the year ended October 31, [removed: 2018.][added: 2019.]

When movements in foreign currency exchange rates have a [removed: positive] [added: negative] impact on [removed: revenue it] [added: revenue, they] will also have a [removed: negative] [added: positive] impact [removed: on] [added: by reducing] our costs and expenses.

| • | changes in diplomatic and trade relationships, [added: such as the United Kingdom's exit from the European Union,] including new tariffs, trade protection measures, import or export licensing requirements, new or different customs duties trade embargoes and sanctions and other trade barriers; |

| • | tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on U.S. goods, including the tariffs [removed: recently] enacted and proposed by the U.S. government on various imports from China and by the Chinese government on certain U.S. [removed: goods, the scope and duration of which, if implemented, remains uncertain;] [added: goods;] |

| • | negative consequences from changes in [added: or differing interpretations of laws and regulations, including those related to] tax [removed: laws;] [added: and import/export;] |

We sell our products into many countries and we also source many components and materials for our products from [added: and manufacture our products in] various countries.

Tariffs recently announced and implemented could have negative impact on our business, results of operations and [added: financial condition.]

Further, additional [removed: tariffs] [added: tariffs, the scope and duration of which, if implemented, remains uncertain,] which have been proposed or threatened and the potential escalation of a trade war and retaliatory measures could have a material adverse effect on our business, results of operations and financial condition.

[removed: We centralized most] [added: Most] of our accounting and tax processes [removed: to two locations:] [added: including general accounting, cost accounting, accounts payable, accounts receivables and tax functions are centralized at locations in] India and Malaysia.

Our hedging programs reduce, but do not always entirely eliminate, within any given twelve-month period, the impact of currency exchange rate movements, and therefore fluctuations in exchange rates, including those caused by currency controls, could impact our business, [removed: operating results and financial condition by resulting in lower revenue or increased expenses.]

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

[removed: Our] [added: Our] business will suffer if we are not able to retain and hire key [removed: personnel.][added: personnel.]

However, there is [removed: an] intense competition for certain highly technical specialties in geographic areas where we continue to recruit, and it may become more difficult to hire and retain our key employees.

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

Acquisitions and strategic investments and alliances may require us to integrate and collaborate with a different company culture, management team, business [removed: models,] [added: model,] business infrastructure and sales and distribution [removed: methodologies] [added: methodology] and assimilate and retain geographically dispersed, decentralized operations and personnel.

Depending on the size and complexity of an acquisition, our successful integration of the entity depends on a variety of factors, including introducing new products and meeting revenue targets as expected, the retention of key employees and key customers, increased exposure to [added: certain governmental regulations and compliance requirements and increased costs and use of resources.]

A successful divestiture depends on various factors, including our ability to effectively transfer liabilities, contracts, facilities and employees to the purchaser, identify and separate the intellectual property to be divested from the intellectual property that [removed: we wish to keep and reduce fixed costs previously associated with the divested assets or business.]

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

[removed: Our] [added: Our] customers and we are subject to various governmental regulations.

Compliance with or changes in such regulations may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal [removed: penalties.][added: penalties.]

The EU's General Data Protection Regulation [removed: (GDPR),] [added: ("GDPR"),] which became effective in May 2018, applies to all of our activities related to products and services that we offer to EU customers and workers.

Other governmental authorities around the world [added: have passed or] are considering similar types of legislative and regulatory proposals concerning data protection.

[added: Any failure by us] to comply with applicable government regulations could also result in the cessation of our operations or portions of our operations, product recalls or impositions of fines and restrictions on our ability to carry on or expand our operations.

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

If we or any of our suppliers or distributors fail to comply with FDA and other applicable regulatory requirements or are perceived to potentially have failed to comply, we may face, among other things, warning [removed: letters,] [added: letters;] adverse publicity affecting both us and our customers; investigations or notices of non-compliance, fines, injunctions, and civil penalties; import or export restrictions; partial suspensions or total shutdown of production facilities or the imposition of operating restrictions; increased difficulty in obtaining required FDA clearances or approvals or foreign equivalents; seizures or recalls of our products or those of our customers; or the inability to sell our products.

[removed: Some] [added: Some] of our products are subject to particularly complex regulations such as regulations of toxic [removed: substances,] [added: substances] and failure to comply with such regulations could harm our [removed: business.][added: business.]

The Toxic Substances Control Act prohibits persons from manufacturing any chemical in the United States that has not been reviewed by [added: the] EPA for its effect on health and safety, and placed on an EPA inventory of chemical substances.

[removed: Our] [added: Our] business may suffer if we fail to comply with government contracting laws and [removed: regulations.][added: regulations.]

Failure to comply with these laws, regulations or provisions in our government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments, [added: increased pricing pressure] or suspension from future government contracting.

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

We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, [added: employment practices and workplace behavior,] export and import compliance, money laundering and data privacy.

In addition, the government may seek to hold us liable as a successor for violations committed by [removed: companies in which we invest or that we acquire.]

Risks, Uncertainties and Other Factors That May Affect Future Results

It may be time-consuming and expensive for us to alter our business operations in order to adapt to any such change.

operating results and financial condition by resulting in lower revenue or increased expenses.

we wish to keep and reduce fixed costs previously associated with the divested assets or business.

In addition, the global regulatory environment has become increasingly stringent.

For example, the EU has adopted the EU In Vitro Diagnostic Regulation (the “EU IVDR”), which imposes stricter requirements for the marketing and sale of medical devices, including in the area of clinical evaluation requirements, quality systems and post-market surveillance.

Manufacturers will have until May 2022 to meet the EU IVDR requirements for in vitro diagnostic medical devices currently on the market.

Failure to meet these requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

companies in which we invest or that we acquire.

Further, in the event that any future climate change legislation would require that stricter standards be imposed by domestic or international environmental regulatory authorities, we may be required to make certain changes and adaptations to our manufacturing processes.

could make it easier for competitors to capture market share and could result in lost revenues.

We are party to a $1 billion five-year unsecured credit facility that will expire on March 13, 2024.

On August 7, 2019, we entered into an amendment to the credit agreement, which provides for a $500 million short-term loan facility that was used in full to complete the acquisition of BioTek.

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 facilities as of October 31, 2019.

financial condition.

These processes include general accounting, cost accounting, accounts payable, accounts receivables and tax functions.

certain governmental regulations and compliance requirements and increased costs and use of resources.

Any failure by us

providers or other outsourcers could cause disruptions or delays.

There are costs associated with complying with these disclosure requirements, including for diligence in regards to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities.

In addition, our ongoing implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products.

could subject us to significant damages or to an injunction against the development and sale of certain of our products or services.

may lose the related tax incentive and could be required to refund tax incentives previously realized.

We also are party to a five-year unsecured revolving credit facility which expires in September 2019.

On June 9, 2015, we increased the commitments under the existing credit facility by $300 million and on July 14, 2017, the commitments under the existing credit facility were increased by an additional $300 million so that the aggregate commitments under the facility now total $1 billion.

or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business.

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

We have received an opinion from outside tax counsel to the effect that the separation and distribution of Keysight qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.

The opinion relies on certain facts, assumptions, representations and undertakings from Keysight and us regarding the past and future conduct of the companies’ respective businesses and other matters.

If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, our shareholders and we may not be able to rely on the opinion of tax counsel and could be subject to significant tax liabilities.

Notwithstanding the opinion of tax counsel we have received, the IRS could determine on audit that the separation is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion.

If the separation is determined to be taxable for U.S. federal income tax purposes, our shareholders that are subject to U.S. federal income tax and we could incur significant U.S. federal income tax liabilities.

This report contains forward-looking statements including, without limitation, statements regarding [removed: trends, seasonality and] growth [removed: in,] [added: opportunities, including for revenue] and [added: our end markets, strength and] drivers [removed: of,] [added: of] the markets we sell into, [added: sales funnels,] our strategic direction, new product and service introductions and [removed: future] [added: the position of our current] products and services, [added: market demand for and] adoption of our products, the ability of our products [removed: to meet market] and [added: solutions to address] customer [removed: needs,] [added: needs and meet industry requirements, our focus on differentiating our product solutions,] improving our customers’ [removed: experience,] [added: experience and growing our earnings,] future financial results, our operating margin, mix, our investments, including in manufacturing [removed: infrastructure and] [added: infrastructure,] research and [removed: development,] [added: development and expanding and improving] our [removed: ability to identify] [added: applications] and [removed: enable synergies across] [added: solutions portfolios, expanding] our [removed: businesses,] [added: position in developing countries and emerging markets,] our focus on balanced capital allocation, [removed: competition,] our contributions to our pension and other defined benefit plans, impairment of goodwill and other intangible assets, the effect of the U.S. Tax Cuts and Jobs Act of 2017 [added: (the "Tax Act")] and U.S. and other tariffs, the impact of foreign currency movements, our hedging programs and other actions to offset the effects of tariffs and foreign currency movements, our future effective tax [removed: rate and] [added: rate,] tax valuation [removed: allowance, earnings from our foreign subsidiaries, repatriation of our earnings from foreign jurisdictions,] [added: allowance and unrecognized tax benefits,] the impact of local government regulations on our ability to pay vendors or conduct operations, our [removed: liquidity position, our] ability to [removed: generate] [added: satisfy our liquidity requirements, including through] cash [added: generated] from operations, the potential impact of adopting new accounting [removed: pronouncements,indemnification, the use of contract manufacturers, out sourcing and third-party package delivery services,] [added: pronouncements, indemnification,] source and supply of materials used in our products, our sales, our purchase commitments, our capital expenditures, the integration [added: and effects] of our acquisitions and other [removed: transactions, write down of investment values or loans] [added: transactions] and [removed: convertible notes,] our stock repurchase [removed: program, our declared dividends,] [added: program] and [removed: the existence of economic instability,] [added: dividends,] that involve risks and uncertainties.

[removed: Overview] [added: Overview] and Executive [removed: Summary][added: Summary]

[removed: On November 14, 2018,] [added: In 2019,] we acquired 100 percent of the stock of ACEA Biosciences Inc. ("ACEA"), a developer of cell analysis tools, for $250 [removed: million in cash.][added: million.]

The financial results of [removed: ACEA will be] [added: these businesses have been] included [removed: within] [added: in] our financial results from the date of the close.

Agilent's net revenue of $4,914 million [removed: in 2018] increased 10 percent [added: in 2018] when compared to 2017.

Foreign currency movements had an [added: overall] favorable impact [removed: on revenue] of [removed: 2] [added: 3] percentage points [added: on revenue] in 2018 when compared to 2017.

Foreign currency movements had an [added: overall] favorable impact on revenue of [removed: 3] [added: 2] percentage points in 2018 when compared to 2017.

Revenue [removed: in the] [added: generated by] Agilent CrossLab [removed: business] increased 11 percent in 2018 when compared to 2017.

Agilent's net revenue of [removed: $4,472] [added: $5,163] million [added: in 2019] increased [removed: 6] [added: 5] percent [removed: in 2017] when compared to [removed: 2016.][added: 2018.]

Foreign currency movements for [removed: 2017] [added: 2019] had an overall unfavorable impact on revenue of approximately [removed: 1] [added: 2] percentage [removed: point] [added: points] compared to [removed: 2016.][added: 2018.]

Revenue in the life sciences and applied markets business increased [removed: 4] [added: 1] percent in [removed: 2017] [added: 2019] when compared to [removed: 2016.][added: 2018.]

Foreign currency movements had an overall unfavorable impact on revenue of [removed: less than 1] [added: 2] percentage [removed: point] [added: points] in [removed: 2017] [added: 2019] when compared to [removed: 2016.][added: 2018.]

Revenue in the diagnostics and genomics business increased [removed: 9] [added: 8] percent in [removed: 2017] [added: 2019] when compared to [removed: 2016.][added: 2018.]

Foreign currency movements had [removed: no] [added: an] overall [added: unfavorable] impact on revenue [added: of 3 percentage points] in [removed: 2017] [added: 2019] when compared to [removed: 2016.][added: 2018.]

Revenue in the Agilent CrossLab business increased 8 percent in [removed: 2017] [added: 2019] when compared to [removed: 2016.][added: 2018.]

Net income was [removed: $316] [added: $1,071] million in [removed: 2018] [added: 2019] compared to net income of [removed: $684] [added: $316] million and [removed: $462] [added: $684] million in [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

Net income for the year ended October 31, 2018 was impacted by a discrete tax charge of $552 million related to the enactment of the Tax Act [added: that was] passed on December 22, 2017.

See Note [removed: 4,] [added: 6,] "Income Taxes" for more details.

As of October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] we had cash and cash equivalents balances of [removed: $2,247] [added: $1,382] million and [removed: $2,678] [added: $2,247] million, respectively.

On [removed: November 22, 2013] [added: May 28, 2015] we announced that our board of directors had [removed: authorized] [added: approved] a share repurchase [removed: program.][added: program (the "2015 repurchase program").]

[removed: For] [added: During] the year ended October 31, [removed: 2016] [added: 2017,] we repurchased [removed: 2] [added: and retired approximately 4.1] million shares for [removed: $98] [added: $194] million [removed: which completed the purchases] under this authorization.

On May 28, 2015 we announced that our board of directors had approved a [removed: new] share repurchase program (the "2015 repurchase program").

The 2015 repurchase program [removed: does] [added: did] not require the company to acquire a specific number of shares and [removed: may be] [added: could have been] suspended or discontinued at any time.

During the year ended October 31, [removed: 2016, upon the completion of our previous repurchase program,] [added: 2018,] we repurchased [added: and retired] approximately [removed: 8.3] [added: 6.4] million shares for [removed: $336] [added: $422] million under this authorization.

During the year ended October 31, 2017, we repurchased [added: and retired] approximately 4.1 million shares for $194 million under this authorization.

During the year ended October 31, [removed: 2018] [added: 2018,] we repurchased and retired approximately 6.4 million shares for $422 million under this authorization.

[removed: As of] October 31, 2018, we had remaining authorization to repurchase up to $188 million of our common stock under this program which expired on November 1, 2018.

During the year ended October 31, 2018, cash dividends of [removed: $0.596] [added: 0.596] per share, or $191 million were declared and paid on the company's outstanding common stock.

During the year ended October 31, 2017, cash dividends of [removed: $0.528] [added: 0.528] per share, or $170 million were declared and paid on the company's outstanding common stock.

During the year ended October 31, [removed: 2016,] [added: 2019,] cash dividends of [removed: $0.460] [added: 0.656] per share, or [removed: $150] [added: $206] million were declared and paid on the company's outstanding common stock.

On November [removed: 14, 2018] [added: 20, 2019] we declared a quarterly dividend of [removed: $0.164] [added: $0.18] per share of common stock, or approximately [removed: $52] [added: $56] million which will be paid on January [removed: 23, 2019] [added: 22, 2020] to shareholders of record as of the close of business on December 31, [removed: 2018.][added: 2019.]

Looking forward, we continue to focus on differentiating product solutions, improving our customers' [removed: experience] [added: experience, continued growth] and [removed: growing our operating margin.][added: earnings expansion.]

We expect foreign currency to negatively impact revenue [removed: in 2019] [added: for 2020] but we also anticipate the contribution from our recent acquisitions to partially offset the currency impact.

[removed: Critical] [added: Critical] Accounting Policies and [removed: Estimates][added: Estimates]

Those policies are revenue recognition, inventory valuation, [removed: share-based compensation,] retirement and post-retirement plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes.

We enter into [removed: agreements] [added: contracts] to sell [removed: products (hardware] [added: products, services] or [removed: software), services, and other arrangements (multiple element arrangements) that include] combinations of products and services.

For products that include installation, if the installation meets the criteria to be considered a separate [removed: element,] [added: performance obligation,] product revenue is recognized [removed: upon delivery,] [added: when control has passed to the customer,] and recognition of installation revenue occurs [removed: when the installation is complete.][added: once completed.]

[removed: Revenue from services] [added: Service revenue] is deferred and recognized over the contractual period or as services are rendered and accepted by the customer.

[added: *Inventory Valuation.*] We assess the valuation of our inventory on a periodic basis and make adjustments to the value for estimated excess and obsolete inventory based upon estimates about future demand and actual usage.

[removed: Retirement] [added: *Retirement] and Post-Retirement Benefit Plan [removed: Assumptions.][added: Assumptions.* Retirement and post-retirement benefit plan costs are a significant cost of doing business.]

In addition, 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.

Acquisitions in 2019 had an overall favorable impact of 2 percentage points when compared to 2018.

Foreign currency movements had an unfavorable impact on revenue of 3 percentage points in 2019 when compared to 2018.

Foreign currency movements had an unfavorable impact on revenue of 3 percentage points in 2019 when compared to 2018.

Net income for the year ended October 31, 2019 was impacted by a discrete tax benefit of $299 million related to

restructuring and the extension of the company's tax incentive in Singapore.

During the year ended October 31, 2019, we repurchased and retired approximately 10.4 million shares for $723 million under this authorization.

As of October 31, 2019, we had remaining authorization to repurchase up to $1.03 billion of our common stock under this program.

We remain optimistic that we have the ability and resilience to manage any changing market conditions to deliver positive results in fiscal year 2020.

*Revenue Recognition*.

On November 1, 2018, we adopted Accounting Standard Codification Topic 606, *Revenue from Contracts with Customers* ("ASC 606").

Products may include hardware or software and services may include one-time service events or services performed over time.

We derive revenue primarily from the sale of analytical and diagnostics products and services.

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606.

Revenue is recognized when control of the promised products or services is transferred to our customers and the performance obligation

is fulfilled in an amount that reflects the consideration that we expect to be entitled in exchange for those products or services, the transaction price.

For equipment, consumables, and most software licenses, control transfers to the customer at a point in time.

We use present right to payment, legal title, physical possession of the asset, and risks and rewards of ownership as indicators to determine the transfer of control to the customer.

Where acceptance is not a formality, the customer must have documented their acceptance of the product or service.

Product revenue, including sales to resellers and distributors is reduced for provisions for warranties, returns, and other adjustments in the period the related sales are recorded.

Service revenue includes extended warranty, customer and software support including: Software as a Service, post contract support, consulting including companion diagnostics, and training and education.

Instrument service contracts and software maintenance contracts are typically annual contracts, which are billed at the beginning of the contract or maintenance period.

Revenue for these contracts is recognized on a straight-line basis to revenue over the service period, as a time-based measure of progress best reflects our performance in satisfying this obligation.

There are no deferred costs associated with the service contract, as the cost of the service is recorded when the service is performed.

Service calls not included in a support contract are recognized to revenue at the time a service is performed.

We have sales from standalone software.

These arrangements typically include software licenses and maintenance contracts, both of which we have determined are distinct performance obligations.

We determine the amount of the transaction price to allocate to the license and maintenance contract based on the relative standalone selling price of each performance obligation.

Software license revenue is recognized at the point in time when control has been transferred to the customer.

The revenue allocated to the software maintenance contract is recognized on a straight-line basis over the maintenance period, which is the contractual term of the contract, as a time-based measure of progress best reflects our performance in satisfying this obligation.

Unspecified rights to software upgrades are typically sold as part of the maintenance contract on a when-and-if-available basis.

Our multiple-element arrangements are generally comprised of a combination of instruments, installation or other start-up services, and/or software, and/or support or services.

Hardware and software elements are typically delivered at the same time and revenue is recognized when control passes to the customer.

Our arrangements generally do not include any provisions for cancellation, termination, or refunds that would significantly impact recognized revenue.

For contracts with multiple performance obligations, we allocate the consideration to which we expect to be entitled to each performance obligation based on relative standalone selling prices and recognize the related revenue when or as control of each individual performance obligation is transferred to customers.

We estimate the standalone selling price by calculating the average historical selling price of our products and services per country for each performance obligation.

Stand-alone selling prices are determined for each distinct good or service in the contract and then we allocate the transaction price in proportion to those standalone selling prices by performance obligations.

A portion of our revenue relate to lease arrangements.

Standalone lease arrangements are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 840, 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.

The program was designed to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive

programs to target maintaining a weighted average share count of approximately 335 million diluted shares.

Revenue Recognition.

Revenue from product sales, net of trade discounts and allowances, is recognized provided that persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.

Delivery is considered to have occurred when title and risk of loss have transferred to the customer.

Revenue is reduced for estimated product returns, when appropriate.

For sales that include customer-specified acceptance criteria, revenue is recognized after the acceptance criteria have been met.

Otherwise, neither the product nor the installation revenue is recognized until the installation is complete.

We allocate revenue to each element in our multiple-element arrangements based upon their relative selling prices.

We determine the selling price for each deliverable based on a selling price hierarchy.

The selling price for a deliverable is based on our vendor specific objective evidence (VSOE) if available, third-party

evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available.

Revenue from the sale of software products that are not required to deliver the tangible product's essential functionality are accounted for under software revenue recognition rules.

Revenue allocated to each element is then recognized when the basic revenue recognition criteria for that element have been met.

The amount of product revenue recognized is affected by our judgments as to whether an arrangement includes multiple elements.

The aforementioned factors may result in a different allocation of revenue to the deliverables in multiple element arrangements, which may change the pattern and timing of revenue recognition for these elements but will not change the total revenue recognized for the arrangement.

Inventory Valuation.

Share-Based Compensation.

We account for share-based awards in accordance with the authoritative guidance.

Under the authoritative guidance, share-based compensation expense is primarily based on estimated grant date fair value and is recognized on a straight-line basis.

The fair value of share-based awards for employee stock option awards was estimated using the Black-Scholes option pricing model.

Stock options were granted in years prior to fiscal year 2016.

Shares granted under the Long-Term Performance Program based on Total Shareholders Return ("LTPP-TSR") were valued using the Monte Carlo simulation model.

The estimated fair value of restricted stock unit awards, LTPP based on Operating Margin (“LTPP-OM”) and LTPP based on Earnings per share (“LTPP-EPS”) is determined based on the market price of Agilent's common stock on the date of grant adjusted for expected dividend yield.

The compensation cost for LTPP (OM) and LTPP (EPS) reflects the cost of awards that are probable to vest at the end of the performance period.

In the case of LTPP-OM, the performance targets for all the three years of performance period is set at the time of grant.

The performance targets for LTPP-EPS grants for year 2 and year 3 of the performance period will be set in the first quarter of year 2 and year 3, respectively.

The probable shares to vest are estimated based on the forecasted OM and EPS at the time of the grant and updated every quarter with latest forecast and actual information.

The Employee Stock Purchase Plan ("ESPP") allows eligible employees to purchase shares of our common stock at 85 percent of the fair market value at the purchase date.

All awards granted after 2015 to our senior management employees have a one year post-vest holding restriction.

The estimated discount associated with post-vest holding restrictions is calculated using the Finnerty model.

Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option's expected life and the price volatility of the underlying stock.

For LTPP (TSR) grants in 2016, we used the 3-year average historical stock price volatility of a group of our peer companies.

We believed our historical volatility prior to the separation of Keysight in 2015 was no longer relevant to use.

For the 2017 and 2018 LTPP (TSR) grants and calculation of the post-vest discount using the Finnerty model, we used our own post-separation historical stock price volatility.

See Note 3, "Share-based Compensation," to the consolidated financial statements for more information.

The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment.

Although we believe the assumptions and estimates we have made are reasonable and appropriate, changes in assumptions could materially impact our reported financial results.

Retirement and post-retirement benefit plan costs are a significant cost of doing business.

increased compared to the previous year.

[removed: Approximately 53 percent of our revenue in 2018, 51 percent of our revenue in 2017 and 54 percent of our revenues in 2016 were generated in U.S. dollars.The favorable] [added: The unfavorable] effects of changes in foreign currency exchange rates, principally as a result of the [removed: strengthening] [added: strength] of the U.S. dollar, has [removed: increased] [added: decreased] revenue by approximately 2 percentage points in the year ended October 31, [removed: 2018.][added: 2019.]

As of October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations, statement of comprehensive income or cash flows.

As of October 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the sensitivity analyses indicated that a hypothetical 10 percent adverse movement in interest rates would result in an immaterial impact to the fair value of our fixed interest rate debt.

Approximately 51 percent of our revenue in 2019, 53 percent of our revenue in 2018 and 51 percent of our revenues in 2017 were generated in U.S. dollars.

[removed: Overview][added: Overview]

[removed: Following this re-organization and for the] [added: For fiscal] year ended October 31, [removed: 2018,] [added: 2019,] we [removed: continue to] have three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business.

Our diagnostics and genomics business is comprised of six areas of activity providing [added: 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.

As of October 31, [removed: 2018,] [added: 2019,] we employed approximately [removed: 14,800] [added: 16,300] people worldwide.

Our primary research and development and manufacturing sites are in California, Colorado, Delaware, [removed: Massachusetts and] [added: Massachusetts,] Texas [added: and Vermont] in the U.S. and in Australia, China, Denmark, Germany, Italy, Japan, Malaysia, Singapore and the United Kingdom.

[removed: Life] [added: Life] Sciences and Applied Markets [removed: Business][added: Business]

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 [removed: (“MP-AES”)] [added: ("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; [added: cell imaging systems; microplate reader;] laboratory software for sample [removed: tracking,] [added: tracking;] information management and analytics; laboratory automation and robotic systems; dissolution testing; vacuum pumps and measurement technologies.

We employed approximately [removed: 4,500] [added: 5,400] people as of October 31, [removed: 2018] [added: 2019] in our life sciences and applied markets business.

[removed: Life] [added: Life] Sciences and Applied [removed: Markets][added: Markets]

[added: *The Pharmaceutical, Biopharmaceutical, CRO & CMO Market.*] This market consists of “for-profit” companies who participate across the pharmaceutical value chain in the areas of therapeutic research, discovery & development, clinical trials, manufacturing and quality assurance and quality control.

A second sub-segment includes [removed: biotechnology] [added: biopharmaceutical] companies [removed: (“biotech”),] [added: ("biopharma"),] contract research organizations [removed: (“CROs”)] [added: ("CROs")] and contract manufacturing organizations [removed: (“CMOs”).][added: ("CMOs").]

[removed: Biotech] [added: Biopharma] companies and, to a somewhat lesser extent, CROs and CMOs typically participate in specific points in the pharmaceutical industry value chain.

[added: *The Academic and Government Market.*] This market consists primarily of “not-for-profit” organizations and includes academic institutions, large government institutes and privately funded organizations.

[added: *The Chemical & Energy Market.*] The natural gas and petroleum refining markets use our products to measure and control the quality of their finished products and to verify the environmental safety of their operations.

[added: *The Environmental & Forensics Market.*] Our instruments, software and workflow solutions are used by the environmental market for applications such as laboratory and field analysis of chemical pollutants in air, water, soil and solid waste.

[added: *The Food Market.*] Our instruments, software, and workflow solutions are used throughout the food production chain, including incoming inspection, new product development, quality control and assurance, and packaging.

[removed: Life] [added: Life] Sciences and Applied Markets Products and [removed: Applications][added: Applications]

[removed: Liquid Chromatography][added: *Liquid Chromatography*]

A liquid chromatograph ("LC") or a [removed: high performance] [added: high-performance] liquid chromatograph [removed: (“HPLC”)] [added: ("HPLC")] is used to separate molecules of a liquid mixture to determine the quantity and identity of the molecules present.

[removed: Gas Chromatography][added: *Gas Chromatography*]

[removed: Mass Spectrometry][added: *Mass Spectrometry*]

[removed: Spectroscopy][added: *Spectroscopy*]

Our spectroscopy instruments include AA spectrometers, microwave plasma-atomic emission spectrometers [removed: (“MP-AES”),] [added: ("MP-AES"),] ICP-OES, ICP-MS, fluorescence spectrophotometers, ultraviolet- visible ("UV-Vis") spectrophotometers, Fourier Transform infrared [removed: ("FT-IR")] [added: ("FT-IR"] spectrophotometers, near-infrared ("NIR") spectrophotometers, [removed: Raman] [added: raman] spectrometers and sample automation products.

[removed: Software] [added: *Software] and [removed: Informatics][added: Informatics*]

[removed: Lab] [added: *Lab] Automation and [removed: Robotics][added: Robotics*]

[removed: Vacuum Technology][added: *Vacuum Technology*]

Products include a wide range of high and ultra-high vacuum pumps (diffusion, turbomolecular and ion getter), intermediate vacuum pumps (rotary vane, sorption and dry scroll), vacuum instrumentation (vacuum control [added: instruments, sensor gauges and meters) and vacuum components (valves, flanges and other mechanical hardware).]

[removed: Cell Analysis][added: *Cell Analysis*]

Cell analysis customers are typically academic institutions and pharma and [removed: bio-pharma] [added: biopharma] companies.

[removed: Life] [added: Life] Sciences and Applied Markets [removed: Customers][added: Customers]

We had approximately [removed: 24,000] [added: 23,700] customers for our life sciences and applied markets business in fiscal [removed: 2018.][added: 2019.]

[removed: Life] [added: Life] Sciences and Applied Markets Sales, Marketing and [removed: Support][added: Support]

The [removed: life sciences] [added: diagnostics] and [removed: applied markets] [added: genomics] channels focus on the therapeutics and human disease research customer base (pharma, [removed: biotech,] [added: biopharma,] CRO, CMO and generics), clinical customer base [removed: (high] [added: (pathology labs and high] complexity clinical testing labs) and on emerging life sciences opportunities in life science research institutes.

We primarily use direct sales to market our solutions to our pharmaceutical, [removed: biopharmaceutical] [added: biopharmaceutical, clinical, life science research] and [removed: clinical] [added: applied market] accounts.

[removed: Life] [added: Life] Sciences and Applied Markets [removed: Manufacturing][added: Manufacturing]

[removed: We have manufacturing facilities in California, Delaware and Massachusetts in the U.S.] Outside of the U.S., we have manufacturing facilities in Germany, Malaysia and Singapore.

We have FDA registered sites in California, [added: Vermont,] Germany and Singapore.

[removed: Life] [added: Life] Sciences and Applied Markets [removed: Competition][added: Competition]

[removed: Diagnostics] [added: Diagnostics] and Genomics [removed: Business][added: Business]

We employed approximately [removed: 2,500] [added: 2,800] people as of October 31, [removed: 2018] [added: 2019] in our diagnostics and genomics business.

Our cell analysis portfolio includes cell analysis plate-based assays, flow cytometer, real-time cell analyzer, microplate reader, cell imaging system and related consumables.

Inside the U.S., we have manufacturing facilities in California, Delaware, Massachusetts and Vermont.

We support pharmaceutical companies during each phase of their drug development process, from early pre-clinical through commercial launch activities.

Companion diagnostics has a history of developing clinically relevant and validated tests, with accurate and effective scoring and interpretation guidelines, that enable successful regulatory approvals in our worldwide markets.

In the U.S., we have manufacturing facilities in California, Colorado and Texas.

Our principal competitors in the diagnostics and genomics arena include: Roche Ventana

A second sub-segment includes biopharmaceutical companies ("biopharma"), contract research organizations ("CROs") and contract manufacturing organizations ("CMOs").

Biopharma companies and, to a somewhat lesser extent, CROs and CMOs typically participate in specific points in the pharmaceutical industry value chain.

Petroleum refiners use our services and consumable products to support their analysis of crude oil composition and raw materials, as well as help improve their refining processes and improve the quality of their products.

Our services and consumable products are also used in the development, manufacturing and quality control of fine chemicals and other industrial applications, such as material analysis.

Our services and consumable products also support the food safety market in their work to analyze food for concerns ranging from pathogen contamination, genetic modification, species verification and others.

We offer a broad range of market specific consumables and supplies to complete customers' analytical workflows from sample preparation through separation and analysis to storage, with the support of our technology platforms.

Advancements in our offering software and service solutions will help our customers operate a more digitally connected smart lab that can derive more value out of data analytics, artificial intelligence and robotics.

biopharmaceutical customers to keep instruments fully operational and compliant with the respective industry requirements.

Information about our Executive Officers

Before joining Agilent, he served in various capacities at Dako A/S, a Danish diagnostics company,

In 2018, we re-organized our operating segments and moved the microfluidics business from our life sciences and applied markets operating segment to our diagnostics and genomics operating segment.

All historical financial segment information for the life sciences and applied markets segment and the diagnostics and genomics segment has been recast to reflect this reorganization in our financial statements.

The Pharmaceutical, Biotechnology, CRO & CMO Market.

The Academic and Government Market.

The Chemical & Energy Market.

The Environmental & Forensics Market.

The Food Market.

instruments, sensor gauges and meters) and vacuum components (valves, flanges and other mechanical hardware).

In the fourth quarter of 2013, we launched our combined IHC/ISH platform, Dako Omnis.

Agilent continues to be a strong player in the next generation sequencing market.

After preparing samples with SureSelect and HaloPlex, products can be sequenced in the main next generation sequencing platforms available in the market.

Over 400 probes are available in our catalog, covering most relevant regions in the genome.

Cytogenetic labs can use SureFISH probes to detect specific translocations or copy number changes in samples.

Our end-to-end solution includes reagents for sample preparation and microarray processing; hardware for sample QC and high-throughput microarray scanning; microarrays on industry-standard 1” × 3” glass slides for key applications; custom microarray design services; and GeneSpring and CytoGenomics software products for data analysis.

general no single license, patent or other intellectual property right is in itself material.

Acquisition and Disposal of Material Assets

In 2018, we acquired seven businesses, for a combined purchase price of approximately $536 million.

The largest of which was Advanced Analytical Technologies, Inc. ("AATI") for approximately $268 million in cash.

These acquisitions were not material individually or in aggregate.

Executive Officers of the Registrant

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

[removed: | (Mark One) | | |][added: (MARK ONE)]

[removed: | x | | ANNUAL REPORT] [added: ☒ ANNUAL REPORT] PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 |][added: 1934.]

[removed: | | | For] [added: For] the fiscal year [removed: ended October] [added: ended October] 31, [removed: 2018 |][added: 2019]

[removed: | o | | TRANSITION] [added: ☐ TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 |][added: 1934.]

[removed: | | | For the] [added: For] transition period from [removed: to |][added: to]

[removed: Commission] [added: Commission] File [removed: Number: 001-15405][added: Number: 001-15405]

[removed: Agilent] [added: Agilent] Technologies, [removed: Inc.][added: Inc.]

[removed: (Exact] [added: *(Exact] name of registrant as specified in its [removed: charter)][added: charter)*]

| [removed: Delaware] | [added: Delaware] | [removed: 77-0518772] | [added: | | 77-0518772 | |]

| [removed: State] [added: (State] or other jurisdiction of [removed: Incorporation] [added: incorporation] or [removed: organization] [added: organization)] | | [removed: I.R.S.] [added: | | (IRS] Employer Identification [removed: No.] [added: No.)] | [added: | |]

[removed: Address] [added: Address] of principal executive [removed: offices: 5301] [added: offices: 5301] Stevens Creek [removed: Blvd., Santa Clara, California 95051][added: Blvd., Santa Clara, California 95051]

[removed: Registrant's] [added: Registrant's] telephone number, including area [removed: code: (408) 345-8886][added: code: (800) 227-9770]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: Class] | | [removed: Name] [added: Trading Symbol | | | | Name] of each [removed: exchange] [added: Exchange] on which [removed: registered] [added: registered] | [added: | |]

| Common [removed: Stock] [added: Stock, $0.01] par value [removed: $0.01 per share] | | [added: | A | | | |] New York Stock Exchange | [added: |]

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [added: None]

Yes [removed: x] [added: ☒] No [removed: ¨][added: ☐]

Yes [removed: ¨] [added: ☐] No [removed: x][added: ☒]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company or an emerging growth company.

| [removed: Large accelerated filer x] [added: Smaller reporting company] | [added: ☐] | [removed: Accelerated filer ¨] | | [removed: Smaller reporting company ¨] | | Emerging growth company [removed: ¨] | [added: ☐ | |]

| [removed: Non-accelerated] [added: Large accelerated] filer [removed: ¨] | [added: ☒] | | [added: Accelerated filer] | [added: ☐] | | [added: Non-accelerated filer] | [added: ☐ | |]

The aggregate market value of the registrant's common equity held by non-affiliates as of April 30, [removed: 2018,] [added: 2019,] was approximately [removed: $16.0] [added: $18.9] billion.

As of December 10, [removed: 2018,] [added: 2019,] there were [removed: 318,533,054] [added: 310,183,415] outstanding shares of common stock, par value $0.01 per share.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

| [removed: Document Description] [added: Document Description] | | [removed: 10-K Part] [added: 10-K Part] |

| Portions of the Proxy Statement for the Annual Meeting of Stockholders (the "Proxy Statement") to be held on March [removed: 20, 2019,] [added: 18, 2020,] and to be filed pursuant to Regulation 14A within 120 days after registrant's fiscal year ended October 31, [removed: 2018] [added: 2019] are incorporated by reference into Part III of this Report | | III |

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: Page] [added: Page] |

[removed: | [Forward-Looking Statements](#s7358B43CE31457F4B0B7EBA204A19019) | | [3](#s7358B43CE31457F4B0B7EBA204A19019) |][added: Forward-Looking Statements]

[removed: | [PART I](#s38593EB4F0A3550A82E43F0A41011C29) | | |][added: PART I]

| [Item [removed: 1A](#s39BF9182D3325EFCB82B3624AE5C7DFF)] [added: 1A](#s4684D88046995D398E2776D2C9A7993C)] | [Risk [removed: Factors](#s39BF9182D3325EFCB82B3624AE5C7DFF)] [added: Factors](#s4684D88046995D398E2776D2C9A7993C)] | [removed: [15](#s39BF9182D3325EFCB82B3624AE5C7DFF)] [added: [15](#s4684D88046995D398E2776D2C9A7993C)] |

| [Item [removed: 1B](#sB3E9F42A07105EC2966F62D7CB2001DF)] [added: 1B](#s80388092C99A51459AFAACBA45638A39)] | [Unresolved Staff [removed: Comments](#sB3E9F42A07105EC2966F62D7CB2001DF)] [added: Comments](#s80388092C99A51459AFAACBA45638A39)] | [removed: [24](#sB3E9F42A07105EC2966F62D7CB2001DF)] [added: [25](#s80388092C99A51459AFAACBA45638A39)] |

| [Item [removed: 2](#s8C3FBC2F25955137B6C4F2504C43D3EC)] [added: 2](#s6742F7445BC65BB4A3F1A5864AA5F1EA)] | [removed: [Properties](#s8C3FBC2F25955137B6C4F2504C43D3EC)] [added: [Properties](#s6742F7445BC65BB4A3F1A5864AA5F1EA)] | [removed: [24](#s8C3FBC2F25955137B6C4F2504C43D3EC)] [added: [25](#s6742F7445BC65BB4A3F1A5864AA5F1EA)] |

| [Item [removed: 3](#sFBA07E60150556E1B6D1EAC909D52FEE)] [added: 3](#s4E0376E9CCC052DD99F0F461B6C1E6ED)] | [Legal [removed: Proceedings](#sFBA07E60150556E1B6D1EAC909D52FEE)] [added: Proceedings](#s4E0376E9CCC052DD99F0F461B6C1E6ED)] | [removed: [25](#sFBA07E60150556E1B6D1EAC909D52FEE)] [added: [25](#s4E0376E9CCC052DD99F0F461B6C1E6ED)] |

| [Item [removed: 4](#s8953A2872F745A41B88CD8925E9F6BE5)] [added: 4](#sF38459B2F5B252239D26A1E361763766)] | [Mine Safety [removed: Disclosures](#s8953A2872F745A41B88CD8925E9F6BE5)] [added: Disclosures](#sF38459B2F5B252239D26A1E361763766)] | [removed: [25](#s8953A2872F745A41B88CD8925E9F6BE5)] [added: [26](#sF38459B2F5B252239D26A1E361763766)] |

| [Item [removed: 5](#s413A23C6955A583197CD554F4C47BC21)] [added: 5](#sA889B33FF3C65E8782BC98908DDD341B)] | [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s413A23C6955A583197CD554F4C47BC21)] [added: Securities](#sA889B33FF3C65E8782BC98908DDD341B)] | [removed: [25](#s413A23C6955A583197CD554F4C47BC21)] [added: [26](#sA889B33FF3C65E8782BC98908DDD341B)] |

or

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

Yes ☒ No ☐

Yes ☒ No ☐

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

Yes ☐ No ☒

| [Item 1](#s478CEC51CA025058BC056AF970498C1D) | [Business](#sE501DDC342B25AC5953F9DD90AED6913) | [3](#sE501DDC342B25AC5953F9DD90AED6913) |

| [PART II](#sB63E1CD1C309576E9298B886DF526BF4) | | |

| [PART IV](#s778BB8AA64865155868EF0962FB6EFCA) | | |

10-K 1 a-10312018x10k.htm 10-K

| | | |

| --- | --- | --- |

| or | | |

None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| [Item 1](#s38593EB4F0A3550A82E43F0A41011C29) | [Business](#s13D894C9475F5CA096179D8E95DB9EBF) | [3](#s13D894C9475F5CA096179D8E95DB9EBF) |

| [PART II](#sBD6C4BA7670152B295DC201B6976AF43) | | |

| [PART IV](#s197FF99EC9E656E09998E3C64B171AE7) | | |

As of October 31, [removed: 2018,] [added: 2019,] we owned or leased a total of approximately [removed: 6.3] [added: 6.6] million square feet of space worldwide.

Of that, we owned approximately [removed: 4.4] [added: 4.5] million square feet and leased the remaining [removed: 1.9] [added: 2.1] million square feet.

Our sales and support facilities occupied a total of approximately [removed: 0.7] [added: 0.8] million square feet.

Our manufacturing plants, R&D facilities and warehouse and administrative facilities occupied approximately [removed: 5.6] [added: 5.8] million square feet.

[added: *Life Sciences & Applied Markets Business.*] Our life sciences and applied markets business has manufacturing and R&D facilities in Australia, China, Germany, Italy, Malaysia, Singapore, United Kingdom and the United States.

[added: *Diagnostics and Genomics Business.*] Our diagnostics and genomics business has manufacturing and R&D facilities in Belgium, Denmark, Malaysia and the United States.

[added: *Agilent CrossLab Business.*] Our Agilent CrossLab business has manufacturing and R&D facilities in Australia, China, Germany, Japan, Netherlands, Singapore, United Kingdom and the United States.

Life Sciences & Applied Markets Business.

Diagnostics and Genomics Business.

Agilent CrossLab Business.

[removed: PART II][added: PART II]

As of December [removed: 1, 2018,] [added: 2, 2019,] there were [removed: 22,187] [added: 20,989] common stockholders of record.

The information required by this item with respect to equity compensation plans is included under the caption [removed: "Equity] [added: "*Equity] Compensation [removed: Plans"] [added: Plans"*] in our Proxy Statement for the Annual Meeting of Stockholders to be held March [removed: 20, 2019,] [added: 18, 2020,] to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference.

[removed: STOCK] [added: STOCK] PRICE PERFORMANCE [removed: GRAPH][added: GRAPH]

The graph below shows the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Index and our peer group, consisting of all companies in the Health Care and Materials Indexes of the S&P 500, assuming an initial investment of $100 on October 31, [removed: 2013] [added: 2014] and the reinvestment of all dividends.

[removed: ][added: ]

| | | | | [removed: INDEXED RETURNS] [added: INDEXED RETURNS] | | | | | | | |

| | [removed: Base] [added: Base] | | | [removed: Years Ending] [added: Years Ending] | | | | | | | |

| | [removed: Period] [added: Period] | | | | | | | | | | |

| [removed: Company] [added: Company] Name / [removed: Index] [added: Index] | [removed: 10/31/2013] [added: 10/31/2014] | [removed: 10/31/2014] [added: 10/31/2015] | | [removed: 10/31/2015] [added: 10/31/2016] | | [removed: 10/31/2016] [added: 10/31/2017] | | [removed: 10/31/2017] [added: 10/31/2018] | | [removed: 10/31/2018] [added: 10/31/2019] | |

[removed: ISSUER] [added: ISSUER] PURCHASES OF EQUITY [removed: SECURITIES][added: SECURITIES]

The table below summarizes information about the [removed: Company’s] [added: company’s] purchases, based on trade [removed: date;] [added: date,] of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended October 31, [removed: 2018.][added: 2019.]

The total number of shares of common stock purchased by the [removed: Company] [added: company] during the fiscal year ended October 31, [removed: 2018] [added: 2019] is [removed: 6,435,974] [added: 10,436,060] shares.

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number [removed: of Shares] [added: of Shares] of [removed: Common Stock Purchased(1)] [added: Common Stock Purchased(1)] | | | [removed: Weighted Average Price] [added: Weighted Average Price] Paid per Share [removed: of Common Stock(2)] [added: of Common Stock(2)] | | | | [removed: Total Number of Shares] [added: Total Number of Shares] of [removed: Common Stock] [added: Common Stock] Purchased [removed: as Part] [added: as Part] of [removed: Publicly Announced] [added: Publicly Announced] Plans [removed: or Programs(1)] [added: or Programs(1)] | | | [removed: Maximum Approximate Dollar Value] [added: Maximum Approximate Dollar Value] of Shares [removed: of Common] [added: of Common] Stock [removed: that May] [added: that May] Yet [removed: Be Purchased] [added: Be Purchased] Under [removed: the Plans] [added: the Plans] or [removed: Programs (in millions)(1)] [added: Programs (in millions)(1)] | | |

| (1) | On [removed: May 28, 2015,] [added: November 19, 2018] we announced that our board of directors had approved a new share repurchase program (the [removed: "2015] [added: "2019] repurchase [removed: program").] [added: program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs.] The [removed: 2015] [added: 2019 share] repurchase program authorizes the purchase of up to [removed: $1.14] [added: $1.75] billion of our common stock [removed: through] [added: at the company's discretion] and [removed: including November 1, 2018.] [added: has no fixed termination date. As of October 31, 2019, we had remaining authorization to repurchase up to $1.03 billion of our common stock under this program.] The [removed: 2015] [added: 2019] repurchase program does not require the company to acquire a specific number of shares and may be [removed: suspended] [added: suspended, amended] or discontinued at any time. As of October 31, [removed: 2018,] [added: 2019,] all repurchased shares have been retired. [removed: The remaining authorization of $188 million expired on November 1, 2018.] |

| Agilent Technologies | 100 | 96.51 | | 112.56 | | 177.46 | | 170.53 | | 201.15 | |

| S&P 500 | 100 | 105.20 | | 109.94 | | 135.93 | | 145.91 | | 166.81 | |

| Peer Group | 100 | 106.66 | | 104.08 | | 128.12 | | 138.06 | | 151.39 | |

| August 1, 2019 through August 31, 2019 | | 234,947 | | | 69.42 | | | | 234,947 | | | $ | 1,060 | |

| September 1, 2019 through September 30, 2019 | | 208,701 | | | 75.77 | | | | 208,701 | | | $ | 1,044 | |

| October 1, 2019 through October 31, 2019 | | 222,205 | | | $ | 74.93 | | | 222,205 | | | $ | 1,027 | |

| Total | | 665,853 | | | $ | 73.25 | | | 665,853 | | | | | |

| Agilent Technologies | 100 | 109.93 | | 104.32 | | 121.65 | | 191.77 | | 184.30 | |

| S&P 500 | 100 | 117.27 | | 123.37 | | 128.93 | | 159.40 | | 171.11 | |

| Peer Group | 100 | 125.48 | | 134.19 | | 130.32 | | 160.31 | | 174.07 | |

| Aug. 1, 2018 through Aug. 31, 2018 | | 241,748 | | | 66.07 | | | | 241,748 | | | $ | 258 | |

| Sep. 1, 2018 through Sep. 30, 2018 | | 202,400 | | | 69.04 | | | | 202,400 | | | $ | 244 | |

| Oct. 1, 2018 through Oct. 31, 2018 | | 881,462 | | | $ | 63.93 | | | 881,462 | | | $ | 188 | |

| Total | | 1,325,610 | | | $ | 65.10 | | | 1,325,610 | | | | | |

[removed: SELECTED] [added: SELECTED] FINANCIAL [removed: DATA][added: DATA]

[removed: (Unaudited)][added: (Unaudited)]

| | [removed: Years] [added: Years] Ended October [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| | [removed: (in] [added: (in] millions, except per share [removed: data)] [added: data)] | | | | | | | | | | | | | | | | | | |

| [removed: Consolidated] [added: Consolidated] Statement of Operations [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | |

| Net revenue | $ | [removed: 4,914] [added: 5,163] | | | $ | [removed: 4,472] [added: 4,914] | | | $ | [removed: 4,202] [added: 4,472] | | | $ | [removed: 4,038] [added: 4,202] | | | $ | [removed: 4,048] [added: 4,038] | |

| Income from continuing operations before taxes | $ | [removed: 946] [added: 919] | | | $ | [removed: 803] [added: 946] | | | $ | [removed: 544] [added: 803] | | | $ | [removed: 480] [added: 544] | | | $ | [removed: 229] [added: 480] | |

| Income from continuing operations | $ | [removed: 316] [added: 1,071] | | | $ | [removed: 684] [added: 316] | | | $ | [removed: 462] [added: 684] | | | $ | [removed: 438] [added: 462] | | | $ | [removed: 232] [added: 438] | |

| [removed: Income (loss)] [added: Loss] from discontinued operations, net of taxes | $ | — | | | $ | — | | | $ | — | | | $ | [removed: (37] [added: —] | [removed: )] | | $ | [removed: 317] [added: (37] | [added: )] |

| Net income | $ | [removed: 316] [added: 1,071] | | | $ | [removed: 684] [added: 316] | | | $ | [removed: 462] [added: 684] | | | $ | [removed: 401] [added: 462] | | | $ | [removed: 549] [added: 401] | |

| Income from continuing operations | $ | [removed: 0.98] [added: 3.41] | | | $ | [removed: 2.12] [added: 0.98] | | | $ | [removed: 1.42] [added: 2.12] | | | $ | [removed: 1.32] [added: 1.42] | | | $ | [removed: 0.70] [added: 1.32] | |

| [removed: Income (loss)] [added: Loss] from discontinued operations, net of taxes | — | | | | — | | | | — | | | | [removed: (0.12] [added: —] | | [removed: )] | | [removed: 0.95] [added: (0.12] | | [added: )] |

| Net income per share - basic | $ | [removed: 0.98] [added: 3.41] | | | $ | [removed: 2.12] [added: 0.98] | | | $ | [removed: 1.42] [added: 2.12] | | | $ | [removed: 1.20] [added: 1.42] | | | $ | [removed: 1.65] [added: 1.20] | |

| Income from continuing operations | $ | [removed: 0.97] [added: 3.37] | | | $ | [removed: 2.10] [added: 0.97] | | | $ | [removed: 1.40] [added: 2.10] | | | $ | [removed: 1.31] [added: 1.40] | | | $ | [removed: 0.69] [added: 1.31] | |

| [removed: Income (loss)] [added: Loss] from discontinued operations, net of taxes | — | | | | — | | | | — | | | | [removed: (0.11] [added: —] | | [removed: )] | | [removed: 0.93] [added: (0.11] | | [added: )] |

| Net income per share - diluted | $ | [removed: 0.97] [added: 3.37] | | | $ | [removed: 2.10] [added: 0.97] | | | $ | [removed: 1.40] [added: 2.10] | | | $ | [removed: 1.20] [added: 1.40] | | | $ | [removed: 1.62] [added: 1.20] | |

| Weighted average shares used in computing basic net income per share | [removed: 321] [added: 314] | | | | [removed: 322] [added: 321] | | | | [removed: 326] [added: 322] | | | | [removed: 333] [added: 326] | | | | 333 | | |

| Weighted average shares used in computing diluted net income per share | [removed: 325] [added: 318] | | | | [removed: 326] [added: 325] | | | | [removed: 329] [added: 326] | | | | [removed: 335] [added: 329] | | | | [removed: 338] [added: 335] | | |

| Cash dividends declared per common share | $ | [removed: 0.596] [added: 0.656] | | | $ | [removed: 0.528] [added: 0.596] | | | [removed: 0.460] [added: 0.528] | | | | $ | [removed: 0.400] [added: 0.460] | | | $ | [removed: 0.528] [added: 0.400] | |

| | [removed: October 31,] [added: October 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: (in millions)] [added: (in millions)] | | | | | | | | | | | | | | | | | | |

| [removed: Consolidated] [added: Consolidated] Balance Sheet [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | [removed: (1)] | | |

| Cash and cash equivalents | $ | [removed: 2,247] [added: 1,382] | | | $ | [removed: 2,678] [added: 2,247] | | | $ | [removed: 2,289] [added: 2,678] | | | $ | [removed: 2,003] [added: 2,289] | | | $ | [removed: 2,218] [added: 2,003] | |

| Working capital | $ | [removed: 2,677] [added: 1,109] | | | $ | [removed: 2,906] [added: 2,677] | | | $ | [removed: 2,690] [added: 2,906] | | | $ | [removed: 2,710] [added: 2,690] | | | $ | [removed: 3,817] [added: 2,710] | |

| Total assets | $ | [removed: 8,541] [added: 9,452] | | | $ | [removed: 8,426] [added: 8,541] | | | $ | [removed: 7,794] [added: 8,426] | | | $ | [removed: 7,479] [added: 7,794] | | | $ | [removed: 10,815] [added: 7,479] | |

| Long-term debt | $ | [removed: 1,799] [added: 1,791] | | | $ | [removed: 1,801] [added: 1,799] | | | $ | [removed: 1,904] [added: 1,801] | | | $ | [removed: 1,655] [added: 1,904] | | | $ | [removed: 1,663] [added: 1,655] | |

| Stockholders' equity | $ | [removed: 4,567] [added: 4,748] | | | $ | [removed: 4,831] [added: 4,567] | | | $ | [removed: 4,243] [added: 4,831] | | | $ | [removed: 4,167] [added: 4,243] | | | $ | [removed: 5,301] [added: 4,167] | |

| | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

| (1) The above consolidated balance sheet includes Keysight which is presented as a discontinued operation until October 31, 2014. | | | | | | | | | | | | | | | | | | | |

| [removed: Index] [added: Index] to Consolidated Financial [removed: Statements] [added: Statements] | | [removed: Page] [added: Page] |

[removed: | [Report of Independent Registered Public Accounting Firm](#s015A8D84CE9350EC8CEFA24EA0D73D79) | | [51](#s015A8D84CE9350EC8CEFA24EA0D73D79) |][added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM]

| [Consolidated Statement of Operations for each of the three years in the period ended October 31, [removed: 2018](#s32B8B7555C8C561FBF9AF6BD420BBFED)] [added: 2019](#sC02EDC6E1C5A527F95D5A2653AA42F74)] | | [removed: [53](#s32B8B7555C8C561FBF9AF6BD420BBFED)] [added: [56](#sC02EDC6E1C5A527F95D5A2653AA42F74)] |

| [Consolidated Statement of Comprehensive Income for each of the three years in the period ended October 31, [removed: 2018](#s0BEC9139967B5971AFE13D3D9EF7A447)] [added: 2019](#s87FA9BBD6D5750D5B967979B7E6C217B)] | | [removed: [54](#s0BEC9139967B5971AFE13D3D9EF7A447)] [added: [57](#s87FA9BBD6D5750D5B967979B7E6C217B)] |

| [Consolidated Balance Sheet at October 31, [removed: 2018] [added: 2019] and [removed: 2017](#s4CD8142B456E5FDAA31E07C2F91A2B68)] [added: 2018](#s8388F6C8BC705AB791F53E22C39010D3)] | | [removed: [55](#s4CD8142B456E5FDAA31E07C2F91A2B68)] [added: [58](#s8388F6C8BC705AB791F53E22C39010D3)] |

| [Consolidated Statement of Cash Flows for each of the three years in the period ended October 31, [removed: 2018](#s9068A9E353935DBFA2D55E16889D9848)] [added: 2019](#s3312A7FDB50559128D75BB87902475B0)] | | [removed: [56](#s9068A9E353935DBFA2D55E16889D9848)] [added: [59](#s3312A7FDB50559128D75BB87902475B0)] |

| [Consolidated Statement of Equity for each of the three years in the period ended October 31, [removed: 2018](#sB673C381C8E25A72B429723F9790A3F7)] [added: 2019](#sAAF728E125E45BA7AB38472B9CF26E66)] | | [removed: [57](#sB673C381C8E25A72B429723F9790A3F7)] [added: [60](#sAAF728E125E45BA7AB38472B9CF26E66)] |

[removed: | [Notes to Consolidated Financial Statements](#sA8A93408A06C548387EF4361947D9F9A) | | [58](#sA8A93408A06C548387EF4361947D9F9A) |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

| [Quarterly Summary [removed: (unaudited)](#s0C3AC0D0463E527386451BA8A4C31659)] [added: (unaudited)](#s1D7429A4C999561092792798610A7CFE)] | | [removed: [102](#s0C3AC0D0463E527386451BA8A4C31659)] [added: [113](#s1D7429A4C999561092792798610A7CFE)] |

[removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM][added: | [Report of Independent Registered Public Accounting Firm](#sA3D2EB80EB565DD9A105CF48054E5E0B) | | [53](#sA3D2EB80EB565DD9A105CF48054E5E0B) |]

[removed: Opinions] [added: Opinions] on the Financial Statements and Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited the accompanying consolidated balance sheets of Agilent Technologies, Inc. and its subsidiaries (the “Company”) as of October 31, [removed: 2018] [added: 2019] and [removed: October 31, 2017,] [added: 2018,] and the related consolidated statements of operations, comprehensive income, [added: equity and] cash flows [removed: and equity] for each of the three years in the period ended October 31, [removed: 2018,] [added: 2019,] including the related notes and [removed: financial statement] schedule [added: of valuation and qualifying accounts for each of the three years in the period ended October 31, 2019] appearing under Item [removed: 15(a)(2).][added: 15(a)(2) (collectively referred to as the “consolidated financial statements”).]

We also have audited the Company's internal control over financial reporting as of October 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 31, [removed: 2018] [added: 2019] and [removed: October 31, 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended October 31, [removed: 2018] [added: 2019] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the COSO.

[removed: Basis] [added: Basis] for [removed: Opinions][added: Opinions]

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: AGILENT] [added: AGILENT] TECHNOLOGIES, [removed: INC.][added: INC.]

[removed: CONSOLIDATED] [added: CONSOLIDATED] STATEMENT OF [removed: OPERATIONS][added: OPERATIONS]

| | [removed: Years] [added: Years] Ended October [removed: 31,] [added: 31,] | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| | [removed: (in] [added: (in] millions, except [removed: per share data)] [added: per share data)] | | | | | | | | | | |

| Products | $ | [removed: 3,746] [added: 3,877] | | | $ | [removed: 3,397] [added: 3,746] | | | $ | [removed: 3,213] [added: 3,397] | |

| Services and other | [removed: 1,168] [added: 1,286] | | | | [removed: 1,075] [added: 1,168] | | | | [removed: 989] [added: 1,075] | | |

| Total net revenue | [removed: 4,914] [added: 5,163] | | | | [removed: 4,472] [added: 4,914] | | | | [removed: 4,202] [added: 4,472] | | |

| Cost of services and other | [removed: 639] [added: 678] | | | | [removed: 601] [added: 639] | | | | [removed: 548] [added: 600] | | |

| Research and development | [removed: 385] [added: 7] | | | | [removed: 339] [added: 7] | | | | [removed: 329] [added: 6] | | |

| Selling, general and administrative | [removed: 1,374] [added: 47] | | | | [removed: 1,229] [added: 48] | | | | [removed: 1,253] [added: 40] | | |

| Total costs and expenses | [removed: 3,986] [added: 4,222] | | | | [removed: 3,631] [added: 4,010] | | | | [removed: 3,587] [added: 3,665] | | |

| Interest income | [removed: 38] [added: 36] | | | | [removed: 22] [added: 38] | | | | [removed: 11] [added: 22] | | |

| Interest expense | [removed: (75] [added: (74] | | ) | | [removed: (79] [added: (75] | | ) | | [removed: (72] [added: (79] | | ) |

| Other income (expense), net | [removed: 55] [added: 16] | | | | [removed: 19] [added: 79] | | | | [removed: (10] [added: 53] | | [removed: )] |

| Income before taxes | [removed: 946] [added: 919] | | | | [removed: 803] [added: 946] | | | | [removed: 544] [added: 803] | | |

| Provision [added: (benefit)] for income taxes | [removed: 630] [added: (152] | | [added: )] | | [removed: 119] [added: 630] | | | | [removed: 82] [added: 119] | | |

| Net income | $ | [removed: 316] [added: 1,071] | | | $ | [removed: 684] [added: 316] | | | $ | [removed: 462] [added: 684] | |

| Basic | $ | [removed: 0.98] [added: 3.41] | | | $ | [removed: 2.12] [added: 0.98] | | | $ | [removed: 1.42] [added: 2.12] | |

| Diluted | $ | [removed: 0.97] [added: 3.37] | | | $ | [removed: 2.10] [added: 0.97] | | | $ | [removed: 1.40] [added: 2.10] | |

| Basic | [removed: 321] [added: 314] | | | | [removed: 322] [added: 321] | | | | [removed: 326] [added: 322] | | |

| Diluted | [removed: 325] [added: 318] | | | | [removed: 326] [added: 325] | | | | [removed: 329] [added: 326] | | |

| Cash dividends declared [added: ($0.656] per common [removed: share] [added: share)] | [removed: $] [added: —] | [removed: 0.596] | | [added: —] | [removed: $] | [removed: 0.528] | | [added: —] | [removed: $] | [removed: 0.460] | | [added: — | | | — | | | | (206 | | ) | | — | | | | (206 | | ) | | — | | | | (206 | | ) |]

*Change in Accounting Principle*

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers in 2019.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ACEA Biosciences (“ACEA”) and Lionheart Technologies LLC (“BioTek”) from its assessment of internal control over financial reporting as of October 31, 2019 because they were acquired by the Company in purchase business combinations during 2019.

We have also excluded ACEA and BioTek from our audit of internal control over financial reporting.

ACEA and BioTek are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 2% and less than 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended October 31, 2019.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

*Uncertain Tax Positions*

As described in Note 6 to the consolidated financial statements, the Company has recorded liabilities for uncertain tax positions of $227 million as of October 31, 2019.

As disclosed by management, the estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax law and regulations in a multitude of jurisdictions.

The Company is subject to taxes in the U.S., Singapore and various other foreign jurisdictions and is subject to examinations of its tax returns by tax authorities in various jurisdictions around the world.

The Company has a number of years and matters which remain subject to examination by tax authorities in various jurisdictions that could result in significant changes to unrecognized tax benefits due to either the expiration of a statute of limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable.

The principal considerations for our determination that performing procedures relating to uncertain tax positions is a critical audit matter are there was significant judgment by management when determining uncertain tax positions, including a high degree of estimation uncertainty relative to the numerous and complex tax laws, tax audits, and potential for significant adjustments as a result of such audits.

This in turn led to a high degree of auditor judgment, effort, and subjectivity in performing procedures to evaluate the timely identification and accurate measurement of uncertain tax positions.

Also, the evaluation of audit evidence available to support the tax liabilities for uncertain tax positions is complex and required significant auditor judgment as the nature of the evidence is often highly subjective, and the audit effort involved the use of professionals with specialized skill and knowledge to assist in evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the identification and recognition of the liability for uncertain tax positions, and controls addressing completeness of the uncertain tax positions, as well as controls over measurement of the liability.

These procedures also included, among others, testing the completeness, accuracy, and relevance of information used in the calculation of the liability for uncertain tax positions, including intercompany agreements, international, federal, and state filing positions, and the related final tax returns, testing the calculation of the liability for uncertain tax positions by jurisdiction, including management’s assessment of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained, testing the completeness of management’s assessment of both the identification of uncertain tax positions and possible outcomes of each uncertain tax position, and evaluating the status and results of income tax audits with the relevant tax authorities.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s uncertain tax positions related to the application of relevant tax laws.

*Valuation of acquired developed product technology intangible assets - BioTek acquisition*

As described in Notes 1 and 3 to the consolidated financial statements, in 2019 the Company completed the acquisition of BioTek for consideration of $1.17 billion, of which $387 million of developed product technology intangible assets were recorded.

Management estimated the fair value of the developed product technology using the multi-period excess earnings method under the income approach by discounting forecasted future cash flows directly related to products expecting to result from the projects, net of returns on contributory assets.

Management’s determination of the fair value of the developed product technology intangible assets acquired involved the use of significant estimates and assumptions related to revenue growth rates and the discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of acquired developed product technology intangible assets in connection with the BioTek acquisition is a critical audit matter are (i) there was a high degree of auditor judgment and subjectivity in applying procedures relating to the fair value measurement of acquired developed product technology intangible assets due to the significant amount of judgment by management when developing the estimate, (ii) significant audit effort was required in evaluating the significant assumptions relating to the estimate, such as the revenue growth rates and the discount rates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge to assist in evaluating the audit evidence obtained from these procedures.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the acquired developed product technology intangible assets and controls over the development of the assumptions related to the valuation of the acquired developed product technology intangible assets, including the revenue growth rates and the discount rates.

These procedures also included, among others, reading the purchase agreement, testing management’s process for estimating the fair value of the acquired developed technology intangible assets, testing the completeness, accuracy, and relevance of underlying data used in estimating the fair value of the acquired developed technology intangible assets, and evaluating the appropriateness of the valuation methods and the reasonableness of the significant assumptions, including the revenue growth rates and the discount rates.

Evaluating the reasonableness of the revenue growth rates involved considering the past performance of the acquired business, as well as economic and industry forecasts.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s fair value estimate and certain significant assumptions, including the discount rates.

| Cost of products | 1,680 | | | | 1,595 | | | | 1,473 | | |

| Total costs | 2,358 | | | | 2,234 | | | | 2,073 | | |

| Income from operations | 941 | | | | 904 | | | | 807 | | |

AGILENT TECHNOLOGIES, INC.

| Net income | $ | 1,071 | | | $ | 316 | | | $ | 684 | |

AGILENT TECHNOLOGIES, INC.

| Cash and cash equivalents | $ | 1,382 | | | $ | 2,247 | |

| Goodwill | 3,593 | | | | 2,973 | | |

| Long-term investments | 102 | | | | 68 | | |

| Accounts payable | $ | 354 | | | $ | 340 | |

(collectively referred to as the “consolidated financial statements”).

| December 20, 2018 | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cost of products | 1,588 | | | | 1,462 | | | | 1,457 | | |

| Total costs | 2,227 | | | | 2,063 | | | | 2,005 | | |

| Income from operations | 928 | | | | 841 | | | | 615 | | |

| Impairment of equity method investment and loans | — | | | | — | | | | 25 | | |

| Proceeds from the sale of investment securities | — | | | | — | | | | 1 | | |

| Loan to equity method investment | — | | | | — | | | | (3 | | ) |

| Change in restricted cash, cash equivalents and investments, net | 1 | | | | (1 | | ) | | 245 | | |

| Interest payments | $ | 80 | | | $ | 82 | | | $ | 73 | |

| Balance as of October 31, 2015 | 610,854 | | | $ | 6 | | | $ | 9,045 | | | (279,395 | ) | | $ | (10,074 | ) | | $ | 5,581 | | | $ | (391 | ) | | $ | 4,167 | | | $ | 3 | | | $ | 4,170 | |

| Adjustment due to adoption of ASU 2016-09 | — | | | — | | | | — | | | | — | | | — | | | | 196 | | | | — | | | | 196 | | | | — | | | | 196 | | |

1.

Overview.

Basis of Presentation.

Principles of Consolidation.

Revision of Services and Other, Product Net Revenue and related Cost of Sales.

In 2018, we identified a stream of service revenue that had been presented as product revenue in the prior years.

We have revised prior year's presentation to show the revenue within services and other to conform with the current presentation in fiscal 2018.

The cost of sales associated with these newly identified service revenue has also been revised to align with the new presentation.

For the years ended October 31, 2017 and 2016 service and other revenue increased $13 million and $14 million, respectively, and service and other cost of sales increased $7 million in both periods, with corresponding reductions in product revenue and cost of sales.

These corrections to the classifications are not considered to be material to current or prior periods and had no impact to our results of operations previously reported in our consolidated statement of operations.

Use of Estimates.

Retirement of Treasury Shares.

We recognize revenue, net of trade discounts and allowances, provided that (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the price is fixed or determinable and (4) collectability is reasonably assured.

Delivery is considered to have occurred when title and risk of loss have transferred to the customer for products, or when the service has been provided.

We consider the price to be fixed or determinable when the price is not subject to refund or adjustments.

At the time of the transaction, we evaluate the creditworthiness of our customers to determine the appropriate timing of revenue recognition.

Product Revenue.

Product revenue includes revenue generated from the sales of our analytical instrumentation, software and consumables.

Our product revenue is generated predominantly from the sales of various types of analytical instrumentation.

Product revenue, including sales to resellers and distributors, is reduced for estimated returns when appropriate.

For sales or arrangements that include customer-specified acceptance criteria, including those where acceptance is required upon achievement of performance milestones, revenue is recognized after the acceptance criteria have been met.

Otherwise, neither the product nor the installation revenue is recognized until the installation is complete.

Where software is licensed separately, revenue is recognized when the software is delivered and has been transferred to the customer or, in the case of electronic delivery of software, when the customer is given access to the licensed software programs.

We also evaluate whether collection of the receivable is probable, the fee is fixed or determinable and whether any other undelivered elements of the arrangement exist on which a portion of the total fee would be allocated based on vendor-specific objective evidence.

Service Revenue.

Service revenue is deferred and recognized over the contractual period or as services are rendered and accepted by the customer.

[removed: Evaluation] [added: *Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures*]

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of October 31, [removed: 2018,] [added: 2019,] pursuant to and as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”).

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, [removed: 2018,] [added: 2019,] the company's disclosure controls and procedures, as defined by Rule 13a-15(e) under the Exchange Act, were effective and designed to ensure that (i) information required to be disclosed in the company's reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

[removed: Management's] [added: *Management's] Report on Internal Control Over Financial [removed: Reporting][added: Reporting*]

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting based on the framework in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

As a result of that assessment, management concluded that our internal control over financial reporting was effective as of October 31, [removed: 2018] [added: 2019] based on criteria in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the COSO.

The effectiveness of our internal control over financial reporting as of October 31, [removed: 2018] [added: 2019] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K.

[removed: Changes] [added: *Changes] in Internal Control Over Financial [removed: Reporting][added: Reporting*]

SEC staff guidance discusses the exclusion of an acquired business’s internal controls from management’s annual assessment of the internal controls over financial reporting when it is not possible to conduct assessments for the acquired business in the period between the acquisition date and the date of management’s assessment.

The company completed the acquisitions of Lionheart Technologies LLC ("BioTek") on August 23, 2019 and ACEA Biosciences ("ACEA") on November 14, 2018.

Management excluded both BioTek and ACEA from its assessment of the effectiveness of the company’s internal control over financial reporting as of October 31, 2019.

BioTek and ACEA combined constituted approximately 2 percent of total assets and less than 2 percent of total revenue as of and for the year ended October 31, 2019.

[removed: PART III][added: PART III]

Information regarding our directors appears under “Proposal No. 1 - Election of Directors” in our Proxy Statement for the Annual Meeting of Stockholders (“Proxy Statement”), to be held March [removed: 20, 2019.][added: 18, 2020.]

Information regarding our executive officers appears in Item 1 of this report under “Executive Officers of the Registrant.” Information regarding our Audit and Finance Committee and our Audit and Finance [removed: Committee's financial expert appears under “Audit and Finance Committee Report” and “Corporate Governance” in our Proxy Statement.]

[removed: There] [added: Other than an amendment and restatement of our bylaws to implement “proxy access” starting in our 2021 annual meeting, which was previously disclosed in our Current Report on Form 8-K filed on September 18, 2019, there] were no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

[removed: Compliance] [added: Compliance] with Section 16(a) of the Exchange [removed: Act][added: Act]

Committee's financial expert appears under “Audit and Finance Committee Report” and “Corporate Governance” in our Proxy Statement.

[removed: EQUITY] [added: EQUITY] COMPENSATION PLAN [removed: INFORMATION][added: INFORMATION]

The following table summarizes information about our equity compensation plans as of October 31, [removed: 2018.][added: 2019.]

| [removed: Plan Category] [added: Plan Category] | [removed: Number] [added: Number] of [removed: Securities to] [added: Securities to] be Issued [removed: upon Exercise of Outstanding Options, Warrants] [added: upon Exercise of Outstanding Options, Warrants] and [removed: Rights] [added: Rights] | | | [removed: Weighted-average Exercise] [added: Weighted-average Exercise] Price [removed: of Outstanding Options, Warrants and Rights] [added: of Outstanding Options, Warrants and Rights] | | | | [removed: Number] [added: Number] of [removed: Securities Remaining] [added: Securities Remaining] Available [removed: for Future] [added: for Future] Issuance [removed: under Equity] [added: under Equity] Compensation [removed: Plans (Excluding Securities Reflected] [added: Plans (Excluding Securities Reflected] in [removed: Column (a))] [added: Column (a))] | |

| Equity compensation plans approved by security holders (1)(2)(3) | [removed: 5,178,290] [added: 4,617,581] | | | $ | [removed: 35] [added: 36] | | | [removed: 33,095,375] [added: 54,732,097] | |

| (1) | The number of securities remaining available for future issuance in column (c) includes [removed: 26,937,115] [added: 26,055,571] shares of common stock authorized and available for issuance under [removed: the Agilent Technologies, Inc.] [added: our current] Employee Stock Purchase Plan [removed: ("423(b) Plan").] [added: ("ESPP").] The number of shares authorized for issuance under the [removed: 423(b) Plan] [added: ESPP] is subject to an automatic annual increase of the lesser of one percent of the outstanding common stock of Agilent or an amount determined by the Compensation Committee of our Board of Directors. Under the terms of the [removed: 423(b) Plan,] [added: ESPP,] in no event shall the aggregate number of shares issued under the [removed: Plan] [added: ESPP] exceed 75 million shares. |

| (2) | We issue securities under our equity compensation plans in forms other than options, warrants or rights. On November 15, 2017 and March 21, 2018, the Board and the stockholders, respectively, approved the Agilent Technologies, Inc. 2018 Stock Plan (the “2018 Plan”), which was an amendment and restatement of the [removed: Company’s] [added: company’s] 2009 Stock Plan, approved by the Board and the stockholders, respectively, on November 19, 2008 and March 11, 2009. The 2018 Plan provides for awards of stock-based incentive compensation to our employees (including officers), directors and consultants. The 2018 Plan provides for the grant of awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock [removed: units, performance shares and performance units with performance-based conditions to vesting or exercisability, and cash awards. The 2018 Plan has a term of ten years.] |

| | (a) | | | (b) | | | | (c) | |

| Total | 4,617,581 | | | $ | 36 | | | 54,732,097 | |

units, performance shares and performance units with performance-based conditions to vesting or exercisability, and cash awards.