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

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

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations, comprehensive income (loss) or cash flows. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal periods.

Executive Summary

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

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

COVID-19 Pandemic

Both our domestic and international operations have been and continue to be affected by the ongoing global pandemic of a novel strain of coronavirus (“COVID-19”) and the resulting volatility and uncertainty it has caused in the U.S. and international markets. During the three and six months ended April 30, 2022, many businesses and countries, including the U.S., continued applying preventative and precautionary measures to mitigate the spread of the virus such as quarantine, shelter-in-place, travel and activity restrictions and similar isolation measures, including government orders and other restrictions on the conduct of business operations.

During the latter part of our second quarter, we had to shut down our primary gas chromatography production facility and logistics center in Shanghai in compliance with the city government's imposed lockdown measures related to COVID-19. As a result, revenue was negatively impacted by approximately 350 basis points in the three months ended April 30, 2022. This primarily affected our life sciences and applied markets business with a disproportionate impact on our gas chromatography

business. We believe the revenue impact due to the lockdown is temporary, and we expect the delayed revenue to be recognized throughout the second half of fiscal year 2022 and into the first quarter of fiscal year 2023.

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

Russia-Ukraine Conflict

In response to the ongoing conflict in Ukraine, at the beginning of March, we suspended sales prohibited by sanctions, halted the shipment of products to Russia with the exception of diagnostics and healthcare products and limited our in-country service to those diagnostics and healthcare customers. Subsequently, effective May 23, 2022 we ceased operations totally within Russia and as a result, we recorded an immaterial expense associated with the shutdown of operations for the three months ended April 30, 2022. For the year ended October 31, 2021, sales derived from customers based in Russia represented an immaterial percentage of our total revenue.

Actual Results

Net revenue of $1,607 million and $3,281 million for the three and six months ended April 30, 2022 increased 5 percent and 7 percent, respectively, when compared to the same periods last year. This revenue growth came from increases in all of our segments, in the Americas and Europe regions and from our three largest end markets (pharmaceutical, diagnostics and clinical and chemical and energy markets). Net revenue in the Asia Pacific region was impacted by the COVID lockdown in Shanghai resulting from the mandatory shutdown of our gas chromatography production facility and logistics center. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 3 percentage points and 1 percentage point, respectively, when compared to the same periods last year. Revenue generated by our life sciences and applied markets business in the three and six months ended April 30, 2022 increased 2 percent and 4 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022, had an overall unfavorable impact on revenue growth of 2 percentage points and 1 percentage point, respectively, when compared to the same periods last year. Revenue generated by our diagnostics and genomics business for the three and six months ended April 30, 2022 increased 14 percent and 15 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 2 percentage points for both periods when compared to the same periods last year. Revenue generated by our Agilent CrossLab business in the three and six months ended April 30, 2022 increased 7 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 3 percentage points and 2 percentage points, respectively, when compared to the same periods last year.

Net income for the three and six months ended April 30, 2022 was $274 million and $557 million, respectively, compared to net income of $216 million and $504 million, respectively, for the corresponding periods last year. In the six months ended April 30, 2022, cash provided by operations was $538 million compared to cash provided by operations of $710 million in the same period last year.

During the three and six months ended April 30, 2022, we paid cash dividends of $0.210 per common share or $63 million and $0.420 per common share or $126 million, respectively, on the company's common stock. During the three and six months ended April 30, 2021, we paid cash dividends of $0.194 per common share or $59 million and $0.388 per common share or $118 million, respectively, on the company's common stock.

On February 16, 2021 we announced that our board of directors had approved a new share repurchase program (the "2021 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs. The 2021 repurchase program authorizes the purchase of up to $2.0 billion of our common stock at the company's discretion and has no fixed termination date. The 2021 repurchase program which became effective on February 18, 2021, replaced and terminated the 2019 repurchase program on that date. The 2021 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time. During the three and six months ended April 30, 2022, we repurchased and retired 1.751 million shares for $234

million and 4.658 million shares for $681 million, respectively, under this authorization. During both the three and six months ended April 30, 2021, we repurchased and retired 1.388 million shares for $174 million under this authorization. As of April 30, 2022, we had remaining authorization to repurchase up to approximately $896 million of our common stock under the 2021 repurchase program.

During the three and six months ended April 30, 2021, we repurchased and retired 164,422 shares for $21 million and 3.05 million shares for $365 million, respectively, under the 2019 repurchase program. Effective February 18, 2021, the 2019 repurchase program was terminated and replaced by the new share repurchase program. The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

Looking forward, as we continue to navigate the impacts of the COVID-19 pandemic, our top priority continues to be the health and safety of our employees, customers and community, as well as supporting our customers' operations. We also remain focused on improving our customers’ experience, differentiating product solutions and productivity. We expect to face continued inflationary and logistical pressures (such as longer lead times and limited sources of supply in the near term) which we will continue to mitigate through targeted pricing and various sourcing strategies. We remain optimistic about our long-term growth opportunities in all of our end markets in the second half of fiscal year 2022.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. The preparation of condensed consolidated financial statements in conformity with GAAP in the U.S. requires management to make estimates, judgments and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, retirement and post-retirement benefit plan assumptions, valuation of goodwill and purchased intangible assets and accounting for income taxes. There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates.

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

Adoption of New Pronouncements

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

Foreign Currency

Our revenues, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. Foreign currency movements for the six months ended April 30, 2022 had an overall unfavorable impact on revenue of 1 percentage point when compared to the same period last year. When movements in foreign currency exchange rates have a negative impact on revenue, they will also have a positive impact by reducing our costs and expenses. We calculate the impact of movements in foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods. We hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short term and anticipated basis. We do experience some fluctuations within individual lines of the condensed consolidated statement of operations and balance sheet because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (up to a rolling thirteen-month period). We may also hedge equity balances denominated in foreign currency on a long-term basis. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Results from Operations

Net Revenue

			Three Months Ended												Six Months Ended												Year over Year Change
			April 30,												April 30,												Three						Six
			2022						2021						2022						2021						Months						Months
			(in millions)
Net revenue:
Products			$	1,204					$	1,150					$	2,467					$	2,322					5%						6%
Services and other			403						375						814						751						7%						8%
Total net revenue			$	1,607					$	1,525					$	3,281					$	3,073					5%						7%

Net revenue of $1,607 million and $3,281 million for the three and six months ended April 30, 2022 increased 5 percent and 7 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 3 percentage points and 1 percentage point, respectively, when compared to the same periods last year. In the three and six months ended April 30, 2022, net revenue increased in all three of our business segments, in the Americas and Europe regions and from our three largest end markets (pharmaceutical, chemical and energy, and diagnostics and clinical markets). In the three and six months ended April 30, 2022, net revenue in the Asia Pacific region was impacted by the COVID lockdown in Shanghai resulting from the mandatory shutdown of our gas chromatography production facility and logistics center.

Revenue from products for the three and six months ended April 30, 2022 increased 5 percent and 6 percent, respectively, when compared to the same periods last year. Product revenue growth in the three months ended April 30, 2022 was driven by increased sales within our nucleic acid solutions, cell analysis, spectroscopy and liquid chromatography businesses partially offset by declines in our gas chromatography and gas chromatography mass spectrometry businesses mainly due to the COVID lockdown in Shanghai. Product revenue growth in the six months ended April 30, 2022 was primarily driven by increased sales within our nucleic acid solutions, consumables, cell analysis, spectroscopy and liquid chromatography businesses partially offset by declines in our gas chromatography and gas chromatography mass spectrometry businesses.

Services and other revenue for the three and six months ended April 30, 2022 increased 7 percent and 8 percent, respectively, when compared to the same periods last year. Services and other revenue consist of contract repair, preventive maintenance, compliance services, repair and maintenance, installation services and consulting services related to the companion diagnostics and nucleic acid solutions businesses. For the three and six months ended April 30, 2022, service revenue increases reflected solid growth from contract repair services, compliance services, installation services and consultative services.

Net Revenue By Segment

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
						(in millions)
Net revenue by segment:
Life sciences and applied markets						$	896					$	881					$	1,872					$	1,804					2%						4%
Diagnostics and genomics						358						315						697						609						14%						15%
Agilent CrossLab						353						329						712						660						7%						8%
Total net revenue						$	1,607					$	1,525					$	3,281					$	3,073					5%						7%

Revenue in the life sciences and applied markets business for the three and six months ended April 30, 2022 increased 2 percent and 4 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 2 percentage points and 1 percentage point, respectively, when compared to the same periods last year. For the three months ended April 30, 2022, we

saw strong revenue growth within the pharmaceutical and chemical and energy markets and modest revenue growth in the academia and government markets partially offset by a decline in the food, environmental and forensics and diagnostics and clinical markets when compared to the same periods last year. For the six months ended April 30, 2022, we saw strong revenue growth within the chemical and energy and pharmaceutical markets and moderate revenue growth in the diagnostics and clinical markets partially offset by a decline in the environmental and forensics, food, and academia and government markets when compared to the same periods last year. While the COVID-related shutdown of our Shanghai production facility and logistics center impacted revenue growth in all of our end markets, the food market was disproportionately affected by this shutdown.

Revenue in the diagnostics and genomics business for the three and six months ended April 30, 2022,increased 14 percent and 15 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 2 percentage points for both periods when compared to the same periods last year. For the three and six months ended April 30, 2022, revenue growth was strong within the pharmaceutical market led by performance from our nucleic acid solutions business. Within the diagnostics and clinical markets, revenue growth was moderate in the three months ended April 30, 2022, and revenue growth was strong in the six months ended April 30, 2022 primarily driven by our pathology, companion diagnostics and genomics businesses.

Revenue generated by Agilent CrossLab in the three and six months ended April 30, 2022, increased 7 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 3 percentage points and 2 percentage points, respectively, when compared to the same periods last year. For the three and six months ended April 30, 2022, we saw strong revenue growth from the pharmaceutical, chemical and energy, diagnostics and clinical, and food markets when compared to the same periods last year.

Operating Results

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
(in millions, except margin data)
Total gross margin						53.6		%				53.6		%				54.0		%				53.9		%				—						—
Research and development						$	115					$	109					$	232					$	212					5%						9%
Selling, general and administrative						$	386					$	420					$	803					$	827					(8)%						(3)%
Operating margin						22.4		%				18.9		%				22.4		%				20.0		%				4 ppts						2 ppts
Income from operations						$	360					$	288					$	736					$	616					25%						20%

Total gross margin for the three and six months ended April 30, 2022 was flat in both periods when compared to the same periods last year. Gross margin for the three and six months ended April 30, 2022 was impacted by higher sales volume, price increases and lower inventory charges which were offset by higher wages, materials, shipping and logistics costs, intangible amortization expense and transformational initiatives costs.

Research and development expenses for the three and six months ended April 30, 2022 increased 5 percent and 9 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and six months ended April 30, 2022 increased due to higher wages, program investments in our pathology business within our diagnostics and genomics segment and in our software and informatics business within our our life sciences and applied markets segment, and additional expenses related to our acquisition of Resolution Bioscience.

Selling, general and administrative expenses for the three and six months ended April 30, 2022 decreased 8 percent and 3 percent, respectively, when compared to the same periods last year. The decrease in selling, general and administrative expenses for the three and six months ended April 30, 2022 was due to the decrease in the fair value of an acquisition-related contingent consideration, lower variable pay, commissions, acquisition and integration costs and transformational initiative expenses partially offset by higher wages.

Total operating margin for the three and six months ended April 30, 2022 increased 4 percentage points and 2 percentage points, respectively, when compared to the same periods last year. Operating margin for the three and six months ended April 30, 2022 increased due to higher sales volume and decreases in operating expenses.

Income from operations for the three and six months ended April 30, 2022 increased $72 million or 25 percent and $120 million or 20 percent, respectively, on a corresponding revenue increase of $82 million and $208 million, respectively.

At April 30, 2022, our headcount was approximately 17,400 as compared to approximately 16,500 at April 30, 2021. The increase in headcount was attributed to the normal course of business.

Other income (expense), net

In the three and six months ended April 30, 2022 other income and expense, net includes net loss on equity securities of approximately $16 million and $62 million, respectively. In the three and six months ended April 30, 2022 other income and expense, net also includes income of $2 million and $5 million, respectively, related to the provision of site service costs to, and lease income from Keysight Technologies, Inc. The costs associated with these services are reported within income from operations.

In the three and six months ended April 30, 2021 other income and expense, net includes a $12 million and $17 million loss on the extinguishment of debt, respectively, and gains on the fair value of equity investments of approximately $15 million in both periods. In the three and six months ended April 30, 2021 other income and expense, net also includes income of $2 million and $5 million, respectively, related to the provision of site service costs to, and lease income from Keysight Technologies, Inc. The costs associated with these services are reported within income from operations.

Income Taxes

For the three and six months ended April 30, 2022, our income tax expense was $59 million with an effective tax rate of 17.7 percent and $95 million with an effective tax rate of 14.6 percent, respectively. For the three months ended April 30, 2022, there were no significant discrete items. The income taxes for the six months ended April 30, 2022 include the excess tax benefits from stock-based compensation of $17 million. For the six months ended April 30, 2022, our effective tax rate and the resulting provision for income taxes were also impacted by the expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $8 million.

Our calculation of income tax expense for the three and six months ended April 30, 2022 is dependent in part on forecasts of full year results. The impact of COVID-19 on the economic environment is uncertain and may change these forecasts, which could impact tax expense.

For the three and six months ended April 30, 2021, our income tax expense was $57 million with an effective tax rate of 20.9 percent and $81 million with an effective tax rate of 13.8 percent, respectively. For the three months ended April 30, 2021, there were no significant discrete items. The income taxes for the six months ended April 30, 2021 include the excess tax benefits from stock-based compensation of $22 million. For the six months ended April 30, 2021, our effective tax rate and the resulting provision for income taxes were also impacted by the expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $16 million.

In the U.S., tax years remain open back to the year 2018 for federal income tax purposes and for significant states. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2012.

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

Segment Overview

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

Life Sciences and Applied Markets

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

Net Revenue

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
						(in millions)
Net revenue						$	896					$	881					$	1,872					$	1,804					2%						4%

Life sciences and applied markets business revenue for the three and six months ended April 30, 2022 increased 2 percent and 4 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 2 percentage points and 1 percentage point, respectively, when compared to the same periods last year.

Geographically, revenue increased 9 percent in the Americas with a 1 percentage point favorable currency impact, increased 1 percent in Europe with a 5 percentage point unfavorable currency impact and decreased 3 percent in Asia Pacific with a 1 percentage point unfavorable currency impact for the three months ended April 30, 2022 compared to the same period last year. For the three months ended April 30, 2022, revenue growth was driven by strong growth in liquid chromatography, cell analysis and spectroscopy products when compared to the same period last year. Revenue in the Asia Pacific region was impacted by revenue declines in China due to the COVID lockdown in Shanghai.

Revenue for the six months ended April 30, 2022 increased 11 percent in the Americas with no currency impact, increased 2 percent in Europe with a 4 percentage point unfavorable currency impact and decreased 1 percent in Asia Pacific with a 2 percentage point unfavorable currency impact when compared to the same period last year. For the six months ended April 30, 2022, revenue growth was driven by strong growth in liquid chromatography, cell analysis and spectroscopy products

when compared to the same period last year. Revenue in the Asia Pacific region was impacted by revenue declines in China due to the COVID lockdown in Shanghai.

For the three months ended April 30, 2022, results by end markets were mixed with pharmaceutical and chemical and energy delivering strong revenue growth and academia and government delivering moderate revenue growth while diagnostics and clinical, food, forensics and environmental markets declined when compared to the same period last year. Revenue growth in the pharmaceutical end market was primarily driven by our liquid chromatography, liquid chromatography mass spectrometry and cell analysis businesses. Revenue growth in chemical and energy was mainly driven by strength in our spectroscopy, liquid chromatography mass spectrometry and consumables portfolio while academia growth was mainly led by liquid chromatography and liquid chromatography mass spectrometry products.

For the three months ended April 30, 2022, the diagnostics and clinical market declined mainly due to liquid chromatography mass spectrometry business. Food market declined mainly due to weakness in gas chromatography mass spectrometry and gas chromatography product categories in China partially offset by liquid chromatography mass spectrometry products when compared to the same period last year. In China, the declines were mainly due to the COVID lockdown in Shanghai. Forensics and environmental weakness was mainly driven by declines in gas chromatography mass spectrometry and gas chromatography partially offset by spectroscopy products when compared to the same period last year

For the six months ended April 30, 2022, results by end markets were mixed with pharmaceutical, chemical and energy and diagnostics and clinical markets delivering strong revenue growth while academia, food, and forensics and environmental declined when compared to the same period last year. Revenue growth in the pharmaceutical end market was primarily driven by our liquid chromatography, liquid chromatography mass spectrometry and consumables businesses. Revenue growth in chemical and energy was mainly driven by strength in our spectroscopy, gas chromatography and consumables portfolio while diagnostics and clinical market growth was mainly led by cell analysis and liquid chromatography mass spectrometry products.

For the six months ended April 30, 2022, the academia and government markets declined mainly driven by cell analysis business partially offset by growth in liquid chromatography business when compared to the same period last year. Food market declined mainly due to weakness in gas chromatography mass spectrometry and gas chromatography product categories in China partially offset by consumables and cell analysis business when compared to the same period last year. Forensics and environmental weakness was mainly driven by declines in gas chromatography mass spectrometry and gas chromatography products when compared to the same period last year.

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

Operating Results

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
(in millions, except margin data)
Gross margin						59.0		%				59.9		%				59.8		%				60.1		%				(1) ppt						—
Research and development						$	72					$	69					$	146					$	134					5%						9%
Selling, general and administrative						$	229					$	233					$	463					$	460					(2)%						—
Operating margin						25.5		%				25.7		%				27.3		%				27.2		%				—						—
Income from operations						$	228					$	226					$	510					$	491					1%						4%

Gross margin for products and services for the three and six months ended April 30, 2022, decreased 1 percentage point and was flat, respectively, when compared to the same periods last year. Gross margin for the three and six months ended April 30, 2022 was impacted by higher materials and logistics costs and wages which were offset by price increases, higher sales volume and favorable hedging gains.

Research and development expenses for the three and six months ended April 30, 2022, increased 5 percent and 9 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and six months ended April 30, 2022 increased due to higher wages and program investments in software and informatics.

Selling, general and administrative expenses for the three and six months ended April 30, 2022, decreased 2 percent and were flat, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three months ended April 30, 2022, decreased by controlling discretionary spending on operational expenses, lower variable pay and favorable currency movements partially offset by higher wages when compared to same period last year. Selling, general and administrative expenses for the six months ended April 30, 2022 were impacted by higher wages and commissions offset by lower variable pay, discretionary spending on operational expenses and favorable currency movements when compared to same period last year.

Operating margin for products and services for the three and six months ended April 30, 2022 was flat in both periods when compared to the same periods last year. Operating margin for the three and six months ended April 30, 2022 was impacted by higher sales volume and favorable currency movements partially offset by higher material and logistics costs.

Income from operations for the three and six months ended April 30, 2022, increased $2 million or 1 percent and $19 million or 4 percent, respectively, on a corresponding revenue increase of $15 million and $68 million, respectively. Income from operations for the three and six months ended April 30, 2022 increased primarily due to higher sales volume.

Diagnostics and Genomics

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

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

Net Revenue

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
						(in millions)
Net revenue						$	358					$	315					$	697					$	609					14%						15%

Diagnostics and genomics business revenue for the three and six months ended April 30, 2022 increased 14 percent and 15 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 2 percentage points for both periods when compared to the same periods last year.

Geographically, revenue increased 23 percent in the Americas with no currency impact, increased 3 percent in Europe with a 6 percentage point unfavorable currency impact and increased 7 percent in Asia Pacific with a 3 percentage point unfavorable currency impact for the three months ended April 30, 2022 compared to the same period last year. For the three months ended April 30, 2022, the increase in the Americas was driven by strong performance in our nucleic acid solutions, biomolecular analysis and genomics portfolios. In Europe, the growth was driven by strong demand for our biomolecular analysis and genomics portfolios, while the pathology business growth remained flat. The growth in Asia Pacific was driven by strong performance in our biomolecular analysis businesses.

Revenue for the six months ended April 30, 2022 increased 23 percent in the Americas with no currency impact, increased 2 percent in Europe with a 4 percentage point unfavorable currency impact and increased 12 percent in Asia Pacific with a 3 percentage point unfavorable currency impact when compared to the same period last year. For the six months ended April 30, 2022, the increase in the Americas was driven by strong performance in our nucleic acid solutions, biomolecular analysis and genomics portfolios. In Europe, the growth was driven by our reagent partnership and companion diagnostics businesses but was partially offset by lower biomolecular analysis business resulting from supply chain issues. The growth in Asia Pacific was driven by strong performance across all businesses.

For the three and six months ended April 30, 2022, revenue performance in the pharmaceutical market was led by strong revenue growth in our nucleic acid solutions and biomolecular analysis businesses with moderate growth in our genomics business. For the three months ended April 30, 2022, we saw moderate revenue growth in the diagnostics and clinical, and modest revenue growth in the academia and government markets when compared to the same period last year. For the six months ended April 30, 2022, we saw strong revenue growth in the diagnostics and clinical market led by our pathology and companion diagnostics businesses, and moderate revenue growth in the academia and government markets when compared to the same period last year.

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

Operating Results

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
(in millions, except margin data)
Gross margin						56.0		%				53.4		%				54.4		%				52.5		%				3 ppts						2 ppts
Research and development						$	35					$	30					$	69					$	59					15%						17%
Selling, general and administrative						$	74					$	69					$	151					$	137					8%						10%
Operating margin						25.5		%				21.9		%				22.9		%				20.3		%				4 ppts						3 ppts
Income from operations						$	91					$	69					$	159					$	124					33%						29%

Gross margin for products and services for the three and six months ended April 30, 2022, increased 3 percentage points and 2 percentage points, respectively, when compared to the same periods last year. Gross margin in the three and six months ended April 30, 2022 increased due to higher sales volume offsetting the higher wages and logistics costs.

Research and development expenses for the three and six months ended April 30, 2022, increased 15 percent and 17 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and six months ended April 30, 2022 included higher pathology program investments and additional expenses related to the Resolution Bioscience acquisition.

Selling, general and administrative expenses for the three and six months ended April 30, 2022, increased 8 percent and 10 percent, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three and six months ended April 30, 2022 increased due to an increase in wages and additional expenses related to the Resolution Bioscience acquisition and were partially offset by favorable currency movements.

Operating margin for products and services for the three and six months ended April 30, 2022 increased 4 percentage points and 3 percentage points, respectively, when compared to the same periods last year. Operating margin for the three and six months ended April 30, 2022 improved as the higher revenue growth and gross margins offset the increase in wages, logistics costs and program investments.

Income from operations for the three and six months ended April 30, 2022 increased $22 million or 33 percent and $35 million or 29 percent, respectively, on a corresponding revenue increase of $43 million and $88 million, respectively. Income from operations for the three and six months ended April 30, 2022 increased due to strong revenue performance and higher gross margins.

Agilent CrossLab

The Agilent CrossLab business spans the entire lab with its extensive services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. The services portfolio includes repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements.

Net Revenue

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
						(in millions)
Net revenue						$	353					$	329					$	712					$	660					7%						8%

Agilent CrossLab business revenue for the three and six months ended April 30, 2022 increased 7 percent and 8 percent, respectively, when compared to the same periods last year. Foreign currency movements for the three and six months ended April 30, 2022 had an overall unfavorable impact on revenue growth of 3 percentage points and 2 percentage points, respectively, when compared to the same periods last year.

Geographically, revenue increased 13 percent in the Americas with a 1 percentage point favorable currency impact, increased 2 percent in Europe with a 6 percentage point unfavorable currency impact and increased 6 percent in Asia Pacific with a 3 percentage point unfavorable currency impact for the three months ended April 30, 2022 compared to the same period last year. For the three months ended April 30, 2022, the solid growth in all three regions was driven by contract repair services, compliance services, installation services and consultative services.

Revenue for the six months ended April 30, 2022 increased 9 percent in the Americas with no currency impact, increased 4 percent in Europe with a 5 percentage point unfavorable currency impact and increased 9 percent in Asia Pacific with a 2 percentage point unfavorable currency impact when compared to the same period last year. For the six months ended April 30, 2022, the solid growth in all three regions was driven by contract repair services, compliance services and consultative services.

For the three and six months ended April 30, 2022, the Agilent CrossLab business continued to see high single digit to low double digit revenue growth from the pharmaceutical market, chemical and energy market, food market and the diagnostics and clinical market, which together accounts for the majority of the Agilent CrossLab business revenues. The environmental and forensics market, as well as the academia and government market, remained subdued with low single digit growth.

Looking forward, Agilent CrossLab services are well positioned to continue their success in our key end markets by supporting a growing installed base of instruments. Digital and remote capabilities will continue to be a key factor in improving

the service quality and the experience to customers. Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

Operating Results

						Three Months Ended												Six Months Ended												Year over Year Change
						April 30,												April 30,												Three						Six
						2022						2021						2022						2021						Months						Months
(in millions, except margin data)
Gross margin						47.1		%				45.3		%				47.3		%				46.1		%				2 ppt						1 ppt
Research and development						$	7					$	8					$	15					$	17					(12)%						(9)%
Selling, general and administrative						$	72					$	72					$	144					$	142					—						1%
Operating margin						24.7		%				21.0		%				24.9		%				22.1		%				4 ppts						3 ppts
Income from operations						$	87					$	69					$	178					$	145					26%						22%

Gross margin for the three and six months ended April 30, 2022 increased 2 percentage points and 1 percentage point, respectively, when compared to the same periods last year. Gross margin for the three and six months ended April 30, 2022 was impacted by higher cash flow hedging gains, higher sales volumes and targeted price increases that improved margins, which were partially offset by higher service delivery costs for logistics, parts and labor.

Research and development expenses for the three and six months ended April 30, 2022 decreased 12 percent and 9 percent, respectively, when compared to the same periods last year. Research and development expenses for the three and six months ended April 30, 2022 decreased mainly due to delays in certain research and development projects which led to lower expenditures.

Selling, general and administrative expenses for the three and six months ended April 30, 2022 were flat and increased 1 percent, respectively, when compared to the same periods last year. Selling, general and administrative expenses for the three and six months ended April 30, 2022 increased primarily due to higher wages and higher sales commissions, and these were offset by favorable currency movements.

Operating margin for products and services for the three and six months ended April 30, 2022 increased 4 percentage points and 3 percentage points, respectively, when compared to the same periods last year. Operating margin for the three and six months ended April 30, 2022 increased mostly driven by higher sales volume with improved gross margins and higher cash flow hedging gains.

Income from operations for the three and six months ended April 30, 2022 increased $18 million or 26 percent and $33 million or 22 percent, respectively, on a corresponding revenue increase of $24 million and $52 million, respectively. Income from operations for the three and six months ended April 30, 2022 increased primarily due to higher sales volume.

FINANCIAL CONDITION

Liquidity and Capital Resources

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

Our financial position as of April 30, 2022 consisted of cash and cash equivalents of $1,186 million as compared to $1,484 million as of October 31, 2021.

Term Loan

On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025. As of April 30, 2022, we had no borrowings outstanding under the term loan facility. Loans under the term loan agreement will bear interest, at our option, either at: (i) the alternate base rate, as defined in the term loan agreement, plus the applicable margin for such loans or (ii) adjusted term SOFR, as defined in the term loan agreement, plus the applicable margin for such loans. The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants.

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

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

Net Cash Provided by Operating Activities

Net cash inflow from operating activities was $538 million for the six months ended April 30, 2022 compared to cash inflow of $710 million for the same period in 2021. Cash flow for the six months ended April 30, 2022 was impacted by the transitory impact of COVID-related shutdowns in China in the second quarter of fiscal year 2022. Net cash paid for income taxes in the six months ended April 30, 2022 was approximately $134 million compared to income taxes paid of $116 million for the same period in 2021. Other assets and liabilities, for the six months ended April 30, 2022, had cash outflow of $7 million compared to cash outflow of $15 million for the same period in 2021.

In the six months ended April 30, 2022, accounts receivable used cash of $108 million compared to cash used of $17 million for the same period in 2021. Days’ sales outstanding as of April 30, 2022 and 2021 was 69 days and 63 days, respectively. Cash used for inventory was $124 million for the six months ended April 30, 2022 compared to cash used of $80 million for the same period in 2021. Inventory days on-hand was 113 days as of April 30, 2022 compared to 101 days as of April 30, 2021 mainly due to increased inventory levels to meet customer needs and to compensate for long lead time in ordering from our suppliers. In the six months ended April 30, 2022, accounts payable provided cash of $54 million compared to cash provided of $51 million for the same period in 2021. The change in the employee compensation and benefits liability was $144 million for the six months ended April 30, 2022 compared to cash used of $3 million for the same period in 2021. This was largely due to an increase in variable and incentive payments of $201 million in 2022 compared to $119 million in 2021.

We contributed approximately $8 million and $9 million to our defined benefit plans in the six months ended April 30, 2022 and 2021, respectively. Our annual contributions are highly dependent on the relative performance of our assets versus our projected liabilities, among other factors. We expect to contribute approximately $11 million to our defined benefit plans during the remainder of 2022.

Net Cash Used in Investing Activities

Net cash used in investing activities was $155 million for the six months ended April 30, 2022 as compared to net cash used in investing activities of $629 million in the same period of 2021. Investments in property, plant and equipment were $139 million for the six months ended April 30, 2022 compared to $72 million in the same period of 2021. The increase in our investments in property plant and equipment is primarily due to the expansion of our Frederick, Colorado site. We expect that total capital expenditures for the current year will be approximately $300 million. In the six months ended April 30, 2022, cash provided of $6 million related to the the sale of equity securities. In the six months ended April 30, 2022, cash used of $18 million related to our acquisition of advanced artificial intelligence technology compared to cash used of $547 million related to our acquisition of Resolution Bioscience in 2021.

Net Cash Used in Financing Activities

Net cash used in financing activities for the six months ended April 30, 2022 was $669 million compared to net cash used in financing activities of $150 million for the same period of 2021.

Treasury Stock Repurchases

Our 2021 repurchase program authorizes the purchase of up to $2.0 billion of our common stock at the company's discretion and has no fixed termination date. During the six months ended April 30, 2022 and 2021 we repurchased and retired 4.658 million shares for $681 million and 1.388 million shares for $174 million, respectively, under this authorization. As of April 30, 2022, we had remaining authorization to repurchase up to approximately $896 million of our common stock under the 2021 repurchase program.

During the six months ended April 30, 2021, we also repurchased and retired 3.05 million shares for $365 million under the 2019 repurchase program. Effective February 18, 2021, the 2019 repurchase program was terminated and was replaced by the 2021 share repurchase program. The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

Dividends

During the six months ended April 30, 2022 and 2021, we paid cash dividends of $0.420 per common share or $126 million, and $0.388 per common share or $118 million, respectively, on the company's common stock.

On May 18, 2022, our board of directors declared a quarterly dividend of $0.210 per share of common stock or approximately $63 million which will be paid on July 27, 2022 to all shareholders of record at the close of business on July 5, 2022. The timing and amounts of any future dividends are subject to determination and approval by our board of directors.

Credit Facilities and Short-Term Debt

On March 13, 2019, we entered into a credit agreement with a group of financial institutions which, as amended, provided for a $1 billion five-year unsecured credit facility that will expire on March 13, 2024 and incremental term loan facilities in an aggregate amount of up to $500 million. On April 21, 2021, we entered into an incremental assumption agreement, pursuant to which the aggregate amount available for borrowing under the revolving credit facility was increased to $1.35 billion and the aggregate amount available for incremental facilities was refreshed to remain at $500 million. As of April 30, 2022, we had no borrowings outstanding under the credit facility and no borrowings under the incremental facilities. We were in compliance with the covenants for the credit facility during the six months ended April 30, 2022.

Commercial Paper

Under our U.S. commercial paper program, the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.35 billion with up to 397-day maturities. At any point in time, the company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the six months ended April 30, 2022, we borrowed $575 million and repaid $400 million. As of April 30, 2022, we had borrowings of $175 million outstanding under our U.S. commercial paper program and had a weighted average annual interest rate of 0.69 percent.

Long-Term Debt

There have been no other changes to the principal, maturity, interest rates and interest payment terms of the Agilent outstanding senior notes in the six months ended April 30, 2022 as compared to the senior notes as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.

Other

Our commitments for indirect material and services increased by $62 million from $83 million as reported in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. These commitments are related to a variety of suppliers including IT support service providers. Our commitments to contract manufacturers and suppliers increased by $207 million from $901 million as reported in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. These commitments are related to a variety of suppliers, and we use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates. These open purchase orders with our suppliers have not yet been received and our agreements usually provide us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the firm orders being placed. There were no other substantial changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2021 to our contractual commitments in the first six months of fiscal year 2022. We have no other material non-cancelable guarantees or commitments.

Other long-term liabilities as of April 30, 2022 and October 31, 2021 include $227 million and $241 million, respectively, related to long-term income tax liabilities. Of these amounts, $110 million and $117 million related to uncertain tax positions as of April 30, 2022 and October 31, 2021, respectively. We are unable to accurately predict when these amounts will be realized or released. However, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitations or a tax audit settlement. The remaining $117 million in other long-term liabilities relates to the U.S. transition tax payment which is due in installments over the next four years.