Keysight Technologies (KEYS) 10-K risk factor changes: FY2017 vs FY2016

The success of new products and services will depend on several factors, including [added: but not limited to] our ability to:

Accordingly, our future results could be harmed by a variety of factors, [removed: including:][added: including but not limited to:]

We believe our pay levels are competitive within the regions that we [removed: operate.]

Depending on the size and complexity of an acquisition, the successful integration of the entity depends on a variety of factors, [removed: including:][added: including but not limited to:]

If we do not realize the expected benefits or synergies of such transactions, our [removed: combined and] consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

[added: Although our policy is to apply strict standards for environmental protection at our sites inside] and outside the United States, even if the sites outside the United States are not subject to regulations imposed by foreign governments, we may not be aware of all conditions that could subject us to liability.

We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the [added: adequacy of our provision for income taxes.]

Due to the complexity of tax contingencies, the ultimate resolution of any tax matters related to operations [removed: post-separation] may result in payments greater or less than amounts accrued.

Changes in tax laws, such as tax reform in the United States or changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address “base erosion and profit [removed: shifting,”] [added: shifting” and the taxation of the “Digital Economy”] could impact our effective tax rate.

We benefit from tax incentives extended to [added: certain of] our foreign subsidiaries to encourage investment or employment.

We believe that we will satisfy such conditions in the [removed: future.][added: future as needed, but cannot guarantee that such conditions will be satisfied.]

[removed: The] [added: Our] Singapore tax incentive is due for renewal in fiscal [removed: 2024.][added: 2024, but we cannot guarantee that Singapore will not revoke the tax incentive earlier.]

Our taxes could increase if the incentives are not renewed upon [added: revocation or] expiration.

As a result, our effective tax rate could be higher than it would have been had we maintained the benefits of the tax [removed: incentives.][added: incentives and could harm our operating results.]

Our current revolving credit facility [added: and term loan] imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios.

In addition, the indenture governing our senior notes contains covenants that may adversely affect our ability to incur certain liens or engage in certain types [removed: of sale and leaseback transactions.]

Consequently, if Agilent is unable to pay the consolidated U.S. federal income tax liability for a prior period, we could be required to pay the entire amount of such tax, which could be substantial and in excess of the amount allocated to it [removed: under the tax matters agreement] [added: as agreed] between us and [removed: Agilent.][added: Agilent at the time of separation.]

[removed: Notwithstanding the opinion of tax counsel, the IRS could determine] on audit that the distribution 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.

For example, if the distribution failed to qualify for tax-free treatment, Agilent would for U.S. federal income tax purposes be treated as if it had sold the Keysight common stock in a taxable sale for its fair market value, and Agilent's shareholders, who are subject to U.S. federal income tax, would be treated as receiving a taxable distribution in an amount equal to the fair market value of the Keysight common stock [added: received in the distribution.]

In addition, if the separation and distribution failed to qualify for tax-free treatment under federal, state and local tax law and/or foreign tax law, Agilent [removed: (and, under the tax matters agreement described below, Keysight)] [added: and Keysight] could [added: each] incur significant tax liabilities under U.S. federal, state, local and/or foreign tax law.

Under the [removed: tax matters] agreement between Agilent and [removed: Keysight,] [added: Keysight pertaining to tax matters, as finalized at the time of separation,] we are generally required to indemnify Agilent against taxes incurred by Agilent that arise as a result of our taking or failing to take, as the case may be, certain actions that result in the distribution failing to meet the requirements of a tax-free distribution under Section 355 of the Code.

Under the [removed: tax matters] agreement between Agilent and Keysight, [added: as finalized at the time of separation,] we may also be required to indemnify Agilent for other contingent tax liabilities, which could materially adversely affect our financial position.

Our common stock is listed on NYSE under the ticker symbol “KEYS.” The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, [removed: including:][added: including but not limited to:]

We do not currently [removed: expect to] pay dividends on our common stock.

The payment of any dividends in the future, and the timing and amount thereof, to our [removed: shareholders will] [added: stockholders] fall within the discretion of our board of directors.

operate.

of sale and leaseback transactions.

Singapore announced potential changes to its IP incentive programs in its 2017 budget.

Such potential changes could result in a reduction in tax incentive benefits and an early termination of or changes to our existing Singapore incentive in 2021.

No changes have been finalized, and it is unclear to what extent, if at all, changes will be made to the tax incentives or any specific conditions.

We cannot guarantee that we will qualify for any new incentive regime or that such conditions will be satisfied.

We do not currently pay dividends on our common stock.

These provisions include but are not limited to:

Risks Related to the Acquisition of Ixia

We may not realize all of the anticipated benefits of the Merger or those benefits may take longer to realize than expected.

We may also encounter significant unexpected difficulties in integrating the two businesses.

Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to integrate our and Ixia’s businesses.

The combination of two independent businesses is a complex, costly and time-consuming process.

As a result, we will be required to devote significant management attention and resources to integrating Ixia’s business practices and operations with our existing business practices and operations.

The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits of the Merger.

Our failure to meet the challenges involved in integrating the two businesses to realize the anticipated benefits of the Merger could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.

In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of management's attention.

The difficulties of combining the operations of the companies include but are not limited to:

| • | the diversion of management's attention to integration matters; |

| • | difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining Ixia’s business with our business; |

| • | difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience; |

| | |

| --- | --- |

| • | difficulties in the integration of operations and systems; |

| | |

| --- | --- |

| • | difficulties in the assimilation of employees; |

| | |

| --- | --- |

| • | difficulties in managing the expanded operations of a significantly larger and more complex company; |

| | |

| --- | --- |

| • | successfully managing relationships with our strategic partners and supplier and customer base; and |

| | |

| --- | --- |

| • | challenges in maintaining existing, and establishing new, business relationships. |

Many of these factors will be outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could materially impact the business, financial condition and our results of operations.

In addition, even if the operations of our business and Ixia’s business are integrated successfully, we may not realize the full benefits of the Merger, including the synergies, cost savings or sales or growth opportunities that we expect.

These benefits may not be achieved within the anticipated time frame, or at all.

Furthermore, additional unanticipated costs may be incurred in the integration of the businesses.

Although our policy is to apply strict standards for environmental protection at our sites inside

adequacy of our provision for income taxes.

Our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly-traded company and may not be a reliable indicator of our future results.

The historical information about the company prior to fiscal year 2015 refers to our business as operated by and integrated with Agilent.

Accordingly, the historical financial information does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly-traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below:

| • | prior to the separation, our business was operated by Agilent as part of its broader corporate organization, rather than as an independent company. Agilent or one of its affiliates performed various corporate functions for us such as legal, treasury, accounting, auditing, human resources, corporate affairs and finance. Our historical financial results reflect allocations of corporate expenses from Agilent for such functions and are likely to be less than the expenses we would have incurred had we operated as a separate publicly-traded company. Following the separation, we are responsible for the cost related to such functions previously performed by Agilent; |

| • | generally, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of Agilent. Following the separation, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements; and |

| • | our historical financial information prior to the Separation, does not reflect the debt or the associated interest expense that we have incurred as part of the separation and distribution. |

Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Agilent.

For additional information about the past financial performance of our business and the basis of presentation of the historical combined and consolidated financial statements, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and accompanying notes included elsewhere in this Form 10-K.

Potential indemnification liabilities to Agilent pursuant to the separation and distribution agreement could materially and adversely affect our business, financial condition, results of operations and cash flows.

The separation and distribution agreement provides for, among other things, indemnification obligations designed to make us financially responsible for any liabilities associated with assets used by our business; our failure to pay, perform or otherwise promptly discharge any such liabilities or contracts, in accordance with their respective terms, whether prior to, at or after the distribution; any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement, commitment or understanding by Agilent for our benefit, unless they are liabilities related to assets used in the Agilent business; any breach by us of the separation agreement or any of the ancillary agreements or any action by us in contravention of our amended and restated certificate of incorporation or amended and restated bylaws; and any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the registration statement or any other disclosure document that describes the separation or the distribution or the company and its subsidiaries or primarily relates to the transactions contemplated by the separation and distribution agreement, subject to certain exceptions.

If we are required to indemnify Agilent under the circumstances set forth in the separation and distribution agreement, we may be subject to substantial liabilities.

In connection with our separation from Agilent, Agilent will indemnify us for certain liabilities.

However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that Agilent's ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the separation and distribution agreement and certain other agreements with Agilent, Agilent agreed to indemnify us for certain liabilities.

However, third parties could also seek to hold us responsible for any of the liabilities that Agilent has agreed to retain, and there can be no assurance that the indemnity from Agilent will be sufficient to protect us against the full amount of such liabilities, or that Agilent will be able to fully satisfy its indemnification obligations.

In addition, Agilent's insurers may attempt to deny us coverage for liabilities associated with certain occurrences of indemnified liabilities prior to the separation.

Moreover, even if we ultimately succeed in recovering from Agilent or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.

Each of these risks could negatively affect our business, financial position, results of operations and cash flows.

received in the distribution.

We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends.

These provisions include, among others:

In addition, an acquisition or further issuance of our stock could trigger the application of Section 355(e) of the Code.

Under the tax matters agreement, we would be required to indemnify Agilent for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that some shareholders may consider favorable.

You should read the following discussion in conjunction with the [removed: combined and] consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

The forward-looking statements contained herein include, without limitation, statements regarding trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, our future effective tax rate and tax valuation allowance, earnings from our foreign subsidiaries, remediation activities, new product and service introductions, the ability of our products to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of local government regulations on our ability to pay vendors or conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our acquisitions and other transactions, our transition to lower-cost regions, [removed: and] the existence of economic instability, [added: and our and the combined group's estimated or anticipated future results of operations,] that involve risks and uncertainties.

[removed: Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is] [added: We are] a measurement company providing electronic [removed: design and] test [added: and design] solutions to communications and electronics industries.

[removed: On November 1, 2014, we] [added: Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company") incorporated in Delaware on December 6, 2013 and] became an independent publicly-traded company [removed: through] [added: following] the [removed: distribution by] [added: separation from] Agilent Technologies, Inc. ("Agilent") [removed: of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation").][added: on November 1, 2014.]

The focus of the first phase of the program was on the IT infrastructure to support finance, [removed: field] [added: sales] and human resources.

The second phase of the program, which was initiated in the third quarter of fiscal 2016, primarily [removed: addresses] [added: addressed] the optimization of the IT infrastructure to support the services business.

We recognized costs related to this program of [added: $20 million,] $24 million [removed: for the year ended October 31, 2016] and $20 million [removed: for] [added: in] the [removed: year] [added: years] ended October 31, [removed: 2015.][added: 2017, 2016 and 2015, respectively.]

We expect to recognize additional costs estimated to range from [removed: $25] [added: $2] million to [removed: $35] [added: $3] million through fiscal 2018.

We provide electronic design and test [removed: instruments and] [added: instrumentation] systems and related software, software design tools, and [removed: related] services that are used in the design, development, manufacture, installation, [removed: deployment] [added: deployment, validation, optimization] and [added: secure] operation of electronics [removed: equipment.][added: systems.]

Related services include start-up assistance, instrument [removed: productivity and] [added: productivity,] application services and instrument calibration and repair.

These opportunities are being driven by [added: evolving technology standards and] the need for faster data rates and new form [removed: factors, and by evolving technology standards.][added: factors.]

In [removed: fiscal year] 2016, we [removed: completed an] [added: implemented changes in our] organizational [removed: change] [added: structure designed] to align our organization with the industries we [removed: serve.]

[removed: As a result of this] [added: In fiscal 2016, we completed an] organizational [removed: realignment,] [added: change to align our organization with the industries] we [removed: have] [added: serve which resulted in] three reportable operating segments: Communications Solutions Group, Electronic Industrial Solutions Group and Services Solutions Group.

The Communications Solutions Group serves customers spanning the worldwide commercial communications end [removed: market, which includes internet infrastructure,] [added: market] and the aerospace, defense and [added: government end market.]

Years ended October 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

[removed: Keysight’s total] [added: Total] orders in 2016 were $2,953 million, an increase of 3 percent when compared to 2015.

[removed: Total] [added: Keysight’s total] orders in [removed: 2015] [added: 2017] were [removed: $2,853] [added: $3,406] million, [removed: a decrease] [added: an increase] of [removed: 4] [added: 15] percent when compared to [removed: 2014.][added: 2016.]

Foreign currency movements had [removed: an unfavorable] [added: a negligible] impact [removed: of 4 percentage points] on the year-over-year comparison.

Orders associated with acquisitions accounted for [removed: 1] [added: 9] percentage [removed: point] [added: points] of order growth for the year ended October 31, [removed: 2015] [added: 2017] when compared to [removed: 2014.][added: 2016.]

[removed: Keysight’s net] [added: Net] revenue of $2,918 million in 2016 increased 2 percent when compared to 2015.

[removed: The revenue increase] [added: Revenue] associated with acquisitions accounted for [removed: approximately 1] [added: 7] percentage [removed: point] [added: points of revenue growth] for the year ended October 31, [removed: 2015] [added: 2017] when compared to [removed: 2014.][added: 2016.]

Net income was [removed: $335] [added: $102] million in [removed: 2016] [added: 2017] compared to net income of [removed: $513] [added: $335] million and [removed: $392] [added: $513] million in [removed: 2015] [added: 2016] and [removed: 2014.][added: 2015, respectively.]

In [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] we generated operating cash flows of [removed: $416] [added: $313] million, [removed: $376] [added: $416] million and [removed: $563 million.][added: $376 million, respectively.]

The result of the hedging has been included in our [removed: combined and] consolidated statement of operations.

We experience some fluctuations within individual lines of the consolidated balance sheet and [removed: combined and] consolidated statement of operations because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities.

Results from Operations-Years ended October 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014][added: 2015]

| | Year Ended October 31, | | | | | | | | | | | | [removed: 2016] [added: 2017] over [removed: 2015] [added: 2016] % Change | | [removed: 2015] [added: 2016] over [removed: 2014] [added: 2015] % Change |

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

| Orders | $ | [removed: 2,953] [added: 3,406] | | | $ | [removed: 2,853] [added: 2,953] | | | $ | [removed: 2,963] [added: 2,853] | | | [removed: 3%] [added: 15%] | | [removed: (4)%] [added: 3%] |

| Products | $ | [removed: 2,440] [added: 2,664] | | | $ | [removed: 2,408] [added: 2,440] | | | $ | [removed: 2,479] [added: 2,408] | | | [removed: 1%] [added: 9%] | | [removed: (3)%] [added: 1%] |

| Services and other | [removed: 478] [added: 525] | | | | [removed: 448] [added: 478] | | | | [removed: 454] [added: 448] | | | | [removed: 7%] [added: 10%] | | [removed: (1)%] [added: 7%] |

| Total net revenue | $ | [removed: 2,918] [added: 3,189] | | | $ | [removed: 2,856] [added: 2,918] | | | $ | [removed: 2,933] [added: 2,856] | | | [removed: 2%] [added: 9%] | | [removed: (3)%] [added: 2%] |

| | Year Ended October 31, | | | | | | | | | [removed: 2016] [added: 2017] over [removed: 2015] [added: 2016] % Change | | [removed: 2015] [added: 2016] over [removed: 2014] [added: 2015] % Change |

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

| Products | 84 | % | | 84 | % | | [removed: 85] [added: 84] | % | | — | | [removed: (1) ppt] [added: —] |

| Services and other | 16 | % | | 16 | % | | [removed: 15] [added: 16] | % | | — | | [removed: 1 ppt] [added: —] |

Foreign currency movements had [removed: an unfavorable] [added: a negligible] impact [removed: of 4 percentage points] on the year-over-year [removed: compare.][added: comparison.]

[removed: The orders] [added: Orders] associated with acquisitions accounted for [removed: 1] [added: 9] percentage [removed: point] [added: points] of order growth for the year ended October 31, [removed: 2015] [added: 2017] when compared to [removed: 2014.][added: 2016.]

The following table provides the percent change in revenue for the years ended October 31, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] by geographic region, including and excluding the impact of currency changes, as compared to the respective prior year.

| | [removed: 2016] [added: 2017] over [removed: 2015] [added: 2016] | | | | | | [removed: 2015] [added: 2016] over [removed: 2014] [added: 2015] | | | | |

Following the acquisition of Ixia, we also provide testing, visibility, and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers, and network equipment manufacturers.

On April 18, 2017, we completed the acquisition of Ixia, which became our fourth reportable segment, the Ixia Solutions Group (“ISG”).

The group provides testing, visibility and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers and network equipment manufacturers.

Net revenue of $3,189 million for the year ended October 31, 2017 increased 9 percent when compared to 2016.

Excluding acquisitions, revenue grew year-over-year with growth in the Electronic Industrial Solutions Group, driven by semiconductor measurement and automotive and energy markets and growth in the Services Solutions Group.

The Communications Solution Group revenue was

flat as gains in the commercial communications market were offset by declines in the aerospace, defense and government market.

The decline in net income for the year ended October 31, 2017 is primarily driven by the unfavorable impact from amortization of acquisition-related balances.

Impact of Northern California Wildfires

During the week of October 8, 2017, wildfires in northern California adversely impacted the Keysight corporate headquarters site in Santa Rosa, CA.

Our headquarters was under mandatory evacuation for more than three weeks, and while direct damage to our core facilities was limited, our buildings did experience some smoke and other fire-related impacts.

Cleaning and additional restoration efforts are ongoing in both production and non-production areas of the site.

To ensure business continuity, the company has leased temporary office space that will support Santa Rosa employees who are not immediately re-occupying the site.

Keysight is insured for the damage caused by the fire, including business interruption insurance, and though we do not expect the fire to have a net impact on our business results, the disruption will impact the seasonality of revenue in the first half of fiscal 2018.

For the three and twelve months ended October 31, 2017, we recognized costs of $16 million, net of $2 million of estimated insurance recovery, including the write-off of damaged fixed assets, unabsorbed overhead costs, cleaning and other direct costs related to the impact of this event.

As we are still in the investigation phase, we have only recognized an insurance receivable for known losses for which we believe insurance reimbursement is probable in excess of our self-insured retention amount of $10 million.

In many cases, our insurance coverage exceeds the amount of these covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes.

We currently estimate that total losses and expenses related to the fire will range from $80 million to $110 million, primarily including cleaning and recovery costs, and believe that the expenses will be recoverable under our insurance policy.

There may be a difference in timing of costs incurred and the related insurance reimbursement.

Outlook

Looking forward, we believe our increased investments in R&D combined with our completed acquisitions, which have expanded of our technology portfolio and the size of our addressable market, positions Keysight for growth.

We remain focused on delivering value through innovative solutions targeted at faster growing markets where customers are investing in next-generation digital and electronic technologies.

Internally, we are continuously working to improve operational efficiency within, and across, all functions.

Consistent with our strategy, we are seeing an increase in solution sales, which have a longer order-to-revenue conversion cycle; however, the majority of recorded orders will be delivered within six months.

Total orders for the year ended October 31, 2017 were $3,406 million, an increase of 15 percent when compared to 2016.

Orders grew across all operating segments with growth in all regions.

Net revenue of $3,189 million for the year ended October 31, 2017 increased 9 percent when compared to 2016.

Foreign currency movements had a negligible impact on the year-over-year comparison.

Revenue associated with acquisitions accounted for 7 percentage points of revenue growth for the year ended October 31, 2017 when compared to 2016.

Foreign currency movements

had a negligible impact on the year-over-year comparison.

Revenue from the Communications Solutions Group represented approximately 54 percent of total revenue in 2017 and was flat when compared to 2016.

The Communications Solutions Group revenue remained flat as strength in 5G technologies and data center technologies was offset by decline in the aerospace, defense and government market.

Revenue from the Electronic Industrial Solutions Group represented approximately 27 percent of total revenue in 2017 and grew 8 percent year-over-year when compared to the same period last year, driven by strong growth in semiconductor measurement and automotive and energy markets.

Revenue from the Ixia Solutions Group represented approximately 6 percent of total revenue in 2017.

The Services Solutions Group contribution to the total revenue growth was negligible in 2017, with growth in all regions.

Consistent with our strategy, we are seeing an increase in solution sales, which have a longer order-to-revenue conversion cycle; however, we expect that a majority of the unfilled backlog will be recognized as revenue within six months.

| | Year Ended October 31, | | | | | | | | | 2017 over 2016 % Change | | 2016 over 2015 % Change |

Gross margin declined 2 percentage points in 2017 compared to 2016, primarily driven by the unfavorable impacts from amortization of acquisition-related assets, fire-related costs at our corporate headquarters, an increase in people-related costs and an increase in warranty expense due to a lower compare as a result of a one-time reduction in the standard warranty accrual during the three months ended July 31, 2016.

Research and development expense increased 17 percent in 2017 compared to 2016 primarily driven by the addition of Ixia to the cost structure, an increase in people-related costs, acquisition-related compensation costs and our continued investment in research and development programs.

Basis of Presentation and Separation from Agilent

Our fiscal year end is October 31.

Unless otherwise stated, all years and dates refer to our fiscal year.

Each Agilent shareholder of record as of the close of business on October 22, 2014, received one share of Keysight common stock for every two shares of Agilent common stock held on the record date.

Keysight was incorporated in Delaware on December 6, 2013 and is comprised of Agilent's former electronic measurement business.

Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission on October 6, 2014.

Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

Agilent transferred substantially all of the assets and liabilities and operations of the electronic measurement business to Keysight in August 2014 ("the Capitalization").

Combined financial statements prior to the Capitalization were prepared on a stand-alone basis derived from Agilent’s consolidated financial statements and accounting records, including expenses that were allocated to us using estimates that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by us.

government end market.

Net revenue of $2,856 million in 2015 decreased 3 percent when compared to 2014.

respectively.

Looking forward, we believe the long-term growth rate of our markets is 2 to 3 percent, although near-term macroeconomic indicators remain mixed.

Our focus is on delivering value through innovative electronic design and test solutions as well as continuously improving our operational efficiency.

We accelerated our efforts in both wireless communications and software by acquiring Anite in August 2015.

This acquisition expanded our solutions offering in wireless communications design and test, specifically into the software layer for design and validation and provided an adjacent market opportunity in the Network Test business.

Total orders decreased 4 percent in 2015 compared to 2014, with declines in the Communication Solutions Group and the Electronic Industrial Solutions Group, partially offset by growth in the Services Solutions Group.

For 2015, the Services Solutions Group had no impact on the overall decline.

For the Communications Solutions Group, our backlog was approximately $459 million at October 31, 2016 as compared to approximately $442 million at October 31, 2015.

For the Electronic Industrial Solutions Group, our backlog was approximately $218 million at October 31, 2016 as compared to approximately $211 million at October 31, 2015.

Within our Services Solutions Group, our backlog was approximately $130 million at October 31, 2016 as compared to approximately $126 million at October 31, 2015.

We expect that a majority of the backlog will be recognized as revenue within six months.

Gross margin remained flat in 2015 compared to 2014 primarily due to lower depreciation, warranty and inventory charges, offset by the unfavorable impact of lower revenue volume.

Research and development expense increased 7 percent in 2015 compared to 2014.

The increased expenditure was due to our continued investment in research and development programs and increased costs due to the acquisitions, partially offset by the favorable impact of currency movements.

Selling, general and administrative expenses were flat in 2015 when compared to 2014, primarily driven by lower separation costs and the favorable impact of currency movements, offset by increases in share-based compensation, restructuring programs and increased costs due to acquisitions, primarily Anite.

The increase in other operating income for 2016 was largely driven by a gain on the sale of land.

Operating margins declined 1 percentage point in 2015 compared to 2014 on lower revenue volume and increases in research and development expenses, restructuring programs, acquisition and integration related expenses, offset by decline in separation costs and the favorable impact of foreign currency.

For 2014, the effective tax rate was 18 percent.

The 18 percent effective tax is lower than the U.S. statutory rate primarily due to a higher percentage of earnings in non-U.S. jurisdictions taxed at lower statutory tax rates in particular Singapore, where we benefited from tax incentives for the first three quarters of 2014, which resulted in $40 million lower income tax expense.

The 2014 rate was also favorably impacted by a $55 million benefit from a prior year reserve release, which was offset by $62 million of tax expense as a result of the repatriation of foreign earnings.

For certain entities acquired during 2015, the tax years also remain open back to the year 2006.

For fiscal 2014 and prior, we have calculated our taxes on a separate return basis.

However, the amounts recorded for fiscal 2014 and prior are not necessarily representative of the amounts that would have been reflected in the financial statements had we been an entity that operated independently of Agilent.

Consequently, our results after our separation from Agilent may be materially different than those periods prior to the Separation.

In 2015, the decline in commercial communications revenue was driven by softness across all regions and reflected the difficult compares to 2014, strengths in 4G base station and infrastructure manufacturing in China, coupled with continued weakness in smartphone/device manufacturing.

Gross margin in 2015 increased 3 percentage points when compared to 2014 primarily due to lower depreciation, warranty and inventory charges.

In 2015, research and development expense increased 5 percent primarily due to increased investments in research and development programs and increased costs due to acquisitions.

Selling, general and administrative expenses in 2015 decreased 1 percent when compared to 2014, primarily due to lower field selling expenses.

acquisitions accounted for approximately 1 percentage point in 2016.

For further discussion of derivative financial instruments, refer to Note [removed: 14,] [added: 13,] "Derivatives."

Approximately 71 percent of our revenues in [removed: 2016,] [added: 2017 and 2016 and] 75 percent of our revenues in 2015 [removed: and 74 percent of our revenues in 2014] were generated in U.S. dollars.

As of October 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] the analysis indicated that these hypothetical market movements would not have a material effect on our [removed: combined and] consolidated financial position, results of operations or cash flows.

As of October 31, [removed: 2016,] [added: 2017,] we had [removed: $1,100] [added: $2,060] million in principal amount of [removed: fixed-rate] senior [removed: notes] [added: debt] outstanding.

The carrying amount of the [added: fixed-rate] senior notes was [removed: $1,100] [added: $1,799] million, and the related fair value based on quoted prices was [removed: $1,130] [added: $1,890] million.

As of October 31, [removed: 2016,] [added: 2017,] a hypothetical 10 percent increase in interest rates would have decreased the fair value of the company’s fixed-rate long-term debt by approximately [removed: $20] [added: $36] million.

We provide electronic design and test [removed: instruments and] [added: instrumentation] systems and related software, software design tools, and [removed: related] services that are used in the design, development, manufacture, installation, [removed: deployment] [added: deployment, validation, optimization] and [added: secure] operation of electronics [removed: equipment.][added: systems.]

[removed: Keysight] [added: We] funded the acquisition using existing cash.

We generated [added: $3.2 billion of net revenue in 2017 and] $2.9 billion of net revenue in fiscal year [removed: 2016, 2015] [added: 2016] and [removed: 2014.][added: 2015.]

Of our total net revenue of [removed: $2.9] [added: $3.2] billion for the fiscal year ended October 31, [removed: 2016,] [added: 2017,] we generated [removed: 35] [added: 33] percent in the United States and [removed: 65] [added: 67] percent outside the United States.

As of October 31, [removed: 2016,] [added: 2017,] we had approximately [removed: 10,300] [added: 12,600] employees worldwide.

Our primary research and development [removed: and manufacturing] sites are in [removed: California] [added: California, Colorado, Georgia] and [removed: Colorado] [added: Texas] in the United States and outside of the United States in [removed: Belgium,] China, Finland, Germany, U.K., India, Japan, Malaysia, [removed: Singapore, Spain] [added: Romania, Singapore] and [removed: Switzerland.][added: Spain.]

Net revenue, income from operations and assets by business segment as of and for the fiscal years ended October 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] are shown in Note [removed: 21,] [added: 20,] "Segment Information," to our [removed: combined and] consolidated financial statements, which we incorporate by reference herein.

We had [removed: approximately 15,500] [added: more than 16,000] direct customers for our products and services in fiscal year [removed: 2016] [added: 2017] and [removed: approximately 30,000] [added: greater than 32,000] customers including indirect channels.

[added: Our company’s goal is to increase the productivity of our customers by speeding their product "time-to-market.”] Market and customer opportunities are driven by evolving technology standards, as well as the need for faster data rates and new form factors, from feature-rich solutions to modular solutions to handheld instruments.

| • | New wireless communication measurement solutions. We are investing in the development of new wireless communications test solutions to satisfy the commercial communications end market [removed: which] [added: that] is being driven by growth in mobile data and evolving wireless standards, particularly 5G. The acquisition of Anite in the fourth quarter of fiscal 2015 strengthened our wireless software design and test [removed: portfolio] [added: portfolio,] and its Network Test business expanded our served addressable market. Our early 5G solutions have also been gaining tangible traction. With our technical breadth and expertise and strategic engagement with [added: market-leading] customers and partners around the world, we have leading-edge solutions for 5G applications available when needed, even as development schedules accelerate. |

| • | New services solutions. Our services business represents a meaningful growth opportunity as we invest in expanding our services solutions portfolio. Our focus on growing services through multi-vendor [removed: calibration] [added: managed services] and asset management builds upon a strong foundation of [added: global] repair and calibration [removed: services.] [added: capabilities. In addition, our used equipment remarking business provides an excellent foundation to grow our technology refresh programs.] We are also expanding our [removed: service] [added: services] solutions into new [removed: areas] [added: areas,] such as [removed: technology refresh] [added: tiered product] and [removed: professional services.] [added: solution technical support.] |

[added: | • |] Technology Leadership as a Competitive [removed: Differentiator:] [added: Differentiator.] Proprietary software and hardware technologies unavailable on the commercial market and developed by our [removed: thirteen] [added: fourteen] R&D centers around the world enable many Keysight products to deliver the best design and measurement solution capability available for our customers’ engineering requirements. [added: Built on an intellectual property foundation developed over several decades, Keysight’s EDA computer aided design software for radio and microwave frequency designs is the premiere tool used by over two-thirds of the world’s engineers doing |]

Some of Keysight’s hardware technologies are designed and manufactured in our own in-house integrated circuit fabrication facilities, which were purpose-built and optimized to deliver unmatched [added: performance and] capabilities across the broad portfolio of Keysight instruments.

Once developed, these technologies can be deployed into multiple instrument form [removed: factors] [added: factors,] which [removed: include the Feature Rich Box or Bench Top] [added: includes benchtop] instruments, modular instruments and handheld portable instruments.

The result is that Keysight is recognized as being [removed: the] [added: a] product leader in [removed: four] [added: five] core engineering instrumentation categories; RF and Microwave Design Simulation software, Network [added: Test, Network] Analyzers, Signal Analyzers, and Signal Sources.

[added: | • | Broad Portfolio of Solutions to Address Customer Needs. Keysight has the broadest portfolio of electronic design and test solutions in the industry. Our hardware product portfolio spans many technologies, price points and form factors. We address time and frequency domain applications with RF, microwave, high-speed digital and general instrumentation.] In addition, we have a broad portfolio of software products including EDA software for RF and high-speed digital design, hundreds of measurement application solutions to help customers make specific measurements quickly and consistently, and software tools for programming. [added: |]

[removed: Industry Leading] [added: | • | Industry-Leading] Commitment to Product Quality and [removed: Reliability: We believe we have] [added: Reliability. Keysight has] a reputation in the industry for [removed: high quality] [added: high-quality] and [removed: high reliability] [added: high-reliability] electronic measurement instrumentation and software. [added: Ensuring quality and reliability is an integral part of our new product development processes. |]

[added: | • |] Large Installed [removed: Base:] [added: Base.] We have a large installed base of equipment because of the breadth of our product portfolio and our long history of producing high-performance and high-quality products. [added: This installed base enables a strong and growing Services Solutions Group that provides a wide range of calibration and repair services, on both a per incident and contract basis, and provides a significant source of loyal customers for future sales. |]

[added: | • |] Centralized Order [removed: Fulfillment:] [added: Fulfillment.] Our order fulfillment organization allows us to leverage the scale and scope of our business to provide high-quality, market-leading instrument solutions to our customers while generating competitive gross margins. [added: Keysight has a central order fulfillment organization that supplies solutions to customers across geographies. Our Penang, Malaysia site is our largest manufacturing facility, with a proven track record of operational excellence, technology capability and quality. We have an established network of suppliers and subcontractors, especially in Asia, that complements our in-house capabilities. |]

Our Penang, Malaysia site is our largest [added: test and measurement] manufacturing facility, with [removed: a] proven [removed: track record of] operational [removed: excellence, technology capability] [added: excellence through scale, scope] and [removed: quality.][added: expertise.]

[added: | • |] Business [removed: Model:] [added: Model.] Our operating model incorporates a substantial amount of cost structure flexibility with the intent to be materially profitable across the business cycle. [added: Our variable compensation programs, sales channel strategy and the outsourced components of our supply chain have been implemented to improve the flexibility of our cost structure. |]

[removed: As a result of this] [added: In fiscal 2016, we completed an] organizational [removed: realignment,] [added: change to align our organization with the industries] we [removed: have] [added: serve which resulted in] three reportable operating segments, Communications Solutions Group (“CSG”), Electronic Industrial Solutions Group (“EISG”), and Services Solutions Group (“SSG”).

Prior period amounts were revised [added: in 2016] to conform to the [removed: current] presentation.

This business generated revenue of [removed: $1.8] [added: $1.7] billion in fiscal [removed: 2016, $1.7] [added: 2017, $1.8] billion in fiscal [removed: 2015] [added: 2016] and [removed: $1.8] [added: $1.7] billion in fiscal [removed: 2014.][added: 2015.]

Our Communications Solutions Group [removed: serve] [added: serves] the following two markets:

We market our electronic design and test solutions to manufacturers and research [removed: facilities] [added: laboratories] within the aerospace and defense industries.

RF and microwave test instruments include signal analyzers, signal generators, network analyzers, [removed: one box] [added: one-box] testers and power meters.

Communications Solutions Group [removed: Sales, Marketing] [added: Sales] and Support

Some of our direct sales force concentrates on more complex [removed: products] [added: products,] such as our high‑performance instruments, where customers require strategic consultation.

[removed: Our direct sales force consists] of field and application engineers who have in‑depth knowledge of the customers’ business and technology needs.

These partners, including resellers, manufacturer’s representatives and distributors, serve customers across both [removed: of our segments] [added: the commercial communications] and [added: the aerospace, defense and government end markets and] are expected to provide the same level of service and support as our direct sales force.

Outside of the United States we have manufacturing centralized in [removed: Malaysia] [added: Malaysia,] with other manufacturing facilities in China, Germany and Japan.

In the commercial communications market, our primary competitors are [removed: Anritsu Corporation, Cobham plc, National Instruments Corporation,] Rohde & Schwarz GmbH & Co. KG, Tektronix, Inc. (a subsidiary of Fortive Corporation), [added: Anritsu Corporation, Cobham plc,] LeCroy Corporation (a subsidiary of Teledyne [removed: Technologies)] [added: Technologies), National Instruments Corporation] and Teradyne, Inc. In the aerospace, defense and government [removed: market] [added: market,] our primary competitors are [removed: Cobham plc,] Rohde & Schwarz [removed: GmbH] [added: GmbH,] & Co. KG, [added: Cobham plc,] LeCroy Corporation and Tektronix, Inc.

Our electronic design and test solutions offer a wide range of products and related software, and these products compete primarily on the basis of product quality, differentiated capability, [removed: leading edge] [added: leading-edge] technology and [removed: long term] [added: long-term] value to our customers.

This business generated revenue of [removed: $776] [added: $836] million in fiscal [removed: 2016, $758] [added: 2017, $776] million in fiscal [removed: 2015] [added: 2016] and [removed: $766] [added: $758] million in fiscal [removed: 2014.][added: 2015.]

General purpose test and measurement products include hand-held (portable), [removed: bench] [added: benchtop] instrument and modular forms.

Capability includes Digital Multi-Meters, Function Generators, Waveform Synthesizers, Counters, Data Acquisition (“DAQ”), Audio Analyzers, LCR Meters, [removed: Thermal] [added: thermal] imaging, low-cost USB modular, precision SMU [removed: (Source] [added: (“Source] Measurement [removed: Units),] [added: Units”),] ultra-high precision device current analyzers, test executive software platforms and a wide variety of power supplies ranging from bench to highly scalable AC/DC modular supplies and electronically programmable loads.

[added: This enables] industry and government agencies to determine fundamental electrical parameters and ensure customers can calibrate and ensure traceability measurement metrology.

Electronic Industrial Solutions Group [removed: Sales, Marketing] [added: Sales] and Support

In the electronic industrial test market, our primary competitors are [removed: Anritsu Corporation, National Instruments Corporation,] Rohde & Schwarz GmbH & Co. KG, [added: Anritsu Corporation,] Keithley/Tektronix/Fluke, Inc. (subsidiaries of Fortive Corporation), LeCroy Corporation (a subsidiary of Teledyne Technologies), [added: National Instruments Corporation,] Teradyne, Inc. and Advantest.

On April 18, 2017, pursuant to the terms of an Agreement and Plan of Merger dated January 30, 2017, between Keysight and Ixia (the "Merger Agreement"), we acquired all of the outstanding common stock of Ixia for $1,622 million, net of $72 million of cash acquired, pursuant to an exchange offer for $19.65 per share (the "Merger Consideration").

Pursuant to the Merger Agreement, any outstanding and unexercised Ixia stock options with an exercise price below the Merger Consideration and any outstanding Ixia restricted stock awards were cancelled and converted into the right to receive a cash payment equal to the merger consideration of $19.65 per share (minus the exercise price for the Ixia stock options).

The vested portion of the awards associated with prior service of Ixia employees represented approximately $47 million of the total consideration.

We funded the acquisition with a combination of cash and proceeds from debt and equity financings.

On August 31, 2017, we acquired all of the outstanding common stock of ScienLab for $60 million, net of $2 million of cash acquired.

ScienLab is a Germany-based company that provides test solutions to automotive original equipment manufacturers and Tier 1 suppliers in the automotive and energy markets.

This acquisition complements our portfolio, allowing end-to-end solutions for hybrid electric vehicles, electric vehicles, and battery test solutions that address e-mobility market dynamics.

Additionally, we provide test, security and visibility solutions that validate, secure and optimize networks and applications from engineering concept to live deployment.

| • | New automotive design and measurement solutions. We are actively investing in the development of new automotive test solutions to address the rapidly emerging electric, hybrid electric, connected and autonomous vehicle segments. In support of this strategy we successfully completed the acquisition of ScienLab, an automotive electrical energy test provider, during fiscal 2017. |

| • | First to market network test solutions. The rapidly growing number of high-speed, connected devices requires service providers and data center operators to continuously update their networks to deliver higher levels of data transfer performance, improve customer quality of service and enhance network security. The acquisition of Ixia in the second quarter of FY17 established Keysight Technologies as a market leader in next generation network test and network visibility solutions. |

We help accelerate innovation to connect and secure the world.

design work in this field.

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| • | Sales Channel with Global Reach. We have a worldwide and comprehensive sales channel. We have experienced management teams and highly technical sales and application engineers in all parts of the world, including a strong local presence in emerging markets. Our sales channel strategy is segmented by customer size, customer location and product characteristics. We deploy a direct sales organization focused on selling higher performance products and industry solutions to global and geographic accounts. Approximately 77 percent of our business comes from customer interactions with our direct sales organization. To ensure broad geographic coverage and further drive growth, we maintain a network of over 700 channel partners to complement our direct sales force. |

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On April 18, 2017, we completed the acquisition of Ixia, which became our fourth reportable segment, the Ixia Solutions Group (“ISG”).

With the recent acquisition of ScienLab, EISG now has the solutions required to test the components in the electrified drive train.

Our direct sales force consists

These partners, including resellers, manufacturer’s representatives and distributors, serve customers across the automotive and energy, general electronics measurement and semiconductor measurement markets and are expected to provide the same level of service and support as our direct sales force.

Ixia Solutions Group

The Ixia Solutions Group helps customers validate the performance and security resilience of their networks and associated applications.

The group’s test, visibility, and security products help organizations and their customers strengthen their physical and virtual networks.

Enterprises, service providers, network equipment manufacturers, and governments worldwide rely on the group's solutions to validate new products before shipping and secure ongoing operation of their networks with better visibility and security.

The group’s product solutions consist of high-performance hardware platforms, software applications, and services, including warranty and maintenance offerings.

From the date of acquisition, this business generated revenue of $256 million in fiscal 2017.

Ixia Solutions Group Markets

We market our network test hardware platforms, software applications and services, and our network visibility products to network equipment manufacturers, service providers, enterprises and governments worldwide.

Our network test customers use our products to evaluate the performance of their equipment and networks during the design, manufacture, and pre-deployment stages, as well as after the equipment is deployed in a network.

Our network visibility products improve the way our customers manage their data centers, save valuable IT time and maximize return on IT investments.

Ixia Solutions Group Products and Services

Our product solutions consist of our hardware platforms, such as our chassis, interface cards and appliances, software application tools, and services, including our warranty and maintenance offerings and professional services.

Our highly scalable and flexible products enable our customers to configure solutions based on their specific networks and use cases.

On November 1, 2014, Keysight became an independent publicly-traded company through the distribution by Agilent Technologies Inc. ("Agilent") of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation").

Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date.

Approximately 167 million shares of Keysight common stock were distributed on November 1, 2014 to Agilent shareholders.

Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014.

Keysight's common stock began trading the "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

On August 13, 2015, we acquired all of the share capital of Anite plc ("Anite"), for a cash purchase price of $558 million, net of $43 million cash acquired.

Anite was a United Kingdom ("U.K.")-based global company with strong software expertise and a leading supplier of wireless test solutions.

This acquisition strengthened our wireless software design and test portfolio and its Network Test business expanded our served addressable market.

Coupled with Keysight's expertise in helping customers design and test hardware, we can now provide customers with more comprehensive wireless hardware and software solutions.

Anite’s Network Test business will also enable us to provide innovative solutions that help customers deliver an outstanding experience for mobile users in the network.

We help customers bring breakthrough electronic products to market faster and at a lower cost.

Built on an intellectual property foundation developed over a 30-year period, Keysight’s EDA computer aided design software for radio and microwave frequency designs is the premiere tool used by over two-thirds of the world’s engineers doing design work in this field.

Broad Portfolio of Solutions to Address Customer Needs: We believe we have the broadest portfolio of electronic design and test solutions in the industry.

Our hardware product portfolio spans many technologies, price points and form factors.

We address time and frequency domain applications with RF, microwave, high-speed digital and general instrumentation.

This reputation for quality is supported by a three-year instrument warranty.

Ensuring quality and reliability is an integral part of our new product development processes.

This installed base enables a strong and growing Services Solutions Group that provides a wide range of calibration and repair services, on both a per incident and contract basis, and provides a significant source of loyal customers for future sales.

Sales Channel with Global Reach: We have a worldwide and comprehensive sales channel.

We have experienced management teams and highly technical sales and application engineers in all parts of the world, including a strong local presence in emerging markets.

Our sales channel strategy is segmented by customer size, customer location and product characteristics.

We deploy a direct sales organization focused on selling higher performance products and industry solutions to global and geographic accounts.

Approximately 79 percent of our business comes from customer interactions with our direct sales organization.

To ensure broad geographic coverage and further drive growth, we maintain a network of over 600 channel partners to complement our direct sales force.

We have an established network of suppliers and subcontractors, especially in Asia, that complements our in-house capabilities.

Our variable compensation programs, sales channel strategy and the outsourced components of our supply chain have been implemented to improve the flexibility of our cost structure.

In fiscal year 2016, we completed an organizational change to align our organization with the industries we serve.

Our Penang, Malaysia site is our largest test and measurement manufacturing facility with proven operational excellence through scale, scope and expertise.

This enables

Our remanufactured equipment business faces competition from other electronic measurement instrument competitors with trade‑in programs and from numerous rental companies, equipment dealers, brokers and resellers.

On August 13, 2015, we acquired all of the share capital of Anite, a U.K.-based global company, under the scheme document dated July 6, 2015.

This acquisition strengthens our wireless software design and test portfolio and its Network Test business expands our served addressable market.

The consideration paid was $558 million, net of $43 million of cash acquired.

He served as Senior Vice President, Agilent, and President, Electronic Measurement Group from March 2009 to November 2011, as Agilent’s Vice President and General Manager of the Wireless Business Unit of the Electronics Measurement Group from February 2005 to February 2009, and as Agilent’s Vice President and General Manager of the Design Validation Division from May 2002 to February 2005.

Prior to joining Agilent, Mr. Nersesian served in management positions with LeCroy Corporation from 1996 to 2002.

From 1984 through 1996, Mr. Nersesian served in various roles with HP.

Prior to that, Mr. Dougherty held a broad variety of positions in finance for Agilent and HP.

From March 2014 to November 2015, Mr. Gasparian served as Senior Vice President of Customer Support and Services and Worldwide Marketing for Keysight and, prior to the Separation, served as Vice President, Agilent since 2000, although he did not work at Agilent from 2009 to 2010.

From 2011 to 2012, Mr. Gasparian served as Agilent’s Vice President of Marketing.

From 2007 to 2008, Mr. Gasparian served as the General Manager of the Material Science Solutions Unit of Agilent.

There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, [removed: combined and] consolidated financial condition, results of operations or cash flows.

| | | For the fiscal year ended October 31, [removed: 2016] [added: 2017] |

See the definitions of "large accelerated filer," "accelerated [removed: filer" and] [added: filer,"] "smaller reporting [added: company," and "emerging growth] company" in Rule 12b-2 of the Exchange Act.

| [removed: Large accelerated filer x | | Accelerated filer o | |] Non-accelerated filer o | | Smaller reporting company o |

The aggregate market value of common equity held by non-affiliates as of April 30, [removed: 2016] [added: 2017] was approximately [removed: $3] [added: $5] billion, based upon the closing price of the Registrant's common stock as quoted on New York Stock Exchange on such date.

As of December 15, [removed: 2016,] [added: 2017,] there were [removed: 171,445,423] [added: 187,284,245] shares of our common stock outstanding.

| Portions of the Proxy Statement for the Annual Meeting of Stockholders (the "Proxy Statement") to be held on March [removed: 16, 2017] [added: 22, 2018] and to be filed pursuant to Regulation 14A within 120 days after registrant's fiscal year ended October 31, [removed: 2016] [added: 2017] are incorporated by reference into Part III of this Report. | | III |

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| [Item [removed: 9](#sD0D402B49BF4596EB869157F5056967B)] [added: 9](#sCD68AEA35ECF54F8863785207E9BAABC)] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sD0D402B49BF4596EB869157F5056967B)] [added: Disclosure](#sCD68AEA35ECF54F8863785207E9BAABC)] | [removed: [96](#sD0D402B49BF4596EB869157F5056967B)] [added: [104](#sCD68AEA35ECF54F8863785207E9BAABC)] |

| [Item [removed: 9A](#s238DB079627458A5B088312E789581BE)] [added: 9A](#s81D8CAADD6D05B558B0DC9C05A0DE527)] | [Controls and [removed: Procedures](#s238DB079627458A5B088312E789581BE)] [added: Procedures](#s81D8CAADD6D05B558B0DC9C05A0DE527)] | [removed: [96](#s238DB079627458A5B088312E789581BE)] [added: [104](#s81D8CAADD6D05B558B0DC9C05A0DE527)] |

| [Item [removed: 9B](#sA18A1862E97D5BAF97D1B67329371824)] [added: 9B](#s972CD64E85785F19854592ACA659FA3F)] | [Other [removed: Information](#sA18A1862E97D5BAF97D1B67329371824)] [added: Information](#s972CD64E85785F19854592ACA659FA3F)] | [removed: [96](#sA18A1862E97D5BAF97D1B67329371824)] [added: [104](#s972CD64E85785F19854592ACA659FA3F)] |

| [PART [removed: III](#s4B7E1568551E52BC8203B10BBCAAE65B)] [added: III](#sD4927CA3055C50CB9986D3AC8BE8D93C)] | | |

| [Item [removed: 10](#sD2CFA39842DD567C9F7E0FB3E101E9AA)] [added: 10](#s691595CFA95E5D32ACED96C818092286)] | [Directors, Executive Officers and Corporate [removed: Governance](#sD2CFA39842DD567C9F7E0FB3E101E9AA)] [added: Governance](#s691595CFA95E5D32ACED96C818092286)] | [removed: [96](#sD2CFA39842DD567C9F7E0FB3E101E9AA)] [added: [104](#s691595CFA95E5D32ACED96C818092286)] |

| [Item [removed: 11](#sF437BC39B4E05BF78799D519317F71A1)] [added: 11](#s69D2A9AE2B435121A62A7144796B394A)] | [Executive [removed: Compensation](#sF437BC39B4E05BF78799D519317F71A1)] [added: Compensation](#s69D2A9AE2B435121A62A7144796B394A)] | [removed: [97](#sF437BC39B4E05BF78799D519317F71A1)] [added: [105](#s69D2A9AE2B435121A62A7144796B394A)] |

| [Item [removed: 12](#sEDD5DEADE96551B9A98969D5EC6CC4ED)] [added: 12](#sCE92F4861CB3570E8ECFF335742372A5)] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sEDD5DEADE96551B9A98969D5EC6CC4ED)] [added: Matters](#sCE92F4861CB3570E8ECFF335742372A5)] | [removed: [97](#sEDD5DEADE96551B9A98969D5EC6CC4ED)] [added: [105](#sCE92F4861CB3570E8ECFF335742372A5)] |

| [Item [removed: 13](#sB65611FD66A65C75BF9BA1E4C977D125)] [added: 13](#sAC9517DADCF45683ADBF3D8C7B394421)] | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sB65611FD66A65C75BF9BA1E4C977D125)] [added: Independence](#sAC9517DADCF45683ADBF3D8C7B394421)] | [removed: [98](#sB65611FD66A65C75BF9BA1E4C977D125)] [added: [106](#sAC9517DADCF45683ADBF3D8C7B394421)] |

| [Item [removed: 14](#sFE335397A2A15B3C89E1DE7606A1AE5A)] [added: 14](#s5AB9B9135F8C5FE28F7D740E4896797F)] | [Principal Accounting Fees and [removed: Services](#sFE335397A2A15B3C89E1DE7606A1AE5A)] [added: Services](#s5AB9B9135F8C5FE28F7D740E4896797F)] | [removed: [98](#sFE335397A2A15B3C89E1DE7606A1AE5A)] [added: [106](#s5AB9B9135F8C5FE28F7D740E4896797F)] |

| [Item [removed: 15](#s9C9B729AC1005E6B833D1C737B4C7D3D)] [added: 15](#sD6D4C6307FA65B99867BE5ED2DD43664)] | [Exhibits, Financial Statement [removed: Schedules](#s9C9B729AC1005E6B833D1C737B4C7D3D)] [added: Schedules](#sD6D4C6307FA65B99867BE5ED2DD43664)] | [removed: [98](#s9C9B729AC1005E6B833D1C737B4C7D3D)] [added: [106](#sD6D4C6307FA65B99867BE5ED2DD43664)] |

This report contains forward-looking statements including, without limitation, statements regarding trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, our future effective tax rate and tax valuation allowance, earnings from our foreign subsidiaries, remediation activities, new product and service introductions, the ability of our products to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of local government regulations on our ability to pay vendors or conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our [added: completed] acquisitions and other transactions, our transition to lower-cost regions, [removed: and] the existence of economic instability, [added: and our and the combined group's estimated or anticipated future results of operations,] 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 [added: but not limited to] those [added: risks and uncertainties] discussed in Item 1A and elsewhere in this Form 10-K.

10-K 1 keys-10312017x10k.htm 10-K

| Large accelerated filer x | | Accelerated filer o |

| Emerging growth company o | | (do not check if a smaller reporting company) |

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

| | | |

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

| | | |

| [PART I](#sB9263097529F5758B0CD5965EDB01DA6) | | |

| [Item 1](#sB9263097529F5758B0CD5965EDB01DA6) | [Business](#s8F118FAE3CA25A9D9E3D92E888C78FD5) | [3](#s8F118FAE3CA25A9D9E3D92E888C78FD5) |

| [PART II](#sFC91F99788245DD882E686C621E13433) | | |

| [PART IV](#s539365C8F88E5D6390C08F48B9E33AEC) | | |

10-K 1 keys-10312016x10k.htm 10-K

| | | | | | | |

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

| [PART I](#s46C69CCE1CC550848878BA21B7D20433) | | |

| [Item 1](#s46C69CCE1CC550848878BA21B7D20433) | [Business](#sC0FE3C397D1B58CE99B9A61C575D8D19) | [3](#sC0FE3C397D1B58CE99B9A61C575D8D19) |

| [PART II](#s5B63B46B93AC52B6B78C8E0005A43977) | | |

| [PART IV](#s635432D8C0F15460B9AE3D6653D3E2F2) | | |

We own or lease a total of approximately [removed: 139] [added: 160] operating facilities located throughout the world that handle manufacturing production, [added: research and development, administration,] assembly, sales, quality, assurance testing, distribution and packaging of our products.

As of October 31, [removed: 2016,] [added: 2017,] we own or lease a total of approximately [removed: 5.9] [added: 6.3] million square feet of space worldwide, of which we own approximately 4.2 million square feet and lease [removed: 1.7] [added: 2.1] million square feet.

Our sales and support facilities occupy a total of approximately [removed: 0.5] [added: 0.6] million square feet.

Our manufacturing plants, R&D facilities and warehouse and administrative facilities occupy approximately [removed: 5.4] [added: 5.7] million square feet.

These facilities are primarily located in the following countries: China, Germany, India, Japan, Malaysia, Singapore, Spain, Taiwan, United Kingdom and the United States.

These facilities are located in the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, U.K., Hong Kong, India, Israel, Italy, Japan, Malaysia, Mexico, Netherlands, Russia, Singapore, Spain, South Korea, Sweden, Switzerland, Taiwan, the United Arab Emirates, the United States and Vietnam.

Our common stock is listed on the New York Stock Exchange ("NYSE") with the ticker symbol "KEYS.’’ The following table sets forth the high and low sale prices per quarter for the fiscal [removed: year, 2016] [added: years 2017] and [removed: 2015] [added: 2016] as reported in the consolidated transaction reporting system for the New York Stock Exchange:

| Fiscal [removed: 2015] [added: 2017] | High | | | Low | | | Dividends |

| First Quarter (ended January 31, [removed: 2015)] [added: 2017)] | $ | [removed: 36.33] [added: 38.28] | | $ | [removed: 28.56] [added: 31.81] | | — |

| Second Quarter (ended April 30, [removed: 2015)] [added: 2017)] | $ | [removed: 38.99] [added: 39.36] | | $ | [removed: 33.37] [added: 35.05] | | — |

| Third Quarter (ended July 31, [removed: 2015)] [added: 2017)] | $ | [removed: 36.31] [added: 42.98] | | $ | [removed: 29.51] [added: 35.62] | | — |

| Fourth Quarter (ended October 31, [removed: 2015)] [added: 2017)] | $ | [removed: 34.13] [added: 44.79] | | $ | [removed: 29.28] [added: 39.21] | | — |

There were [removed: 24,427] [added: 23,622] shareholders of record of Keysight common stock as of December 15, [removed: 2016.][added: 2017.]

The information required by this item with respect to equity compensation plans [removed: is] [added: will be] included under the caption Equity Compensation Plans in our proxy statement for the [removed: 2017] [added: 2018] annual meeting of stockholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, and is incorporated herein by reference.

The table below summarizes information about the company’s purchases, based on trade date; of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended October 31, [removed: 2016.][added: 2017.]

The total number of shares of common stock purchased by the [removed: Company] [added: company] during the fiscal year ended October 31, [removed: 2016] [added: 2017] is 2,288,516 shares.

| August 1, [removed: 2016] [added: 2017] through August 31, [removed: 2016] [added: 2017] | | — | | | N/A | | — | | | $ | 138,515,618 | |

| September 1, [removed: 2016] [added: 2017] through September 30, [removed: 2016] [added: 2017] | | — | | | N/A | | — | | | $ | 138,515,618 | |

| October 1, [removed: 2016] [added: 2017] through October 31, [removed: 2016] [added: 2017] | | — | | | N/A | | — | | | $ | 138,515,618 | |

The following table presents the selected combined and consolidated financial data, which should be read in conjunction with our [removed: combined and] consolidated financial statements and related notes and Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K.

We derived the selected financial data as of October 31, [removed: 2016] [added: 2017] and for each of the fiscal years in the three-year period ended October 31, [removed: 2016] [added: 2017] from our audited [removed: combined and] consolidated financial statements included elsewhere in this Form 10-K.

We derived the selected financial data as of October 31, 2013 [removed: and for the fiscal year ended October 31, 2012] from audited combined financial statements that are not included in this Form 10-K.

Our historical combined and consolidated financial statements before November 1, [removed: 2015] [added: 2014] include certain expenses of Agilent that were allocated to us for certain functions, including general corporate expenses related to information technology, research and development, finance, legal, insurance, compliance and human resources activities.

These costs may not be representative of the [removed: future] costs we have incurred or will incur as an independent public company.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Net revenue | $ | [removed: 2,918] [added: 3,189] | | | $ | [removed: 2,856] [added: 2,918] | | | $ | [removed: 2,933] [added: 2,856] | | | $ | [removed: 2,888] [added: 2,933] | | | $ | [removed: 3,315] [added: 2,888] | |

| Income before taxes | $ | [removed: 366] [added: 179] | | | $ | [removed: 388] [added: 366] | | | $ | [removed: 475] [added: 388] | | | $ | [removed: 501] [added: 475] | | | $ | [removed: 746] [added: 501] | |

| Net income | $ | [removed: 335] [added: 102] | | | $ | [removed: 513] [added: 335] | | | $ | [removed: 392] [added: 513] | | | $ | [removed: 457] [added: 392] | | | $ | [removed: 841] [added: 457] | |

| Basic | $ | [removed: 1.97] [added: 0.57] | | | $ | [removed: 3.04] [added: 1.97] | | | $ | [removed: 2.35] [added: 3.04] | | | $ | [removed: 2.74] [added: 2.35] | | | $ | [removed: 5.04] [added: 2.74] | |

| Diluted | $ | [removed: 1.95] [added: 0.56] | | | $ | [removed: 3.00] [added: 1.95] | | | $ | [removed: 2.35] [added: 3.00] | | | $ | [removed: 2.74] [added: 2.35] | | | $ | [removed: 5.04] [added: 2.74] | |

| Basic | [removed: 170] [added: 180] | | | | [removed: 169] [added: 170] | | | | [removed: 167] [added: 169] | | | | 167 | | | | 167 | | |

| Diluted | [removed: 172] [added: 182] | | | | [removed: 171] [added: 172] | | | | [removed: 167] [added: 171] | | | | 167 | | | | 167 | | |

Refer to Note [removed: 7] [added: 6] of the [removed: combined and] consolidated financial statements for information regarding earnings per common share.

| Cash and cash equivalents and short-term investments | $ | [removed: 783] [added: 818] | | | $ | [removed: 483] [added: 783] | | | $ | [removed: 810] [added: 483] | | | $ | [removed: —] [added: 810] | | | $ | — | |

| Working capital | $ | [removed: 1,210] [added: 1,358] | | | $ | [removed: 893] [added: 1,210] | | | $ | [removed: 1,081] [added: 893] | | | $ | [removed: 412] [added: 1,081] | | | $ | [removed: 398] [added: 412] | |

| Stockholders'/Invested equity | $ | [removed: 1,513] [added: 2,310] | | | $ | [removed: 1,302] [added: 1,513] | | | $ | [removed: 769] [added: 1,302] | | | $ | [removed: 1,245] [added: 769] | | | $ | [removed: 1,305] [added: 1,245] | |

| | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | | | 2013 | | |

| Total assets | $ | 5,933 | | | $ | 3,796 | | | $ | 3,501 | | | $ | 3,041 | | | $ | 2,028 | |

| Long-term debt | $ | 2,038 | | | $ | 1,093 | | | $ | 1,092 | | | $ | 1,090 | | | $ | — | |

| Total assets | $ | 3,803 | | | $ | 3,508 | | | $ | 3,050 | | | $ | 2,028 | | | $ | 2,133 | |

| Long-term debt | $ | 1,100 | | | $ | 1,099 | | | $ | 1,099 | | | $ | — | | | $ | — | |

| Index to [removed: Combined and] Consolidated Financial Statements | | Page |

| [removed: Combined and] Consolidated Financial Statements: | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#sB93FCC18F72854C8A996BCD9CDF2D254)] [added: Firm](#s6853EFF32FD6506C8E48006CD29AC676)] | | [removed: [49](#sB93FCC18F72854C8A996BCD9CDF2D254)] [added: [53](#s6853EFF32FD6506C8E48006CD29AC676)] |

| [removed: [Combined and Consolidated] [added: [Consolidated] Statement of Operations for each of the three years in the period ended October 31, [removed: 2016](#s29D5E82A73705AC1B484D8C7FC645177)] [added: 2017](#s102593B40DD756C9AACECF6DFF8F02C3)] | | [removed: [50](#s29D5E82A73705AC1B484D8C7FC645177)] [added: [54](#s102593B40DD756C9AACECF6DFF8F02C3)] |

| [removed: [Combined and Consolidated] [added: [Consolidated] Statement of Comprehensive Income for each of the three years in the period ended October 31, [removed: 2016](#s2A4EFD1ABCF85517B998B45B9577F1E8)] [added: 2017](#sCF990924966F5314805ACE24D91803F2)] | | [removed: [51](#s2A4EFD1ABCF85517B998B45B9577F1E8)] [added: [55](#sCF990924966F5314805ACE24D91803F2)] |

| [Consolidated Balance Sheet at October 31, [removed: 2016] [added: 2017] and [removed: 2015](#sE765355DDFC15D6EBCC8FC0C22A9F09E)] [added: 2016](#s697CEB83B02E566EB73E0AA4E130CFA1)] | | [removed: [52](#sE765355DDFC15D6EBCC8FC0C22A9F09E)] [added: [56](#s697CEB83B02E566EB73E0AA4E130CFA1)] |

| [removed: [Combined and Consolidated] [added: [Consolidated] Statement of Cash Flows for each of the three years in the period ended October 31, [removed: 2016](#s8A02912673B251C4AAF86D456DEBDE7D)] [added: 2017](#s2AAF6105B9FE5D299D3BA8A954A43A2B)] | | [removed: [53](#s8A02912673B251C4AAF86D456DEBDE7D)] [added: [57](#s2AAF6105B9FE5D299D3BA8A954A43A2B)] |

| [removed: [Combined and Consolidated] [added: [Consolidated] Statement of Equity for each of the three years in the period ended October 31, [removed: 2016](#sB77FC1D0794C56149D1A31707BF0AB1C)] [added: 2017](#s99EFDB0FA6CA5D9C85D97E255DEAA299)] | | [removed: [54](#sB77FC1D0794C56149D1A31707BF0AB1C)] [added: [58](#s99EFDB0FA6CA5D9C85D97E255DEAA299)] |

[removed: | [Notes to Combined and Consolidated Financial Statements](#sE996F3AE1D4E5D1588F12FD2EBADB98B) | | [55](#sE996F3AE1D4E5D1588F12FD2EBADB98B) |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

| [Quarterly Summary [removed: (unaudited)](#s7ECFF67852255E30B718B209C7FE0CB1)] [added: (unaudited)](#s921349EC851C5B96990EF300BA3D6FCD)] | | [removed: [95](#s7ECFF67852255E30B718B209C7FE0CB1)] [added: [103](#s921349EC851C5B96990EF300BA3D6FCD)] |

In our opinion, the accompanying consolidated balance sheets and the related [removed: combined and] consolidated statements of operations, of comprehensive income, of equity and of cash flows present fairly, in all material respects, the financial position of Keysight Technologies, Inc. and its subsidiaries at October 31, [removed: 2016] [added: 2017] and October 31, [removed: 2015,] [added: 2016,] and the results of their operations and their cash flows for each of the three years in the period ended October 31, [removed: 2016] [added: 2017] in conformity with accounting principles generally accepted in the United States of America.

In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related [removed: combined and] consolidated financial statements.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our [removed: audits (which were integrated audits in 2016 and 2015).][added: audits.]

As discussed in Note 2 to the [removed: combined and] consolidated financial statements, [added: in 2017] the Company changed the manner in which it [removed: classifies deferred tax assets and liabilities in 2016] [added: presents debt issuance costs on the consolidated balance sheet] due to the adoption of Accounting Standards Update [removed: 2015-17, Balance Sheet Classification] [added: (ASU) 2015-03, Simplifying the Presentation] of [removed: Deferred Taxes.][added: Debt Issuance Costs, as well as the manner in which it recognizes the income tax consequences of intra-entity transfers due to the adoption of ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory.]

[removed: COMBINED AND] CONSOLIDATED STATEMENT OF OPERATIONS

| [removed: |] Year [removed: Ended] [added: ended] October 31, [added: 2017:] | | | | | | | | | | | [added: | | | | | | | | |]

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

| Products | $ | [removed: 2,440] [added: 2,664] | | | $ | [removed: 2,408] [added: 2,440] | | | $ | [removed: 2,479] [added: 2,408] | |

| Services and other | [removed: 478] [added: 525] | | | | [removed: 448] [added: 478] | | | | [removed: 454] [added: 448] | | |

| Total net revenue | [removed: 2,918] [added: 3,189] | | | | [removed: 2,856] [added: 2,918] | | | | [removed: 2,933] [added: 2,856] | | |

| Cost of products | [removed: 1,042] [added: 1,206] | | | | [removed: 1,025] [added: 1,042] | | | | [removed: 1,083] [added: 1,025] | | |

| Cost of services and other | [removed: 252] [added: 281] | | | | [removed: 244] [added: 252] | | | | [removed: 230] [added: 244] | | |

| Total costs | [removed: 1,294] [added: 1,487] | | | | [removed: 1,269] [added: 1,294] | | | | [removed: 1,313] [added: 1,269] | | |

| Research and development | [removed: 425] [added: 498] | | | | [removed: 387] [added: 425] | | | | [removed: 361] [added: 387] | | |

| Selling, general and administrative | [removed: 818] [added: 1,049] | | | | [removed: 787] [added: 818] | | | | [removed: 790] [added: 787] | | |

| Other operating expense (income), net | [removed: (25] [added: (84] | | ) | | [removed: (18] [added: (25] | | ) | | [removed: —] [added: (18] | | [added: )] |

| Total costs and expenses | [removed: 2,512] [added: 2,950] | | | | [removed: 2,425] [added: 2,512] | | | | [removed: 2,464] [added: 2,425] | | |

| Income from operations | [removed: 406] [added: 239] | | | | [removed: 431] [added: 406] | | | | [removed: 469] [added: 431] | | |

| Interest income | [removed: 3] [added: 7] | | | | [removed: 1] [added: 3] | | | | [removed: —] [added: 1] | | |

| Interest expense | [removed: (47] [added: (80] | | ) | | [removed: (46] [added: (47] | | ) | | [removed: (3] [added: (46] | | ) |

| Other income (expense), net | [removed: 4] [added: 13] | | | | [removed: 2] [added: 4] | | | | [removed: 9] [added: 2] | | |

| Income before taxes | [removed: 366] [added: 179] | | | | [removed: 388] [added: 366] | | | | [removed: 475] [added: 388] | | |

| Provision (benefit) for income taxes | [removed: 31] [added: 77] | | | | [removed: (125] [added: 31] | | [removed: )] | | [removed: 83] [added: (125] | | [added: )] |

| Net income | $ | [removed: 335] [added: 102] | | | $ | [removed: 513] [added: 335] | | | $ | [removed: 392] [added: 513] | |

| Net income per [removed: share:(a)] [added: share:] | | | | | | | | | | | |

| Basic | $ | [removed: 1.97] [added: 0.57] | | | $ | [removed: 3.04] [added: 1.97] | | | $ | [removed: 2.35] [added: 3.04] | |

| Diluted | $ | [removed: 1.95] [added: 0.56] | | | $ | [removed: 3.00] [added: 1.95] | | | $ | [removed: 2.35] [added: 3.00] | |

| Weighted average shares used in computing net income per [removed: share:(a)] [added: share:] | | | | | | | | | | | |

| Basic | [removed: 170] [added: 180] | | | | [removed: 169] [added: 170] | | | | [removed: 167] [added: 169] | | |

As described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A, management has excluded Ixia and ScienLab from its assessment of internal control over financial reporting as of October 31, 2017, because they were acquired by the Company in purchase business combinations during 2017.

We have also excluded Ixia and ScienLab from our audit of internal control over financial reporting.

Ixia and ScienLab 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 6% and less than 1% of total assets, respectively and approximately 6% and less than 1% of total revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended October 31, 2017.

| | 2017 | | | | 2016 | | |

| Total assets | $ | 5,933 | | | $ | 3,796 | |

| Long-term debt | 2,038 | | | | 1,093 | | |

| Total liabilities | 3,623 | | | | 2,283 | | |

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

| Net income | $ | 102 | | | $ | 335 | | | $ | 513 | |

| Debt issuance expense | 9 | | | | — | | | | — | | |

| Asset impairment | 7 | | | | — | | | | — | | |

| Pension curtailment and settlement gains | (69 | | ) | | — | | | | — | | |

| Income taxes payable | 3 | | | | (9 | | ) | | 2 | | |

| Proceeds from the sale of investments | 45 | | | | 1 | | | | 1 | | |

| Issuance of common stock under public offerings | 444 | | | | — | | | | — | | |

| Proceeds from issuance of long-term debt | 1,069 | | | | — | | | | — | | |

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

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

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

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

| Adjustment due to adoption of ASU 2016-16 | — | | | — | | | | — | | | | — | | | — | | | | (10 | | ) | | — | | | | (10 | | ) |

| Issuance of common stock | 2,880 | | | — | | | | 41 | | | | — | | | — | | | | — | | | | — | | | | 41 | | |

| Public offering of common stock | 13,143 | | | — | | | | 444 | | | | — | | | — | | | | — | | | | — | | | | 444 | | |

| Tax benefits from share-based awards issued | — | | | — | | | | 3 | | | | — | | | — | | | | — | | | | — | | | | 3 | | |

| Balance as of October 31, 2017 | 188,310 | | | $ | 2 | | | $ | 1,786 | | | (2,289 | ) | | $ | (62 | ) | | $ | 1,041 | | | $ | (457 | ) | | $ | 2,310 | |

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

| | |

| --- | --- |

Following the acquisition of Ixia on April 18, 2017, the company also provides testing, visibility, and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers, and network equipment manufacturers.

Acquisitions.

On April 18, 2017 we acquired all of the outstanding common stock of Ixia for $1,622 million, net of $72 million of cash acquired.

On August 31, 2017 we acquired all of the outstanding common stock of ScienLab for $60 million, net of $2 million of cash acquired.

See Note 3, "Acquisitions," for further discussion of the company's acquisitions of Ixia and ScienLab.

Within our Ixia Solutions Group, when an arrangement contains software and non-software deliverables, we use a two-step process to allocate revenue to each element in the arrangement.

First, we allocate the total arrangement fee to the separate non-software and software deliverables as a group based on their relative selling prices.

Then, we allocate revenue within the software group utilizing the residual method with revenue allocated to the undelivered elements based on VSOE and the residual amount allocated to the delivered elements.

On April 18, 2017 we completed the acquisition of Ixia, which became our fourth reportable operating segment, the Ixia Solutions Group, and reporting unit.

3 months to 10 years.

In 2017, we assessed impairment by performing a qualitative test and recorded an impairment charge of $7 million related to the cancellation of an IPR&D project.

| | |

December 19, 2016

(a) On November 1, 2014, Agilent Technologies, Inc. distributed 167 million shares of Keysight common stock to existing holders of Agilent common stock.

Basic and diluted net income per share for the year ended October 31, 2014 is calculated using the shares distributed on November 1, 2014.

| | | | | | | | |

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

| Long-term deferred tax assets | 392 | | | | 295 | | |

| Total liabilities | 2,290 | | | | 2,206 | | |

| Other investing activities | 1 | | | | 1 | | | | (1 | | ) |

| Net transfers from Agilent | — | | | | — | | | | 217 | | |

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

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

| Balance as of October 31, 2013 | — | | | $ | — | | | $ | — | | | — | | | $ | — | | | $ | — | | | $ | 31 | | | $ | 1,214 | | | $ | 1,245 | |

| Pre-capitalization | — | | | — | | | | — | | | | — | | | — | | | | — | | | | — | | | | 291 | | | | 291 | | |

| Post-capitalization | — | | | — | | | | — | | | | — | | | — | | | | 101 | | | | — | | | | — | | | | 101 | | |

| Pre-capitalization | — | | | — | | | | — | | | | — | | | — | | | | — | | | | (8 | | ) | | — | | | | (8 | | ) |

| Post-capitalization | — | | | — | | | | — | | | | — | | | — | | | | — | | | | (96 | | ) | | — | | | | (96 | | ) |

| Net transfers to Agilent (pre-capitalization) | — | | | — | | | | — | | | | — | | | — | | | | — | | | | — | | | | (267 | | ) | | (267 | | ) |

| Transfers due to Capitalization | — | | | — | | | | — | | | | — | | | — | | | | — | | | | (263 | | ) | | 780 | | | | 517 | | |

| Return of capital to Agilent (post-capitalization) | — | | | — | | | | — | | | | — | | | — | | | | — | | | | — | | | | (900 | | ) | | (900 | | ) |

| Issuance of common stock and reclassification of parent company investment in connection with separation | 167,483 | | | 2 | | | | 1,002 | | | | — | | | — | | | | — | | | | — | | | | (1,004 | | ) | | — | | |

| Reduction in cash payable to Agilent | — | | | — | | | | 25 | | | | — | | | — | | | | — | | | | — | | | | — | | | | 25 | | |

1.

Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date, resulting in the distribution of approximately 167 million shares of Keysight common stock.

Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014.

Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

Agilent transferred substantially all of the assets and liabilities and operations of the electronic measurement business to Keysight in August 2014 ("the Capitalization").

Combined financial statements prior to the Capitalization were prepared on a stand-alone basis and were derived from Agilent’s consolidated financial statements and accounting records.

Expenses were allocated to us using estimates that we consider to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented.

For the first half of fiscal 2015, Agilent provided some services on a transitional basis for a fee, which were partially offset by other income from Keysight services provided to Agilent.

These services were received or provided under a transition services agreement.

The net costs associated with the transition services agreement were not materially different than the historical costs that were allocated to us related to these same services.

The combined and consolidated financial statements include the accounts of the company and our wholly- and majority-owned subsidiaries.

All significant transactions between us and other businesses of Agilent are included in these combined and consolidated financial statements.

All inter-company transactions prior to the Capitalization are considered to be effectively settled for cash in the combined and consolidated statement of cash flows at the time the transaction is recorded.

Prior to our separation from Agilent, our employees historically participated in Agilent’s various incentive award plans, including employee stock options, restricted stock units and the employee stock purchases made under Agilent’s Employee Stock Purchase Plan ("Agilent's ESPP”) and we participated in Agilent’s share-based compensation plans and recorded share-based compensation expense based on the equity awards granted to our employees.

We recorded compensation expense based on expenses for the awards to our employees as well as an allocation of Agilent’s corporate and shared services employee expenses.

In 2014, we accounted for share-based awards made to our employees and directors including employee stock option awards, restricted stock units, employee stock purchases made under Agilent's ESPP and performance share awards under Agilent Technologies, Inc. Long-Term Performance ("Agilent's LTP") Program using the estimated grant date fair value method of accounting.

that the company anticipates payment (or receipt) of cash within one year.

Prior to the Separation, we conducted our business in a single operating segment and reporting unit.

In 2016, we assessed impairment by performing a qualitative test and concluded that it was more-likely-than-not that all indefinite-lived assets were not impaired.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, [removed: 2016,] [added: 2017,] 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.

Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of October 31, [removed: 2016.][added: 2017.]

The effectiveness of our internal control over financial reporting as of October 31, [removed: 2016] [added: 2017] 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.

The SEC provides for 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 acquisition of Ixia on April 18, 2017 and ScienLab on August 31, 2017.

Management excluded Ixia and ScienLab from its assessment of the effectiveness of the company’s internal control over financial reporting as of October 31, 2017.

Ixia constituted approximately 6% of total assets and approximately 6% total revenues, while ScienLab constituted less than 1% of total assets and total revenues for the year ended October 31, 2017.

Information regarding our code of ethics (the company's Standards of Business Conduct) applicable to our principal executive officer, our principal financial officer, our controller and other senior financial officers appears in Item 1 of this report [removed: under “Investor Information.” We will post amendments to or waivers from a provision of the Standards of Business Conduct with respect to those persons on our website at www.investor.keysight.com.]

In order for a stockholder proposal to be considered for inclusion in Keysight’s proxy statement for the [removed: 2017] [added: 2018] annual meeting of stockholders, the written proposal must be received by Keysight no later than December [removed: 18, 2016] [added: 17, 2017] and should contain such information as is required under Keysight’s Bylaws.

under “Investor Information.” We will post amendments to or waivers from a provision of the Standards of Business Conduct with respect to those persons on our website at www.investor.keysight.com.

Information about compensation of our named executive officers appears under “Executive [removed: Compensation”,] [added: Compensation,”] “Compensation Committee Interlocks and Insider Participation” in the Proxy Statement.

The following table summarizes information about our equity compensation plans as of October 31, [removed: 2016.][added: 2017.]

| Equity compensation plans approved by security holders (1)(2)(3) | [removed: 6,331,746] [added: 5,994,017] | | | $ | [removed: 25] [added: 27] | | | [removed: 30,306,620] [added: 27,432,458] | |

| (1) | The number of securities remaining available for future issuance in column (c) includes [removed: 23,272,600] [added: 22,187,218] shares of common stock authorized and available for issuance under the Keysight Technologies, Inc. Employee Stock Purchase Plan ("423(b) Plan"). The number of shares authorized for issuance under the 423(b) Plan is subject to an automatic annual increase of the lesser of one percent of the outstanding common stock of Keysight or an amount determined by the Compensation Committee of our Board of Directors. Under the terms of the 423(b) Plan, in no event shall the aggregate number of shares issued under the Plan exceed 75 million shares. The number of securities remaining available for future issuance in column (c) is before the issuance of shares of common stock to participants in consideration of the aggregate participant contribution under 423(b) plan totaling [removed: $16] [added: $17] million as of October 31, [removed: 2016.] [added: 2017.] |

| (2) | We issue securities under our equity compensation plans in forms other than options, warrants or rights. Those are issued under the 2014 Equity and Incentive Compensation Plan which was originally adopted by the Board on July 16, 2014, subsequently amended and restated by the Board on September 29, 2014 and January 22, 2015 and became effective as of November 1, 2014 (the “Effective Date”). The 2014 Plan provides for the grant of awards in the form of stock options, stock [removed: appreciation rights, restricted stock, restricted stock units, performance shares and performance units with performance-based conditions to vesting or exercisability, and cash awards. The 2014 Plan has a term of ten years.] |

| Total | 5,994,017 | | | $ | 27 | | | 27,432,458 | |

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

The 2014 Plan has a term of ten years.

| Total | 6,331,746 | | | $ | 25 | | | 30,306,620 | |

See Index to [removed: Combined and] Consolidated Financial Statements under Item 8 of this report.

The following additional financial statement schedule should be considered in conjunction with our [removed: combined and] consolidated financial statements.

| Tax valuation allowance | | $ | [removed: 41] [added: 38] | | | $ | [removed: 4] [added: 31] | | | $ | (6 | ) | | $ | [removed: 39] [added: 63] | |

| 2.1 | | | [removed: Separation] [added: [Separation] and Distribution Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-2_1.htm)] | | 10-12B/A | | 8/13/2014 | | 2.1 | | |

| 2.2 | | | [removed: Rule] [added: [Rule] 2.7 Announcement, Recommended Cash Acquisition of Anite Plc by Keysight Technologies B.V. dated June 17, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000022/a21rule27announcementdated.htm)] | | 8-K | | 6/17/2015 | | 2.1 | | |

| 3.1 | | | [removed: Amended] [added: [Amended] and Restated Certificate of Incorporation of Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000110465914076024/a14-23444_1ex3d1.htm)] | | 8-K | | 11/3/2014 | | 3.1 | | |

| 3.2 | | | [removed: Amended] [added: [Amended] and Restated Bylaws of Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000110465914076024/a14-23444_1ex3d2.htm)] | | 8-K | | 11/3/2014 | | 3.2 | | |

| 4.1 | | | [removed: Indenture,] [added: [Indenture,] dated as of October 15, 2014, between Keysight Technologies, Inc. and U.S. Bank National Association, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/1601046/000110465914072101/a14-21591_3ex4d1.htm)] | | 8-K | | 10/17/2014 | | 4.1 | | |

| 4.2 | | | [removed: First] [added: [First] Supplemental Indenture, dated as of October 15, 2014, to the Indenture dated as of October 15, 2014, between Keysight Technologies, Inc. and U.S. Bank National Association, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/1601046/000110465914072101/a14-21591_3ex4d2.htm)] | | 8-K | | 10/17/2014 | | 4.2 | | |

| 4.3 | | | [removed: Guarantee,] [added: [Guarantee,] dated as of October 15, 2014, by Agilent Technologies, Inc. in favor of U.S. Bank National Association as Trustee for the Holders of Notes specified therein of Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000110465914072101/a14-21591_3ex4d3.htm)] | | 8-K | | 10/17/2014 | | 4.3 | | |

| 4.4 | | | [removed: Registration] [added: [Registration] Rights Agreement, dated as of October 15, 2014, by and among Keysight Technologies, Inc., Agilent Technologies, Inc., and Citigroup Global Markets Inc., Goldman, Sachs & Co., and Merrill Lynch, Pierce, Fenner & Smith Incorporated as representatives of the Initial [removed: Purchasers] [added: Purchasers](http://www.sec.gov/Archives/edgar/data/1601046/000110465914072101/a14-21591_3ex4d4.htm)] | | 8-K | | 10/17/2014 | | 4.4 | | |

| 10.1 | | | [removed: Services] [added: [Services] Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_1.htm)] | | 10-12B/A | | 8/13/2014 | | 10.1 | | |

| 10.2 | | | [removed: Tax] [added: [Tax] Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_2.htm)] | | 10-12B/A | | 8/13/2014 | | 10.2 | | |

| 10.3 | | | [removed: Employee] [added: [Employee] Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_3.htm)] | | 10-12B/A | | 8/13/2014 | | 10.3 | | |

| 10.4 | | | [removed: Intellectual] [added: [Intellectual] Property Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_4.htm)] | | 10-12B/A | | 8/13/2014 | | 10.4 | | |

| 10.5 | | | [removed: Trademark] [added: [Trademark] License Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_5.htm)] | | 10-12B/A | | 8/13/2014 | | 10.5 | | |

| 10.6 | | | [removed: Real] [added: [Real] Estate Matters Agreement, dated August 1, 2014, by and between Agilent Technologies, Inc. and Keysight Technologies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_6.htm)] | | 10-12B/A | | 8/13/2014 | | 10.6 | | |

| 10.7 | | | [removed: Form] [added: [Form] of Indemnification [removed: Agreement] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_7.htm)] | | 10-12B/A | | 7/18/2014 | | 10.7 | | |

| 10.8 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. Employee Stock Purchase [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_8.htm)] | | 10-12B/A | | 7/18/2014 | | 10.8 | | |

| 10.9 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. 2014 Equity and Incentive Compensation Plan (As Amended and Restated on September 29, [removed: 2014)*] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/1601046/000110465914072778/a14-22735_1ex4d3.htm)] | | S-8 | | 10/21/2014 | | 4.3 | | |

| 10.10 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Global Stock Award Agreement (with deferral [removed: alternative)*] [added: alternative)*](http://www.sec.gov/Archives/edgar/data/1601046/000110465914076024/a14-23444_1ex10d2.htm)] | | 8-K | | 11/3/2014 | | 10.2 | | |

| 10.11 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Global Performance Award [removed: Agreement*] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_11.htm)] | | 10-12B/A | | 7/18/2014 | | 10.11 | | |

| 10.12 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Global Stock Option Award [removed: Agreement*] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_12.htm)] | | 10-12B/A | | 7/18/2014 | | 10.12 | | |

| 10.13 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Non-Employee Director Stock Option Award [removed: Agreement*] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_13.htm)] | | 10-12B/A | | 7/18/2014 | | 10.13 | | |

| 10.14 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Non-Employee Director Stock Award [removed: Agreement*] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_14.htm)] | | 10-12B/A | | 7/18/2014 | | 10.14 | | |

| 10.15 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. 2014 Deferred Compensation [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_15.htm)] | | 10-12B/A | | 7/18/2014 | | 10.15 | | |

| 10.16 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. 2014 Frozen Deferred Compensation [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_16.htm)] | | 10-12B/A | | 7/18/2014 | | 10.16 | | |

| 10.17 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Excess Benefit Retirement [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_17.htm)] | | 10-12B/A | | 7/18/2014 | | 10.17 | | |

| 10.18 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Supplemental Benefit Retirement [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006273/a2220799zex-10_18.htm)] | | 10-12B/A | | 7/18/2014 | | 10.18 | | |

| 10.19 | | | [removed: Agilent] [added: [Agilent] Technologies, Inc. France Pension [removed: Plan*] [added: Plan*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914006952/a2220952zex-10_19.htm)] | | 10-12B/A | | 8/13/2014 | | 10.19 | | |

| 10.20 | | | [removed: Form] [added: [Form] of Change of Control Severance [removed: Agreement*] [added: Agreement*](http://www.sec.gov/Archives/edgar/data/1601046/000110465914076024/a14-23444_1ex10d1.htm)] | | 8-K | | 11/3/2014 | | 10.1 | | |

| 10.21 | | | [removed: Credit] [added: [Credit] Agreement, dated September 15, 2014, between Keysight Technologies, Inc., Agilent Technologies, Inc. and the Lenders Party [removed: Thereto*] [added: Thereto*](http://www.sec.gov/Archives/edgar/data/1601046/000104746914007795/a2221450zex-10_21.htm)] | | 10-12B/A | | 9/22/2014 | | 10.21 | | |

| 10.22 | | | [removed: Form] [added: [Form] of Keysight Technologies, Inc. Deferral Election for Stock [removed: Award*] [added: Award*](http://www.sec.gov/Archives/edgar/data/1601046/000110465914076024/a14-23444_1ex10d3.htm)] | | 8-K | | 11/3/2014 | | 10.3 | | |

| 10.23 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. Officer and Executive Severance Plan (Established Effective March18, [removed: 2015)*] [added: 2015)*](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000010/exhibit101-severanceplan.htm)] | | 8-K | | 3/24/2015 | | 10.1 | | |

| 10.24 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. 2014 Equity and Incentive Compensation Plan (As Amended and Restated on January 22, [removed: 2015)*] [added: 2015)*](http://www.sec.gov/Archives/edgar/data/1601046/000104746915000650/a2222863zdef14a.htm)] | | [removed: 8-K] [added: DEF 14A] | | [removed: 3/24/2015] [added: 2/6/2015] | | [removed: 10.2] [added: APPENDIX A] | | |

| 10.25 | | | [removed: Letter] [added: [Letter] Agreement, dated July 21, 2015, by and among Keysight Technologies, Inc., the Lenders party thereto and Citibank, N.A., as Administrative [removed: Agent] [added: Agent](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000024/exhibit102letteragreement.htm)] | | 8-K | | 7/21/2015 | | 10.2 | | |

| 10.26 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. 2015 Performance-based Compensation Plan for covered employees (As Adopted on September 29, [removed: 2014)*] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/1601046/000104746915000650/a2222863zdef14a.htm)] | | DEF 14A | | [removed: 2/6/2014] [added: 2/6/2015] | | APPENDIX B | | |

| 10.27 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. 401(k) Plan (Effective as of August 1, [removed: 2014)*] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000044/keys-10312015xexx1027.htm)] | | 10-K | | 12/21/2015 | | 10.27 | | |

| 10.28 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. Deferred Profit-Sharing Plan (Effective as of August 1, [removed: 2014)*] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000044/keys-10312015xexx1028.htm)] | | 10-K | | 12/21/2015 | | 10.28 | | |

| 10.29 | | | [removed: Keysight] [added: [Keysight] Technologies, Inc. Retirement Plan (Effective as of August 1, [removed: 2014)*] [added: 2014)*](http://www.sec.gov/Archives/edgar/data/1601046/000160104615000044/keys-10312015xexx1029.htm)] | | 10-K | | 12/21/2015 | | 10.29 | | |

| 2017 | | | | | | | | | | | | | | | | |

| 21.1 | | | [Subsidiaries of Keysight Technologies, Inc.](https://www.sec.gov/Archives/edgar/data/1601046/000160104617000033/keys-10312017xexx211.htm) | | | | | | | | X |

| | | BY | | /s/ Neil Dougherty |

| | | | | Neil Dougherty |

| 2014 | | | | | | | | | | | | | | | | |

| 12.1 | | | Computation of ratio of earnings to fixed charges. | | | | | | | | X |

| 21.1 | | | Subsidiaries of Keysight Technologies, Inc. | | | | | | | | X |

| | | BY | | /s/ Stephen D. Williams |

| | | | | Stephen D. Williams |