Agilent Technologies Reports Fourth Quarter 2004 Results.PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif. -- Agilent Technologies This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Inc. (NYSE NYSE See: New York Stock Exchange :A) today reported orders of $1.60 billion for the fourth fiscal quarter ended Oct. 31, 2004, 8 percent below one year ago. Revenues during the quarter were $1.82 billion, 9 percent ahead of last year. Fourth quarter GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net earnings were $74 million, or $0.15 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $13 million, or $0.03 per share, in last year's fourth quarter. Excluding $79 million of net restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and amortization charges, Agilent (Agilent Technologies, Santa Clara, CA, www.agilent.com) The test and measurement subsidiary of HP. In 1999, HP split off the division that started the company into an independent subsidiary named Agilent Technologies. At the time, the $2. reported fourth quarter operating net income of $153 million, or $0.30 per share. On a comparable basis, the company earned $71 million, or $0.15 per share, one year ago. For the full year 2004, Agilent achieved orders of $7.00 billion, up 15 percent from 2003, and revenues of $7.18 billion, up 19 percent from one year ago. This year, GAAP diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.71, compared to a loss of $4.35 last year. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before (1) were $1.05 per share this year compared to a loss of $0.26 per share in 2003. "Agilent continued to face a difficult environment in several of its key markets," said Ned Barnholt, Agilent chairman, president and chief executive officer. "Compared to last quarter, however, our gross margins improved, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. declined, working capital remained under good control and we generated $394 million in free cash flow(2) -- despite $63 million lower revenues." Fourth quarter revenues, at $1.82 billion, were below company expectations because of weak conditions in semiconductor-related businesses. Operating earnings, at $0.30 per share, met the bottom of the company's guidance range of $0.30 to $0.35 per share. "For 2004 overall, we are pleased with Agilent's performance despite the mixed finish," Barnholt said. "During the year, we completed the company's operational transformation that we began three years ago." From 2001 through 2004, Agilent reduced its operating breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations by more than 35 percent, completely transformed its IT systems environment and reduced the number of IT applications by more than 75 percent, restored its Test and Measurement segment to traditional levels of profitability, and achieved both double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth and double-digit operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in its Life Sciences and Chemical Analysis (LSCA LScA left scapuloanterior (position of fetus). ) segment. "Performance on the balance sheet has been strong, with inventory days-on-hand, receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). and fixed investment all near historical lows," Barnholt said. "As a result, Agilent has become consistently free-cash-flow positive(2). During the past 12 months, we increased cash by over $700 million to more than $2.3 billion." Looking to fiscal 2005, the company said it expects the sharp adjustment in the semiconductor markets to continue to impact the performance of its Semiconductor Products and Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. Test segments for the next three to six months. Meanwhile, Test and Measurement growth is moderating because of slowing growth in mobile phone production. LSCA, on the other hand, shows few signs of slowing from its recent double-digit growth trend. The company expects first quarter fiscal 2005 revenues of $1.60 billion to $1.70 billion and operating earnings of $0.14 to $0.21 per share (3). "Our commitment is to continue to manage costs and margins aggressively in the short term while maintaining investments critical to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. market leadership and sustained creation of shareholder value," Barnholt said.
Segment Results
---------------
Test and Measurement
(in millions)
Q4:F04 Q4:F03 Q3:F04
------ ------ ------
Orders 693 645 776
Revenues 788 631 768
Operating Profit(4) 116 (11) 88
Fourth quarter Test and Measurement orders of $693 million were 7 percent above one year ago but down 11 percent from the third quarter. Overall segment demand was driven by seasonally strong aerospace and defense business and robust general-purpose gen·er·al-pur·pose adj. Designed for or suitable to more than one use; broadly useful: a general-purpose loan. general-purpose Adjective markets, while weakness was concentrated in wireless handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. manufacturing test. Revenues of $788 million were 25 percent above last year and 3 percent ahead of three months earlier. Fourth quarter operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $116 million were improved by $127 million compared to one year ago on $157 million higher revenues, demonstrating the full benefits of aggressive restructuring and lower levels of discounts. Compared to the third quarter, segment profits were up $28 million on a $20 million increase in revenues as segment operating margins improved to 14.7 percent from the third quarter's 11.5 percent. During the quarter, Test and Measurement achieved an 18 percent Return on Invested Capital(5) (ROIC ROIC Return On Invested Capital ROIC Return On Investment Capital ROIC Readout Integrated Circuit ROIC Resident Officer In Charge ROIC Regional Office Implementation Committee ), up from 14 percent in the third quarter and (0) percent one year ago.
Automated Test
(in millions)
Q4:F04 Q4:F03 Q3:F04
------ ------ ------
Orders 137 260 208
Revenues 196 260 243
Operating Profit(4) (7) 45 19
Fourth quarter Automated Test orders of $137 million were down 47 percent from one year ago to the lowest level since early 2003. All product lines were weaker except parametric See parametric modeling, parametric symbol and PTC. test as semiconductor manufacturers slowed production and delayed capital investments. Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be rates for SOC (System On a Chip) The electronics for a complete, working product contained on a single chip. While a microcontroller includes all the hardware components required to process instructions, an SoC includes the computer and all required ancillary electronics. testers at semiconductor contract manufacturers (SCMs) did improve by about five points to 90 percent during the quarter, suggesting that the period of semiconductor industry digestion digestion Process of dissolving and chemically converting food for absorption by cells. In the mouth, food is chewed, mixed with saliva, which begins to break down starches, and kneaded by the tongue into a ball for swallowing. and cautious ordering may not be very extended. Revenues of $196 million were 25 percent below last year and down 19 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . The segment had an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $7 million during the quarter compared to profits of $45 million one year ago on $64 million lower revenues. During the quarter, gross margins were depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. by lower volumes and intense competitive pressures. Operating expenses were relatively flat year-to-year, with R&D up and SG&A lower as the company released a new generation of flash memory and SOC test systems. The company entered the flat panel test market during the quarter with the introduction of a new test platform and acquisition of IBM's flat panel test business.
Semiconductor Products
(in millions)
Q4:F04 Q4:F03 Q3:F04
------ ------ ------
Orders 403 493 470
Revenues 486 463 539
Operating Profit(4) 8 40 33
Semiconductor Products orders were $403 million during the fourth quarter, down 18 percent from one year ago and off 14 percent sequentially. Orders declined virtually across the board as customers reacted quickly to excess inventories built up over the past few months. Personal systems orders were down 12 percent from last year and off 16 percent sequentially; networking systems orders dropped 31 percent from last year and were down 9 percent sequentially. Fourth quarter revenues of $486 million were 5 percent above last year and down 10 percent sequentially. Segment profits of $8 million were $32 million below last year despite a $23 million increase in revenues; margins were hurt by severe price pressures in camera modules and fiber optics fiber optics, transmission of digitized messages or information by light pulses along hair-thin glass fibers. Each fiber is surrounded by a cladding having a high index of refractance so that the light is internally reflected and travels the length of the fiber . Sequentially, profits were down $25 million on a $53 million reduction in revenues. Segment ROIC(5) was 6 percent during the quarter compared to 16 percent one year ago and 15 percent during the third quarter. During the quarter, the company announced plans for the sale of its camera module business to Flextronics.
Life Sciences and Chemical Analysis
(in millions)
Q4:F04 Q4:F03 Q3:F04
------ ------ ------
Orders 366 333 321
Revenues 352 321 335
Operating Profit(4) 58 53 46
Life Sciences and Chemical Analysis had an outstanding quarter. Orders of $366 million were 10 percent above last year, with Life Sciences orders up 11 percent and Chemical Analysis up 9 percent. Revenues of $352 million were 10 percent above last year and up 5 percent sequentially. Segment profits of $58 million were $5 million above last year on a $31 million increase in revenues; the segment operating margin of 16.5 percent equaled last year's record level. During the quarter, the segment achieved an ROIC(5) of 25 percent, compared with last year's ROIC of 30 percent and 23 percent in the third quarter. About Agilent Technologies Agilent Technologies Inc. (NYSE:A) is a global technology leader in communications, electronics, life sciences and chemical analysis. The company's 28,000 employees serve customers in more than 110 countries. Agilent had net revenue of $7.2 billion in fiscal year 2004. Information about Agilent is available on the Web at www.agilent.com. Agilent management will host a live webcast of its quarterly conference call with the investment community in listen-only mode today at 1:30 p.m. (PT). Listeners may log on at www.investor.agilent.com and select "Fourth Quarter FY04 Financial Results Conference Call" under "Events & Presentations." The webcast will remain on the company site for 90 days. A telephone replay of the conference call will be available from 4:30 p.m. (PT) today through Nov. 18 by dialing + 1 719 457 0820 and entering pass code 835568. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements (including, without limitation, information regarding the markets we serve and the conditions in those markets, growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in our businesses, revenues, operating margins, costs and earnings) that involve risks and uncertainties that could cause results of Agilent to differ materially from management's current expectations. In addition, other risks that Agilent faces in running its operations include the ability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution successfully through business cycles while it continues to implement workforce and other cost reductions; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross margin pressures; the risk that our cost-cutting initiatives will impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. uncertainties on our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix, and other risks detailed in Agilent's filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended July July: see month. 31, 2004. (1) Before net restructuring and amortization charges in all periods. (2) Free cash flow is defined as Net Cash provided by operating activities less Investments in property, plant and equipment. (3) Agilent's expected range of EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for Q105 excludes restructuring, which cannot be estimated, and amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , which is expected to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1 million per quarter. The annual non-GAAP tax rate is assumed to be 24 percent. Beginning in Q304, Agilent is treating its senior convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. as "if converted." As a result, approximately 36 million shares were added to the denominator denominator the bottom line of a fraction; the base population on which population rates such as birth and death rates are calculated. denominator of diluted EPS, and $6.2 million of associated after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. quarterly interest expense was added back to the numerator numerator the upper part of a fraction. numerator relationship see additive genetic relationship. numerator Epidemiology The upper part of a fraction . (4) Before restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in all periods. (5) Refer to financial results tables for ROIC.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three Months
Ended
October 31, Percent
---------------
2004 2003 Inc/(Dec)
------- ------- ---------
Orders $1,599 $1,731 (8%)
======= =======
Net revenue $1,822 $1,675 9%
Costs and expenses:
Cost of products and services 1,042 961 8%
Research and development 232 221 5%
Selling, general and administrative 459 437 5%
------- -------
Total costs and expenses 1,733 1,619 7%
------- -------
Income from operations 89 56 59%
Other income (expense), net 7 21 (67%)
------- -------
Income from operations before taxes 96 77 25%
Provision for taxes 22 64 (66%)
------- -------
Net income $74 $13 469%
======= =======
Net income per share:
Basic $0.15 $0.03
Diluted $0.15 $0.03
Weighted average shares used in
computing net income per share:
Basic 486 476
Diluted 490 481
Historical amounts were reclassified to
conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Twelve Months
Ended
October 31, Percent
----------------
2004 2003 Inc/(Dec)
------- -------- ---------
Orders $6,997 $6,084 15%
======= ========
Net revenue $7,181 $6,056 19%
Costs and expenses:
Cost of products and services 4,058 3,750 8%
Research and development 933 1,051 (11%)
Selling, general and administrative 1,804 1,980 (9%)
------- --------
Total costs and expenses 6,795 6,781 -
------- --------
Income (loss) from operations 386 (725) 153%
Other income (expense), net 54 35 54%
------- --------
Income (loss) before taxes 440 (690) 164%
Provision for taxes 91 1,100 (92%)
------- --------
Income (loss) before cumulative effect of
accounting change 349 (1,790) 119%
Cumulative effect of adopting SFAS No. 142 - (268)
------- --------
Net income (loss) $349 $(2,058) 117%
======= ========
Net income (loss) per share:
Basic
Income (loss) before cumulative effect of
accounting change $0.72 $(3.78)
Cumulative effect of adopting SFAS No. 142 - (0.57)
------- --------
Net income (loss) $0.72 $(4.35)
======= ========
Diluted
Income (loss) before cumulative
effect of accounting change $0.71 $(3.78)
Cumulative effect of adopting SFAS
No. 142 - (0.57)
------- --------
Net income (loss) $0.71 $(4.35)
======= ========
Weighted average shares used in
computing net income (loss) per share:
Basic 483 473
Diluted 490 473
Historical amounts were reclassified to conform with current
period presentation.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Excluding Restructuring, Amortization of Intangibles
and Non-Operational Items
(Unaudited)
(In millions, except per share amounts)
Three Months
Ended
October 31, Percent
---------------
2004 2003 Inc/(Dec)
------- ------- ---------
Orders $1,599 $1,731 (8%)
======= =======
Net revenue $1,822 $1,675 9%
Costs and expenses:
Cost of products and services 1,006 938 7%
Research and development 228 218 5%
Selling, general and administrative 415 397 5%
------- -------
Total costs and expenses 1,649 1,553 6%
------- -------
Income from operations 173 122 42%
Other income (expense), net 20 21 (5%)
------- -------
Income before taxes 193 143 35%
Provision for taxes 40 72 (44%)
------- -------
Non-GAAP net income $153 $71 115%
======= =======
Non-GAAP net income per share:
Basic $0.31 $0.15
Diluted $0.30 $0.15
Weighted average shares used in
computing non-GAAP net income per share:
Basic 486 476
Diluted 526 481
The above non-GAAP condensed
consolidated statement of operations
has been adjusted to exclude the
following items and reconcile to
GAAP net income:
Net income per GAAP $74 $13
Non-GAAP adjustments:
Other intangibles 1 9
Restructuring and asset impairment 54 58
Gain on sale of assets - (2)
Investment Impairments 7 -
Camera module charge 18 -
Other 17 1
Adjustment for income taxes (18) (8)
------- -------
Non-GAAP net income $153 $71
======= =======
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as are disclosed in this release.
This information facilitates management's internal comparisons to
the company's historical operating results and comparisons to
competitors operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
Historical amounts were reclassified to conform with current
period presentation.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Excluding Restructuring, Amortization of Intangibles
and Non-Operational Items
(Unaudited)
(In millions, except per share amounts)
Twelve Months
Ended
October 31, Percent
----------------
2004 2003 Inc/(Dec)
------- -------- ---------
Orders $6,997 $6,084 15%
======= ========
Net revenue $7,181 $6,056 19%
Costs and expenses:
Cost of products and services 3,955 3,587 10%
Research and development 914 984 (7%)
Selling, general and administrative 1,670 1,774 (6%)
------- --------
Total costs and expenses 6,539 6,345 3%
------- --------
Income (loss) from operations 642 (289) 322%
Other income (expense), net 73 47 55%
------- --------
Income (loss) before taxes 715 (242) 395%
Provision (benefit) for taxes 186 (121) 254%
------- --------
Non-GAAP income (loss) $529 $(121) 537%
======= ========
Non-GAAP net income (loss) per share:
Basic $1.10 $(0.26)
Diluted $1.05 $(0.26)
Weighted average shares used in
computing non-GAAP net income
(loss) per share:
Basic 483 473
Diluted 526 473
The above non-GAAP condensed
consolidated statement of
operations has been adjusted to
exclude the following items and
reconcile to GAAP net income (loss:)
Net income (loss) per GAAP $349 $(2,058)
Non-GAAP adjustments:
Other intangibles 22 55
Restructuring and asset impairment 169 387
Gain on sale of assets (1) (5)
SFAS No. 142 adoption - 268
Retirement plans curtailment loss - 5
Investment Impairment 7 -
Camera module charge 18 -
Contract termination fees 14 -
Other 46 6
Adjustment for income taxes (95) 1,221
------- --------
Non-GAAP net income (loss) $529 $(121)
======= ========
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as are disclosed in this release.
This information facilitates management's internal comparisons to
the company's historical operating results and comparisons to
competitors operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non- GAAP information provided by other
companies.
Historical amounts were reclassified to conform with current
period presentation.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
October October
31, 31,
2004 2003
------- -------
ASSETS
Current assets:
Cash and cash equivalents $2,315 $1,607
Accounts receivable, net 1,044 1,086
Inventory 1,026 995
Other current assets 192 201
------- -------
Total current assets 4,577 3,889
Property, plant and equipment, net 1,258 1,447
Goodwill and other intangible assets, net 443 402
Other assets 778 559
------- -------
Total assets $7,056 $6,297
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $441 $441
Employee compensation and benefits 549 566
Deferred revenue 284 262
Income and other taxes payable 340 326
Other accrued liabilities 261 311
------- -------
Total current liabilities 1,875 1,906
------- -------
Senior convertible debentures 1,150 1,150
Other liabilities 466 417
------- -------
Total liabilities 3,491 3,473
------- -------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock; $0.01 par value; 125 million
shares authorized; none issued and outstanding - -
Common stock; $0.01 par value; 2 billion
shares authorized; 487 million shares at October
31, 2004 and 476 million shares at
October 31, 2003 issued and outstanding 5 5
Additional paid-in capital 5,193 4,984
Accumulated deficit (1,810) (2,159)
Accumulated comprehensive income (loss) 177 (6)
------- -------
Total stockholders' equity 3,565 2,824
------- -------
Total liabilities and stockholders' equity $7,056 $6,297
======= =======
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Twelve Three
months months
ended ended
October October
31, 31,
2004 2004
---------- ---------
Cash flows from operating activities:
Net income $349 $74
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 266 65
Amortization 26 1
Deferred taxes 31 17
Asset impairment charges 40 15
Net gain (loss) on sale of assets 1 (4)
Changes in assets and liabilities:
Accounts receivable 116 166
Inventory (31) 39
Accounts payable 76 105
Employee compensation and benefits 29 54
Income taxes and other taxes payable (82) (31)
Other current assets and liabilities (9) 38
Other long-term assets and liabilities (136) (117)
---------- ---------
Net cash provided by operating activities (1) 676 422
Cash flows from investing activities:
Investments in property, plant and equipment (118) (28)
Dispositions of property, plant and equipment 36 -
Acquisitions, net of cash acquired (18) (18)
Purchased intangibles and investments (13) (6)
---------- ---------
Net cash used in investing activities (113) (52)
Cash flows from financing activities:
Issuance of common stock under
employee stock plans 144 8
Net borrowings of notes payable
and short-term borrowings 1 -
---------- ---------
Net cash provided by financing activities 145 8
Change in cash and cash equivalents 708 378
Cash and cash equivalents at beginning of period 1,607 1,937
---------- ---------
Cash and cash equivalents at end of period $2,315 $2,315
========== =========
(1) Cash payments included in
operating activities:
Restructuring 138 33
Income tax payments 149 67
Pension trust fund contributions 122 8
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET INCOME
THREE MONTHS ENDED OCTOBER 31, 2004
(Unaudited) Non-GAAP Adjustments
Restructuring
Other and Camera
(In millions, except GAAP Intangibles Asset Module
per share amounts) Impairment Charge
----------------------------------------
Orders $1,599 $- $- $-
======= ========== ============ =======
Net revenue $1,822 $- $- $-
Costs and expenses:
Cost of products and
services 1,042 (1) (15) (18)
Research and
development 232 - (4) -
Selling, general and
administrative 459 - (35) -
------- ---------- ------------ -------
Total costs and
expenses 1,733 (1) (54) (18)
------- ---------- ------------ -------
Income from operations 89 1 54 18
Other income (expense),
net 7 - - -
------- ---------- ------------ -------
Income from operations
before taxes 96 1 54 18
Provision for taxes 22 - - -
------- ---------- ------------ -------
Net income $74 $1 $54 $18
======= ========== ============ =======
Net income per share -
Basic and Diluted:
Basic $0.15 $0.00 $0.11 $0.04
Diluted $0.15 $0.00 $0.11 $0.04
Weighted average shares used in computing net
income per share:
Basic 486 486 486 486
Diluted 490 490 490 490
Non-GAAP Adjustments
Adjustment
Investment for
(In millions, except Impairments Other Income Non-GAAP
per share amounts) Taxes
-------------------------------------
Orders $- $- $- $1,599
=========== ====== ======= =======
Net revenue $- $- $- 1,822
Costs and expenses:
Cost of products and
services - (2) - 1,006
Research and development - - - 228
Selling, general and
administrative - (9) - 415
----------- ------ ------- -------
Total costs and
expenses - (11) - 1,649
----------- ------ ------- -------
Income from operations - 11 - 173
Other income (expense), net 7 6 - 20
----------- ------ ------- -------
Income from operations before
taxes 7 17 - 193
Provision for taxes - - 18 40
----------- ------ ------- -------
Net income $7 $17 $(18) $153
=========== ====== ======= =======
Net income per share - Basic
and Diluted:
Basic $0.01 $0.04 $(0.04) $0.31
Diluted $0.01 $0.03 $(0.04) $0.30 (1)
Weighted average shares used in computing
net income per share:
Basic 486 486 486 486
Diluted 490 490 490 526 (1)
(1) In order to calculate non-GAAP diluted net income per share,
we added 36 million shares and approximately $6 million of
after-tax interest expense to non-GAAP net income to treat our
senior convertible debentures as if they were converted. The
impact of this was ($.01) to our diluted earnings per share.
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET INCOME
TWELVE MONTHS ENDED OCTOBER 31, 2004
(Unaudited) Non-GAAP Adjustments
Restructuring
Other and Contract Gain On
(In millions, GAAP Intangibles Asset Termination Sale of
except per Impairment Fees Assets
share amounts) --------------------------------------------------
Orders $6,997 $- $- $- $-
======= ========== ============ ========== =======
Net revenue $7,181 $- $- $- $-
Costs and expenses:
Cost of products
and services 4,058 (19) (54) (4) -
Research and
development 933 - (16) (3) -
Selling,
general and
administrative 1,804 (3) (91) (7) 1
------- ---------- ------------ ---------- -------
Total costs and
expenses 6,795 (22) (161) (14) 1
------- ---------- ------------ ---------- -------
Income from
operations 386 22 161 14 (1)
Other income
(expense), net 54 - 8 - -
------- ---------- ------------ ---------- -------
Income from
operations
before taxes 440 22 169 14 (1)
Provision for
taxes 91 - - - -
------- ---------- ------------ ---------- -------
Net income $349 $22 $169 $14 $(1)
======= ========== ============ ========== =======
Net income per share
- Basic and Diluted:
Basic $0.72 $0.05 $0.35 $0.03 $(0.00)
Diluted $0.71 $0.04 $0.34 $0.03 $(0.00)
Weighted average shares used in
computing net income per share:
Basic 483 483 483 483 483
Diluted 490 490 490 490 490
Non-GAAP Adjustments
Adjustment
Camera Investment for
(In millions, Module Impairments Other Income Non-GAAP
except per share Charge Taxes
amounts)
---------------------------------------------------
Orders $- $- $- $- $6,997
======= ========== ====== ======= =======
Net revenue $- $- $- $- $7,181
Costs and expenses:
Cost of products and
services (18) - (8) - 3,955
Research and development - - - - 914
Selling, general and
administrative - - (34) - 1,670
------- ---------- ------ ------- -------
Total costs and
expenses (18) - (42) - 6,539
------- ---------- ------ ------- -------
Income from operations 18 - 42 - 642
Other income
(expense), net - 7 4 - 73
------- ---------- ------ ------- -------
Income from operations
before taxes 18 7 46 - 715
Provision for
taxes - - - 95 186
------- ---------- ------ ------- -------
Net income $18 $7 $46 $(95) $529
======= ========== ====== ======= =======
Net income per share
- Basic and Diluted:
Basic $0.04 $0.01 $0.10 $(0.20) $1.10
Diluted $0.04 $0.01 $0.09 $(0.19) $1.05 (1)
Weighted average shares
used in computing net
income per share:
Basic 483 483 483 483 483
Diluted 490 490 490 490 526 (1)
(1) In order to calculate non-GAAP diluted net income per share,
we added 36 million shares and approximately $26 million of
after-tax interest expense to non-GAAP net income to treat our
senior convertible debentures as if they were converted. The
impact of this was ($.03) to our diluted earnings per share.
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET INCOME
THREE MONTHS ENDED OCTOBER 31, 2003
(Unaudited) Non-GAAP Adjustments
Restructuring Gain on
Other and Sale
(In millions, GAAP Intangibles Asset of
except per Impairment Assets
share amounts) ------------------------------------------
Orders $1,731 $- $- $-
======= =========== ============= =======
Net revenue $1,675 $- $- $-
Costs and expenses:
Cost of products and
services 961 (8) (15) -
Research and development 221 - (3) -
Selling, general and
administrative 437 (1) (40) 2
------- ----------- ------------- -------
Total costs and
expenses 1,619 (9) (58) 2
------- ----------- ------------- -------
Income from operations 56 9 58 (2)
Other income (expense), net 21 - - -
------- ----------- ------------- -------
Income before taxes 77 9 58 (2)
Provision for taxes 64 - - -
------- ----------- ------------- -------
Net income $13 $9 $58 $(2)
======= =========== ============= =======
Net income per share -
Basic and Diluted:
Basic $0.03 $0.02 $0.12 $-
======= =========== ============= =======
Diluted $0.03 $0.02 $0.12 $-
======= =========== ============= =======
Weighted average shares used in
computing net income per share:
Basic 476 476 476 476
Diluted 481 481 481 481
Non-GAAP Adjustments
Adjustment
(In millions, except per share amounts) Other for Income Non-
Taxes GAAP
-------------------------
Orders $- $- $1,731
====== ========== =======
Net revenue $- $- $1,675
Costs and expenses:
Cost of products and services - - 938
Research and development - - 218
Selling, general and administrative (1) - 397
------ ---------- -------
Total costs and expenses (1) - 1,553
------ ---------- -------
Income from operations 1 - 122
Other income (expense), net - - 21
------ ---------- -------
Income before taxes 1 - 143
Provision for taxes - 8 72
------ ---------- -------
Net income $1 $(8) $71
====== ========== =======
Net income per share -
Basic and Diluted:
Basic $0.00 $(0.02) $0.15
====== ========== =======
Diluted $0.00 $(0.02) $0.15
====== ========== =======
Weighted average shares used in
computing net income per share:
Basic 476 476 476
Diluted 481 481 481
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non- GAAP information provided by other
companies.
Historical amounts were reclassified to conform with current
period presentation.
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET LOSS
TWELVE MONTHS ENDED OCTOBER 31, 2003
(Unaudited) Non-GAAP Adjustments
Restructuring Gain on
Other and Sale
(In millions, GAAP Intangibles Asset of
except per share amounts) Impairment Assets
-----------------------------------------
Orders $6,084 $- $- $-
======== ========== ============ =======
Net revenue $6,056 $- $- $-
Costs and expenses:
Cost of products
and services 3,750 (46) (111) -
Research and development 1,051 - (66) -
Selling, general
and administrativ 1,980 (9) (195) 2
-------- ---------- ------------ -------
Total costs and expenses 6,781 (55) (372) 2
-------- ---------- ------------ -------
Loss from operations (725) 55 372 (2)
Other income
(expense), net 35 - 15 (3)
-------- ---------- ------------ -------
Loss from
operations before
taxes (690) 55 387 (5)
Provision for taxes 1,100 - - -
-------- ---------- ------------ -------
Loss before cumulative
effect of accounting change (1,790) 55 387 (5)
Cumulative effect
of adopting SFAS No. 142 (268) - - -
-------- ---------- ------------ -------
Net loss $(2,058) $55 $387 $(5)
======== ========== ============ =======
Net loss per share
- Basic and Diluted:
Loss before cumulative
effect of accounting change $(3.78) $0.11 $0.82 $(0.01)
Cumulative effect
of adopting SFAS No. 142 (0.57) - - -
-------- ---------- ------------ -------
Net loss $(4.35) $0.11 $0.82 $(0.01)
======== ========== ============ =======
Weighted average shares
used in computing net
loss per share:
Basic and diluted 473 473 473 473
Non-GAAP Adjustments
Retirement Adjustment
SFAS Plans for
(In millions, No. Curtailment Income Non-
except per share amounts) 142 Loss Other Taxes GAAP
----------------------------------------
Orders $- $- $- $- $6,084
====== ========== ====== ======= =======
Net revenue $- $- $- $- $6,056
Costs and expenses:
Cost of products and
services - (1) (5) - 3,587
Research and development - (1) - - 984
Selling, general and
administrative - (3) (1) - 1,774
------ ---------- ------ ------- -------
Total costs and expenses - (5) (6) - 6,345
------ ---------- ------ ------- -------
Loss from operations - 5 6 - (289)
Other income (expense), net - - - - 47
------ ---------- ------ ------- -------
Loss from operations before
taxes - 5 6 - (242)
Provision for taxes - - - (1,221) (121)
------ ---------- ------ ------- -------
Loss before cumulative
effect of accounting change - 5 6 1,221 (121)
Cumulative effect of
adopting SFAS No. 142 268 - - - -
------ ---------- ------ ------- -------
Net loss $268 $5 $6 $1,221 $(121)
====== ========== ====== ======= =======
Net loss per share -
Basic and Diluted:
Loss before cumulative
effect of accounting change $- $0.01 $0.01 $2.58 $(0.26)
Cumulative effect of
adopting SFAS No. 142 0.57 - - - -
------ ---------- ------ ------- -------
Net loss $0.57 $0.01 $0.01 $2.58 $(0.26)
====== ========== ====== ======= =======
Weighted average shares used in
computing net loss per share:
Basic and diluted 473 473 473 473 473
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
Historical amounts were reclassified to conform with current
period presentation.
AGILENT TECHNOLOGIES, INC.
TEST AND MEASUREMENT INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended ended
October October Yr July
31, 31, vs.Yr 31, Sequential
2004 2003 % change 2004 % change
------------------------------------------------
Orders $693 $645 7% $776 (11%)
Net Revenue $788 $631 25% $768 3%
Income (loss) from
operations $116 $(11) 1155% $88 32%
----------------------------------------------------------------------
Twelve Twelve
months months
ended ended
October October
31, 31, Yr vs.Yr
2004 2003 % change
-----------------------------
Orders $2,856 $2,413 18%
Net Revenue $2,903 $2,529 15%
Income (loss) from
operations $219 $(315) 170%
-----------------------------
----------------------------------------------------------------------
Q4 FY04 vs Q3 FY04 BY
MARKET SEGMENT
Orders Net Revenue
-------------------------- --------------------------
Q4 FY04 Sequential % of Q4 FY04 Sequential % of
$ Amount % change Segment $Amount % change Segment
-------------------------- --------------------------
Communications
test $460 (16%) 66% $547 2% 69%
General purpose
test 233 2% 34% 241 5% 31%
------- ------- ------- -------
$693 (11%) 100% $788 3% 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q4 FY04 vs Q4 FY03 BY
MARKET SEGMENT
Orders Net Revenue
------------------- -------------------
Q4 FY04 Yr vs.Yr Q4 FY04 Yr vs.Yr
$ Amount % change $ Amount % change
------------------- -------------------
Communications
test $460 3% $547 28%
General
purpose test 233 17% 241 18%
------- -------
$693 7% $788 25%
======= =======
----------------------------------------------------------------------
Income (loss) from operations reflect the results of our
reportable segments under Agilent's management reporting system
which are not necessarily in conformity with accounting principles
generally accepted in the United States (GAAP). Income (loss) from
operations of our reporting segments excludes restructuring,
amortization of intangibles, non-operational charges and
unallocated infrastructure charges.
In general, recorded orders represent firm purchase commitments
from our customers with established terms and conditions for
products and services that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
AUTOMATED TEST INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended ended
October October Yr July
31, 31, vs.Yr 31, Sequential
2004 2003 % change 2004 % change
--------------------------------------------
Orders $137 $260 (47%) $208 (34%)
Net Revenue $196 $260 (25%) $243 (19%)
Income from operations $(7) $45 (116%) $19 (137%)
----------------------------------------------------------------------
Twelve Twelve
months months
ended ended
October October
31, 31, Yr vs.Yr
2004 2003 % change
-------------------------
Orders $831 $845 (2%)
Net Revenue $924 $755 22%
Income (loss) from
operations $66 $(34) 294%
----------------------------------------------------------------------
Q4 FY04 vs Q3 FY04 BY
MARKET SEGMENT
Orders Net Revenue
-------------------------- --------------------------
Q4 FY04 Sequential % of Q4 FY04 Sequential % of
$ Amount % change Segment $Amount % change Segment
-------------------------- --------------------------
Semiconductor
test $107 (33%) 78% $157 (20%) 80%
Manufacturing
test 30 (39%) 22% 39 (15%) 20%
------- ------- ------- -------
$137 (34%) 100% $196 (19%) 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q4 FY04 vs Q4 FY03 BY
MARKET SEGMENT
Orders Net Revenue
------------------- -------------------
Q4 FY04 Yr vs.Yr Q4 FY04 Yr vs.Yr
$ Amount % change $ Amount % change
------------------- -------------------
Semiconductor
test $107 (51%) $157 (29%)
Manufacturing
test 30 (27%) 39 %
------- -------
$137 (47%) $196 (25%)
======= =======
----------------------------------------------------------------------
Income (loss) from operations reflect the results of our
reportable segments under Agilent's management reporting system
which are not necessarily in conformity with accounting principles
generally accepted in the United States (GAAP). Income (loss) from
operations of our reporting segments excludes restructuring,
amortization of intangibles, non-operational charges and
unallocated infrastructure charges.
In general, recorded orders represent firm purchase commitments
from our customers with established terms and conditions for
products and services that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
SEMICONDUCTOR PRODUCTS INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended ended
October October Yr July
31, 31, vs.Yr 31, Sequential
2004 2003 % change 2004 % change
--------------------------------------------
Orders $403 $493 (18%) $470 (14%)
Net Revenue $486 $463 5% $539 (10%)
Income from operations $8 $40 (80%) $33 (76%)
----------------------------------------------------------------------
Twelve Twelve
months months
ended ended
October October
31, 31, Yr vs.Yr
2004 2003 % change
-------------------------
Orders $1,978 $1,652 20%
Net Revenue $2,021 $1,586 27%
Income (loss) from
operations $166 $(59) 381%
----------------------------------------------------------------------
Q4 FY04 vs Q3 FY04 BY
MARKET SEGMENT
Orders Net Revenue
-------------------------- --------------------------
Q4 FY04 Sequential % of Q4 FY04 Sequential % of
$ Amount % change Segment $Amount % change Segment
-------------------------- --------------------------
Networking $116 (9%) 29% $122 (12%) 25%
Personal
systems 287 (16%) 71% 364 (9%) 75%
------- ------- ------- -------
$403 (14%) 100% $486 (10%) 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q4 FY04 vs Q4 FY03 BY
MARKET SEGMENT
Orders Net Revenue
------------------- -------------------
Q4 FY04 Yr vs.Yr Q4 FY04 Yr vs.Yr
$ Amount % change $ Amount % change
------------------- -------------------
Networking $116 (31%) $122 (21%)
Personal
systems 287 (12%) 364 18%
------- -------
$403 (18%) $486 5%
======= =======
----------------------------------------------------------------------
Income (loss) from operations reflect the results of our
reportable segments under Agilent's management reporting system
which are not necessarily in conformity with accounting principles
generally accepted in the United States (GAAP). Income (loss) from
operations of our reporting segments excludes restructuring,
amortization of intangibles, non-operational charges and
unallocated infrastructure charges.
In general, recorded orders represent firm purchase commitments
from our customers with established terms and conditions for
products that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
LIFE SCIENCES AND CHEMICAL ANALYSIS INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended ended
October October Yr July
31, 31, vs.Yr 31, Sequential
2004 2003 % change 2004 % change
---------------------------------------------
Orders $366 $333 10% $321 14%
Net Revenue $352 $321 10% $335 5%
Income from operations $58 $53 9% $46 26%
----------------------------------------------------------------------
Twelve Twelve
months months
ended ended
October October
31, 31, Yr vs.Yr
2004 2003 % change
-------------------------
Orders $1,332 $1,174 13%
Net Revenue $1,333 $1,186 12%
Income from operations $192 $148 30%
----------------------------------------------------------------------
Income (loss) from operations reflect the results of our
reportable segments under Agilent's management reporting system
which are not necessarily in conformity with accounting principles
generally accepted in the United States (GAAP). Income from
operations of our reporting segments excludes restructuring,
amortization of intangibles, non-operational charges and
unallocated infrastructure charges.
In general, recorded orders represent firm purchase commitments
from our customers with established terms and conditions for
products and services that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
Segment Income (Loss) from Operations
Reconciliation of Reporting Segments to Agilent
Non-GAAP Income (Loss)
(In millions)
(Unaudited)
Three months Three months
ended ended
October 31, July 31,
----------------- -------
2004 2003 2004
--------- ------- -------
Test and Measurement $116 $(11) $88
Semiconductor Products 8 40 33
Automated Test (7) 45 19
Life Sciences and Chemical Analysis 58 53 46
Unallocated infrastructure charges (2) (5) (3)
--------- ------- -------
Non-GAAP income from operations - Agilent $173 $122 $183
========= ======= =======
Income (loss) from operations reflect the results of our
reportable segments under Agilent's management reporting system
which are not necessarily in conformity with accounting principles
generally accepted in the United States (GAAP). Income (loss) from
operations of our reporting segments excludes restructuring,
amortization of intangibles, non-operational charges and
unallocated infrastructure charges.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM OPERATIONS
BY GEOGRAPHY
(In millions, except percent changes)
(Unaudited)
---------------------------------------------------------------------
Three Months Ended Percent
October 31, Inc/(Dec)
------------------------------------ ----------
2004 2003
------------------- ---------------- ----------
ORDERS
Americas $586 $665 (12%)
Europe 347 337 3%
Asia Pacific 666 729 (9%)
------------------- ----------------
Total $1,599 $1,731 (8%)
=================== ================
NET REVENUE
Americas $600 $660 (9%)
Europe 374 323 16%
Asia Pacific 848 692 23%
------------------- ----------------
Total $1,822 $1,675 9%
=================== ================
---------------------------------------------------------------------
Twelve Months Ended Percent
October 31, Inc/(Dec)
------------------- ---------------- ----------
2004 2003
------------------- ---------------- ----------
ORDERS
Americas $2,420 $2,303 5%
Europe 1,463 1,248 17%
Asia Pacific 3,114 2,533 23%
------------------- ----------------
Total $6,997 $6,084 15%
=================== ================
NET REVENUE
Americas $2,424 2,347 3%
Europe 1,474 1,214 21%
Asia Pacific 3,283 2,495 32%
------------------- ----------------
Total $7,181 $6,056 19%
=================== ================
---------------------------------------------------------------------
In general, recorded orders represent firm purchase commitments
from our customers with established terms and conditions for
products and services that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
Reconciliation of Segment ROIC
(In millions)
(Unaudited)
Q4 Q4 Q4 Q4 Q3 Q3
FY04 FY04 FY04 FY04 FY04 FY04
Numerator: ATG SPG LSCA TMO ATG SPG
Segment income (loss) from
operations $(7) $8 $58 $116 $19 $33
Less:
Other (income) expense
and taxes (4) (10) 24 36 6 (11)
----- ------- ----- ------- ----- -------
Segment
return (3) 18 34 80 13 44
----- ------- ----- ------- ----- -------
Segment return annualized $(12) $72 $136 $320 $52 $176
===== ======= ===== ======= ===== =======
Denominator:
Segment assets (1)(2) $718 $1,434 $725 $2,148 $766 $1,462
Less:
Net current liabilities(3) 117 241 181 414 123 253
----- ------- ----- ------- ----- -------
Invested
capital $601 $1,193 $544 $1,734 $643 $1,209
----- ------- ----- ------- ----- -------
Average
Invested
capital $622 $1,201 $538 $1,781 $676 $1,168
ROIC -2% 6% 25% 18% 8% 15%
Q3 Q3 Q4 Q4 Q4 Q4
FY04 FY04 FY03 FY03 FY03 FY03
Numerator: LSCA TMO ATG SPG LSCA TMO
Segment income (loss) from
operations $46 $88 $45 $40 $53 $(11)
Less:
Other (income) expense and
taxes 16 24 23 (7) 16 (11)
----- ------- ----- ------- ----- -------
Segment
return 30 64 22 47 37 -
----- ------- ----- ------- ----- -------
Segment return annualized $120 $256 $88 $188 $148 $-
===== ======= ===== ======= ===== =======
Denominator:
Segment
assets(1)(2) $704 $2,231 $804 $1,420 $680 $2,268
Less:
Net current liabilities(3) 172 404 115 289 181 471
----- ------- ----- ------- ----- -------
Invested
capital $532 $1,827 $689 $1,131 $499 $1,797
----- ------- ----- ------- ----- -------
Average
Invested
capital $521 $1,830 $666 $1,152 $490 $1,851
ROIC 23% 14% 13% 16% 30% 0%
ROIC calculation:(annualized current quarter segment
return)/(average of the two most recent quarter-end balances of
Segment Invested Capital)
(1) As of Q3 FY04 the invested capital used to calculate ROIC was
increased to include allocated corporate net assets. The largest
component of the increase for each segment relates to deferred tax
assets which were calculated and allocated as if the valuation
allowance had not been recorded in Q3 FY03. Prior periods have
been restated to reflect this change.
(2) Segment assets consist of inventory, accounts receivable,
property plant and equipment, gross goodwill and other
intangibles, deferred taxes and allocated corporate assets. (3)
Includes accounts payable, employee compensation and benefits,
other accrued liabilities and allocated corporate liabilities.
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
AGILENT TECHNOLOGIES, INC
RECONCILIATION OF DAYS ON HAND (DOH)
(In millions)
Yr vs.
Yr
Change
in
Q404 Q403 Days
------ ------- --------
GAAP
Costs of Products and Services 1,042 961
Net Inventory 1,026 995
------ -------
GAAP Inventory Days 89 93 (4)
====== =======
Non-GAAP
Costs of Products and Services 1,042 961
Less:
Amort of Intangibles 1 8
Restructuring 15 15
Inventory Charges 18 -
Other 2 -
------ -------
Adjusted Costs of Products and Services 1,006 938
Net Inventory 1,026 995
------ -------
Non-GAAP Inventory Days 92 95 (3)
====== =======
GAAP DOH Formula: (Quarter end net inventory x 90 Days)/(Current
quarter's COGS)
Non-GAAP DOH Formula: (Quarter-end net inventory x 90
Days)/(Current quarter's COGS - Inventory Charges - Non- GAAP
Adjustments)
We provide non-GAAP financial information in order to provide
meaningful supplemental information regarding our operational
performance and to enhance our investors' overall understanding of
our core current financial performance and our prospects for the
future. We believe that our investors benefit from seeing our
results "through the eyes" of management in addition to the GAAP
presentation. Management measures segment and enterprise
performance using measures such as those that are disclosed in
this release. This information facilitates management's internal
comparisons to the company's historical operating results and
comparisons to competitors' operating results.
Non-GAAP information allows for greater transparency to
supplemental information used by management in its financial and
operational decision making. Historically, we have reported
similar non-GAAP information to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting.
This information is not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. It
excludes items, such as restructuring and amortization, that may
have a material effect on the company's net income (loss) and net
income (loss) per share calculated in accordance with GAAP.
Management monitors these items to ensure that expenses are in
line with expectations and that our GAAP results are correctly
stated but does not use them to measure the ongoing operating
performance of the company. The non-GAAP information we provide
may be different from the non-GAAP information provided by other
companies.
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