United States
Agilent Technologies Reports Third Quarter 2005 Results
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PALO ALTO, Calif., Aug. 15, 2005 Agilent Technologies Inc. (NYSE: A) today reported orders of $1.80 billion for the third fiscal quarter ended July 31, 2005, 1 percent above one year ago. Revenues during the quarter were $1.69 billion, 10 percent below last year. Third quarter GAAP net earnings were $104 million, or $0.21 per diluted share, compared with $100 million, or $0.20 per share, in last year's third quarter. Excluding a net $38 million composed largely of restructuring charges and tax benefits, Agilent reported third quarter operating net income of $142 million, or $0.28 per share. On a comparable basis, the company earned $154 million, or $0.30 per share, one year ago(1). "Agilent performed well in the third quarter, despite still-soft markets," said Bill Sullivan, Agilent president and chief executive officer. "Revenues were slightly below our expectations because of weak wireless test and life sciences markets. We were disciplined in our spending, however, and demonstrated excellent cash generation once again. As the world's premier measurement company, we extended our leadership through major new product introductions in both electronic and bioanalytical instrumentation." The company reported third quarter revenues of $1.69 billion, just below its expectations of $1.70 billion to $1.80 billion. Operating earnings, at $0.28 per share, were at the high end of expectations of $0.23 to $0.28 per share. Gross margins improved by over 2 percentage points compared with last year, despite 10 percent lower revenues and difficult conditions in several of Agilent's markets. During the quarter, the company generated $85 million in free cash flow(2) from operations, bringing total cash on hand to $2.8 billion. Looking ahead, Agilent said it remained comfortable with its prior guidance
for the fourth fiscal quarter. With evidence of a rebound in semiconductor-related
markets, signs of a bottoming in wireless test, and the assumption of normal
seasonality, the company expects fourth quarter fiscal 2005 revenues of $1.79
billion to $1.89 billion. Operating earnings are expected to be in the range
of $0.33 to $0.38 per share(3).
Segment Results
Segment profits of $42 million were $3 million below last year on a $6 million
increase in revenues. Excluding the impact of recent acquisitions, profits were
flat compared with last year. A lower tax rate and tight capital management
enabled the segment to achieve a Return On Invested Capital(5) (ROIC) of 27
percent during the quarter, compared with last year's ROIC of 22 percent.
Third quarter operating profits of $72 million were $17 million below last year on $58 million lower revenues, with gross margins improved by over 1 point and operating expenses slightly below one year ago. Compared with the second quarter, segment profits were flat despite $43 million lower revenues. During the quarter, Test and Measurement achieved a 17 percent ROIC(5), up 3 points from last year despite a 1.5 point lower operating margin, with taxes lower and capital investment well contained.
The third quarter segment loss of $13 million represents an improvement of
$7 million compared with the second quarter on an $11 million increase in revenues.
With momentum building in semiconductor test, this segment is expected to return
to profitability in the fourth quarter.
Segment profits of $39 million were $2 million below last year on an $8 million drop in revenues. Sequentially, profits were up $27 million on a $36 million increase in revenues. Segment ROIC(5) was 18 percent during the quarter, flat with last year but up 12 points from the second quarter.
About Agilent Technologies Agilent Technologies Inc. (NYSE: A) is the world's premier measurement company and a 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. In lieu of the normal earnings conference call, Agilent management will present more details on its third-quarter FY05 financial results and the additional announcements made today during a meeting at the Mandarin Oriental hotel in New York City beginning today at 8:30 a.m. (ET). This event will also be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Major Announcement and Third Quarter FY05 Financial Results Conference Call" under "News & Events - Calendar of Events." A telephone replay of the meeting will be available one hour after the conference
call today through August 22. This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding our revenues, earnings and profitability, our new product introductions in electronic and bioanalytical instrumentation, the nature and timing of growth in the markets we serve, including specifically the semiconductor-related markets and wireless test markets, the strength of our business segments, including the Life Sciences and Chemical Analysis segment and the Automated Test segment, and the seasonality of the markets in which certain of our businesses operate. These forward-looking statements involve risks and uncertainties that could cause Agilent's results to differ materially from management's current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers' businesses and unforeseen changes in the demand for new products and technologies. In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles while it continues to implement 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 our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties on our operations, 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 Annual Report on Form 10-K for the year ended Oct. 31, 2004, and our Quarterly Report on Form 10-Q for the period ended April 30, 2005. Forward-looking statements are based on the beliefs and assumptions of Agilent's management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.
# # # Financial tables for third quarter fiscal 2005
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
July 31,
-------------------- Percent
2005 2004 Inc/(Dec)
---------- --------- ----------
Orders $1,797 $1,775 1%
========== =========
Net revenue $1,688 $1,885 (10%)
Costs and expenses:
Cost of products and services 923 1,089 (15%)
Research and development 244 235 4%
Selling, general and administrative 432 454 (5%)
---------- ---------
Total costs and expenses 1,599 1,778 (10%)
---------- ---------
Income from operations 89 107 (17%)
Other income (expense), net 40 26 54%
---------- ---------
Income before taxes 129 133 (3%)
Provision for taxes 25 33 (24%)
---------- ---------
Net income $104 $100 4%
========== =========
Net income per share:
Basic $0.21 $0.21
Diluted $0.21 $0.20
Weighted average shares used in
computing net income per share:
Basic 494 485
Diluted 500 491
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
Nine Months Ended
July 31,
-------------------- Percent
2005 2004 Inc/(Dec)
---------- --------- ----------
Orders $5,127 $5,398 (5%)
========== =========
Net revenue $5,034 $5,359 (6%)
Costs and expenses:
Cost of products and services 2,728 3,016 (10%)
Research and development 724 701 3%
Selling, general and administrative 1,316 1,345 (2%)
---------- ---------
Total costs and expenses 4,768 5,062 (6%)
---------- ---------
Income from operations 266 297 (10%)
Other income (expense), net 107 47 128%
---------- ---------
Income before taxes 373 344 8%
Provision for taxes 71 69 3%
---------- ---------
Net income $302 $275 10%
========== =========
Net income per share:
Basic $0.61 $0.57
Diluted $0.61 $0.56
Weighted average shares used in
computing net income per share:
Basic 492 482
Diluted 497 491
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Excluding Restructuring, Amortization of Intangibles
and Non-Operational Items
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
July 31,
-------------------- Percent
2005 2004 Inc/(Dec)
---------- --------- ----------
Orders $1,797 $1,775 1%
========== =========
Net revenue $1,688 $1,885 (10%)
Costs and expenses:
Cost of products and services 899 1,052 (15%)
Research and development 231 230 -
Selling, general and administrative 412 420 (2%)
---------- ---------
Total costs and expenses 1,542 1,702 (9%)
---------- ---------
Income from operations 146 183 (20%)
Other income (expense), net 39 26 50%
---------- ---------
Income before taxes 185 209 (11%)
Provision for taxes 43 55 (22%)
---------- ---------
Non-GAAP net income $142 $154 (8%)
========== =========
Non-GAAP net income per share:
Basic $0.29 $0.32
Diluted $0.28 $0.30
Weighted average shares used in
computing non-GAAP net income per
share:
Basic 494 485
Diluted 535 527
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 $104 $100
Non-GAAP adjustments:
Other intangibles 4 3
Restructuring and asset
impairment 40 42
Loss (gain) on sale of
assets 1 (1)
Camera module inventory
charge 3 -
Contract termination fees - 14
Transaction Related Costs 7 -
Other 1 18
Adjustment for income taxes (18) (22)
---------- ---------
Non-GAAP net income $142 $154
========== =========
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.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Excluding Restructuring, Amortization of Intangibles
and Non-Operational Items
(In millions, except per share amounts)
(Unaudited)
Nine Months Ended
July 31,
-------------------- Percent
2005 2004 Inc/(Dec)
---------- --------- ----------
Orders $5,127 $5,398 (5%)
========== =========
Net revenue $5,034 $5,359 (6%)
Costs and expenses:
Cost of products and services 2,698 2,949 (9%)
Research and development 708 686 3%
Selling, general and administrative 1,273 1,255 1%
---------- ---------
Total costs and expenses 4,679 4,890 (4%)
---------- ---------
Income from operations 355 469 (24%)
Other income (expense), net 91 53 72%
---------- ---------
Income before taxes 446 522 (15%)
Provision for taxes 103 146 (29%)
---------- ---------
Non-GAAP net income $343 $376 (9%)
========== =========
Non-GAAP net income per share:
Basic $0.70 $0.78
Diluted $0.68 $0.75
Weighted average shares used in
computing non-GAAP net income per
share:
Basic 492 482
Diluted 533 527
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 $302 $275
Non-GAAP adjustments:
Other intangibles 10 21
Restructuring and asset
impairment 49 115
Gain on sale of equity
investments (8) -
Gain on camera module
divesture (12) -
Gain on sale of assets (9) (1)
Gain on sale of investments (7) -
Investment impairments 13 -
Camera module inventory
charge 5 -
Inventory write-down/2" fab
decommissioning 5 -
Donation to Agilent
foundation 10 -
Contract termination fees 2 14
Transaction Related Costs 7 -
Other 8 29
Adjustment for income taxes (32) (77)
---------- ---------
Non-GAAP net income $343 $376
========== =========
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.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
July 31, October 31,
2005 2004
---------- -----------
ASSETS
Current assets:
Cash and cash equivalents $2,782 $2,315
Accounts receivable, net 966 1,044
Inventory 936 1,026
Other current assets 242 192
---------- -----------
Total current assets 4,926 4,577
Property, plant and equipment, net 1,148 1,258
Goodwill and other intangible assets, net 461 443
Other assets 817 778
---------- -----------
Total assets $7,352 $7,056
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $399 $441
Employee compensation and benefits 471 545
Deferred revenue 323 284
Income and other taxes payable 374 340
Other accrued liabilities 204 261
---------- -----------
Total current liabilities 1,771 1,871
---------- -----------
Senior convertible debentures 1,150 1,150
Other liabilities 483 466
---------- -----------
Total liabilities 3,404 3,487
---------- -----------
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; 494 million shares at
July 31, 2005 and 487 million shares at
October 31, 2004 issued and outstanding 5 5
Additional paid-in capital 5,311 5,195
Accumulated deficit (1,509) (1,810)
Accumulated other comprehensive income 141 179
---------- -----------
Total stockholders' equity 3,948 3,569
---------- -----------
Total liabilities and stockholders'
equity $7,352 $7,056
========== ===========
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Nine months Three months
ended ended
July 31, July 31,
2005 2005
----------- ------------
Cash flows from operating activities:
Net income $302 $104
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 173 58
Amortization 13 6
In-Process R&D 2 1
Deferred taxes 29 17
E&O Inventory related charges 68 21
Asset impairment charges 19 1
Gain on sale of investments (16) -
(Gain) loss on sale of assets (17) 4
Changes in assets and liabilities:
Accounts receivable 70 (18)
Inventory 4 4
Accounts payable (55) (11)
Employee compensation and benefits (75) (55)
Income taxes and other taxes payable (28) (38)
Other current assets and liabilities (39) 24
Other long-term assets and liabilities 31 21
----------- ------------
Net cash provided by operating activities (a) 481 139
Cash flows from investing activities:
Investments in property, plant and
equipment (140) (54)
Investment in equity securities (11) (8)
Proceeds from sale of investments 22 -
Proceeds from sale of assets 77 7
(Increase) decrease in restricted cash (20) 1
Repayment of loan 6 6
Purchase of intangible assets (56) (37)
----------- ------------
Net cash used in investing activities (122) (85)
Cash flows from financing activities:
Issuance of common stock under employee
stock plans 114 52
Net payments of notes payable and short-
term borrowings (3) -
----------- ------------
Net cash provided by financing activities 111 52
Impact of exchange rate movements (3) (9)
----------- ------------
Net increase in cash and cash equivalents 467 97
Cash and cash equivalents at beginning of
period 2,315 2,685
----------- ------------
Cash and cash equivalents at end of period $2,782 $2,782
=========== ============
(a) Cash payments included in operating
activities:
Restructuring 61 21
Income tax payments 28 13
AGILENT TECHNOLOGIES, INC
RECONCILIATION FROM GAAP TO NON-GAAP
NET INCOME
THREE MONTHS ENDED JULY 31, 2005
(Unaudited)
Non-GAAP Adjustments
Restruc- Loss on Camera
Other turing and Sale Module
(In millions, except Intan- Asset of Inventory
per share amounts) GAAP gibles Impairment Assets Charge
------------------------------- -----------------
Orders $1,797 $- $- $- $-
======= ========== ============ ======= =========
Net revenue $1,688 $- $- $- $-
Costs and expenses:
Cost of products
and services 923 (2) (16) (1) (3)
Research and
development 244 - (12) - -
Selling, general
and
administrative 432 (2) (12) - -
------- ---------- ------------ ------- ---------
Total costs
and expenses 1,599 (4) (40) (1) (3)
------- ---------- ------------ ------- ---------
Income from
operations 89 4 40 1 3
Other income
(expense), net 40 - - - -
------- ---------- ------------ ------- ---------
Income before taxes 129 4 40 1 3
Provision for taxes 25 - - - -
------- ---------- ------------ ------- ---------
Net income $104 $4 $40 $1 $3
======= ========== ============ ======= =========
Net income per share
- Basic and
Diluted:
Basic $0.21 $0.01 $0.08 $0.00 $0.01
Diluted $0.21 $0.01 $0.07 $0.00 $0.01
Weighted average
shares used in
computing net
income per share:
Basic 494 494 494 494 494
Diluted 500 535 535 535 535
Non-GAAP Adjustments
Adjustment
Transaction for
(In millions, except per Related Income
share amounts) Costs Other Taxes Non-GAAP
------------------------------------------
Orders $- $- $- $1,797
=========== ======== ========== =======
Net revenue $- $- $- $1,688
Costs and expenses:
Cost of products and
services - (2) - 899
Research and development - (1) - 231
Selling, general and
administrative (7) 1 - 412
----------- -------- ---------- -------
Total costs and
expenses (7) (2) - 1,542
----------- -------- ---------- -------
Income from operations 7 2 - 146
Other income (expense), net - (1) - 39
----------- -------- ---------- -------
Income before taxes 7 1 - 185
Provision for taxes - - 18 43
----------- -------- ---------- -------
Net income $7 $1 $(18) $142
=========== ======== ========== =======
Net income per share -
Basic and Diluted:
Basic $0.01 $0.00 $(0.03) $0.29
Diluted $0.01 $0.00 $(0.03) $0.28 (a)
Weighted average shares
used in computing net
income per share:
Basic 494 494 494 494
Diluted 535 535 535 535 (a)
(a) In order to calculate non-GAAP diluted net income per share, we
added 36 million shares and approximately $7 million of after-tax
interest expense to non-GAAP net income to treat our senior
convertible debentures as if they were converted. There was no impact
of this 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
NINE MONTHS ENDED JULY 31, 2005
(Unaudited)
Non-GAAP Adjustments
Restructuring Gain on Sale
(In millions, except Other and Asset of Equity
per share amounts) GAAP Intangibles Impairment Investments
----------------------------------------------
Orders $5,127 $- $- $-
======= =========== ============= ============
Net revenue $5,034 $- $- $-
Costs and expenses:
Cost of products and
services 2,728 (6) (19) -
Research and
development 724 - (13) -
Selling, general and
administrative 1,316 (4) (17) -
------- ----------- ------------- ------------
Total costs and
expenses 4,768 (10) (49) -
------- ----------- ------------- ------------
Income from operations 266 10 49 -
Other income (expense),
net 107 - - (8)
------- ----------- ------------- ------------
Income before taxes 373 10 49 (8)
Provision for taxes 71 - - -
------- ----------- ------------- ------------
Net income $302 $10 $49 $(8)
======= =========== ============= ============
Net income per share -
Basic and Diluted:
Basic $0.61 $0.02 $0.10 $(0.02)
Diluted $0.61 $0.02 $0.09 $(0.02)
Weighted average shares
used in computing net
income per share:
Basic 492 492 492 492
Diluted 497 533 533 533
Non-GAAP Adjustments
Gain on
Camera Gain on Gain on Sale
(In millions, except Module Sale of Investment
per share amounts) Divesture of Assets Investments Impairments
----------------------------------------------
Orders $- $- $- $-
=========== ========= ============ ===========
Net revenue $- $- $- $-
Costs and expenses:
Cost of products and
services - 9 - -
Research and
development - - - -
Selling, general and
administrative - - - -
----------- --------- ------------ -----------
Total costs and
expenses - 9 - -
----------- --------- ------------ -----------
Income from operations - (9) - -
Other income (expense),
net (12) - (7) 13
----------- --------- ------------ -----------
Income before taxes (12) (9) (7) 13
Provision for taxes - - - -
----------- --------- ------------ -----------
Net income $(12) $(9) $(7) $13
=========== ========= ============ ===========
Net income per share -
Basic and Diluted:
Basic $(0.02) $(0.02) $(0.01) $0.03
Diluted $(0.02) $(0.02) $(0.01) $0.02
Weighted average shares
used in computing net
income per share:
Basic 492 492 492 492
Diluted 533 533 533 533
Non-GAAP Adjustments
Camera Donation
Module Inventory Write- to Contract
(In millions, except Inventory Down/2" Fab Agilent Termination
per share amounts) Charge Decommissioning Foundation Fees
-------------------------------------------------
Orders $- $- $- $-
========= ================ ========== ===========
Net revenue $- $- $- $-
Costs and expenses:
Cost of products
and services (5) (5) - -
Research and
development - - - -
Selling, general
and
administrative - - (10) (2)
--------- ---------------- ---------- -----------
Total costs
and expenses (5) (5) (10) (2)
--------- ---------------- ---------- -----------
Income from
operations 5 5 10 2
Other income
(expense), net - - - -
--------- ---------------- ---------- -----------
Income before taxes 5 5 10 2
Provision for taxes - - - -
--------- ---------------- ---------- -----------
Net income $5 $5 $10 $2
========= ================ ========== ===========
Net income per share
- Basic and
Diluted:
Basic $0.01 $0.01 $0.02 $0.00
Diluted $0.01 $0.01 $0.02 $0.00
Weighted average
shares used in
computing net
income per share:
Basic 492 492 492 492
Diluted 533 533 533 533
Non-GAAP Adjustments
Transaction Adjustment
(In millions, except Related for
per share amounts) Costs Other Income Taxes Non-GAAP
----------------------------------------------
Orders $- $- $- $5,127
============= ======== ============ =======
Net revenue $- $- $- $5,034
Costs and expenses:
Cost of products and
services - (4) - 2,698
Research and
development - (3) - 708
Selling, general and
administrative (7) (3) - 1,273
------------- -------- ------------ -------
Total costs and
expenses (7) (10) - 4,679
------------- -------- ------------ -------
Income from operations 7 10 - 355
Other income (expense),
net - (2) - 91
------------- -------- ------------ -------
Income before taxes 7 8 - 446
Provision for taxes - - 32 103
------------- -------- ------------ -------
Net income $7 $8 $(32) $343
============= ======== ============ =======
Net income per share -
Basic and Diluted:
Basic $0.01 $0.02 $(0.06) $0.70
Diluted $0.01 $0.02 $(0.06) $0.68 (a)
Weighted average shares
used in computing net
income per share:
Basic 492 492 492 492
Diluted 533 533 533 533 (a)
(a) In order to calculate non-GAAP diluted net income per share, we
added 36 million shares and approximately $7 million of after-tax
quarterly interest expense to non-GAAP net income to treat our senior
convertible debentures as if they were converted. The impact of this
was ($.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
THREE MONTHS ENDED JULY 31, 2004
(Unaudited)
Non-GAAP Adjustments
Restructuring
and Gain on
(In millions, except per Other Asset Sale of
share amounts) GAAP Intangibles Impairment Assets
-----------------------------------------
Orders $1,775 $- $- $-
======= =========== ============= =======
Net revenue $1,885 $- $- $-
Costs and expenses:
Cost of products and
services 1,089 (3) (24) -
Research and development 235 - (2) -
Selling, general and
administrative 454 - (16) 1
------- ----------- ------------- -------
Total costs and expenses 1,778 (3) (42) 1
------- ----------- ------------- -------
Income from operations 107 3 42 (1)
Other income (expense), net 26 - - -
------- ----------- ------------- -------
Income before taxes 133 3 42 (1)
Provision for taxes 33 - - -
------- ----------- ------------- -------
Net income $100 $3 $42 $(1)
======= =========== ============= =======
Net income per share - Basic
and Diluted:
Basic $0.21 $- $0.09 $-
Diluted $0.20 $- $0.08 $-
Weighted average shares used
in computing net income per
share:
Basic 485 485 485 485
Diluted 491 527 527 527
Non-GAAP Adjustments
Contract Adjustment
(In millions, except per Termination for Income Non-
share amounts) Fees Other Taxes GAAP
-----------------------------------------
Orders $- $- $- $1,775
=========== ====== ========== =======
Net revenue $- $- $- $1,885
Costs and expenses:
Cost of products and
services (4) (6) - 1,052
Research and development (3) - - 230
Selling, general and
administrative (7) (12) - 420
----------- ------ ---------- -------
Total costs and expenses (14) (18) - 1,702
----------- ------ ---------- -------
Income from operations 14 18 - 183
Other income (expense), net - - - 26
----------- ------ ---------- -------
Income before taxes 14 18 - 209
Provision for taxes - - 22 55
----------- ------ ---------- -------
Net income $14 $18 $(22) $154
=========== ====== ========== =======
Net income per share - Basic
and Diluted:
Basic $0.03 $0.04 $(0.05) $0.32
Diluted $0.03 $0.03 $(0.04) $0.30 (a)
Weighted average shares used
in computing net income per
share:
Basic 485 485 485 485
Diluted 527 527 527 527 (a)
(a) 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
NINE MONTHS ENDED JULY 31, 2004
(Unaudited)
Non-GAAP Adjustments
Restructuring
and Gain on
(In millions, except per Other Asset Sale of
share amounts) GAAP Intangibles Impairment Assets
------------------------------------------
Orders $5,398 $- $- $-
======= =========== ============= ========
Net revenue $5,359 $- $- $-
Costs and expenses:
Cost of products and
services 3,016 (18) (39) -
Research and development 701 - (12) -
Selling, general and
administrative 1,345 (3) (56) 1
------- ----------- ------------- --------
Total costs and
expenses 5,062 (21) (107) 1
------- ----------- ------------- --------
Income from operations 297 21 107 (1)
Other income (expense), net 47 - 8 -
------- ----------- ------------- --------
Income before taxes 344 21 115 (1)
Provision for taxes 69 - - -
------- ----------- ------------- --------
Net income $275 $21 $115 $(1)
======= =========== ============= ========
Net income per share -
Basic and Diluted:
Basic $0.57 $0.04 $0.24 $-
Diluted $0.56 $0.04 $0.22 $-
Weighted average shares
used in computing net
income per share:
Basic 482 482 482 482
Diluted 491 527 527 527
Non-GAAP Adjustments
Contract Adjustment
(In millions, except per Termination for Income Non-
share amounts) Fees Other Taxes GAAP
------------------------------------------
Orders $- $- $- $5,398
============= ====== ========== =======
Net revenue $- $- $- $5,359
Costs and expenses:
Cost of products and
services (4) (6) - 2,949
Research and development (3) - - 686
Selling, general and
administrative (7) (25) - 1,255
------------- ------ ---------- -------
Total costs and
expenses (14) (31) - 4,890
------------- ------ ---------- -------
Income from operations 14 31 - 469
Other income (expense), net - (2) - 53
------------- ------ ---------- -------
Income before taxes 14 29 - 522
Provision for taxes - - 77 146
------------- ------ ---------- -------
Net income $14 $29 $(77) $376
============= ====== ========== =======
Net income per share -
Basic and Diluted:
Basic $0.03 $0.06 $(0.16) $0.78
Diluted $0.03 $0.05 $(0.15) $0.75 (a)
Weighted average shares
used in computing net
income per share:
Basic 482 482 482 482
Diluted 527 527 527 527 (a)
(a) In order to calculate non-GAAP diluted net income per share, we
added 36 million shares and approximately $19 million of after-tax
interest expense to non-GAAP net income to treat our senior
convertible debentures as if they were converted. The impact of this
was ($.02) 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.
LIFE SCIENCES AND CHEMICAL ANALYSIS INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended ended
July July Yr April
31, 31, vs.Yr 30, Sequential
2005 2004 % change 2005 % change
---------------------------------------------
Orders $348 $321 8% $385 (10%)
Net Revenue $341 $335 2% $344 (1%)
Income from operations $42 $45 (7%) $39 8%
----------------------------------------------------------------------
Nine Nine
months months
ended ended
July July Yr
31, 31, vs.Yr
2005 2004 % change
--------------------------
Orders $1,089 $966 13%
Net Revenue $1,039 $981 6%
Income from operations $132 $129 2%
----------------------------------------------------------------------
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.
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 Yr ended
ended ended vs.Yr April
July 31, July 31, % 30, Sequential
2005 2004 change 2005 % change
-----------------------------------------------
Orders $722 $772 (6%) $757 (5%)
Net Revenue $705 $763 (8%) $748 (6%)
Income from operations $72 $89 (19%) $72 -
----------------------------------------------------------------------
Nine months Nine months
ended ended
July 31, July 31, Yr vs.Yr
2005 2004 % change
-----------------------------------------------
Orders $2,131 $2,147 (1%)
Net Revenue $2,153 $2,100 3%
Income from operations $207 $106 95%
-----------------------------------------------
----------------------------------------------------------------------
Q3 FY05 vs Q2 FY05 BY MARKET SEGMENT
Orders Net Revenue
-------------------------- ----------------------------
Q3 FY05 Q3 FY05
$ Sequential % of $ Sequential % of
Amount % change Segment Amount % change Segment
-------------------------- ----------------------------
Communications
test $512 (4%) 71% $497 (8%) 70%
General
purpose test 210 (7%) 29% 208 (1%) 30%
------- ------- ------- -------
$722 (5%) 100% $705 (6%) 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q3 FY05 vs Q3 FY04 BY MARKET SEGMENT
Orders Net Revenue
------------------------ -----------------------
Q3 FY05 Yr vs.Yr Q3 FY05 Yr vs.Yr
$ Amount % change $ Amount % change
------------------------ -----------------------
Communications test $512 (6%) $497 (7%)
General purpose test 210 (8%) 208 (10%)
----------- -------------
$722 (6%) $705 (8%)
=========== =============
----------------------------------------------------------------------
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.
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
AUTOMATED TEST INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended Yr ended
July July vs.Yr April
31, 31, % 30, Sequential
2005 2004 change 2005 % change
-----------------------------------------
Orders $228 $208 10% $171 33%
Net Revenue $192 $243 (21%) $181 6%
Income (loss) from operations $(13) $19 (168%) $(20) 35%
----------------------------------------------------------------------
Nine months Nine months
ended ended
July 31, July 31, Yr vs.Yr
2005 2004 % change
-----------------------------------------
Orders $559 $694 (19%)
Net Revenue $528 $728 (27%)
Income (loss) from operations $(67) $75 (189%)
----------------------------------------------------------------------
Q3 FY05 vs Q2 FY05 BY MARKET SEGMENT
Orders Net Revenue
--------------------------- ----------------------------
Q3 FY05 Q3 FY05
$ Sequential % of $ Sequential % of
Amount % change Segment Amount % change Segment
--------------------------- ----------------------------
Semiconductor
test $187 41% 82% $149 1% 78%
Manufacturing
test 41 8% 18% 43 26% 22%
------- ------- ------- -------
$228 33% 100% $192 6% 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q3 FY05 vs Q3 FY04 BY MARKET SEGMENT
Orders Net Revenue
------------------------- -----------------------
Yr Yr
Q3 FY05 vs.Yr Q3 FY05 vs.Yr
$ Amount % change $ Amount % change
------------------------- -----------------------
Semiconductor test $187 18% $149 (24%)
Manufacturing test 41 (16%) 43 (7%)
-------------- -------------
$228 10% $192 (21%)
============== =============
----------------------------------------------------------------------
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.
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
SEMICONDUCTOR PRODUCTS INFORMATION
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Three Three
months months months
ended ended Yr ended
July July vs.Yr April
31, 31, % 30, Sequential
2005 2004 change 2005 % change
-------------------------------------------
Orders $499 $399 25% $464 8%
Net Revenue $450 $458 (2%) $414 9%
Income from operations $39 $41 (5%) $12 225%
----------------------------------------------------------------------
Nine months Nine months
ended ended
July 31, July 31, Yr vs.Yr
2005 2004 % change
-----------------------------------------------
Orders $1,343 $1,329 1%
Net Revenue $1,245 $1,345 (7%)
Income from operations $66 $158 (58%)
----------------------------------------------------------------------
Q3 FY05 vs Q2 FY05 BY MARKET SEGMENT
Orders Net Revenue
-------------------------- --------------------------
Q3 FY05 Q3 FY05
$ Sequential % of $ Sequential % of
Amount % change Segment Amount % change Segment
-------------------------- --------------------------
Networking $133 (13%) 27% $139 (4%) 31%
Personal systems 366 17% 73% 311 16% 69%
------- ------- ------- -------
$499 8% 100% $450 9% 100%
======= ======= ======= =======
----------------------------------------------------------------------
Q3 FY05 vs Q3 FY04 BY MARKET SEGMENT
Orders Net Revenue
--------------------------- -----------------------
Q3 FY05 Yr vs.Yr Q3 FY05 Yr vs.Yr
$ Amount % change $ Amount % change
--------------------------- -----------------------
Networking $133 2% $139 (3%)
Personal systems 366 37% 311 (1%)
-------------- -------------
$499 25% $450 (2%)
============== =============
----------------------------------------------------------------------
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.
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
Segment Information
Reconciliation of Reporting Segments to Agilent Consolidated Totals
(In millions)
(Unaudited)
Three months
Three months ended ended
July 31, April 30,
---------------------- ----------------
Orders 2005 2004 2005
------------ --------- ----------------
Life Sciences and Chemical
Analysis $348 $321 $385
Test and Measurement 722 772 757
Automated Test 228 208 171
Semiconductor Products 499 399 464
Camera Module - 75 (52)
Unallocated infrastructure and
rounding - - -
------------ --------- ----------------
Total Agilent orders $1,797 $1,775 $1,725
============ ========= ================
Three months
Three months ended ended
July 31, April 30,
---------------------- ----------------
Net Revenue 2005 2004 2005
------------ --------- ----------------
Life Sciences and Chemical
Analysis $341 $335 $344
Test and Measurement 705 763 748
Automated Test 192 243 181
Semiconductor Products 450 458 414
Camera Module - 86 -
Unallocated infrastructure and
rounding - - 1
------------ --------- ----------------
Total Agilent net revenue $1,688 $1,885 $1,688
============ ========= ================
Three months
Three months ended ended
July 31, April 30,
---------------------- ----------------
Income (Loss) from Operations 2005 2004 2005
------------ --------- ----------------
Life Sciences and Chemical
Analysis $42 $45 $39
Test and Measurement 72 89 72
Automated Test (13) 19 (20)
Semiconductor Products 39 41 12
Camera Module - (9) -
Unallocated infrastructure
charges 6 (2) -
------------ --------- ----------------
Total Agilent Non-GAAP
income from operations $146 $183 $103
============ ========= ================
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.
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM OPERATIONS
BY GEOGRAPHY
(In millions, except percent changes)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended Percent
July 31, Inc/(Dec)
---------------- ---------------- -------------
2005 2004
---------------- ---------------- -------------
ORDERS
Americas $655 $613 7%
Europe 340 392 (13%)
Asia Pacific 802 770 4%
---------------- ----------------
Total $1,797 $1,775 1%
================ ================
NET REVENUE
Americas $612 $663 (8%)
Europe 340 363 (6%)
Asia Pacific 736 859 (14%)
---------------- ----------------
Total $1,688 $1,885 (10%)
================ ================
----------------------------------------------------------------------
Nine Months Ended Percent
July 31, Inc/(Dec)
---------------- ---------------- -------------
2005 2004
---------------- ---------------- -------------
ORDERS
Americas $1,780 $1,833 (3%)
Europe 1,096 1,117 (2%)
Asia Pacific 2,251 2,448 (8%)
---------------- ----------------
Total $5,127 $5,398 (5%)
================ ================
NET REVENUE
Americas $1,749 $1,824 (4%)
Europe 1,093 1,100 (1%)
Asia Pacific 2,192 2,435 (10%)
---------------- ----------------
Total $5,034 $5,359 (6%)
================ ================
----------------------------------------------------------------------
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 DAYS ON HAND (DOH)
(In millions)
Yr vs. Yr
Change in
Q305 Q304 Days
---------- ------------ --------------
GAAP
Costs of Products and Services 923 1,089
Net Inventory 936 1,061
---------- ------------
GAAP Inventory Days 91 88 3
========== ============
Non-GAAP
Costs of Products and Services 923 1,089
Less:
Amortization of Intangibles 2 3
Restructuring 16 24
Inventory Charges 14 6
Other 1 10
---------- ------------
Adjusted Costs of Products and
Services 890 1,046
Net Inventory 936 1,061
---------- ------------
Non-GAAP Inventory Days 95 91 4
========== ============
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.
AGILENT TECHNOLOGIES, INC.
Reconciliation of Segment ROIC
(In millions)
(Unaudited)
Q3 FY05 Q3 FY05 Q3 FY05 Q3 FY05
Numerator: LSCA TMO ATG SPG
Segment income (loss) from
operations $42 $72 $(13) $39
Less:
Other (income) expense and taxes 6 9 (4) (7)
--------- -------- ------- -------
Segment return 36 63 (9) 46
--------- -------- ------- -------
Segment return annualized $144 $252 $(36) $184
========= ======== ======= =======
Denominator:
Segment assets (a) $734 $1,850 $690 $1,299
Less:
Net current liabilities (b) 188 394 116 225
--------- -------- ------- -------
Invested capital $546 $1,456 $574 $1,074
--------- -------- ------- -------
Average Invested capital $532 $1,523 $596 $1,051
ROIC 27% 17% -6% 18%
Q2 FY05 Q2 FY05 Q2 FY05 Q2 FY05
Numerator: LSCA TMO ATG SPG
Segment income (loss) from
operations $39 $72 $(20) $12
Less:
Other (income) expense and taxes 11 11 (6) (5)
--------- -------- ------- -------
Segment return 28 61 (14) 17
--------- -------- ------- -------
Segment return annualized $112 $244 $(56) $68
========= ======== ======= =======
Denominator:
Segment assets (a) $721 $2,020 $738 $1,273
Less:
Net current liabilities (b) 203 430 121 245
--------- -------- ------- -------
Invested capital $518 $1,590 $617 $1,028
--------- -------- ------- -------
Average Invested capital $510 $1,601 $602 $1,077
ROIC 22% 15% -9% 6%
Q3 FY04 Q3 FY04 Q3 FY04 Q3 FY04
Numerator: LSCA TMO ATG SPG
Segment income (loss) from
operations $45 $89 $19 $41
Less:
Other (income) expense and taxes 16 23 6 (11)
--------- -------- ------- -------
Segment return 29 66 13 52
--------- -------- ------- -------
Segment return annualized $116 $264 $52 $208
========= ======== ======= =======
Denominator:
Segment assets (a) $716 $2,241 $746 $1,398
Less:
Net current liabilities (b) 173 403 123 214
--------- -------- ------- -------
Invested capital $543 $1,838 $623 $1,184
--------- -------- ------- -------
Average Invested capital $533 $1,841 $657 $1,132
ROIC 22% 14% 8% 18%
ROIC calculation:(annualized current quarter segment return)/(average
of the two most recent quarter-end balances of Segment Invested
Capital)
(a) Segment assets consist of inventory, accounts receivable, property
plant and equipment, gross goodwill and other intangibles, deferred
taxes and allocated corporate assets.
(b) 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.
Historical amounts were reclassified to conform with current period
presentation.
Contacts: Michele Drake Jorgen Tesselaar (Europe and Asia) Investor Contact: |
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