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Highlights:

Fourth-quarter fiscal year 2019

  • Revenue of $1.37 billion represents 6% reported growth; and up 4% on a core(1) basis led by strong results from the Agilent CrossLab Group and the Diagnostics and Genomics Group
  • GAAP net income of $194 million with EPS of 62 cents, up 2% year over year
  • Non-GAAP(2) net income of $277 million with EPS of 89 cents, up 10% year over year

Fiscal year 2019

  • Fiscal year 2019 revenue of $5.16 billion delivers 5% reported growth and a 5% increase in core(1) revenue over fiscal year 2018
  • Full-year GAAP net income of $1.07 billion with EPS of $3.37, up 247% year over year
  • Non-GAAP(2) net income of $989 million with EPS of $3.11, up 11% year over year

Outlook

  • Fiscal year 2020 revenue expected in the range of $5.50 billion to $5.55 billion, representing core(1) growth of 4% to 5%. Fiscal year 2020 non-GAAP(3) earnings guidance of $3.38 to $3.43 per share
  • Fiscal first-quarter revenue guidance of $1.340 billion to $1.355 billion, representing core(1) revenue growth of 2.5% to 3.5%. Fiscal first-quarter non-GAAP(3) earnings guidance of 80 cents to 81 cents per share

Agilent Technologies, Inc. (NYSE: A) today reported revenue of $1.37 billion for the fourth quarter ended Oct. 31, 2019, up 6% year over year (core(1) growth of 4%).

On a GAAP basis, fourth-quarter net income was $194 million, or 62 cents per share. This compares with $195 million, or 61 cents per share, in the fourth quarter of fiscal year 2018. Non-GAAP(2) net income was $277 million, or 89 cents per share, during the quarter, compared with $262 million or 81 cents per share during the fourth quarter a year ago.

"Agilent's fourth-quarter results cap off a very solid 2019 and reflect the broad-based business we've built over the last five years," said Mike McMullen, Agilent president and CEO. "Based on what we've been able to achieve in 2019, I'm convinced we're in an exceptionally strong position for the future."

Financial Highlights

Life Sciences and Applied Markets Group

Fourth-quarter revenue of $622 million from Agilent's Life Sciences and Applied Markets Group (LSAG) grew a reported 4% year over year (declining 2% on a core(1) basis). LSAG's operating margin for the quarter was 25.3%. Full-year revenue of $2.30 billion increased a reported 1% versus fiscal 2018 (down 1% on a core(1) basis). LSAG's operating margin for the year was 23.5%.

Agilent CrossLab Group

Agilent CrossLab Group (ACG) posted fourth-quarter revenue of $476 million, representing year-over-year reported growth of 8% (up 10% on a core(1) basis). ACG's operating margin for the quarter was 28.0%. Full-year revenue of $1.84 billion grew a reported 8% over last year (up 10% on a core(1) basis). ACG's operating margin for the year was 25.8%.

Diagnostics and Genomics Group

The Diagnostics and Genomics Group (DGG) generated fourth-quarter revenue of $269 million, up a reported 5% year over year (up 7% on a core(1) basis). DGG posted operating margins of 19.7%. Full-year revenue was $1.02 billion, which was up a reported 8% year over year (up 9% on a core(1) basis). DGG's operating margin for the year was 18.2%.

Full-Year and Fourth Quarter Outlook

For fiscal year 2020, Agilent expects revenue of $5.50 billion to $5.55 billion. Fiscal year 2020 non-GAAP(3) earnings guidance is in the range of $3.38 to $3.43 per share.

Agilent expects fiscal first-quarter 2020 revenue in the range of $1.340 billion to $1.355 billion. First-quarter 2020 non-GAAP(3) earnings are expected to be in the range of 80 cents to 81 cents per share.

The outlook is based on Oct. 31, 2019, currency exchange rates.

Conference Call

Agilent's management will present more details about its fourth-quarter and fiscal year 2019 financial results on a conference call with investors today at 1:30 p.m. (Pacific time). This event will be webcast live in listen-only mode. Listeners may log on to Agilent's Investor Relations web page and select "Q4 2019 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events – Events" section. The webcast will remain available on the company's website for 90 days.

Additional financial information can be found at www.investor.agilent.com by selecting "Financial Results" in the "Financial Information" section.

# # #

Financial Statements for Fourth-Quarter Fiscal 2019

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

PRELIMINARY

Three Months Ended

Years Ended

October 31,

October 31,

2019

2018 (a)

2019

2018 (a)

Net revenue

$

1,367

$

1,294

$

5,163

$

4,914

Costs and expenses:
Cost of products and services

630

586

2,358

2,234

Research and development

102

104

404

387

Selling, general and administrative

385

360

1,460

1,389

Total costs and expenses

1,117

1,050

4,222

4,010

Income from operations

250

244

941

904

Interest income

6

10

36

38

Interest expense

(21

)

(18

)

(74

)

(75

)

Other income (expense), net

(4

)

8

16

79

Income before taxes

231

244

919

946

Provision (benefit) for income taxes

37

49

(152

)

630

Net income

$

194

$

195

$

1,071

$

316

Net income per share:
Basic

$

0.63

$

0.61

$

3.41

$

0.98

Diluted

$

0.62

$

0.61

$

3.37

$

0.97

Weighted average shares used in computing net income per share:
Basic

309

319

314

321

Diluted

313

322

318

325

(a) Adjusted to include the impact of the adoption of ASU 2017-07 (pension expense reclassification) as of 11/1/2018. There is no impact to net income or net income per share.
The preliminary income statement is estimated based on our current information.
Page 1

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In millions, except par value and share amounts)

(Unaudited)

PRELIMINARY

October 31,

October 31,

2019

2018

ASSETS
Current assets:
Cash and cash equivalents

$

1,382

$

2,247

Accounts receivable, net

930

776

Inventory

679

638

Other current assets

198

187

Total current assets

3,189

3,848

Property, plant and equipment, net

850

822

Goodwill and other intangible assets, net

4,700

3,464

Long-term investments

102

68

Other assets

611

339

Total assets

$

9,452

$

8,541

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable

$

354

$

340

Employee compensation and benefits

334

304

Deferred revenue

336

324

Short-term debt

616

Other accrued liabilities

440

203

Total current liabilities

2,080

1,171

Long-term debt

1,791

1,799

Retirement and post-retirement benefits

360

239

Other long-term liabilities

473

761

Total liabilities

4,704

3,970

Total Equity:
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; 309 million shares at October 31, 2019 and 318 million shares at October 31, 2018, issued

3

3

Additional paid-in-capital

5,277

5,308

Accumulated deficit

(18

)

(336

)

Accumulated other comprehensive loss

(514

)

(408

)

Total stockholders' equity

4,748

4,567

Non-controlling interest

4

Total equity

4,748

4,571

Total liabilities and equity

$

9,452

$

8,541

The preliminary balance sheet is estimated based on our current information.
Page 2

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In millions)

(Unaudited)

PRELIMINARY

Years Ended

October 31,

October 31,

2019

2018

Cash flows from operating activities:
Net income

$

1,071

$

316

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization

238

210

Share-based compensation

72

70

Excess and obsolete inventory related charges

19

26

Loss on extinguishment of debt

9

Other non-cash expenses, net

6

10

Changes in assets and liabilities:
Accounts receivable, net

(106

)

(65

)

Inventory

(36

)

(83

)

Accounts payable

30

40

Employee compensation and benefits

23

31

Change in assets and liabilities due to Tax Act

552

Treasury lock agreement payment

(6

)

Other assets and liabilities

(299

)

(20

)

Net cash provided by operating activities (a)

1,021

1,087

Cash flows from investing activities:
Investments in property, plant and equipment

(155

)

(177

)

Proceeds from the sale of property, plant and equipment

1

Payment to acquire fair value investments

(23

)

(11

)

Payment in exchange for convertible note

(3

)

(2

)

Payment to acquire intangible assets

(1

)

Acquisition of businesses and intangible assets, net of cash acquired

(1,408

)

(516

)

Net cash used in investing activities

(1,590

)

(705

)

Cash flows from financing activities:
Issuance of common stock under employee stock plans

54

56

Payment of taxes related to net share settlement of equity awards

(16

)

(30

)

Payment of dividends

(206

)

(191

)

Proceeds from revolving credit facility and short-term loan, net of repayments

615

#

(110

)

Issuance of debt

497

Debt issuance costs

(4

)

Repayment of debt

(512

)

(100

)

Purchase of non-controlling interest

(4

)

Treasury stock repurchases

(723

)

(422

)

Net cash used in financing activities

(299

)

(797

)

Effect of exchange rate movements

2

(17

)

Net decrease in cash, cash equivalents and restricted cash

(866

)

(432

)

Cash, cash equivalents and restricted cash at beginning of period

2,254

2,686

Cash, cash equivalents and restricted cash at end of period

$

1,388

$

2,254

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents

$

1,382

$

2,247

Restricted cash, included in other assets

6

7

Total cash, cash equivalents and restricted cash

$

1,388

$

2,254

(a) Cash payments included in operating activities:

$

159

$

102

Income tax payments (refunds), net

$

80

$

80

Interest payments
The preliminary cash flow is estimated based on our current information.
Page 3

AGILENT TECHNOLOGIES, INC.

NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS

(In millions, except per share amounts)

(Unaudited)

PRELIMINARY

Three Months Ended

Years Ended

October 31,

October 31,

2019

Diluted
EPS

2018

Diluted
EPS

2019

Diluted
EPS

2018

Diluted
EPS

GAAP net income

$

194

$

0.62

$

195

$

0.61

$

1,071

$

3.37

$

316

$

0.97

Non-GAAP adjustments:
Asset impairments

21

0.06

21

0.06

Intangible amortization

46

0.15

29

0.09

125

0.39

105

0.32

Business exit and divestiture costs

9

0.03

Transformational initiatives

19

0.06

11

0.03

44

0.14

25

0.08

Acquisition and integration costs

16

0.05

9

0.03

48

0.15

23

0.07

Loss on extinguishment of debt

9

0.03

9

0.03

Pension settlement gain

(5

)

(0.02

)

Gain on step acquisition of Lasergen

(20

)

(0.06

)

NASD site costs

2

0.01

12

0.04

8

0.02

Special compliance costs

1

2

0.01

4

0.01

Other

12

0.04

2

0.01

29

0.09

(10

)

(0.03

)

Adjustment for Tax Reform

19

0.06

552

1.70

Tax benefit on intra-entity asset transfer

(299

)

(0.94

)

Adjustment for taxes (a)

(19

)

(0.06

)

(27

)

(0.09

)

(52

)

(0.17

)

(121

)

(0.36

)

Non-GAAP net income

$

277

$

0.89

$

262

$

0.81

$

989

$

3.11

$

907

$

2.79

(a) The adjustment for taxes excludes tax benefits that management believes are not directly related to on-going operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. For the three months and year ended October 31, 2019, management used a non-GAAP effective tax rate of 16.82% and 16.75%, respectively. In the same periods last year, management used a non-GAAP effective tax rate of 18%.
We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to asset impairments, amortization of intangibles, business exit and divestiture costs, transformational initiatives, acquisition and integration costs, loss on extinguishment of debt, pension settlement gain, gain on step acquisition of Lasergen, NASD site costs, special compliance costs, adjustment for Tax Reform, and tax benefit on intra-entity asset transfer.
Asset impairments include assets that have been written down to their fair value.
Business exit and divestiture costs include costs associated with business divestitures.
Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers including costs to move manufacturing due to new tariffs and tariff remediation actions, small site consolidations, legal entity and other business reorganizations, insourcing or outsourcing of activities. Such costs may include move and relocation costs, one-time termination benefits and other one-time reorganization costs. Included in this category are also expenses associated with company programs to transform our product lifecycle management (PLM) system, human resources and financial systems.
Acquisition and integration costs include all incremental expenses incurred to effect a business combination. Such acquisition costs may include advisory, legal, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of business and facility operations, the transfer of assets and intellectual property, information technology systems and infrastructure and other employee-related costs.
Loss on extinguishment of debt relates to the net loss recorded on full redemption of $500 million of outstanding 5.00% senior notes due July 2020, called on August 16, 2019 and settled on September 17, 2019.
Pension settlement gain resulted from transfer of the substitutional portion of our Japanese pension plan to the government.
Gain on step acquisition of Lasergen resulted from the measurement at fair value of our equity interest held at the date of business combination.
NASD site costs include all the costs related to the expansion of our manufacturing of nucleic acid active pharmaceutical ingredients incurred prior to the commencement of commercial manufacturing.
Special compliance costs include costs associated with transforming our processes to implement new regulations such as the EU's General Data Protection Regulation (GDPR), revenue recognition, lease and certain tax reporting requirements.
Other includes certain legal costs and settlements in addition to other miscellaneous adjustments.
Adjustment for Tax Reform primarily consists of an estimated provision of $499 million for U.S. transition tax and correlative items on deemed repatriated earnings of non-U.S. subsidiaries and an estimated provision of $53 million associated with the decrease in the U.S. corporate tax rate from 35% to 21% and its impact on our U.S. deferred tax assets and liabilities.
Tax benefit on intra-entity asset transfer relates to our operations in Singapore along with our application of the new accounting rules for income tax consequences of intra-entity transfer of assets as adopted on November 1, 2018.
Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.
Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
The preliminary non-GAAP net income and diluted EPS reconciliation is estimated based on our current information.

Page 4

AGILENT TECHNOLOGIES, INC.
SEGMENT INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY
Quarter-over-Quarter
Life Sciences and Applied Markets Group
Q4'19 Q4'18
Revenue

$

622

$

597

Gross Margin, %

60.7

%

62.1

%

Income from Operations

$

158

$

154

Operating margin, %

25.3

%

25.7

%

Diagnostics and Genomics Group
Q4'19 Q4'18
Revenue

$

269

$

256

Gross Margin, %

54.0

%

59.0

%

Income from Operations

$

53

$

58

Operating margin, %

19.7

%

22.7

%

Agilent CrossLab Group
Q4'19 Q4'18
Revenue

$

476

$

441

Gross Margin, %

52.6

%

51.0

%

Income from Operations

$

133

$

107

Operating margin, %

28.0

%

24.2

%

Year-over-Year
Life Sciences and Applied Markets Group
FY19 FY18
Revenue

$

2,302

$

2,270

Gross Margin, %

61.0

%

61.3

%

Income from Operations

$

542

$

543

Operating margin, %

23.5

%

23.9

%

Diagnostics and Genomics Group
FY19 FY18
Revenue

$

1,021

$

943

Gross Margin, %

54.7

%

56.3

%

Income from Operations

$

185

$

173

Operating margin, %

18.2

%

18.4

%

Agilent CrossLab Group
FY19 FY18
Revenue

$

1,840

$

1,701

Gross Margin, %

51.8

%

50.4

%

Income from Operations

$

475

$

388

Operating margin, %

25.8

%

22.8

%

Income from operations reflect the results of our reportable segments under Agilent's management reporting system which are not necessarily in conformity with GAAP financial measures. Income from operations of our reporting segments exclude, among other things, charges related to asset impairments, amortization of intangibles, business exit and divestiture costs, transformational initiatives, acquisition and integration costs, pension settlement gain, gain on step acqusition of Lasergen, NASD site costs, and special compliance costs.
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
The preliminary segment information is estimated based on our current information.
Page 5
AGILENT TECHNOLOGIES, INC.
RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING
ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS (CORE)
(in millions)
(Unaudited)
PRELIMINARY
Year-over-Year
GAAP
Year-over-Year
GAAP Revenue by Segment Q4'19 Q4'18 % Change
Life Sciences and Applied Markets Group

$

622

$

597

4

%

Diagnostics and Genomics Group

269

256

5

%

Agilent CrossLab Group

476

441

8

%

Agilent

$

1,367

$

1,294

6

%

Non-GAAP
(excluding Acquisitions & Divestitures)
Year-over-Year
at Constant Currency (a)
Year-over-Year Year-over-Year Percentage Point
Impact from Currency
Current Quarter
Currency Impact (b)
Non GAAP Revenue by Segment Q4'19 Q4'18 % Change % Change
Life Sciences and Applied Markets Group

$

575

$

597

(4

%)

(2

%)

-2 ppts

$

(7

)

Diagnostics and Genomics Group

269

256

5

%

7

%

-2 ppts

(4

)

Agilent CrossLab Group

476

441

8

%

10

%

-2 ppts

(9

)

Agilent (Core)

$

1,320

$

1,294

2

%

4

%

-2 ppts

$

(20

)

We compare the year-over-year change in revenue excluding the effect of recent acquisitions and divestitures and foreign currency rate fluctuations to assess the performance of our underlying business.
(a) The constant currency year-over-year growth percentage is calculated by recalculating all periods in the comparison period at the foreign currency exchange rates used for accounting during the last month of the current quarter, and then using those revised values to calculate the year-over-year percentage change.
(b) The dollar impact from the current quarter currency impact is equal to the total year-over-year dollar change less the constant currency year-over-year change.
The preliminary reconciliation of GAAP revenue adjusted for recent acquisitions and divestitures and impact of currency is estimated based on our current information.
Page 6
AGILENT TECHNOLOGIES, INC.
RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING
ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS (CORE)
(in millions)
(Unaudited)
PRELIMINARY
Year-over-Year
GAAP
Year-over-Year
GAAP Revenue by Segment

FY19

FY18

% Change
Life Sciences and Applied Markets Group

$

2,302

$

2,270

1

%

Diagnostics and Genomics Group

1,021

943

8

%

Agilent CrossLab Group

1,840

1,701

8

%

Agilent

$

5,163

$

4,914

5

%

Non-GAAP
(excluding Acquisitions & Divestitures)
Year-over-Year
at Constant Currency (a)
Year-over-Year Year-over-Year Percentage Point
Impact from Currency
Current Year
Currency Impact (b)
Non GAAP Revenue by Segment

FY19

FY18

% Change % Change
Life Sciences and Applied Markets Group

$

2,219

$

2,270

(2

%)

(1

%)

-1 ppt

$

(37

)

Diagnostics and Genomics Group

1,009

943

7

%

9

%

-2 ppts

(20

)

Agilent CrossLab Group

1,820

1,701

7

%

10

%

-3 ppts

(50

)

Agilent (Core)

$

5,048

$

4,914

3

%

5

%

-2 ppts

$

(107

)

We compare the year-over-year change in revenue excluding the effect of recent acquisitions and divestitures and foreign currency rate fluctuations to assess the performance of our underlying business.
(a) The constant currency year-over-year growth percentage is calculated by recalculating all periods in the comparison period at the foreign currency exchange rates used for accounting during the last month of the current quarter, and then using those revised values to calculate the year-over-year percentage change.
(b) The dollar impact from the current year currency impact is equal to the total year-over-year dollar change less the constant currency year-over-year change.
The preliminary reconciliation of GAAP revenue adjusted for recent acquisitions and divestitures and impact of currency is estimated based on our current information.
Page 7

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