Information regarding financial statements for 3 and 12 months ended 10/31/2003

EX-99.1 3 dex991.htm INFORMATION REGARDING FINANCIAL STATEMENTS FOR 3 AND 12 MONTHS ENDED 10/31/2003 Information regarding financial statements for 3 and 12 months ended 10/31/2003

Exhibit 99.1

On November 17, 2003, Agilent Technologies Inc. (NYSE: A) reported orders of $1.73 billion and revenue of $1.68 billion for the fiscal fourth quarter ended Oct. 31, 2003. During the quarter, the company reported GAAP net earnings of $13 million, or $0.03 per diluted share. This compares to a GAAP loss of $236 million, or $0.51 per share, in last year’s fourth quarter.

“We had a very good finish to a very tough year,” said Ned Barnholt, Agilent chairman, president and chief executive officer. “Orders, revenues and earnings all came in above expectations.”

The company ended the quarter with about $1.6 billion in cash and equivalents, up $177 million from the prior quarter. In the fourth quarter, inventories improved to below 100 days on hand for the first time in Agilent’s history. Capital spending of $57 million was $21 million below the level of depreciation.

During the fourth quarter, Agilent saw evidence of stronger economic activity reflected in several of its markets. Semiconductor Products orders were up 36 percent from one year ago to the highest level since early 2001. Automated Test segment orders were higher for the third consecutive quarter, reaching the highest level in three years. Life Sciences and Chemical Analysis orders were at record levels, 8 percent ahead of one year earlier. Activity in the Test and Measurement segment was somewhat weaker than the prior year because of continued softness in wireline telecom markets. Overall, the company’s book-to-bill ratio was 1.03 compared to 0.98 in the prior quarter and 0.86 one year ago.

About 40 percent of Agilent’s revenues today are tied to consumer electronics.

Segment Results

Test and Measurement

(in millions)

	Q4:F03		Q4:F02		Q3:F03
Orders	645		673		566
Revenues	631		747		613
Operating Profit⁽¹⁾	(11	)	(107	)	(69	)

Fourth-quarter Test and Measurement orders were 4 percent below one year ago and up 14 percent from the seasonally weak third quarter. By market segment, communications test orders were about flat from last year with continued weakness in wireline test offsetting a modest rise in wireless test. General purpose test orders were off about 6 percent from one year ago because of relative weakness in services and support. Revenues of $631 million were 16 percent below last year.

Aggressive restructuring continued to improve the operating performance of this segment. The fourth-quarter operating loss of $11 million was $96 million better than one year ago despite $116 million lower revenues. Compared to the third quarter, profits were improved by $58 million on only $18 million higher revenues.

Automated Test

(in millions)

	Q4:F03	Q4:F02	Q3:F03
Orders	260	151	251
Revenues	260	220	206
Operating Profit⁽¹⁾	45	9	6

The Automated Test segment had another strong performance in the fourth quarter, with orders of $260 million up 72 percent from last year to the highest levels since the fourth quarter of 2000. Sequentially, orders were up 4 percent from already strong third quarter levels, with both semiconductor test and manufacturing test participating in the increase for the third consecutive quarter. Revenues of $260 million were 18 percent above last year and up 26 percent sequentially. Operating profits of $45 million, or 17 percent of revenues, compared to profits of $9 million one year ago and $6 million in the prior quarter.

Semiconductor Products

(in millions)

	Q4:F03	Q4:F02	Q3:F03
Orders	493	363	358
Revenues	463	471	380
Operating Profit⁽¹⁾	40	21	(8	)

Semiconductor Products saw an unexpected fourth-quarter surge in demand, with orders reaching $493 million, 36 percent above last year to the highest levels since early 2001. Sequentially, orders were up 38 percent. The strength was almost across the board, with personal systems orders up 35 percent from last year and networking systems up 37 percent. Fourth-quarter revenues of $463 million were down 2 percent from last year because of a sharp drop in the hardcopy ASIC business. Semiconductor Products’ book-to-bill ratio of 1.06 compares to 0.77 last year and 0.94 in the third quarter.

Segment operating performance continued to reflect the benefits of restructuring actions, better yields on new products and higher volumes. Operating profits in the quarter reached $40 million, essentially double last year on $8 million lower volume. Sequentially, profits were up $48 million on $83 million higher volume.

Life Sciences and Chemical Analysis

(in millions)

	Q4:F03	Q4:F02	Q3:F03
Orders	333	308	293
Revenues	321	298	303
Operating Profit⁽¹⁾	53	43	41

Life Sciences and Chemical Analysis orders and revenues were at record levels in the fourth quarter, showing the second consecutive quarterly improvement after several quarters of relatively flat activity. Fourth-quarter orders of $333 million were up 8 percent from one year ago and up 14 percent sequentially. Revenues of $321 million were also 8 percent ahead of one year ago and 6 percent ahead of the third quarter. Segment profits of $53 million were also at record levels, $10 million above last year on $23 million higher volume and $12 million above the third quarter on $18 million higher volume.

⁽¹⁾Before restructuring charges in all periods.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended October 31,					Percent Inc/(Dec)
	2003		2002			Percent Inc/(Dec)
Orders	$	1,731	$	1,495		16	%


Net revenue	$	1,675	$	1,736		(4	)%
Costs and expenses:
Cost of products and services		964		1,164		(17	)%
Research and development		221		322		(31	)%
Selling, general and administrative		434		637		(32	)%

Total costs and expenses		1,619		2,123		(24	)%


Income (loss) from operations		56		(387	)	114	%

Other income (expense), net		21		13		62	%


Income (loss) from continuing operations before taxes		77		(374	)	121	%

Provision (benefit) for taxes		64		(139	)	(146	)%


Income (loss) from continuing operations		13		(235	)	106	%

Loss from sale of discontinued operations, net of taxes		—		(1	)


Net income (loss)	$	13	$	(236	)	106	%


Net income (loss) per share—Basic and diluted:

Income (loss) from continuing operations	$	0.03	$	(0.51	)
Loss from sale of discontinued operations, net		—		(0.00	)

Net income (loss)	$	0.03	$	(0.51	)


Weighted average shares used in computing net income (loss) per share:
Basic		476		467
Diluted		481		467

Loss from sale of discontinued operations, net of taxes relate to the sale of our Healthcare Solutions group.

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 Inc/(Dec)
	2003			2002			Percent Inc/(Dec)
Orders	$	6,084		$	6,013		1	%

Net revenue	$	6,056		$	6,010		1	%
Costs and expenses:
Cost of products and services		3,762			3,875		(3	%)
Research and development		1,051			1,250		(16	%)
Selling, general and administrative		1,968			2,492		(21	%)

Total costs and expenses		6,781			7,617		(11	%)

Loss from operations		(725	)		(1,607	)	55	%
Other income (expense), net		35			60		(42	%)

Loss from continuing operations before taxes		(690	)		(1,547	)	55	%
Provision (benefit) for taxes		1,100			(525	)	(310	%)

Loss from continuing operations		(1,790	)		(1,022	)	(75	%)
Loss from sale of discontinued operations, net of taxes		—			(10	)

Loss before cumulative effect of accounting changes		(1,790	)		(1,032	)	(73	%)
Cumulative effect of adopting SFAS No. 142		(268	)		—

Net loss	$	(2,058	)	$	(1,032	)	(99	%)

Net loss per share - Basic and diluted:
Loss from continuing operations	$	(3.78	)	$	(2.20	)
Loss from sale of discontinued operations, net		—			(0.02	)
Cumulative effect of adopting SFAS No. 142, net		(0.57	)		—

Net loss	$	(4.35	)	$	(2.22	)

Weighted average shares used in computing net loss per share:
Basic and diluted		473			465

Loss from sale of discontinued operations, net of taxes relate to the sale of our Healthcare Solutions group.

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 31, 2003			October 31, 2002
ASSETS
Current assets:
Cash and cash equivalents	$	1,607		$	1,844
Accounts receivable, net		1,086			1,118
Inventory		995			1,184
Current deferred tax assets		10			462
Other current assets		191			272

Total current assets		3,889			4,880
Property, plant and equipment, net		1,447			1,579
Goodwill and other intangible assets, net		402			685
Long-term deferred tax assets		27			635
Other assets		532			424

Total assets	$	6,297		$	8,203


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	441		$	451
Employee compensation and benefits		566			558
Deferred revenue		262			244
Income and other taxes payable		326			325
Other accrued liabilities		311			403

Total current liabilities		1,906			1,981

Senior convertible debentures		1,150			1,150
Other liabilities		417			445

Total liabilities		3,473			3,576


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; 476 million shares at October 31, 2003 and 467 million shares at October 31, 2002 issued and outstanding		5			5
Additional paid-in capital		4,984			4,872
Accumulated deficit		(2,160	)		(101	)
Accumulated comprehensive loss		(5	)		(149	)

Total stockholders’ equity		2,824			4,627

Total liabilities and stockholders’ equity	$	6,297		$	8,203

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In millions)

(Unaudited)

	Twelve months ended October 31, 2003			Three months ended October 31, 2003
Cash flows from operating activities:
Net (loss) income	$	(2,058	)	$	13
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		311			78
Amortization		51			11
Inventory-related charges		11			—
Deferred taxes		1,071			(14	)
Asset impairment charges		91			2
Retirement plans curtailment loss		5			—
Net gain on sale of assets		(5	)		—
Adoption of SFAS No. 142		268			—
Changes in assets and liabilities:
Accounts receivable		55			(106	)
Inventory		169			57
Accounts payable		74			43
Employee compensation and benefits		(21	)		96
Income taxes		(63	)		134
Other current assets and liabilities		(6	)		32
Other long-term assets and liabilities		(97	)		(117	)

Net cash (used in) provided by operating activities		(144	)		229

Cash flows from investing activities:
Investments in property, plant and equipment		(205	)		(57	)
Dispositions of property, plant and equipment		6			—
Purchase of equity investments		(4	)		—

Net cash used in investing activities		(203	)		(57	)

Cash flows from financing activities:
Issuance of common stock under employee stock plans		112			8
Net repayments of notes payable and short-term borrowings		(2	)		(3	)

Net cash provided by financing activities		110			5

Change in cash and cash equivalents		(237	)		177

Cash and cash equivalents at beginning of period		1,844			1,430


Cash and cash equivalents at end of period	$	1,607		$	1,607

AGILENT TECHNOLOGIES, INC.

TEST AND MEASUREMENT INFORMATION

(In millions, except percent changes)

(Unaudited)

	Three months ended October 31, 2003			Three months ended July 31, 2003			Sequential % change		Three months ended October 31, 2002			Yr vs.Yr % change
Orders	$	645		$	566		14	%	$	673		(4	%)
Net Revenue	$	631		$	613		3	%	$	747		(16	%)
Loss from operations	$	(11	)	$	(69	)	84	%	$	(107	)	90	%

	Twelve months ended October 31, 2003			Twelve months ended October 31, 2002			Yr vs.Yr % change
Orders	$	2,413		$	2,549		(5	%)
Net Revenue	$	2,529		$	2,612		(3	%)
Loss from operations	$	(315	)	$	(710	)	56	%

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). Loss from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and some residual corporate 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 have been reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

AUTOMATED TEST INFORMATION

(In millions, except percent changes)

(Unaudited)

	Three months ended October 31, 2003		Three months ended July 31, 2003		Sequential % change		Three months ended October 31, 2002		Yr vs. Yr % change
Orders	$	260	$	251	4	%	$	151	72	%
Net Revenue	$	260	$	206	26	%	$	220	18	%
Income from operations	$	45	$	6	650	%	$	9	400	%

	Twelve months ended October 31, 2003			Twelve months ended October 31, 2002			Yr vs. Yr % change
Orders	$	845		$	745		13	%
Net Revenue	$	755		$	706		7	%
Loss from operations	$	(34	)	$	(70	)	51	%

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 some residual corporate 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 have been reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

SEMICONDUCTOR PRODUCTS INFORMATION

(In millions, except percent changes)

(Unaudited)

	Three months ended October 31, 2003		Three months ended July 31, 2003			Sequential % change		Three months ended October 31, 2002		Yr vs.Yr % change
Orders	$	493	$	358		38	%	$	363	36	%
Net Revenue	$	463	$	380		22	%	$	471	(2	%)
Income (loss) from operations	$	40	$	(8	)	600	%	$	21	(90	%)

	Twelve months ended October 31, 2003			Twelve months ended October 31, 2002			Yr vs.Yr % change
Orders	$	1,652		$	1,568		5	%
Net Revenue	$	1,586		$	1,559		2	%
Loss from operations	$	(59	)	$	(115	)	49	%

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 have been reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

LIFE SCIENCES AND CHEMICAL ANALYSIS INFORMATION

(In millions, except percent changes)

(Unaudited)

	Three months ended October 31, 2003		Three months ended July 31, 2003		Sequential % change		Three months ended October 31, 2002		Yr vs.Yr % change
Orders	$	333	$	293	14	%	$	308	8	%
Net Revenue	$	321	$	303	6	%	$	298	8	%
Income from operations	$	53	$	41	29	%	$	43	23	%

	Twelve months ended October 31, 2003		Twelve months ended October 31, 2002		Yr vs.Yr % change
Orders	$	1,174	$	1,151	2	%
Net Revenue	$	1,186	$	1,133	5	%
Income from operations	$	148	$	140	6	%

Income 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 some residual corporate 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 have been 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 October 31,				Percent Inc/(Dec)
	2003		2002		Percent Inc/(Dec)
ORDERS
Americas	$	665	$	629	6	%
Europe		337		296	14	%
Asia Pacific		729		570	28	%

Total	$	1,731	$	1,495	16	%

NET REVENUE
Americas	$	660	$	713	(7	%)
Europe		323		320	1	%
Asia Pacific		692		703	(2	%)

Total	$	1,675	$	1,736	(4	%)

	Twelve Months Ended October 31,				Percent Inc/(Dec)
	2003		2002		Percent Inc/(Dec)
ORDERS
Americas	$	2,303	$	2,539	(9	%)
Europe		1,248		1,154	8	%
Asia Pacific		2,533		2,320	9	%

Total	$	6,084	$	6,013	1	%

NET REVENUE
Americas	$	2,347		2,553	(8	%)
Europe		1,214		1,154	5	%
Asia Pacific		2,495		2,303	8	%

Total	$	6,056	$	6,010	1	%

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.