AGILENT TECHNOLOGIES INC (Form: 8-K, Received: 11/12/2004 06:59:43)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported) November 11, 2004

AGILENT TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-15405

77-0518772

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

395 Page Mill Road, Palo Alto, California 94306

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (650) 752-5000

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

The information in this Item 2.02 of Form 8-K and Exhibit 99.1 attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

On November 11, 2004, Agilent Technologies, Inc. (the “Company”) issued its press release announcing financial results for the three months ended October 31, 2004. A copy of this press release is attached as Exhibit 99.1.

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 earnings and earnings 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.

Item 8.01 Other Events

The Company grants various awards to its executive officers under the Agilent Technologies, Inc. 1999 Stock Plan, as amended and restated (the “Plan”). Forms of Award Agreements under the Plan are attached hereto as exhibits and are hereby incorporated by reference. The Company also grants stock options to its directors under the Agilent Technologies, Inc. 1999 Non-Employee Director Stock Plan, as amended and restated (the “Director Plan”). A form of agreement under the Director Plan is attached hereto as an exhibit and is hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits

The following are filed as exhibits to this report:

10.1: Form of Award Agreement (U.S.) for grants under the Agilent Technologies, Inc. 1999 Stock Plan.

10.2: Form of Award Agreement (Non-U.S.) for grants under the Agilent Technologies, Inc. 1999 Stock Plan.

10.3: Form of Stock Option Agreement for grants under the Agilent Technologies, Inc. 1999 Non-Employee Director Stock Plan.

The following is furnished as an exhibit to this report, and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended:

99.1 Press release announcing financial results for three months ended October 31, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


AGILENT TECHNOLOGIES, INC.

By:		/s/ Marie Oh Huber
Name:		Marie Oh Huber
Title:		Vice President, Assistant Secretary and
		Assistant General Counsel

Date: November 12, 2004

EXHIBIT INDEX


Exhibit No.		Description
10.1		Form of Award Agreement (U.S.) for grants under the Agilent Technologies, Inc. 1999 Stock Plan.

10.2		Form of Award Agreement (Non-U.S.) for grants under the Agilent Technologies, Inc. 1999 Stock Plan.

10.3		Form of Stock Option Agreement for grants under the Agilent Technologies, Inc. 1999 Non-Employee Director Stock Plan.

99.1		Press release announcing financial results for three months ended October 31, 2004.

Exhibit 10.1

FORM OF AGILENT TECHNOLOGIES, INC.

1999 STOCK PLAN

AWARD AGREEMENT (NON-QUALIFIED)

THIS AGREEMENT, dated as of the date of grant indicated in your Smith Barney account the (“Grant Date”) between Agilent Technologies, Inc., a Delaware corporation (the “Company”), and you as an individual who has been granted a stock option pursuant to the Agilent Technologies, Inc. 1999 Stock Plan (the “Awardee”) is entered into as follows:

WITNESSETH:

WHEREAS, the Company has established the Agilent Technologies, Inc. 1999 Stock Plan, as amended and restated effective November 18, 2003, (the “Plan”), and a description of the terms and conditions of the Plan is set forth in the U.S. Plan prospectus (the “Prospectus”). A copy of the Prospectus is available at http://stockoptions.corporate.agilent.com and also on your Smith Barney website. A copy of the Plan document can be viewed at http://stockoptions.corporate.agilent.com and will also be made available upon request; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) or its authorized delegate(s) determined that the Awardee shall be granted an option under the Plan as hereinafter set forth;

NOW THEREFORE, the parties hereby agree that the Company grants the Awardee an option (“Option”) to purchase the number of shares of the Company’s $0.01 par value voting common stock indicated in the Awardee’s Smith Barney account.

1.	This Option is granted under and pursuant to the Plan and is subject to each and all of the provisions thereof. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan shall prevail.

2.	The Option price shall be equal to the Fair Market Value (as defined in the Plan document) of the underlying shares on the Grant Date. The Option price for this grant is indicated in the Awardee’s Smith Barney account.

This Option is not transferable by the Awardee except by will or the laws of descent and distribution. During the Awardee’s lifetime, only the Awardee can exercise this Option. This Option may not be transferred, assigned, pledged or hypothecated by the Awardee during his or her lifetime, whether by operation of law or otherwise, and is not subject to execution, attachment or similar process.

4.	Subject to accelerated vesting upon the occurrence of certain events as set forth in the Plan, and so long as the Awardee retains status as an Awardee Eligible to Vest as such term is defined in the Plan, this Option will vest in whole or in part, in accordance with the following vesting schedule:

An Awardee loses status as an Awardee Eligible to Vest when certain events occur, including but not limited to, termination of employment with the Company or transfer of employment from the Company.

This Option will expire ten (10) years from the Grant Date, unless sooner terminated, forfeited, or canceled in accordance with the provisions of the Plan. This means that the Option must be exercised, if at all, on or before the expiration date. This expiration date is indicated in the Awardee’s Smith Barney account. The Awardee is responsible for keeping track of this date and will not receive any prior notification of the expiration date from the Company.

As set forth in the Prospectus, this Option may be exercised by following the steps indicated in the Awardee’s Smith Barney account. In addition, Smith Barney must receive an executed authorization form accompanied by payment of the full Option price for the underlying shares, including applicable taxes. Payment may be in cash or shares of the Company’s Common Stock or a combination thereof, provided, however, that any payment in shares shall be in strict compliance with all procedural rules established by the Committee or its authorized delegate(s). In some instances, the Committee or its authorized delegate(s) may also permit payment using a cashless method of exercise. The Company reserves the right to limit availability of certain methods of exercise as it deems necessary.

All rights of the Awardee in this Option, to the extent that it has not vested, shall terminate when Awardee loses status as an Awardee Eligible to Vest, except where such status is lost due to the occurrence of certain events as set forth in the Plan. For example, if status as an Awardee Eligible to Vest is lost because of death, retirement due to age or permanent and total disability, the vesting of unvested Awards will accelerate.

All rights of the Awardee in this Option, to the extent that it has vested but has not been exercised, shall terminate on the earlier of the expiration date or three (3) months after the Awardee loses status as an Awardee Eligible to Vest, except where the Awardee loses such status because of death, retirement due to age or permanent and total disability. In the event of the Awardee’s death, his or her legal representative or designated beneficiary shall have the right to exercise all or a portion of the Awardee’s right under this Option. The representative or designee must exercise the Option before the earlier of the expiration date or one (1) year after the death of the Awardee, and shall be bound by the provisions of the Plan. In case of retirement due to age or permanent and total disability, the Awardee retains rights in this Option until the earlier of the expiration date or three (3) years from the date thereof.

8.	The Awardee shall remit to the Company payment for all applicable withholding taxes and required social security contributions at the time the Awardee exercises any portion of this Option.

By accepting the grant of this Option, Awardee acknowledges and agrees that: (i) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (ii) the grant of an option is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (iii) all determinations with respect to any such future grants, including, but not limited to, the times when options shall be granted, the maximum number of shares subject to each option and the option price, will be at the sole discretion of the Company; (iv) participation in the Plan is voluntary; (v) the value of the option is outside the scope of Awardee’s employment contract, if any; (vi) the value of the option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (vii) the vesting of any Option ceases upon termination of employment with the Company or transfer of employment from the Company, or other cessation of eligibility to vest for any reason, except as may otherwise be explicitly provided in the Plan document or this Agreement; (viii) if the underlying stock does not increase in value, this Option will have no value, nor does the Company guarantee any future value; (ix) no claim or entitlement to compensation or damages arises if the Option does not increase in value and Awardee irrevocably releases the Company and its subsidiaries from any such claim that does arise.

10.

For the exclusive purpose of implementing, administering and managing Awardee’s stock options, Awardee consents to the collection, receipt, use, retention and transfer, in electronic or other form, of his or her personal data by and among the Company, its subsidiaries, affiliates and third party vendors. Awardee understands that personal data, including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, job and payroll location, data for tax withholding purposes and shares of stocks awarded, cancelled, exercised, vested and unvested may be transferred to third parties assisting in the implementation, administration and management of Awardee’s stock options and Awardee expressly authorizes such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). Awardee understands that these recipients may be located in Awardee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Awardee’s country. Awardee understands that data will be held only as long as is necessary to implement, administer and manage Awardee’s stock option. Awardee understands that he or she may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s legal department representative. Awardee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to accept an Award under the Plan. For more information on the consequences of Awardee’s refusal to consent or withdrawal of consent, Awardee may contact the Company’s local legal department representative.

11.

The Plan is incorporated herein by reference. The Plan and this Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Awardee’s interest except by means of a writing signed by the Company and the Awardee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of the state of Delaware. Any proceeding arising out of or relating to this Award Agreement or the Plan may be brought only in the state or federal courts located in the Northern District of California.

12.	Neither the Plan nor this Award Agreement nor any provision under either shall be construed so as to grant the Awardee any right to remain in the employ of the Company or any of its subsidiaries, and it is expressly agreed and understood that employment is terminable at the will of either party.

13.

By accepting the grant of this Option evidenced hereby, the Awardee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Award Agreement. Awardee has reviewed the Prospectus and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting the Option and fully understands all provisions of the Prospectus and Award Agreement. Awardee agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Award Agreement.

14.	The Awardee acknowledges that this Award Agreement is between the Awardee and the Company, and that the Awardee’s local employer is not a party to this Award Agreement.

15.	The Awardee acknowledges that he or she may be executing part or all of the Award Agreement in English and agrees to be bound accordingly.

16.	The Awardee acknowledges that by clicking on the “Accept” button on the screen titled “Step 3: Confirm the Review/Acceptance of your Award,” the Awardee agrees to be bound by the electronic execution of this Award Agreement.


Agilent Technologies, Inc.

By
		Edward W. Barnholt
		President, Chief Executive Officer and Director

By
		D. Craig Nordlund
		Senior Vice President, General Counsel and Secretary

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

Exhibit 10.2

FORM OF AGILENT TECHNOLOGIES, INC.

1999 STOCK PLAN

AWARD AGREEMENT

WITNESSETH:

This Option is granted under and pursuant to the Plan and is subject to each and all of the provisions thereof. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan shall prevail.

The Option price shall be equal to the Fair Market Value (as defined in the Plan document) of the underlying shares on the Grant Date. The Option price for this grant is indicated in the Awardee’s Smith Barney account.

Subject to accelerated vesting upon the occurrence of certain events as set forth in the Plan, and so long as the Awardee retains status as an Awardee Eligible to Vest as such term is defined in the Plan, this Option will vest in whole or in part, in accordance with the following vesting schedule:

An Awardee loses status as an Awardee Eligible to Vest when certain events occur, including but not limited to, termination of employment with the Company or transfer of employment from the Company.

The Awardee shall remit to the Company payment for all applicable withholding taxes and required social security contributions at the time the Awardee exercises any portion of this Option.

10.

For the exclusive purpose of implementing, administering and managing Awardee’s stock options, Awardee consents to the collection, receipt, use, retention and transfer, in electronic or other form, of his or her personal data by and among the Company, its subsidiaries, affiliates and third party vendors. Awardee understands that personal data, including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, job and payroll location, data for tax withholding purposes and shares of stocks awarded, cancelled, exercised, vested and unvested, may be transferred to third parties assisting in the implementation, administration and management of Awardee’s stock options and Awardee expressly authorizes such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). Awardee understands that these recipients may be located in Awardee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Awardee’s country. Awardee understands that data will be held only as long as is necessary to implement, administer and manage Awardee’s stock option. Awardee understands that he or she may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s legal department representative. Awardee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to accept an Award under the Plan. For more information on the consequences of Awardee’s refusal to consent or withdrawal of consent, Awardee may contact the Company’s local legal department representative.

11.

12.

Neither the Plan nor this Award Agreement nor any provision under either shall be construed so as to grant the Awardee any right to remain in the employ of the Company or any of its subsidiaries, and it is expressly agreed and understood that employment is terminable at the will of either party.

13.

Prospectus and Award Agreement. Awardee agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Award Agreement.

14.

The Awardee acknowledges that this Award Agreement is between the Awardee and the Company, and that the Awardee’s local employer is not a party to this Award Agreement.

15.

The Awardee acknowledges that he or she may be executing part or all of the Award Agreement in English and agrees to be bound accordingly.

16.

The Awardee acknowledges that by clicking on the “Accept” button on the screen titled “Step 3: Confirm the Review/Acceptance of your Award,” the Awardee agrees to be bound by the electronic execution of this Award Agreement.


Agilent Technologies, Inc.

By
		Edward W. Barnholt
		President, Chief Executive Officer and Director

By
		D. Craig Nordlund
		Senior Vice President, General Counsel and Secretary

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

Exhibit 10.3

FORM OF AGILENT TECHNOLOGIES, INC

1999 NON-EMPLOYEE DIRECTOR STOCK PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT, dated (“Grant Date”) between AGILENT TECHNOLOGIES, INC., a Delaware corporation (“the Company”) and (“the Director”), a director of the Company is entered into as follows:

WITNESSETH:

WHEREAS, the Company has established the Agilent Technologies, Inc. 1999 Non-Employee Director Stock Plan (the “Plan”), a copy of which is attached hereto as Exhibit “A” and made a part hereof;

NOW THEREFORE, the parties hereby agree that in consideration of services to be rendered, the Company grants the Director an option (the “Option”) to purchase shares of Common Stock of the Company upon the terms and conditions set forth in the attached Plan document and further subject to the terms and conditions set forth herein.

1.	The Option is granted under and pursuant to the Plan and is subject to each and all of the provisions thereof.

2.	The exercise price of the Option shall be $ per share.

This Option is not transferable by the Director other than by will or the laws of descent and distribution, and is exercisable only by the Director during his or her lifetime. This Option may not be transferred, assigned, pledged, or hypothecated by the Director during his or her lifetime, whether by operation of law or otherwise, and is not subject to execution, attachment or similar process.

4.	This Option may not be exercised before the first anniversary of the date hereof.

This Option will expire ten (10) years from the date hereof, unless sooner terminated or cancelled in accordance with the provisions of the Plan. Should the Director cease to be a member of the Board of Directors for any reason during the period commencing with the Grant Date hereof and ending on the next annual shareholders meeting (including, but not limited to, cessation by reason of the failure to be re-elected at such annual shareholders meeting), this Option shall be automatically cancelled on the date of such cessation.

6.	This Option shall be exercised by delivering to the Secretary of the Company at its head office a written notice stating the number of shares as to which the Option is exercised. The written notice must be accompanied by payment of the full exercise price for such Option shares.

All rights of the Director in this Option, to the extent that it has not been exercised, shall terminate upon the death of the Director (except as hereinafter provided). The Director may, by written notice to the company, designate one or more persons, including his or her legal representative, who shall by reason of the Director’s death acquire the right to exercise all or a portion of the Director’s Option. The person so designated must exercise the Option within the term of the Option set forth in the attached document. The person designated to exercise the Option after the Director’s death shall be bound by the provisions of the Plan.

8.	The Director hereby designates the following person(s) as the one(s) who may exercise this Option after his or her death as provided above:


Name:		Relationship:

Name:		Relationship:

The Director may change the above designation at his or her pleasure by filing with the Secretary of the Company a written notice of change.

IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate the day and year first above written.


AGILENT TECHNOLOGIES, INC.

By:
		Marie Oh Huber
		Vice President, Assistant Secretary and
		Assistant General Counsel


Accepted By:
		Director

RETAIN THIS AGREEMENT FOR YOUR RECORDS

Exhibit 99.1

EDITORIAL CONTACTS: PRGP42SN424

Michele Drake

+1 650 752 5296

michele_drake@agilent.com

Jorgen Tesselaar (Europe and Asia)

+31 20 547 2825

jorgen_tesselaar@agilent.com

INVESTOR CONTACT:

Hilliard Terry

+1 650 752 5329

hilliard_terry@agilent.com

Agilent Technologies Reports Fourth Quarter 2004 Results

PALO ALTO, Calif., Nov. 11, 2004 — Agilent Technologies Inc. (NYSE: A) today reported orders of $1.60 billion for the fourth fiscal quarter ended Oct. 31, 2004, 8 percent below one year ago. Revenues during the quarter were $1.82 billion, 9 percent ahead of last year. Fourth quarter GAAP net earnings were $74 million, or $0.15 per diluted share, compared to $13 million, or $0.03 per share, in last year’s fourth quarter.

Excluding $79 million of net restructuring and amortization charges, Agilent reported fourth quarter operating net income of $153 million, or $0.30 per share. On a comparable basis, the company earned $71 million, or $0.15 per share, one year ago.

For the full year 2004, Agilent achieved orders of $7.00 billion, up 15 percent from 2003, and revenues of $7.18 billion, up 19 percent from one year ago. This year, GAAP diluted earnings per share were $0.71, compared to a loss of $4.35 last year. Operating earnings ⁽¹⁾ were $1.05 per share this year compared to a loss of $0.26 per share in 2003.

“Agilent continued to face a difficult environment in several of its key markets,” said Ned Barnholt, Agilent chairman, president and chief executive officer. “Compared to last quarter, however, our gross margins improved, operating expenses declined, working capital remained under good control and we generated $394 million in free cash flow ⁽²⁾ — despite $63 million lower revenues.”

Fourth quarter revenues, at $1.82 billion, were below company expectations because of weak conditions in semiconductor-related businesses. Operating earnings, at $0.30 per share, met the bottom of the company’s guidance range of $0.30 to $0.35 per share.

“For 2004 overall, we are pleased with Agilent’s performance despite the mixed finish,” Barnholt said. “During the year, we completed the company’s operational transformation that we began three years ago.”

From 2001 through 2004, Agilent reduced its operating breakeven by more than 35 percent, completely transformed its IT systems environment and reduced the number of IT applications by more than 75 percent, restored its Test and Measurement segment to traditional levels of profitability, and achieved both double-digit growth and double-digit operating margins in its Life Sciences and Chemical Analysis (LSCA) segment.

“Performance on the balance sheet has been strong, with inventory days-on-hand, receivables days sales outstanding and fixed investment all near historical lows,” Barnholt said. “As a result, Agilent has become consistently free-cash-flow positive ⁽²⁾ . During the past 12 months, we increased cash by over $700 million to more than $2.3 billion.”

Looking to fiscal 2005, the company said it expects the sharp adjustment in the semiconductor markets to continue to impact the performance of its Semiconductor Products and Automated Test segments for the next three to six months. Meanwhile, Test and Measurement growth is moderating because of slowing growth in mobile phone production. LSCA, on the other hand, shows few signs of slowing from its recent double-digit growth trend.

The company expects first quarter fiscal 2005 revenues of $1.60 billion to $1.70 billion and operating earnings of $0.14 to $0.21 per share ⁽³⁾ .

“Our commitment is to continue to manage costs and margins aggressively in the short term while maintaining investments critical to long-term market leadership and sustained creation of shareholder value,” Barnholt said.

Segment Results

Test and Measurement

(in millions)


	Q4:F04	Q4:F03		Q3:F04
Orders	693	645		776
Revenues	788	631		768
Operating Profit ⁽⁴⁾	116	(11	)	88

Fourth quarter Test and Measurement orders of $693 million were 7 percent above one year ago but down 11 percent from the third quarter. Overall segment demand was driven by seasonally strong aerospace and defense business and robust general-purpose markets, while weakness was concentrated in wireless handset manufacturing test. Revenues of $788 million were 25 percent above last year and 3 percent ahead of three months earlier.

Fourth quarter operating profits of $116 million were improved by $127 million compared to one year ago on $157 million higher revenues, demonstrating the full benefits of aggressive restructuring and lower levels of discounts. Compared to the third quarter, segment profits were up $28 million on a $20 million increase in revenues as segment operating margins improved to 14.7 percent from the third quarter’s 11.5 percent. During the quarter, Test and Measurement achieved an 18 percent Return on Invested Capital ⁽⁵⁾ (ROIC), up from 14 percent in the third quarter and (0) percent one year ago.

Automated Test

(in millions)


	Q4:F04		Q4:F03	Q3:F04
Orders	137		260	208
Revenues	196		260	243
Operating Profit ⁽⁴⁾	(7	)	45	19

Fourth quarter Automated Test orders of $137 million were down 47 percent from one year ago to the lowest level since early 2003. All product lines were weaker except parametric test as semiconductor manufacturers slowed production and delayed capital investments. Utilization rates for SOC testers at semiconductor contract manufacturers (SCMs) did improve by about five points to 90 percent during the quarter, suggesting that the period of semiconductor industry digestion and cautious ordering may not be very extended. Revenues of $196 million were 25 percent below last year and down 19 percent sequentially.

The segment had an operating loss of $7 million during the quarter compared to profits of $45 million one year ago on $64 million lower revenues. During the quarter, gross margins were depressed by lower volumes and intense competitive pressures. Operating expenses were relatively flat year-to-year, with R&D up and SG&A lower as the company released a new generation of flash memory and SOC test systems. The company entered the flat panel test market during the quarter with the introduction of a new test platform and acquisition of IBM’s flat panel test business.

Semiconductor Products

(in millions)


	Q4:F04	Q4:F03	Q3:F04
Orders	403	493	470
Revenues	486	463	539
Operating Profit ⁽⁴⁾	8	40	33

Semiconductor Products orders were $403 million during the fourth quarter, down 18 percent from one year ago and off 14 percent sequentially. Orders declined virtually across the board as customers reacted quickly to

excess inventories built up over the past few months. Personal systems orders were down 12 percent from last year and off 16 percent sequentially; networking systems orders dropped 31 percent from last year and were down 9 percent sequentially. Fourth quarter revenues of $486 million were 5 percent above last year and down 10 percent sequentially.

Segment profits of $8 million were $32 million below last year despite a $23 million increase in revenues; margins were hurt by severe price pressures in camera modules and fiber optics. Sequentially, profits were down $25 million on a $53 million reduction in revenues. Segment ROIC ⁽⁵⁾ was 6 percent during the quarter compared to 16 percent one year ago and 15 percent during the third quarter. During the quarter, the company announced plans for the sale of its camera module business to Flextronics.

Life Sciences and Chemical Analysis

(in millions)


	Q4:F04	Q4:F03	Q3:F04
Orders	366	333	321
Revenues	352	321	335
Operating Profit ⁽⁴⁾	58	53	46

Life Sciences and Chemical Analysis had an outstanding quarter. Orders of $366 million were 10 percent above last year, with Life Sciences orders up 11 percent and Chemical Analysis up 9 percent. Revenues of $352 million were 10 percent above last year and up 5 percent sequentially.

Segment profits of $58 million were $5 million above last year on a $31 million increase in revenues; the segment operating margin of 16.5 percent equaled last year’s record level. During the quarter, the segment achieved an ROIC ⁽⁵⁾ of 25 percent, compared with last year’s ROIC of 30 percent and 23 percent in the third quarter.

About Agilent Technologies

Agilent Technologies Inc. (NYSE: A) is a global technology leader in communications, electronics, life sciences and chemical analysis. The company’s 28,000 employees serve customers in more than 110 countries. Agilent had net revenue of $7.2 billion in fiscal year 2004. Information about Agilent is available on the Web at www.agilent.com.

Agilent management will host a live webcast of its quarterly conference call with the investment community in listen-only mode today at 1:30 p.m. (PT). Listeners may log on at www.investor.agilent.com and select “Fourth Quarter FY04 Financial Results Conference Call” under “Events & Presentations.” The webcast will remain on the company site for 90 days.

A telephone replay of the conference call will be available from 4:30 p.m. (PT) today through Nov. 18 by dialing + 1 719 457 0820 and entering pass code 835568.

Forward-Looking Statements

This news release contains forward-looking statements (including, without limitation, information regarding the markets we serve and the conditions in those markets, growth rates in our businesses, revenues, operating margins, costs and earnings) that involve risks and uncertainties that could cause results of Agilent to differ materially from management’s current expectations.

In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles while it continues to implement workforce and other cost reductions; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross margin pressures; the risk that our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties on our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix, and other risks detailed in Agilent’s filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended July 31, 2004.

# # #

⁽¹⁾ Before net restructuring and amortization charges in all periods.

⁽²⁾ Free cash flow is defined as Net Cash provided by operating activities less Investments in property, plant and equipment.

⁽³⁾ Agilent’s expected range of EPS for Q105 excludes restructuring, which cannot be estimated, and amortization of intangibles, which is expected to be approximately $1 million per quarter. The annual non-GAAP tax rate is assumed to be 24 percent. Beginning in Q304, Agilent is treating its senior convertible debentures as “if converted.” As a result, approximately 36 million shares were added to the denominator of diluted EPS, and $6.2 million of associated after-tax quarterly interest expense was added back to the numerator.

⁽⁴⁾ Before restructuring charges in all periods.

⁽⁵ ⁾ Refer to financial results tables for ROIC.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended October 31,				Percent Inc/(Dec)
	2004		2003		Percent Inc/(Dec)
Orders	$	1,599	$	1,731	(8	)%

Net revenue	$	1,822	$	1,675	9	%

Costs and expenses:
Cost of products and services		1,042		961	8	%
Research and development		232		221	5	%
Selling, general and administrative		459		437	5	%

Total costs and expenses		1,733		1,619	7	%

Income from operations		89		56	59	%

Other income (expense), net		7		21	(67	)%

Income from operations before taxes		96		77	25	%

Provision for taxes		22		64	(66	)%

Net income	$	74	$	13	469	%

Net income per share:
Basic	$	0.15	$	0.03
Diluted	$	0.15	$	0.03

Weighted average shares used in computing net income per share:
Basic		486		476
Diluted		490		481

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)


	Twelve Months Ended October 31,					Percent Inc/(Dec)
	2004		2003			Percent Inc/(Dec)
Orders	$	6,997	$	6,084		15	%

Net revenue	$	7,181	$	6,056		19	%

Costs and expenses:
Cost of products and services		4,058		3,750		8	%
Research and development		933		1,051		(11	)%
Selling, general and administrative		1,804		1,980		(9	)%

Total costs and expenses		6,795		6,781		—

Income (loss) from operations		386		(725	)	153	%

Other income (expense), net		54		35		54	%

Income (loss) before taxes		440		(690	)	164	%

Provision for taxes		91		1,100		(92	)%

Income (loss) before cumulative effect of accounting change		349		(1,790	)	119	%

Cumulative effect of adopting SFAS No. 142		—		(268	)

Net income (loss)	$	349	$	(2,058	)	117	%

Net income (loss) per share:
Basic
Income (loss) before cumulative effect of accounting change	$	0.72	$	(3.78	)
Cumulative effect of adopting SFAS No. 142		—		(0.57	)

Net income (loss)	$	0.72	$	(4.35	)

Diluted
Income (loss) before cumulative effect of accounting change	$	0.71	$	(3.78	)
Cumulative effect of adopting SFAS No. 142		—		(0.57	)

Net income (loss)	$	0.71	$	(4.35	)

Weighted average shares used in computing net income (loss) per share:
Basic		483		473
Diluted		490		473

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Excluding Restructuring, Amortization of Intangibles

and Non-Operational Items

(Unaudited)


	Three Months Ended October 31,						Percent Inc/(Dec)
(In millions, except per share amounts)	2004			2003			Percent Inc/(Dec)
Orders	$	1,599		$	1,731		(8	)%

Net revenue	$	1,822		$	1,675		9	%
Costs and expenses:
Cost of products and services		1,006			938		7	%
Research and development		228			218		5	%
Selling, general and administrative		415			397		5	%

Total costs and expenses		1,649			1,553		6	%

Income from operations		173			122		42	%

Other income (expense), net		20			21		(5	)%

Income before taxes		193			143		35	%

Provision for taxes		40			72		(44	)%

Non-GAAP net income	$	153		$	71		115	%

Non-GAAP net income per share:
Basic	$	0.31		$	0.15
Diluted	$	0.30		$	0.15

Weighted average shares used in computing non-GAAP net income per share:
Basic		486			476
Diluted		526			481

The above non-GAAP condensed consolidated statement of operations has been adjusted to exclude the following items and reconcile to GAAP net income:

Net income per GAAP	$	74		$	13
Non-GAAP adjustments:
Other intangibles		1			9
Restructuring and asset impairment		54			58
Gain on sale of assets		—			(2	)
Investment Impairments		7			—
Camera module charge		18			—
Other		17			1
Adjustment for income taxes		(18	)		(8	)

Non-GAAP net income	$	153		$	71

Non-GAAP information allows for greater transparency to supplemental information used by management in its financial and operational decision making. Historically, we have reported similar non-GAAP information to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting.

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Excluding Restructuring, Amortization of Intangibles

and Non-Operational Items

(Unaudited)


	Twelve Months Ended October 31,						Percent Inc/(Dec)
(In millions, except per share amounts)	2004			2003			Percent Inc/(Dec)
Orders	$	6,997		$	6,084		15	%

Net revenue	$	7,181		$	6,056		19	%

Costs and expenses:
Cost of products and services		3,955			3,587		10	%
Research and development		914			984		(7	)%
Selling, general and administrative		1,670			1,774		(6	)%

Total costs and expenses		6,539			6,345		3	%

Income (loss) from operations		642			(289	)	322	%

Other income (expense), net		73			47		55	%

Income (loss) before taxes		715			(242	)	395	%

Provision (benefit) for taxes		186			(121	)	254	%

Non-GAAP income (loss)	$	529		$	(121	)	537	%

Non-GAAP net income (loss) per share:
Basic	$	1.10		$	(0.26	)
Diluted	$	1.05		$	(0.26	)

Weighted average shares used in computing non-GAAP net income (loss) per share:
Basic		483			473
Diluted		526			473

The above non-GAAP condensed consolidated statement of operations has been adjusted to exclude the following items and reconcile to GAAP net income (loss:)
Net income (loss) per GAAP	$	349		$	(2,058	)

Non-GAAP adjustments:
Other intangibles		22			55
Restructuring and asset impairment		169			387
Gain on sale of assets		(1	)		(5	)
SFAS No. 142 adoption		—			268
Retirement plans curtailment loss		—			5
Investment Impairment		7			—
Camera module charge		18			—
Contract termination fees		14			—
Other		46			6
Adjustment for income taxes		(95	)		1,221

Non-GAAP net income (loss)	$	529		$	(121	)

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In millions, except par value and share amounts)

(Unaudited)


	October 31, 2004			October 31, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	2,315		$	1,607
Accounts receivable, net		1,044			1,086
Inventory		1,026			995
Other current assets		192			201

Total current assets		4,577			3,889

Property, plant and equipment, net		1,258			1,447
Goodwill and other intangible assets, net		443			402
Other assets		778			559

Total assets	$	7,056		$	6,297

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	441		$	441
Employee compensation and benefits		549			566
Deferred revenue		284			262
Income and other taxes payable		340			326
Other accrued liabilities		261			311

Total current liabilities		1,875			1,906

Senior convertible debentures		1,150			1,150
Other liabilities		466			417

Total liabilities		3,491			3,473

Commitments and contingencies		—			—

Stockholders’ equity:
Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding		—			—
Common stock; $0.01 par value; 2 billion shares authorized; 487 million shares at October 31, 2004 and 476 million shares at October 31, 2003 issued and outstanding		5			5
Additional paid-in capital		5,193			4,984
Accumulated deficit		(1,810	)		(2,159	)
Accumulated comprehensive income (loss)		177			(6	)

Total stockholders’ equity		3,565			2,824

Total liabilities and stockholders’ equity	$	7,056		$	6,297

AGILENT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In millions)

(Unaudited)


	Twelve months ended October 31, 2004			Three months ended October 31, 2004
Cash flows from operating activities:
Net income	$	349		$	74
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		266			65
Amortization		26			1
Deferred taxes		31			17
Asset impairment charges		40			15
Net gain (loss) on sale of assets		1			(4	)
Changes in assets and liabilities:
Accounts receivable		116			166
Inventory		(31	)		39
Accounts payable		76			105
Employee compensation and benefits		29			54
Income taxes and other taxes payable		(82	)		(31	)
Other current assets and liabilities		(9	)		38
Other long-term assets and liabilities		(136	)		(117	)

Net cash provided by operating activities ⁽¹⁾		676			422

Cash flows from investing activities:
Investments in property, plant and equipment		(118	)		(28	)
Dispositions of property, plant and equipment		36			—
Acquisitions, net of cash acquired		(18	)		(18	)
Purchased intangibles and investments		(13	)		(6	)

Net cash used in investing activities		(113	)		(52	)

Cash flows from financing activities:
Issuance of common stock under employee stock plans		144			8
Net borrowings of notes payable and short-term borrowings		1			—

Net cash provided by financing activities		145			8

Change in cash and cash equivalents		708			378

Cash and cash equivalents at beginning of period		1,607			1,937

Cash and cash equivalents at end of period	$	2,315		$	2,315

⁽¹⁾ Cash payments included in operating activities:

Restructuring		138			33
Income tax payments		149			67
Pension trust fund contributions		122			8

AGILENT TECHNOLOGIES, INC

RECONCILIATION FROM GAAP TO NON-GAAP

NET INCOME

THREE MONTHS ENDED OCTOBER 31, 2004

(Unaudited)


			Non-GAAP Adjustments
(In millions, except per share amounts)	GAAP		Other Intangibles			Restructuring and Asset Impairment			Camera Module Charge			Investment Impairments		Other			Adjustment for Income Taxes			Non-GAAP
Orders	$	1,599	$	—		$	—		$	—		$	—	$	—		$	—		$	1,599

Net revenue	$	1,822	$	—		$	—		$	—		$	—	$	—		$	—			1,822

Costs and expenses:
Cost of products and services		1,042		(1	)		(15	)		(18	)		—		(2	)		—			1,006
Research and development		232		—			(4	)		—			—		—			—			228
Selling, general and administrative		459		—			(35	)		—			—		(9	)		—			415

Total costs and expenses		1,733		(1	)		(54	)		(18	)		—		(11	)		—			1,649

Income from operations		89		1			54			18			—		11			—			173

Other income (expense), net		7		—			—			—			7		6			—			20

Income from operations before taxes		96		1			54			18			7		17			—			193

Provision for taxes		22		—			—			—			—		—			18			40

Net income	$	74	$	1		$	54		$	18		$	7	$	17		$	(18	)	$	153

Net income per share - Basic and Diluted:
Basic	$	0.15	$	0.00		$	0.11		$	0.04		$	0.01	$	0.04		$	(0.04	)	$	0.31
Diluted	$	0.15	$	0.00		$	0.11		$	0.04		$	0.01	$	0.03		$	(0.04	)	$	0.30	(1)

Weighted average shares used in computing net income per share:
Basic		486		486			486			486			486		486			486			486
Diluted		490		490			490			490			490		490			490			526	(1)

(1)

In order to calculate non-GAAP diluted net income per share, we added 36 million shares and approximately $6 million of after-tax interest expense to non-GAAP net income to treat our senior convertible debentures as if they were converted. The impact of this was ($.01) to our diluted earnings per share.

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

AGILENT TECHNOLOGIES, INC

RECONCILIATION FROM GAAP TO NON-GAAP

NET INCOME

TWELVE MONTHS ENDED OCTOBER 31, 2004

(Unaudited)


			Non-GAAP Adjustments
(In millions, except per share amounts)	GAAP		Other Intangibles			Restructuring and Asset Impairment			Contract Termination Fees			Gain On Sale of Assets			Camera Module Charge			Investment Impairments		Other			Adjustment for Income Taxes			Non-GAAP
Orders	$	6,997	$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—		$	6,997

Net revenue	$	7,181	$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—		$	7,181

Costs and expenses:
Cost of products and services		4,058		(19	)		(54	)		(4	)		—			(18	)		—		(8	)		—			3,955
Research and development		933		—			(16	)		(3	)		—			—			—		—			—			914
Selling, general and administrative		1,804		(3	)		(91	)		(7	)		1			—			—		(34	)		—			1,670

Total costs and expenses		6,795		(22	)		(161	)		(14	)		1			(18	)		—		(42	)		—			6,539

Income from operations		386		22			161			14			(1	)		18			—		42			—			642

Other income (expense), net		54		—			8			—			—			—			7		4			—			73

Income from operations before taxes		440		22			169			14			(1	)		18			7		46			—			715

Provision for taxes		91		—			—			—			—			—			—		—			95			186

Net income	$	349	$	22		$	169		$	14		$	(1	)	$	18		$	7	$	46		$	(95	)	$	529

Net income per share - Basic and Diluted:

Basic	$	0.72	$	0.05		$	0.35		$	0.03		$	(0.00	)	$	0.04		$	0.01	$	0.10		$	(0.20	)	$	1.10
Diluted	$	0.71	$	0.04		$	0.34		$	0.03		$	(0.00	)	$	0.04		$	0.01	$	0.09		$	(0.19	)	$	1.05	(1)

Weighted average shares used in computing net income per share:

Basic		483		483			483			483			483			483			483		483			483			483
Diluted		490		490			490			490			490			490			490		490			490			526	(1)

(1)

In order to calculate non-GAAP diluted net income per share, we added 36 million shares and approximately $26 million of after-tax interest expense to non-GAAP net income to treat our senior convertible debentures as if they were converted. The impact of this was ($.03) to our diluted earnings per share.

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

AGILENT TECHNOLOGIES, INC

RECONCILIATION FROM GAAP TO NON-GAAP

NET INCOME

THREE MONTHS ENDED OCTOBER 31, 2003

(Unaudited)


			Non-GAAP Adjustments
(In millions, except per share amounts)	GAAP		Other Intangibles			Restructuring and Asset Impairment			Gain on Sale of Assets			Other			Adjustment for Income Taxes			Non-GAAP
Orders	$	1,731	$	—		$	—		$	—		$	—		$	—		$	1,731

Net revenue	$	1,675	$	—		$	—		$	—		$	—		$	—		$	1,675
Costs and expenses:
Cost of products and services		961		(8	)		(15	)		—			—			—			938
Research and development		221		—			(3	)		—			—			—			218
Selling, general and administrative		437		(1	)		(40	)		2			(1	)		—			397

Total costs and expenses		1,619		(9	)		(58	)		2			(1	)		—			1,553

Income from operations		56		9			58			(2	)		1			—			122

Other income (expense), net		21		—			—			—			—			—			21

Income before taxes		77		9			58			(2	)		1			—			143

Provision for taxes		64		—			—			—			—			8			72

Net income	$	13	$	9		$	58		$	(2	)	$	1		$	(8	)	$	71

Net income per share - Basic and Diluted:
Basic	$	0.03	$	0.02		$	0.12		$	—		$	0.00		$	(0.02	)	$	0.15

Diluted	$	0.03	$	0.02		$	0.12		$	—		$	0.00		$	(0.02	)	$	0.15

Weighted average shares used in computing net income per share:
Basic		476		476			476			476			476			476			476
Diluted		481		481			481			481			481			481			481

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC

RECONCILIATION FROM GAAP TO NON-GAAP

NET LOSS

TWELVE MONTHS ENDED OCTOBER 31, 2003

(Unaudited)


				Non-GAAP Adjustments
(In millions, except per share amounts)	GAAP			Other Intangibles			Restructuring and Asset Impairment			Gain on Sale of Assets			SFAS No. 142		Retirement Plans Curtailment Loss			Other			Adjustment for Income Taxes			Non-GAAP

Orders	$	6,084		$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	6,084

Net revenue	$	6,056		$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	6,056
Costs and expenses:
Cost of products and services		3,750			(46	)		(111	)		—			—		(1	)		(5	)		—			3,587
Research and development		1,051			—			(66	)		—			—		(1	)		—			—			984
Selling, general and administrative		1,980			(9	)		(195	)		2			—		(3	)		(1	)		—			1,774

Total costs and expenses		6,781			(55	)		(372	)		2			—		(5	)		(6	)		—			6,345

Loss from operations		(725	)		55			372			(2	)		—		5			6			—			(289	)
Other income (expense), net		35			—			15			(3	)		—		—			—			—			47

Loss from operations before taxes		(690	)		55			387			(5	)		—		5			6			—			(242	)
Provision for taxes		1,100			—			—			—			—		—			—			(1,221	)		(121	)

Loss before cumulative effect of accounting change		(1,790	)		55			387			(5	)		—		5			6			1,221			(121	)
Cumulative effect of adopting SFAS No. 142		(268	)		—			—			—			268		—			—			—			—

Net loss	$	(2,058	)	$	55		$	387		$	(5	)	$	268	$	5		$	6		$	1,221		$	(121	)

Net loss per share - Basic and Diluted:
Loss before cumulative effect of accounting change	$	(3.78	)	$	0.11		$	0.82		$	(0.01	)	$	—	$	0.01		$	0.01		$	2.58		$	(0.26	)
Cumulative effect of adopting SFAS No. 142		(0.57	)		—			—			—			0.57		—			—			—			—

Net loss	$	(4.35	)	$	0.11		$	0.82		$	(0.01	)	$	0.57	$	0.01		$	0.01		$	2.58		$	(0.26	)

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

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

Historical amounts were reclassified to conform with current period presentation.

AGILENT TECHNOLOGIES, INC.

TEST AND MEASUREMENT INFORMATION

(In millions, except percent changes)

(Unaudited)


	Three months ended October 31, 2004		Three months ended October 31, 2003			Yr vs. Yr % change		Three months ended July 31, 2004		Sequential % change
Orders	$	693	$	645		7	%	$	776	(11	)%
Net Revenue	$	788	$	631		25	%	$	768	3	%
Income (loss) from operations	$	116	$	(11	)	1155	%	$	88	32	%



	Twelve months ended October 31, 2004		Twelve months ended October 31, 2003			Yr vs. Yr % change
Orders	$	2,856	$	2,413		18	%
Net Revenue	$	2,903	$	2,529		15	%
Income (loss) from operations	$	219	$	(315	)	170	%

Q4 FY04 vs Q3 FY04 BY MARKET SEGMENT


	Orders						Net Revenue
	Q4 FY04 $ Amount		Sequential % change		% of Segment		Q4 FY04 $ Amount		Sequential % change		% of Segment
Communications test	$	460	(16	)%	66	%	$	547	2	%	69	%
General purpose test		233	2	%	34	%		241	5	%	31	%

	$	693	(11	)%	100	%	$	788	3	%	100	%

Q4 FY04 vs Q4 FY03 BY MARKET SEGMENT


	Orders				Net Revenue
	Q4 FY04 $ Amount		Yr vs. Yr % change		Q4 FY04 $ Amount		Yr vs. Yr % change
Communications test	$	460	3	%	$	547	28	%
General purpose test		233	17	%		241	18	%

	$	693	7	%	$	788	25	%

Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income (loss) from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and unallocated infrastructure charges.

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.

AGILENT TECHNOLOGIES, INC.

AUTOMATED TEST INFORMATION

(In millions, except percent changes)

(Unaudited)


	Three months ended October 31, 2004			Three months ended October 31, 2003		Yr vs. Yr % change		Three months ended July 31, 2004		Sequential % change
Orders	$	137		$	260	(47	)%	$	208	(34	)%
Net Revenue	$	196		$	260	(25	)%	$	243	(19	)%
Income from operations	$	(7	)	$	45	(116	)%	$	19	(137	)%


	Twelve months ended October 31, 2004		Twelve months ended October 31, 2003			Yr vs. Yr % change
Orders	$	831	$	845		(2	)%
Net Revenue	$	924	$	755		22	%
Income (loss) from operations	$	66	$	(34	)	294	%

Q4 FY04 vs Q3 FY04 BY MARKET SEGMENT


	Orders						Net Revenue
	Q4 FY04 $ Amount		Sequential % change		% of Segment		Q4 FY04 $ Amount		Sequential % change		% of Segment
Semiconductor test	$	107	(33	)%	78	%	$	157	(20	)%	80	%
Manufacturing test		30	(39	)%	22	%		39	(15	)%	20	%

	$	137	(34	)%	100	%	$	196	(19	)%	100	%

Q4 FY04 vs Q4 FY03 BY MARKET SEGMENT


	Orders				Net Revenue
	Q4 FY04 $ Amount		Yr vs.Yr % change		Q4 FY04 $ Amount		Yr vs.Yr % change
Semiconductor test	$	107	(51	)%	$	157	(29	)%
Manufacturing test		30	(27	)%		39		%

	$	137	(47	)%	$	196	(25	)%

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.

AGILENT TECHNOLOGIES, INC.

SEMICONDUCTOR PRODUCTS INFORMATION

(In millions, except percent changes)

(Unaudited)


	Three months ended October 31, 2004		Three months ended October 31, 2003		Yr vs.Yr % change		Three months ended July 31, 2004		Sequential % change
Orders	$	403	$	493	(18	)%	$	470	(14	)%
Net Revenue	$	486	$	463	5	%	$	539	(10	)%
Income from operations	$	8	$	40	(80	)%	$	33	(76	)%


	Twelve months ended October 31, 2004		Twelve months ended October 31, 2003			Yr vs. Yr % change
Orders	$	1,978	$	1,652		20	%
Net Revenue	$	2,021	$	1,586		27	%
Income (loss) from operations	$	166	$	(59	)	381	%

Q4 FY04 vs Q3 FY04 BY MARKET SEGMENT


	Orders						Net Revenue
	Q4 FY04 $ Amount		Sequential % change		% of Segment		Q4 FY04 $ Amount		Sequential % change		% of Segment
Networking	$	116	(9	)%	29	%	$	122	(12	)%	25	%
Personal systems		287	(16	)%	71	%		364	(9	)%	75	%

	$	403	(14	)%	100	%	$	486	(10	)%	100	%

Q4 FY04 vs Q4 FY03 BY MARKET SEGMENT


	Orders				Net Revenue
	Q4 FY04 $ Amount		Yr vs. Yr % change		Q4 FY04 $ Amount		Yr vs. Yr % change
Networking	$	116	(31	)%	$	122	(21	)%
Personal systems		287	(12	)%		364	18	%

	$	403	(18	)%	$	486	5	%

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products that will be delivered within six months.

AGILENT TECHNOLOGIES, INC.

LIFE SCIENCES AND CHEMICAL ANALYSIS INFORMATION

(In millions, except percent changes)

(Unaudited)


	Three months ended October 31, 2004		Three months ended October 31, 2003		Yr vs. Yr % change		Three months ended July 31, 2004		Sequential % change
Orders	$	366	$	333	10	%	$	321	14	%
Net Revenue	$	352	$	321	10	%	$	335	5	%
Income from operations	$	58	$	53	9	%	$	46	26	%


	Twelve months ended October 31, 2004		Twelve months ended October 31, 2003		Yr vs. Yr % change
Orders	$	1,332	$	1,174	13	%
Net Revenue	$	1,333	$	1,186	12	%
Income from operations	$	192	$	148	30	%

Income (loss) from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with accounting principles generally accepted in the United States (GAAP). Income from operations of our reporting segments excludes restructuring, amortization of intangibles, non-operational charges and unallocated infrastructure charges.

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.

AGILENT TECHNOLOGIES, INC.

Segment Income (Loss) from Operations

Reconciliation of Reporting Segments to Agilent Non-GAAP Income (Loss)

(In millions)

(Unaudited)


	Three months ended October 31,						Three months ended July 31,
	2004			2003			2004
Test and Measurement	$	116		$	(11	)	$	88
Semiconductor Products		8			40			33
Automated Test		(7	)		45			19
Life Sciences and Chemical Analysis		58			53			46
Unallocated infrastructure charges		(2	)		(5	)		(3	)

Non-GAAP income from operations - Agilent	$	173		$	122		$	183

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)
	2004		2003		Percent Inc/(Dec)
ORDERS
Americas	$	586	$	665	(12	)%
Europe		347		337	3	%
Asia Pacific		666		729	(9	)%

Total	$	1,599	$	1,731	(8	)%

NET REVENUE
Americas	$	600	$	660	(9	)%
Europe		374		323	16	%
Asia Pacific		848		692	23	%

Total	$	1,822	$	1,675	9	%


	Twelve Months Ended October 31,				Percent Inc/(Dec)
	2004		2003		Percent Inc/(Dec)
ORDERS
Americas	$	2,420	$	2,303	5	%
Europe		1,463		1,248	17	%
Asia Pacific		3,114		2,533	23	%

Total	$	6,997	$	6,084	15	%

NET REVENUE
Americas	$	2,424		2,347	3	%
Europe		1,474		1,214	21	%
Asia Pacific		3,283		2,495	32	%

Total	$	7,181	$	6,056	19	%

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months.

AGILENT TECHNOLOGIES, INC.

Reconciliation of Segment ROIC

(In millions)

(Unaudited)


	Q4 FY04 ATG			Q4 FY04 SPG			Q4 FY04 LSCA			Q4 FY04 TMO			Q3 FY04 ATG			Q3 FY04 SPG			Q3 FY04 LSCA			Q3 FY04 TMO			Q4 FY03 ATG			Q4 FY03 SPG			Q4 FY03 LSCA			Q4 FY03 TMO
Numerator:
Segment income (loss) from operations	$	(7	)	$	8		$	58		$	116		$	19		$	33		$	46		$	88		$	45		$	40		$	53		$	(11	)
Less:
Other (income) expense and taxes		(4	)		(10	)		24			36			6			(11	)		16			24			23			(7	)		16			(11	)

Segment return		(3	)		18			34			80			13			44			30			64			22			47			37			—

Segment return annualized	$	(12	)	$	72		$	136		$	320		$	52		$	176		$	120		$	256		$	88		$	188		$	148		$	—

Denominator:
Segment assets ⁽¹⁾⁽²⁾	$	718		$	1,434		$	725		$	2,148		$	766		$	1,462		$	704		$	2,231		$	804		$	1,420		$	680		$	2,268
Less:
Net current liabilities ⁽³⁾		117			241			181			414			123			253			172			404			115			289			181			471

Invested capital	$	601		$	1,193		$	544		$	1,734		$	643		$	1,209		$	532		$	1,827		$	689		$	1,131		$	499		$	1,797

Average Invested capital	$	622		$	1,201		$	538		$	1,781		$	676		$	1,168		$	521		$	1,830		$	666		$	1,152		$	490		$	1,851

ROIC		-2	%		6	%		25	%		18	%		8	%		15	%		23	%		14	%		13	%		16	%		30	%		0	%

ROIC calculation:(annualized current quarter segment return)/(average of the two most recent quarter-end balances of Segment Invested Capital)

⁽¹⁾

As of Q3 FY04 the invested capital used to calculate ROIC was increased to include allocated corporate net assets. The largest component of the increase for each segment relates to deferred tax assets which were calculated and allocated as if the valuation allowance had not been recorded in Q3 FY03. Prior periods have been restated to reflect this change.

⁽²⁾	Segment assets consist of inventory, accounts receivable, property plant and equipment, gross goodwill and other intangibles, deferred taxes and allocated corporate assets.

⁽³⁾	Includes accounts payable, employee compensation and benefits, other accrued liabilities and allocated corporate liabilities.

This information is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. It excludes items, such as restructuring and amortization, that may have a material effect on the company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Management monitors these items to ensure that expenses are in line with expectations and that our GAAP results are correctly stated but does not use them to measure the ongoing operating performance of the company. The non-GAAP information we provide may be different from the non-GAAP information provided by other companies.

AGILENT TECHNOLOGIES, INC

RECONCILIATION OF DAYS ON HAND (DOH)

(In millions)


	Q404	Q403	Yr vs. Yr Change in Days
GAAP
Costs of Products and Services	1,042	961
Net Inventory	1,026	995
GAAP Inventory Days	89	93	(4	)
Non-GAAP
Costs of Products and Services	1,042	961
Less:
Amort of Intangibles	1	8
Restructuring	15	15
Inventory Charges	18	—
Other	2	—

Adjusted Costs of Products and Services	1,006	938
Net Inventory	1,026	995

Non-GAAP Inventory Days	92	95	(3	)


		GAAP DOH Formula:		(Quarter end net inventory x 90 Days)/(Current quarter’s COGS)
		Non-GAAP DOH Formula:		(Quarter-end net inventory x 90 Days)/(Current quarter’s COGS - Inventory Charges - Non-GAAP Adjustments)

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.