(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended October 31, 2018
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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46-4254555
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State or other jurisdiction of
Incorporation or organization
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I.R.S. Employer
Identification No.
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Title of each class
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Name of each exchange on which registered
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Common Stock
par value $0.01 per share
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New York Stock Exchange, Inc.
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(do not check if a smaller reporting company)
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Document Description
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10-K Part
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Portions of the Proxy Statement for the Annual Meeting of Stockholders (the "Proxy Statement") to be held on March 21, 2019 and to be filed pursuant to Regulation 14A within 120 days after registrant's fiscal year ended October 31, 2018 are incorporated by reference into Part III of this Report.
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III
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Page
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•
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New wireless communication measurement solutions.
We are investing in the development of new wireless communications test solutions to satisfy the commercial communications end market, which is being driven by growth in mobile data and evolving wireless standards, particularly 5G. With our technical breadth and expertise and strategic engagement with market-leading customers and partners around the world, we have leading-edge solutions for 5G applications available and have been first to market with many 5G solutions.
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•
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New automotive design and measurement solutions.
We are actively investing in the development of new automotive test solutions to address the rapidly emerging electric, hybrid electric, connected and autonomous vehicle segments. In
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•
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First-to-market network test solutions.
The rapidly growing number of high-speed, connected devices requires service providers and data center operators to continuously update their networks to deliver higher levels of data transfer performance, improve customer quality of service and enhance network security. The acquisition of Ixia in fiscal 2017 established Keysight as a market leader in next-generation network test and network visibility solutions. With the addition of these capabilities to our portfolio, we are uniquely positioned to deliver complete end-to-end communications network solutions, spanning the entire network from data center through the core and radio access network all the way to wide bandwidth mobile devices, up and down the protocol stack.
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•
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Technology Leadership as a Competitive Differentiator.
Proprietary software and hardware technologies unavailable on the commercial market and developed by our fourteen research and development centers around the world enable many Keysight products to deliver the best design and measurement solution capability available for our customers’ engineering requirements. Keysight’s technology leadership is noteworthy because we strive to deliver first-to-market solutions for our customers, ahead of our competition, allowing the customer to also be first with their products, gaining a competitive advantage. Built on an intellectual property foundation developed over several decades, Keysight’s EDA computer aided design software for radio and microwave frequency designs is the premiere tool used by over two-thirds of the world’s engineers doing design work in this field. Some of Keysight’s hardware technologies are designed and manufactured in our own in-house integrated circuit fabrication facilities, which were purpose-built and optimized to deliver unmatched performance and capabilities across the broad portfolio of Keysight instruments. Once developed, these technologies can be deployed into multiple-instrument form factors, which include feature-rich instruments, modular instruments and handheld portable instruments. For Keysight, deploying technology across all instrument form factors provides multiple revenue streams from a single technology investment. Keysight is recognized as being a technology leader in six core product instrumentation categories: RF and Microwave Design Simulation software, Network Test, Network Analyzers, Oscilloscopes, Signal Analyzers and Signal Sources.
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•
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Broad Portfolio of Solutions to Address Customer Needs.
Keysight has the broadest portfolio of electronic design and test solutions in the industry. Our hardware product portfolio spans many technologies, price points and form factors. We address time and frequency domain applications with RF, microwave, high-speed digital and general instrumentation. In addition, we have a broad portfolio of software products to enable customer success, including EDA software for RF and high-speed digital design, software tools for programming and a broad range of measurement application solutions. These help our customers make specific measurements quickly and consistently. Keysight is recognized as being a leader across our five key markets: commercial communications, aerospace, defense and government, electronic industrial, network test and visibility, and services.
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•
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Industry-Leading Commitment to Product Quality and Reliability.
Keysight has a reputation in the industry for high-quality and high-reliability electronic measurement instrumentation and software. Ensuring quality and reliability is an integral part of our new product development processes.
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•
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Large Installed Base.
We have a large worldwide installed base of equipment because of the breadth of our solutions portfolio and our long history of producing high-performance and high-quality solutions. This installed base enables a strong and growing Services Solutions Group, which provides a wide range of calibration and repair services, on both a per incident and contract basis, and provides a significant source of loyal customers for future sales.
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•
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Sales Channel with Global Reach.
We have a worldwide and comprehensive sales channel. We have experienced management teams and highly technical sales and application engineers in all parts of the world, including a strong local presence in emerging markets. Our sales channel strategy is segmented by customer size, customer location and product characteristics. We deploy a direct sales organization focused on selling high performance products and industry solutions to global and geographic accounts. Most of our sales in international markets are made by foreign sales subsidiaries. In countries with low sales volumes, sales are made through various representatives and distributors. However, we also sell
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•
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Centralized Order Fulfillment.
Our order fulfillment organization allows us to leverage the scale and scope of our business to provide high-quality, market-leading instrument solutions to our customers while generating competitive gross margins. Keysight has a central order fulfillment organization that supplies solutions to customers across geographies. Our Penang, Malaysia site is our largest manufacturing facility, with a proven track record of operational excellence, technology capability and quality. We have an established network of suppliers and subcontractors, especially in Asia, that complements our in-house capabilities.
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•
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Business Model.
Our operating model incorporates a substantial amount of cost structure flexibility with the intent to be materially profitable across a range of economic and market conditions. Our variable compensation programs, sales channel strategy and the outsourced components of our supply chain have been implemented to improve the flexibility of our cost structure.
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•
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Accredited Product Support Services.
Comprehensive support services that include repair, parts, and accredited calibrations of Keysight and non-Keysight test equipment.
|
•
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Professional Services.
Training and engineering services to optimize equipment adoption, utilization, and design and test processes.
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•
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Remanufactured Equipment.
Refurbished used equipment, including Keysight Premium Used, which ensures the same high quality as our new equipment.
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•
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Asset Management Program.
A full-service solution to optimize a customer’s asset tracking, servicing and utilization requirements throughout the product life cycle.
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•
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properly identify customer needs;
|
•
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innovate and develop new technologies, services and applications;
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•
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successfully commercialize new technologies in a timely manner;
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•
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manufacture and deliver our solutions in sufficient volumes and on time;
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•
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differentiate our offerings from our competitors' offerings;
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•
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price our solutions competitively;
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•
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anticipate our competitors' development of new solutions, services or technological innovations; and
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•
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control product quality in our manufacturing process.
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•
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changes in a specific country's or region's political, economic or other conditions, including but not limited to changes that favor national interests and economic volatility;
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•
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negative consequences from changes in tax laws;
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•
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difficulty in protecting intellectual property;
|
•
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interruption to transportation flows for delivery of parts to us and finished goods to our customers;
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•
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changes in foreign currency exchange rates;
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•
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difficulty in staffing and managing foreign operations;
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•
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local competition;
|
•
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differing labor regulations;
|
•
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unexpected changes in regulatory requirements;
|
•
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inadequate local infrastructure;
|
•
|
potential incidences of corruption and fraudulent business practices; and
|
•
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volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism, and war.
|
•
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reduced demand for our solutions, delays in the shipment of orders or increases in order cancellations;
|
•
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increased risk of excess and obsolete inventories;
|
•
|
increased price pressure for our solutions and services; and
|
•
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greater risk of impairment to the value, and a detriment to the liquidity, of our future investment portfolio.
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•
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the achievement of anticipated cost savings, synergies, business opportunities and growth prospects from combining the acquired company;
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•
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the compatibility of our infrastructure, operations, policies and organizations with those of the acquired company;
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•
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the retention of key employees and/or customers;
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•
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the management of facilities and employees in different geographic areas; and
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•
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the management of relationships with our strategic partners, suppliers, and customer base.
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•
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requiring a portion of our cash flow from operations to make interest payments on this debt;
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•
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increasing our vulnerability to general adverse economic and industry conditions;
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•
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reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; and
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry.
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•
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actual or anticipated fluctuations in our operating results due to factors related to our business;
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•
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success or failure of our business strategy;
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•
|
our quarterly or annual earnings, or those of other companies in our industry;
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•
|
our ability to obtain third-party financing as needed;
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•
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announcements by us or our competitors of significant acquisitions or dispositions;
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•
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changes in accounting standards, policies, guidance, interpretations or principles;
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•
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the failure of securities analysts to cover our common stock;
|
•
|
changes in earnings estimates by securities analysts or our ability to meet those estimates;
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•
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the operating and share price performance of other comparable companies;
|
•
|
investor perception of our company;
|
•
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natural or other disasters that investors believe may affect us;
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•
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overall market fluctuations;
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•
|
results from any material litigation or government investigations;
|
•
|
changes in laws or regulations affecting our business; and
|
•
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general economic conditions and other external factors.
|
•
|
the inability of our shareholders to call a special meeting;
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•
|
the inability of our shareholders to act without a meeting of shareholders;
|
•
|
rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;
|
•
|
the right of our board to issue preferred stock without shareholder approval;
|
•
|
the division of our board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult;
|
•
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a provision that shareholders may only remove directors with cause;
|
•
|
the ability of our directors, and not shareholders, to fill vacancies on our board of directors; and
|
•
|
the requirement that the affirmative vote of shareholders holding at least 80 percent of our voting stock is required to amend certain provisions in our amended and restated certificate of incorporation (relating to the number, term and removal of our directors, the filling of our board vacancies, the advance notice to be given for nominations for elections of directors, the calling of special meetings of shareholders, shareholder action by written consent, the ability of the board of directors to amend the bylaws, elimination of liability of directors to the extent permitted by Delaware law, exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and amendments of the certificate of incorporation) and certain provisions in our amended and restated bylaws (relating to the calling of special meetings of shareholders, the business that may be conducted or considered at annual or special meetings, the advance notice of shareholder business and nominations, shareholder action by written consent, the number, tenure, qualifications and removal of our directors, the filling of our board vacancies, director and officer indemnification and amendments of the bylaws).
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•
|
the diversion of management's attention to integration matters;
|
•
|
difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining Ixia’s business with our business;
|
•
|
difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience;
|
•
|
difficulties in the integration of operations and systems;
|
•
|
difficulties in the assimilation of employees;
|
•
|
difficulties in managing the expanded operations of a significantly larger and more complex company;
|
•
|
successfully managing relationships with our strategic partners and supplier and customer base; and
|
•
|
challenges in maintaining existing, and establishing new, business relationships.
|
Period
|
|
Total Number of Shares of Common Stock Purchased
(1)
|
|
Weighted Average Price Paid per Share of Common Stock
(2)
|
|
Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Maximum Approximate Dollar Value of Shares of Common Stock that May Yet Be Purchased Under the Program
(1)
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||||
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|
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|
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|
||||
August 1, 2018 through August 31, 2018
|
|
—
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|
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N/A
|
|
—
|
|
|
$
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269,846,917
|
|
September 1, 2018 through September 30, 2018
|
|
151,501
|
|
|
$65.99
|
|
151,501
|
|
|
$
|
259,850,059
|
|
October 1, 2018 through October 31, 2018
|
|
482,349
|
|
|
$62.18
|
|
482,349
|
|
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$
|
229,859,564
|
|
Total
|
|
633,850
|
|
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$63.09
|
|
633,850
|
|
|
|
(1)
|
On March 6, 2018, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to $350 million of the company’s common stock, replacing a previously approved 2016 program authorizing the purchase of up to $200 million of the company’s common stock and of which $139 million remained. Under the new program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. All such shares and related costs are held as treasury stock and accounted for at trade date using the cost method.
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(2)
|
The weighted average price paid per share of common stock does not include the cost of commissions.
|
|
Years Ended October 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Combined and Consolidated Statement of Operations Data:
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
3,878
|
|
|
$
|
3,189
|
|
|
$
|
2,918
|
|
|
$
|
2,856
|
|
|
$
|
2,933
|
|
Income (loss) before taxes
|
$
|
(411
|
)
|
|
$
|
179
|
|
|
$
|
366
|
|
|
$
|
388
|
|
|
$
|
475
|
|
Net income
|
$
|
165
|
|
|
$
|
102
|
|
|
$
|
335
|
|
|
$
|
513
|
|
|
$
|
392
|
|
Net income per share
(b)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.57
|
|
|
$
|
1.97
|
|
|
$
|
3.04
|
|
|
$
|
2.35
|
|
Diluted
|
$
|
0.86
|
|
|
$
|
0.56
|
|
|
$
|
1.95
|
|
|
$
|
3.00
|
|
|
$
|
2.35
|
|
Weighted average shares used in computing net income per share:
(b)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
187
|
|
|
180
|
|
|
170
|
|
|
169
|
|
|
167
|
|
|||||
Diluted
|
191
|
|
|
182
|
|
|
172
|
|
|
171
|
|
|
167
|
|
|
October 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Combined and Consolidated Balance Sheet Data:
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and short-term investments
|
$
|
913
|
|
|
$
|
818
|
|
|
$
|
783
|
|
|
$
|
483
|
|
|
$
|
810
|
|
Working capital
|
$
|
916
|
|
|
$
|
1,358
|
|
|
$
|
1,210
|
|
|
$
|
893
|
|
|
$
|
1,081
|
|
Total assets
|
$
|
5,824
|
|
|
$
|
5,933
|
|
|
$
|
3,796
|
|
|
$
|
3,501
|
|
|
$
|
3,041
|
|
Long-term debt
|
$
|
1,291
|
|
|
$
|
2,038
|
|
|
$
|
1,093
|
|
|
$
|
1,092
|
|
|
$
|
1,090
|
|
Stockholders' equity
|
$
|
2,433
|
|
|
$
|
2,310
|
|
|
$
|
1,513
|
|
|
$
|
1,302
|
|
|
$
|
769
|
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|||||||||
|
(in millions)
|
|
|
|
|
||||||||||
Orders
|
$
|
4,082
|
|
|
$
|
3,406
|
|
|
$
|
2,953
|
|
|
20%
|
|
15%
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
3,229
|
|
|
$
|
2,664
|
|
|
$
|
2,440
|
|
|
21%
|
|
9%
|
Services and other
|
649
|
|
|
525
|
|
|
478
|
|
|
24%
|
|
10%
|
|||
Total net revenue
|
$
|
3,878
|
|
|
$
|
3,189
|
|
|
$
|
2,918
|
|
|
22%
|
|
9%
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
% of total net revenue:
|
|
|
|
|
|
|
|
|
|
|||
Products
|
83
|
%
|
|
84
|
%
|
|
84
|
%
|
|
(1) ppt
|
|
—
|
Services and other
|
17
|
%
|
|
16
|
%
|
|
16
|
%
|
|
1 ppt
|
|
—
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
Year over Year % Change
|
||||||||||
|
2018 over 2017
|
|
2017 over 2016
|
||||||||
Geographic Region
|
actual
|
|
currency adjusted
|
|
actual
|
|
currency adjusted
|
||||
Americas
|
28
|
%
|
|
28
|
%
|
|
11
|
%
|
|
11
|
%
|
Europe
|
29
|
%
|
|
25
|
%
|
|
6
|
%
|
|
7
|
%
|
Japan
|
—
|
|
|
(1
|
)%
|
|
5
|
%
|
|
6
|
%
|
Asia Pacific ex-Japan
|
17
|
%
|
|
16
|
%
|
|
11
|
%
|
|
11
|
%
|
Total revenue
|
22
|
%
|
|
20
|
%
|
|
9
|
%
|
|
10
|
%
|
|
Year Ended October 31,
|
|
2018 over 2017
% Change |
|
2017 over 2016
% Change |
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Gross margin on products
|
55.4
|
%
|
|
54.7
|
%
|
|
57.3
|
%
|
|
1 ppt
|
|
(3) ppts
|
Gross margin on services and other
|
51.4
|
%
|
|
46.5
|
%
|
|
47.4
|
%
|
|
5 ppts
|
|
(1) ppt
|
Total gross margin
|
54.7
|
%
|
|
53.4
|
%
|
|
55.7
|
%
|
|
1 ppt
|
|
(2) ppts
|
Operating margin
|
(8.9
|
)%
|
|
7.5
|
%
|
|
13.9
|
%
|
|
(16) ppts
|
|
(6) ppts
|
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
607
|
|
|
$
|
498
|
|
|
$
|
425
|
|
|
22%
|
|
17%
|
Selling, general and administrative
|
$
|
1,185
|
|
|
$
|
1,049
|
|
|
$
|
818
|
|
|
13%
|
|
28%
|
Goodwill impairment
|
$
|
709
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
—
|
Other operating expense (income), net
|
$
|
(33
|
)
|
|
$
|
(84
|
)
|
|
$
|
(25
|
)
|
|
(60)%
|
|
237%
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Provision (benefit) for income taxes
|
$
|
(576
|
)
|
|
$
|
77
|
|
|
$
|
31
|
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|||||||||
|
(in millions)
|
|
|
|
|
||||||||||
Total net revenue
|
$
|
2,037
|
|
|
$
|
1,738
|
|
|
$
|
1,752
|
|
|
17%
|
|
(1)%
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Total gross margin
|
62.1
|
%
|
|
61.5
|
%
|
|
60.8
|
%
|
|
1 ppt
|
|
1 ppt
|
Operating margin
|
22.3
|
%
|
|
17.9
|
%
|
|
17.9
|
%
|
|
4 ppts
|
|
—
|
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
331
|
|
|
$
|
302
|
|
|
$
|
303
|
|
|
10%
|
|
—
|
Selling, general and administrative
|
$
|
486
|
|
|
$
|
463
|
|
|
$
|
457
|
|
|
5%
|
|
1%
|
Other operating expense (income), net
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
4%
|
|
(27)%
|
Income from operations
|
$
|
454
|
|
|
$
|
311
|
|
|
$
|
314
|
|
|
46%
|
|
(1)%
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Total gross margin
|
61.1
|
%
|
|
61.1
|
%
|
|
59.2
|
%
|
|
—
|
|
2 ppts
|
Operating margin
|
25.0
|
%
|
|
23.8
|
%
|
|
21.8
|
%
|
|
1 ppt
|
|
2 ppts
|
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
141
|
|
|
$
|
121
|
|
|
$
|
108
|
|
|
16%
|
|
12%
|
Selling, general and administrative
|
$
|
212
|
|
|
$
|
194
|
|
|
$
|
186
|
|
|
9%
|
|
4%
|
Other operating expense (income), net
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
15%
|
|
(13)%
|
Income from operations
|
$
|
241
|
|
|
$
|
199
|
|
|
$
|
169
|
|
|
21%
|
|
18%
|
|
Year Ended October 31,
|
|
2018 over 2017
% Change |
|
2017 over 2016
% Change |
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|||||||||
Total gross margin
|
74.3
|
%
|
|
76.6
|
%
|
|
—
|
|
|
n/a
|
|
n/a
|
|||
Operating margin
|
4.7
|
%
|
|
16.4
|
%
|
|
—
|
|
|
n/a
|
|
n/a
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
451
|
|
|
$
|
256
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
Research and development
|
$
|
118
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
Selling, general and administrative
|
$
|
196
|
|
|
$
|
103
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
Other operating expense (income), net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
Income from operations
|
$
|
21
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
|
Year Ended October 31,
|
|
2018 over 2017 % Change
|
|
2017 over 2016 % Change
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||
Total gross margin
|
40.5
|
%
|
|
41.2
|
%
|
|
40.9
|
%
|
|
(1) ppt
|
|
—
|
Operating margin
|
14.7
|
%
|
|
16.3
|
%
|
|
15.6
|
%
|
|
(2) ppts
|
|
1 ppt
|
(in millions)
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
64%
|
|
(67)%
|
Selling, general and administrative
|
$
|
118
|
|
|
$
|
105
|
|
|
$
|
99
|
|
|
12%
|
|
7%
|
Other operating expense (income), net
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
(1)%
|
|
25%
|
Income from operations
|
$
|
68
|
|
|
$
|
68
|
|
|
$
|
63
|
|
|
(1)%
|
|
8%
|
•
|
Net income in 2018 increased by $63 million as compared to 2017. Non-cash adjustments in 2018 increased $111 million compared to the same period last year, due to a $709 million goodwill impairment, a $74 million increase in amortization expense, a $70 million increase from a prior-period pension curtailment and settlement gain, an $11 million increase in depreciation expense and $1 million from other miscellaneous non-cash activities, partially offset by $742 million reduction in the adjustment for deferred tax benefits and $12 million gain on the sale of assets and divestitures.
|
•
|
The aggregate of accounts receivable, inventory and accounts payable used net cash of $128 million during 2018, compared to net cash used of zero in 2017 and $72 million in 2016. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory and accounts payable depends on the cash conversion cycle, which represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers and can be significantly impacted by the timing of shipments and purchases, as well as collections and payments in a period.
|
•
|
The aggregate of employee compensation and benefits, income taxes payable, deferred revenue, and other assets and liabilities provided net operating cash of $335 million during 2018 as compared to net cash provided of $42 million and net cash used of $22 million in 2017 and 2016, respectively. The difference between 2018 and 2017 activities is primarily due to an increase in the U.S. federal income tax payable due to the impact of new U.S. tax legislation, higher variable compensation accruals and other differences due to timing of accruals, collections and payments between the periods. In
|
•
|
Net cash used for retirement and post-retirement benefits was $127 million, $15 million and $32 million in 2018, 2017 and 2016, respectively. In 2018, we made an accelerated contribution of $85 million to our U.S. Defined Benefit Plans to secure tax deductibility at the current corporate rate prior to new tax legislation taking effect, as compared to zero contributions in 2017 and 2016. We also contributed $33 million to our non-U.S. defined benefit plans during 2018 compared to $34 million in 2017 and $38 million in 2016. We did not contribute to the U.S. Post-Retirement Benefit Plan in 2018 and 2017, and we contributed $1 million in 2016.
|
|
Total
|
|
Less than one
year
|
|
One to three years
|
|
Three to five years
|
|
More than five years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Debt obligations
|
$
|
1,800
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,300
|
|
Interest payments on debt
|
452
|
|
|
76
|
|
|
119
|
|
|
119
|
|
|
138
|
|
|||||
Operating lease commitments
|
191
|
|
|
44
|
|
|
65
|
|
|
36
|
|
|
46
|
|
|||||
Capital lease commitments
|
5
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||
Commitments to contract manufacturers and suppliers
|
376
|
|
|
375
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Retirement plans
|
33
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
US transition tax liability
|
89
|
|
|
4
|
|
|
15
|
|
|
15
|
|
|
55
|
|
|||||
Other purchase commitments
|
59
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,005
|
|
|
$
|
1,092
|
|
|
$
|
201
|
|
|
$
|
171
|
|
|
$
|
1,541
|
|
Index to Consolidated Financial Statements
|
|
Page
|
|
|
|
Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net revenue:
|
|
|
|
|
|
||||||
Products
|
$
|
3,229
|
|
|
$
|
2,664
|
|
|
$
|
2,440
|
|
Services and other
|
649
|
|
|
525
|
|
|
478
|
|
|||
Total net revenue
|
3,878
|
|
|
3,189
|
|
|
2,918
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of products
|
1,440
|
|
|
1,206
|
|
|
1,042
|
|
|||
Cost of services and other
|
316
|
|
|
281
|
|
|
252
|
|
|||
Total costs
|
1,756
|
|
|
1,487
|
|
|
1,294
|
|
|||
Research and development
|
607
|
|
|
498
|
|
|
425
|
|
|||
Selling, general and administrative
|
1,185
|
|
|
1,049
|
|
|
818
|
|
|||
Goodwill impairment
|
709
|
|
|
—
|
|
|
—
|
|
|||
Other operating expense (income), net
|
(33
|
)
|
|
(84
|
)
|
|
(25
|
)
|
|||
Total costs and expenses
|
4,224
|
|
|
2,950
|
|
|
2,512
|
|
|||
Income (loss) from operations
|
(346
|
)
|
|
239
|
|
|
406
|
|
|||
Interest income
|
12
|
|
|
7
|
|
|
3
|
|
|||
Interest expense
|
(83
|
)
|
|
(80
|
)
|
|
(47
|
)
|
|||
Other income (expense), net
|
6
|
|
|
13
|
|
|
4
|
|
|||
Income (loss) before taxes
|
(411
|
)
|
|
179
|
|
|
366
|
|
|||
Provision (benefit) for income taxes
|
(576
|
)
|
|
77
|
|
|
31
|
|
|||
Net income
|
$
|
165
|
|
|
$
|
102
|
|
|
$
|
335
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.57
|
|
|
$
|
1.97
|
|
Diluted
|
$
|
0.86
|
|
|
$
|
0.56
|
|
|
$
|
1.95
|
|
|
|
|
|
|
|
||||||
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
||||||
Basic
|
187
|
|
|
180
|
|
|
170
|
|
|||
Diluted
|
191
|
|
|
182
|
|
|
172
|
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
165
|
|
|
$
|
102
|
|
|
$
|
335
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments, net of tax benefit (expense) of $3, $(1) and $2
|
(14
|
)
|
|
4
|
|
|
(11
|
)
|
|||
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of zero, $(2) and $2
|
—
|
|
|
4
|
|
|
(5
|
)
|
|||
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $1, $(1) and $(4)
|
(3
|
)
|
|
—
|
|
|
8
|
|
|||
Foreign currency translation, net of tax benefit (expense) of zero
|
(21
|
)
|
|
(10
|
)
|
|
19
|
|
|||
Net defined benefit pension cost and post retirement plan costs:
|
|
|
|
|
|
||||||
Change in actuarial net gain (loss), net of tax benefit (expense) of $(7), $(68) and $53
|
23
|
|
|
178
|
|
|
(135
|
)
|
|||
Change in net prior service credit, net of tax benefit of $6, $9 and $10
|
(16
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|||
Other comprehensive income (loss)
|
(31
|
)
|
|
161
|
|
|
(139
|
)
|
|||
Total comprehensive income
|
$
|
134
|
|
|
$
|
263
|
|
|
$
|
196
|
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
913
|
|
|
$
|
818
|
|
Accounts receivable, net
|
624
|
|
|
547
|
|
||
Inventory
|
619
|
|
|
588
|
|
||
Other current assets
|
222
|
|
|
224
|
|
||
Total current assets
|
2,378
|
|
|
2,177
|
|
||
Property, plant and equipment, net
|
555
|
|
|
530
|
|
||
Goodwill
|
1,171
|
|
|
1,882
|
|
||
Other intangible assets, net
|
645
|
|
|
855
|
|
||
Long-term investments
|
46
|
|
|
63
|
|
||
Long-term deferred tax assets
|
750
|
|
|
186
|
|
||
Other assets
|
279
|
|
|
240
|
|
||
Total assets
|
$
|
5,824
|
|
|
$
|
5,933
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term and current portion of long-term debt
|
$
|
499
|
|
|
$
|
10
|
|
Accounts payable
|
242
|
|
|
211
|
|
||
Employee compensation and benefits
|
276
|
|
|
217
|
|
||
Deferred revenue
|
334
|
|
|
291
|
|
||
Income and other taxes payable
|
42
|
|
|
28
|
|
||
Other accrued liabilities
|
69
|
|
|
62
|
|
||
Total current liabilities
|
1,462
|
|
|
819
|
|
||
Long-term debt
|
1,291
|
|
|
2,038
|
|
||
Retirement and post-retirement benefits
|
224
|
|
|
309
|
|
||
Long-term deferred revenue
|
127
|
|
|
101
|
|
||
Other long-term liabilities
|
287
|
|
|
356
|
|
||
Total liabilities
|
3,391
|
|
|
3,623
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock; $0.01 par value; 1 billion shares authorized; 191 million shares at October 31, 2018, and 188 million shares at October 31, 2017 issued
|
2
|
|
|
2
|
|
||
Treasury stock at cost; 4.4 million shares at October 31, 2018 and 2.3 million shares at October 31, 2017
|
(182
|
)
|
|
(62
|
)
|
||
Additional paid-in-capital
|
1,889
|
|
|
1,786
|
|
||
Retained earnings
|
1,212
|
|
|
1,041
|
|
||
Accumulated other comprehensive loss
|
(488
|
)
|
|
(457
|
)
|
||
Total stockholders' equity
|
2,433
|
|
|
2,310
|
|
||
Total liabilities and equity
|
$
|
5,824
|
|
|
$
|
5,933
|
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
165
|
|
|
$
|
102
|
|
|
$
|
335
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
103
|
|
|
92
|
|
|
85
|
|
|||
Amortization
|
207
|
|
|
133
|
|
|
49
|
|
|||
Share-based compensation
|
59
|
|
|
56
|
|
|
49
|
|
|||
Debt issuance expense
|
—
|
|
|
9
|
|
|
—
|
|
|||
Deferred tax expense (benefit)
|
(789
|
)
|
|
(47
|
)
|
|
17
|
|
|||
Excess and obsolete inventory related charges
|
25
|
|
|
16
|
|
|
17
|
|
|||
Gain on sale of assets and divestitures
|
(20
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|||
Goodwill impairment
|
709
|
|
|
—
|
|
|
—
|
|
|||
Pension curtailment and settlement loss (gain)
|
1
|
|
|
(69
|
)
|
|
—
|
|
|||
Other non-cash expenses, net
|
15
|
|
|
17
|
|
|
4
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(89
|
)
|
|
(11
|
)
|
|
(42
|
)
|
|||
Inventory
|
(61
|
)
|
|
(4
|
)
|
|
(22
|
)
|
|||
Accounts payable
|
22
|
|
|
15
|
|
|
(8
|
)
|
|||
Employee compensation and benefits
|
63
|
|
|
(1
|
)
|
|
16
|
|
|||
Deferred revenue
|
75
|
|
|
90
|
|
|
15
|
|
|||
Income taxes payable
|
181
|
|
|
3
|
|
|
(9
|
)
|
|||
Retirement and post-retirement benefits
|
(127
|
)
|
|
(15
|
)
|
|
(32
|
)
|
|||
Other assets and liabilities
|
16
|
|
|
(50
|
)
|
|
(44
|
)
|
|||
Net cash provided by operating activities
|
555
|
|
|
328
|
|
|
420
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(132
|
)
|
|
(72
|
)
|
|
(91
|
)
|
|||
Proceeds from the sale of assets and divestitures
|
29
|
|
|
8
|
|
|
10
|
|
|||
Acquisitions of businesses and intangible assets, net of cash acquired
|
(11
|
)
|
|
(1,702
|
)
|
|
(10
|
)
|
|||
Proceeds from the sale of investments
|
—
|
|
|
45
|
|
|
1
|
|
|||
Other investing activities
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(116
|
)
|
|
(1,722
|
)
|
|
(90
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of common stock under employee stock plans
|
64
|
|
|
51
|
|
|
43
|
|
|||
Issuance of common stock under public offerings
|
—
|
|
|
444
|
|
|
—
|
|
|||
Payment of taxes related to net share settlement of equity awards
|
(18
|
)
|
|
(12
|
)
|
|
(9
|
)
|
|||
Treasury stock repurchases
|
(120
|
)
|
|
—
|
|
|
(62
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
1,069
|
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(16
|
)
|
|
—
|
|
|||
Proceeds from short-term borrowings
|
40
|
|
|
212
|
|
|
—
|
|
|||
Repayment of debt and credit facility
|
(300
|
)
|
|
(323
|
)
|
|
(1
|
)
|
|||
Other financing activities
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by/(used in) financing activities
|
(335
|
)
|
|
1,425
|
|
|
(29
|
)
|
|||
Effect of exchange rate movements
|
(9
|
)
|
|
4
|
|
|
(1
|
)
|
|||
Net increase in cash and cash equivalents
|
95
|
|
|
35
|
|
|
300
|
|
|||
Cash and cash equivalents at beginning of year
|
818
|
|
|
783
|
|
|
483
|
|
|||
Cash and cash equivalents at end of year
|
$
|
913
|
|
|
$
|
818
|
|
|
$
|
783
|
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
||||||||||||||||||||
|
Number of Shares
|
|
Par Value
|
|
Additional Paid-in Capital
|
|
Number of Shares
|
|
Treasury Stock at Cost
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income/(Loss)
|
|
Total Stockholders' Equity
|
||||||||||||||
Balance as of October 31, 2015
|
169,591
|
|
|
$
|
2
|
|
|
$
|
1,165
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
614
|
|
|
$
|
(479
|
)
|
|
$
|
1,302
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
335
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
(139
|
)
|
||||||
Issuance of common stock
|
2,696
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
||||||
Tax deficiency from share-based awards issued
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,289
|
)
|
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
||||||
Balance as of October 31, 2016
|
172,287
|
|
|
2
|
|
|
1,242
|
|
|
(2,289
|
)
|
|
(62
|
)
|
|
949
|
|
|
(618
|
)
|
|
1,513
|
|
||||||
Adjustment due to adoption of ASU 2016-16
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
161
|
|
||||||
Issuance of common stock
|
2,880
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||||
Public offering of common stock
|
13,143
|
|
|
—
|
|
|
444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
444
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Tax benefits from share-based awards issued
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Balance as of October 31, 2017
|
188,310
|
|
|
2
|
|
|
1,786
|
|
|
(2,289
|
)
|
|
(62
|
)
|
|
1,041
|
|
|
(457
|
)
|
|
2,310
|
|
||||||
Adjustment due to adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
||||||
Issuance of common stock
|
2,894
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,075
|
)
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
||||||
Balance as of October 31, 2018
|
191,204
|
|
|
$
|
2
|
|
|
$
|
1,889
|
|
|
(4,364
|
)
|
|
$
|
(182
|
)
|
|
$
|
1,212
|
|
|
$
|
(488
|
)
|
|
$
|
2,433
|
|
1.
|
OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
NEW ACCOUNTING PRONOUNCEMENTS
|
|
Year Ended October 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
As Originally
Reported |
|
As
Adjusted |
|
Change
|
|
As Originally
Reported |
|
As
Adjusted |
|
Change
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Net cash provided by operating activities
|
$
|
313
|
|
|
$
|
328
|
|
|
$
|
15
|
|
|
$
|
416
|
|
|
$
|
420
|
|
|
$
|
4
|
|
Net cash provided by/(used in) financing activities
|
$
|
1,440
|
|
|
$
|
1,425
|
|
|
$
|
(15
|
)
|
|
$
|
(25
|
)
|
|
$
|
(29
|
)
|
|
$
|
(4
|
)
|
3.
|
ACQUISITIONS
|
Cash and cash equivalents
|
$
|
72
|
|
Short-term investments
|
44
|
|
|
Accounts receivable
|
91
|
|
|
Inventory
|
107
|
|
|
Other current assets
|
34
|
|
|
Property, plant and equipment
|
50
|
|
|
Goodwill
|
1,117
|
|
|
Other intangible assets
|
744
|
|
|
Other assets
|
4
|
|
|
Total assets acquired
|
2,263
|
|
|
Accounts payable
|
(10
|
)
|
|
Employee compensation and benefits
|
(32
|
)
|
|
Deferred revenue
|
(35
|
)
|
|
Income and other taxes payable
|
(1
|
)
|
|
Other accrued liabilities
|
(32
|
)
|
|
Other long-term liabilities
|
(459
|
)
|
|
Net assets acquired
|
$
|
1,694
|
|
|
Estimated Fair Value
|
|
Estimated useful life
|
||
Developed product technology
|
$
|
423
|
|
|
4 years
|
Customer relationships
|
234
|
|
|
7 years
|
|
Tradenames and trademarks
|
12
|
|
|
3 years
|
|
Backlog
|
8
|
|
|
90 days
|
|
Total intangible assets subject to amortization
|
677
|
|
|
|
|
In-process research and development
|
67
|
|
|
|
|
Total intangible assets
|
$
|
744
|
|
|
|
Cash and cash equivalents
|
$
|
2
|
|
Accounts receivable
|
3
|
|
|
Inventory
|
16
|
|
|
Other current assets
|
1
|
|
|
Goodwill
|
23
|
|
|
Other intangible assets
|
40
|
|
|
Total assets acquired
|
85
|
|
|
Accounts payable
|
(1
|
)
|
|
Deferred revenue
|
(3
|
)
|
|
Income and other taxes payable
|
(2
|
)
|
|
Current portion of long-term debt
|
(1
|
)
|
|
Other long-term liabilities
|
(16
|
)
|
|
Net assets acquired
|
$
|
62
|
|
|
Estimated Fair Value
|
|
Estimated useful life
|
||
Developed product technology
|
$
|
33
|
|
|
6 years
|
Customer relationships
|
4
|
|
|
5 years
|
|
Non-compete agreements
|
1
|
|
|
3 years
|
|
Tradenames and trademarks
|
1
|
|
|
3 years
|
|
Backlog
|
1
|
|
|
6 months
|
|
Total intangible assets
|
$
|
40
|
|
|
|
|
Year Ended
|
||||||
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
Net revenue
|
$
|
3,462
|
|
|
$
|
3,413
|
|
Net income
|
$
|
116
|
|
|
$
|
231
|
|
Net income per share - Basic
|
$
|
0.63
|
|
|
$
|
1.26
|
|
Net income per share - Diluted
|
$
|
0.62
|
|
|
$
|
1.25
|
|
4.
|
SHARE-BASED COMPENSATION
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cost of products and services
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
11
|
|
Research and development
|
10
|
|
|
9
|
|
|
8
|
|
|||
Selling, general and administrative
|
38
|
|
|
36
|
|
|
30
|
|
|||
Total share-based compensation expense
|
$
|
59
|
|
|
$
|
56
|
|
|
$
|
49
|
|
|
Year Ended October 31,
|
||||
|
2018
|
|
2017
|
|
2016
|
Volatility of Keysight shares
|
25%
|
|
27%
|
|
25%
|
Volatility of index/peer group
|
14%
|
|
15%
|
|
14%-54%
|
Price-wise correlation with selected peers
|
57%
|
|
57%
|
|
38%
|
|
Options
Outstanding
|
|
Weighted
Average
Exercise Price
|
|||
|
(in thousands)
|
|
|
|||
Outstanding at October 31, 2017
|
2,354
|
|
|
$
|
27
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Exercised
|
(1,048
|
)
|
|
$
|
26
|
|
Forfeited and expired
|
—
|
|
|
$
|
—
|
|
Outstanding at October 31, 2018
|
1,306
|
|
|
$
|
27
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||||||
Range of
Exercise Prices
|
Number
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|
Number
Exercisable
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
||||||||||
|
(in thousands)
|
|
(in years)
|
|
|
|
(in thousands)
|
|
(in thousands)
|
|
(in years)
|
|
|
|
(in thousands)
|
||||||||||
$0 - 25
|
415
|
|
|
3.1
|
|
$
|
20
|
|
|
$
|
15,505
|
|
|
415
|
|
|
3.1
|
|
$
|
20
|
|
|
$
|
15,505
|
|
$25.01 - 30
|
288
|
|
|
5.1
|
|
$
|
30
|
|
|
7,836
|
|
|
288
|
|
|
5.1
|
|
$
|
30
|
|
|
7,836
|
|
||
$30.01 - 40
|
603
|
|
|
6.0
|
|
$
|
31
|
|
|
15,740
|
|
|
363
|
|
|
6.0
|
|
$
|
31
|
|
|
9,476
|
|
||
|
1,306
|
|
|
4.9
|
|
$
|
27
|
|
|
$
|
39,081
|
|
|
1,066
|
|
|
4.6
|
|
$
|
26
|
|
|
$
|
32,817
|
|
|
Aggregate
Intrinsic Value
|
|
Weighted
Average
Exercise
Price
|
||||
|
(in thousands)
|
|
|
||||
Options exercised in fiscal 2016
|
$
|
5,656
|
|
|
$
|
19
|
|
Options exercised in fiscal 2017
|
$
|
16,385
|
|
|
$
|
20
|
|
Options exercised in fiscal 2018
|
$
|
28,985
|
|
|
$
|
26
|
|
|
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Non-vested at October 31, 2017
|
3,640
|
|
|
$
|
33
|
|
Granted
|
1,335
|
|
|
$
|
46
|
|
Vested
|
(1,354
|
)
|
|
$
|
33
|
|
Forfeited
|
(155
|
)
|
|
$
|
38
|
|
LTP Program decremental
|
(107
|
)
|
|
$
|
31
|
|
Non-vested at October 31, 2018
|
3,359
|
|
|
$
|
36
|
|
5.
|
INCOME TAXES
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
U.S. operations
|
$
|
(532
|
)
|
|
$
|
(147
|
)
|
|
$
|
(30
|
)
|
Non-U.S. operations
|
121
|
|
|
326
|
|
|
396
|
|
|||
Total income (loss) before taxes
|
$
|
(411
|
)
|
|
$
|
179
|
|
|
$
|
366
|
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
U.S. federal taxes:
|
|
|
|
|
|
||||||
Current
|
$
|
131
|
|
|
$
|
21
|
|
|
$
|
(15
|
)
|
Deferred
|
46
|
|
|
(56
|
)
|
|
(13
|
)
|
|||
Non-U.S. taxes:
|
|
|
|
|
|
||||||
Current
|
75
|
|
|
101
|
|
|
32
|
|
|||
Deferred
|
(832
|
)
|
|
9
|
|
|
28
|
|
|||
State taxes, net of federal benefit:
|
|
|
|
|
|
||||||
Current
|
7
|
|
|
2
|
|
|
(1
|
)
|
|||
Deferred
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Total provision (benefit) for income taxes
|
$
|
(576
|
)
|
|
$
|
77
|
|
|
$
|
31
|
|
|
October 31,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
|
Deferred
Tax Assets
|
|
Deferred Tax
Liabilities
|
|
Deferred
Tax Assets
|
|
Deferred Tax
Liabilities
|
||||||||
|
(in millions)
|
||||||||||||||
Inventory
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
(3
|
)
|
Intangibles
|
664
|
|
|
(66
|
)
|
|
55
|
|
|
(158
|
)
|
||||
Property, plant and equipment
|
14
|
|
|
(23
|
)
|
|
16
|
|
|
(20
|
)
|
||||
Warranty reserves
|
11
|
|
|
(1
|
)
|
|
17
|
|
|
(1
|
)
|
||||
Pension benefits
|
47
|
|
|
(67
|
)
|
|
90
|
|
|
(58
|
)
|
||||
Employee benefits, other than retirement
|
27
|
|
|
(1
|
)
|
|
29
|
|
|
(1
|
)
|
||||
Net operating loss, capital loss, and credit carryforwards
|
120
|
|
|
—
|
|
|
257
|
|
|
—
|
|
||||
Unremitted earnings of foreign subsidiaries
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(305
|
)
|
||||
Share-based compensation
|
14
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||
Deferred revenue
|
37
|
|
|
(1
|
)
|
|
24
|
|
|
(3
|
)
|
||||
Other
|
11
|
|
|
(1
|
)
|
|
10
|
|
|
(10
|
)
|
||||
Subtotal
|
959
|
|
|
(165
|
)
|
|
540
|
|
|
(559
|
)
|
||||
Tax valuation allowance
|
(79
|
)
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
||||
Total deferred tax assets or deferred tax liabilities
|
$
|
880
|
|
|
$
|
(165
|
)
|
|
$
|
477
|
|
|
$
|
(559
|
)
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Profit before tax times statutory rate
|
$
|
(96
|
)
|
|
$
|
63
|
|
|
$
|
128
|
|
State income taxes, net of federal benefit
|
2
|
|
|
1
|
|
|
(1
|
)
|
|||
U.S. federal statutory tax rate change
|
10
|
|
|
—
|
|
|
—
|
|
|||
Non-U.S. income taxed at different rates
|
16
|
|
|
(83
|
)
|
|
(88
|
)
|
|||
Singapore tax incentives and amortization
|
(591
|
)
|
|
—
|
|
|
—
|
|
|||
U.S. transition tax and repatriation of foreign earnings
|
210
|
|
|
5
|
|
|
(42
|
)
|
|||
Foreign earnings not considered indefinitely reinvested
|
5
|
|
|
3
|
|
|
39
|
|
|||
Re-measurement of deferred taxes on foreign earnings not considered indefinitely reinvested
|
(304
|
)
|
|
—
|
|
|
—
|
|
|||
Change in unrecognized tax benefits
|
86
|
|
|
23
|
|
|
1
|
|
|||
U.S. research credits
|
(10
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|||
Share-based compensation
|
(1
|
)
|
|
7
|
|
|
5
|
|
|||
Goodwill impairment
|
99
|
|
|
—
|
|
|
—
|
|
|||
Malaysia tax assessment
|
—
|
|
|
68
|
|
|
—
|
|
|||
Other, net
|
(2
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|||
Provision (benefit) for income taxes
|
$
|
(576
|
)
|
|
$
|
77
|
|
|
$
|
31
|
|
Effective tax rate
|
140
|
%
|
|
43
|
%
|
|
8
|
%
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Current income tax assets (included within other current assets)
|
$
|
32
|
|
|
$
|
40
|
|
Current income tax liabilities (included within income and other taxes payable)
|
(18
|
)
|
|
(7
|
)
|
||
Long-term income tax assets (included within other assets)
|
—
|
|
|
—
|
|
||
Long-term income tax liabilities (included within other long-term liabilities)
|
(205
|
)
|
|
(39
|
)
|
||
Total
|
$
|
(191
|
)
|
|
$
|
(6
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Balance, beginning of year
|
$
|
146
|
|
|
$
|
51
|
|
|
$
|
50
|
|
Additions due to acquisition
|
—
|
|
|
22
|
|
|
—
|
|
|||
Additions for tax positions related to the current year
|
93
|
|
|
31
|
|
|
5
|
|
|||
Additions for tax positions from prior years
|
2
|
|
|
52
|
|
|
1
|
|
|||
Reductions for tax positions from prior years
|
(1
|
)
|
|
(9
|
)
|
|
(4
|
)
|
|||
Settlements with taxing authorities
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||
Statute of limitations expirations
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balance, end of year
|
$
|
227
|
|
|
$
|
146
|
|
|
$
|
51
|
|
6.
|
NET INCOME PER SHARE
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
165
|
|
|
$
|
102
|
|
|
$
|
335
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted-average shares
|
187
|
|
|
180
|
|
|
170
|
|
|||
Potential common shares— stock options and other employee stock plans
|
4
|
|
|
2
|
|
|
2
|
|
|||
Diluted weighted-average shares
|
191
|
|
|
182
|
|
|
172
|
|
7.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Non-cash investing activities:
|
|
|
|
|
|
||||||
Increase (decrease) in unpaid capital expenditures
|
$
|
10
|
|
|
$
|
(4
|
)
|
|
$
|
(11
|
)
|
Increase in capital lease liabilities
|
—
|
|
|
4
|
|
|
1
|
|
|||
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
8.
|
INVENTORY
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Finished goods
|
$
|
283
|
|
|
$
|
286
|
|
Purchased parts and fabricated assemblies
|
336
|
|
|
302
|
|
||
Total inventory
|
$
|
619
|
|
|
$
|
588
|
|
9.
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Land
|
$
|
63
|
|
|
$
|
63
|
|
Buildings and leasehold improvements
|
695
|
|
|
678
|
|
||
Machinery and equipment
|
1,074
|
|
|
1,008
|
|
||
Total property, plant and equipment
|
1,832
|
|
|
1,749
|
|
||
Accumulated depreciation and amortization
|
(1,277
|
)
|
|
(1,219
|
)
|
||
Property, plant and equipment, net
|
$
|
555
|
|
|
$
|
530
|
|
10.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
Communications Solutions Group
|
|
Electronic Industrial Solutions Group
|
|
Ixia Solutions Group
|
|
Services Solutions Group
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Goodwill at October 31, 2016
|
$
|
456
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
736
|
|
Foreign currency translation impact
|
(15
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(13
|
)
|
|||||
Goodwill arising from acquisitions
|
—
|
|
|
23
|
|
|
1,117
|
|
|
19
|
|
|
1,159
|
|
|||||
Goodwill at October 31, 2017
|
441
|
|
|
240
|
|
|
1,117
|
|
|
84
|
|
|
1,882
|
|
|||||
Foreign currency translation impact
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Goodwill arising from acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||
Impairment losses
|
—
|
|
|
—
|
|
|
(709
|
)
|
|
—
|
|
|
(709
|
)
|
|||||
Divestitures
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Balance at October 31, 2018
|
$
|
437
|
|
|
$
|
237
|
|
|
$
|
407
|
|
|
$
|
90
|
|
|
$
|
1,171
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
$
|
437
|
|
|
$
|
237
|
|
|
$
|
1,116
|
|
|
$
|
90
|
|
|
$
|
1,880
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(709
|
)
|
|
—
|
|
|
(709
|
)
|
|||||
Balance at October 31, 2018
|
$
|
437
|
|
|
$
|
237
|
|
|
$
|
407
|
|
|
$
|
90
|
|
|
$
|
1,171
|
|
|
Other Intangible Assets as of October 31, 2018
|
|
Other Intangible Assets as of October 31, 2017
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization and Impairments
|
|
Net Book Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
and Impairments
|
|
Net Book
Value
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Developed technology
|
$
|
835
|
|
|
$
|
415
|
|
|
$
|
420
|
|
|
$
|
808
|
|
|
$
|
252
|
|
|
$
|
556
|
|
Backlog
|
13
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
12
|
|
|
1
|
|
||||||
Trademark/Tradename
|
33
|
|
|
14
|
|
|
19
|
|
|
33
|
|
|
8
|
|
|
25
|
|
||||||
Customer relationships
|
304
|
|
|
100
|
|
|
204
|
|
|
304
|
|
|
61
|
|
|
243
|
|
||||||
Non-compete agreements
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total amortizable intangible assets
|
1,186
|
|
|
542
|
|
|
644
|
|
|
1,159
|
|
|
333
|
|
|
826
|
|
||||||
In-Process R&D
|
1
|
|
|
—
|
|
|
1
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||
Total
|
$
|
1,187
|
|
|
$
|
542
|
|
|
$
|
645
|
|
|
$
|
1,188
|
|
|
$
|
333
|
|
|
$
|
855
|
|
11.
|
INVESTMENTS
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Long-Term
|
|
|
|
||||
Cost method investments
|
$
|
16
|
|
|
$
|
16
|
|
Trading securities
|
13
|
|
|
13
|
|
||
Available-for-sale investments
|
17
|
|
|
34
|
|
||
Total
|
$
|
46
|
|
|
$
|
63
|
|
|
October 31, 2018
|
|
October 31, 2017
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Amortized Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Long-Term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
34
|
|
12.
|
FAIR VALUE MEASUREMENTS
|
|
Fair Value Measurements as of October 31, 2018
|
|
Fair Value Measurements as of October 31, 2017
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
484
|
|
|
$
|
484
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
403
|
|
|
$
|
403
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative instruments (foreign exchange contracts)
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||||
Long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Trading securities
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||||
Available-for-sale investments
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets measured at fair value
|
$
|
520
|
|
|
$
|
514
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
456
|
|
|
$
|
450
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative instruments (foreign exchange contracts)
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Deferred compensation liability
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||||||
Total liabilities measured at fair value
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
13.
|
DERIVATIVES
|
|
|
Derivatives in
Cash Flow Hedging Relationships |
|
Derivatives Not Designated as Hedging Instruments
|
||||
|
|
Forward
Contracts
|
|
Forward
Contracts
|
||||
Currency
|
|
Buy/(Sell)
|
|
Buy/(Sell)
|
||||
|
|
(in millions)
|
||||||
Euro
|
|
$
|
14
|
|
|
$
|
95
|
|
British Pound
|
|
—
|
|
|
(28
|
)
|
||
Singapore Dollar
|
|
15
|
|
|
1
|
|
||
Malaysian Ringgit
|
|
79
|
|
|
1
|
|
||
Japanese Yen
|
|
(86
|
)
|
|
(1
|
)
|
||
Other currencies
|
|
3
|
|
|
6
|
|
||
|
|
$
|
25
|
|
|
$
|
74
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Cash flow hedges
|
|
|
|
|
|
||||||
Foreign exchange contracts:
|
|
|
|
|
|
||||||
Gain (loss) recognized in accumulated other comprehensive income
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(7
|
)
|
Gain (loss) reclassified from accumulated other comprehensive income into cost of products
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
(12
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Gain (loss) recognized in other income (expense), net
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
(10
|
)
|
14.
|
RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS
|
|
Defined Benefit Plans
|
|
U.S. Post-Retirement Benefit Plan
|
||||||||||||||||||||||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
|||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||||||
Net periodic benefit cost (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost — benefits earned during the period
|
$
|
24
|
|
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
14
|
|
|
$
|
18
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost on benefit obligation
|
25
|
|
|
21
|
|
|
22
|
|
|
23
|
|
|
23
|
|
|
32
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|||||||||
Expected return on plan assets
|
(37
|
)
|
|
(33
|
)
|
|
(37
|
)
|
|
(85
|
)
|
|
(74
|
)
|
|
(74
|
)
|
|
(13
|
)
|
|
(11
|
)
|
|
(14
|
)
|
|||||||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net actuarial loss
|
12
|
|
|
15
|
|
|
9
|
|
|
25
|
|
|
33
|
|
|
27
|
|
|
16
|
|
|
21
|
|
|
20
|
|
|||||||||
Prior service credit
|
(7
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|
(17
|
)
|
|||||||||
Net periodic benefit cost (benefit)
|
17
|
|
|
17
|
|
|
8
|
|
|
(24
|
)
|
|
(1
|
)
|
|
3
|
|
|
(3
|
)
|
|
3
|
|
|
(1
|
)
|
|||||||||
Curtailments and settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic benefit cost (benefit)
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
(23
|
)
|
|
$
|
(70
|
)
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net actuarial loss (gain)
|
$
|
(11
|
)
|
|
$
|
4
|
|
|
$
|
60
|
|
|
$
|
41
|
|
|
$
|
(145
|
)
|
|
$
|
188
|
|
|
$
|
(1
|
)
|
|
$
|
(16
|
)
|
|
$
|
5
|
|
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net actuarial loss
|
(12
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|
(25
|
)
|
|
(33
|
)
|
|
(27
|
)
|
|
(16
|
)
|
|
(21
|
)
|
|
(20
|
)
|
|||||||||
Prior service credit
|
7
|
|
|
8
|
|
|
7
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
14
|
|
|
15
|
|
|
17
|
|
|||||||||
Settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Foreign currency
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
1
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total recognized in other comprehensive (income) loss
|
$
|
(16
|
)
|
|
$
|
(3
|
)
|
|
$
|
58
|
|
|
$
|
11
|
|
|
$
|
(199
|
)
|
|
$
|
157
|
|
|
$
|
(3
|
)
|
|
$
|
(22
|
)
|
|
$
|
2
|
|
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
66
|
|
|
$
|
(12
|
)
|
|
$
|
(269
|
)
|
|
$
|
160
|
|
|
$
|
(6
|
)
|
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
U.S. Defined
Benefit Plans
|
|
Non-U.S. Defined
Benefit Plans
|
|
U.S.
Post-Retirement
Benefit Plan
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Change in fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value — beginning of year
|
$
|
515
|
|
|
$
|
464
|
|
|
$
|
1,440
|
|
|
$
|
1,317
|
|
|
$
|
182
|
|
|
$
|
171
|
|
Actual return on plan assets
|
6
|
|
|
72
|
|
|
2
|
|
|
136
|
|
|
3
|
|
|
26
|
|
||||||
Employer contributions
|
85
|
|
|
—
|
|
|
33
|
|
|
34
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(31
|
)
|
|
(21
|
)
|
|
(42
|
)
|
|
(42
|
)
|
|
(13
|
)
|
|
(15
|
)
|
||||||
Currency impact
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
46
|
|
|
—
|
|
|
—
|
|
||||||
Fair value — end of year
|
$
|
575
|
|
|
$
|
515
|
|
|
$
|
1,392
|
|
|
$
|
1,440
|
|
|
$
|
172
|
|
|
$
|
182
|
|
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation — beginning of year
|
$
|
675
|
|
|
$
|
610
|
|
|
$
|
1,338
|
|
|
$
|
1,508
|
|
|
$
|
207
|
|
|
$
|
214
|
|
Service cost
|
24
|
|
|
22
|
|
|
14
|
|
|
18
|
|
|
1
|
|
|
1
|
|
||||||
Interest cost
|
25
|
|
|
21
|
|
|
23
|
|
|
23
|
|
|
7
|
|
|
7
|
|
||||||
Settlements
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
||||||
Curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
||||||
Actuarial loss (gain)
|
(43
|
)
|
|
43
|
|
|
(43
|
)
|
|
(69
|
)
|
|
(12
|
)
|
|
|
|
||||||
Benefits paid
|
(31
|
)
|
|
(21
|
)
|
|
(42
|
)
|
|
(42
|
)
|
|
(13
|
)
|
|
(15
|
)
|
||||||
Currency impact
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
54
|
|
|
—
|
|
|
—
|
|
||||||
Benefit obligation — end of year
|
$
|
650
|
|
|
$
|
675
|
|
|
$
|
1,249
|
|
|
$
|
1,338
|
|
|
$
|
190
|
|
|
$
|
207
|
|
Overfunded (Underfunded) status of PBO
|
$
|
(75
|
)
|
|
$
|
(160
|
)
|
|
$
|
143
|
|
|
$
|
102
|
|
|
$
|
(18
|
)
|
|
$
|
(25
|
)
|
Amounts recognized in the consolidated balance sheet consist of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
211
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employee compensation and benefits
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Retirement and post-retirement benefits
|
(74
|
)
|
|
(159
|
)
|
|
(114
|
)
|
|
(109
|
)
|
|
(18
|
)
|
|
(25
|
)
|
||||||
Net asset (liability)
(a)
|
$
|
(75
|
)
|
|
$
|
(160
|
)
|
|
$
|
143
|
|
|
$
|
102
|
|
|
$
|
(18
|
)
|
|
$
|
(25
|
)
|
Amounts recognized in accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial losses
|
$
|
112
|
|
|
$
|
135
|
|
|
$
|
396
|
|
|
$
|
385
|
|
|
$
|
28
|
|
|
$
|
45
|
|
Prior service credits
|
(4
|
)
|
|
(11
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(28
|
)
|
|
(42
|
)
|
||||||
Total
|
$
|
108
|
|
|
$
|
124
|
|
|
$
|
395
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
U.S. Defined
Benefit Plans
|
|
Non-U.S. Defined
Benefit Plans
|
|
U.S. Post-Retirement
Benefit Plan
|
||||||
|
(in millions)
|
||||||||||
Amortization of net prior service credit
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(14
|
)
|
Amortization of actuarial net loss
|
$
|
10
|
|
|
$
|
28
|
|
|
$
|
9
|
|
|
|
|
Fair Value Measurement
as of October 31, 2018 Using
|
||||||||||||||||
|
October 31,
2018 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
392
|
|
|
120
|
|
|
1
|
|
|
—
|
|
|
271
|
|
|||||
Fixed income
|
179
|
|
|
14
|
|
|
94
|
|
|
—
|
|
|
71
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
575
|
|
|
$
|
134
|
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
342
|
|
|
|
|
Fair Value Measurement
as of October 31, 2017 Using
|
||||||||||||||||
|
October 31,
2017 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
371
|
|
|
114
|
|
|
1
|
|
|
—
|
|
|
256
|
|
|||||
Fixed income
|
139
|
|
|
16
|
|
|
75
|
|
|
—
|
|
|
48
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
515
|
|
|
$
|
130
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
304
|
|
|
|
|
Fair Value Measurement as of
October 31, 2018 Using
|
||||||||||||||||
|
October 31,
2018 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
120
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||
Fixed income
|
51
|
|
|
4
|
|
|
27
|
|
|
—
|
|
|
20
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
172
|
|
|
$
|
41
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
|
|
Fair Value Measurement as of
October 31, 2017 Using
|
||||||||||||||||
|
October 31,
2017 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
132
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|||||
Fixed income
|
47
|
|
|
5
|
|
|
25
|
|
|
—
|
|
|
17
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total assets measured at fair value
|
$
|
182
|
|
|
$
|
47
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
|
|
Fair Value Measurement as of
October 31, 2018 Using
|
||||||||||||||||
|
October 31,
2018 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
791
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
656
|
|
|||||
Fixed income
|
595
|
|
|
—
|
|
|
208
|
|
|
—
|
|
|
387
|
|
|||||
Other investments
|
6
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Total assets measured at fair value
|
$
|
1,392
|
|
|
$
|
135
|
|
|
$
|
208
|
|
|
$
|
3
|
|
|
$
|
1,046
|
|
|
|
|
Fair Value Measurement as of
October 31, 2017 Using
|
||||||||||||||||
|
October 31,
2017 |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Assets Measured at NAV
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity
|
757
|
|
|
156
|
|
|
2
|
|
|
—
|
|
|
599
|
|
|||||
Fixed income
|
677
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
477
|
|
|||||
Other investments
|
6
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Total assets measured at fair value
|
$
|
1,440
|
|
|
$
|
156
|
|
|
$
|
202
|
|
|
$
|
3
|
|
|
$
|
1,079
|
|
|
Year Ended
|
||||||
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Balance, beginning of year
|
$
|
3
|
|
|
$
|
3
|
|
Realized gains
|
—
|
|
|
—
|
|
||
Unrealized gains/(losses)
|
—
|
|
|
—
|
|
||
Purchases, sales, issuances, and settlements
|
—
|
|
|
—
|
|
||
Transfers in (out)
|
—
|
|
|
—
|
|
||
Balance, end of year
|
$
|
3
|
|
|
$
|
3
|
|
|
2018
|
|
2017
|
||||||||||||
|
Benefit
Obligation
|
|
Fair Value of Plan Assets
|
|
Benefit
Obligation
|
|
Fair Value of Plan Assets
|
||||||||
|
|
||||||||||||||
|
PBO
|
|
|
PBO
|
|
||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||
U.S. defined benefit plans where PBO exceeds the fair value of plan assets
|
$
|
650
|
|
|
$
|
575
|
|
|
$
|
675
|
|
|
$
|
515
|
|
U.S. defined benefit plans where fair value of plan assets exceeds PBO
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
650
|
|
|
$
|
575
|
|
|
$
|
675
|
|
|
$
|
515
|
|
Non-U.S. defined benefit plans where PBO exceeds or is equal to the fair value of plan assets
|
$
|
363
|
|
|
$
|
249
|
|
|
$
|
378
|
|
|
$
|
269
|
|
Non-U.S. defined benefit plans where fair value of plan assets exceeds PBO
|
886
|
|
|
1,143
|
|
|
960
|
|
|
1,171
|
|
||||
Total
|
$
|
1,249
|
|
|
$
|
1,392
|
|
|
$
|
1,338
|
|
|
$
|
1,440
|
|
|
|
|
|
|
|
|
|
||||||||
|
ABO
|
|
|
|
ABO
|
|
|
||||||||
U.S. defined benefit plans where ABO exceeds the fair value of plan assets
|
$
|
609
|
|
|
$
|
575
|
|
|
$
|
629
|
|
|
$
|
515
|
|
U.S. defined benefit plans where the fair value of plan assets exceeds ABO
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
609
|
|
|
$
|
575
|
|
|
$
|
629
|
|
|
$
|
515
|
|
Non-U.S. defined benefit plans where ABO exceeds or is equal to the fair value of plan assets
|
$
|
351
|
|
|
$
|
249
|
|
|
$
|
364
|
|
|
$
|
269
|
|
Non-U.S. defined benefit plans where fair value of plan assets exceeds ABO
|
879
|
|
|
1,143
|
|
|
952
|
|
|
1,171
|
|
||||
Total
|
$
|
1,230
|
|
|
$
|
1,392
|
|
|
$
|
1,316
|
|
|
$
|
1,440
|
|
|
U.S. Defined
Benefit Plans
|
|
Non-U.S. Defined
Benefit Plans
|
|
U.S. Post-Retirement
Benefit Plan
|
||||||
|
(in millions)
|
||||||||||
2019
|
$
|
39
|
|
|
$
|
32
|
|
|
$
|
18
|
|
2020
|
$
|
41
|
|
|
$
|
36
|
|
|
$
|
18
|
|
2021
|
$
|
46
|
|
|
$
|
39
|
|
|
$
|
17
|
|
2022
|
$
|
48
|
|
|
$
|
41
|
|
|
$
|
16
|
|
2023
|
$
|
52
|
|
|
$
|
44
|
|
|
$
|
16
|
|
2024 - 2028
|
$
|
275
|
|
|
$
|
238
|
|
|
$
|
71
|
|
|
For years ended October 31,
|
||
|
2018
|
|
2017
|
U.S. Defined Benefit Plans:
|
|
|
|
Discount rate
|
3.75%
|
|
3.50%
|
Average increase in compensation levels
|
3.00%
|
|
3.00%
|
Expected long-term return on assets
|
7.50%
|
|
7.50%
|
Non-U.S. Defined Benefit Plans:
|
|
|
|
Discount rate
|
0.59-2.52%
|
|
0.40-2.63%
|
Average increase in compensation levels
|
2.50-3.25%
|
|
2.50-3.50%
|
Expected long-term return on assets
|
4.00-6.50%
|
|
4.00-6.50%
|
U.S. Post-Retirement Benefits Plan:
|
|
|
|
Discount rate
|
3.50%
|
|
3.50%
|
Expected long-term return on assets
|
7.50%
|
|
7.50%
|
Current medical cost trend rate
|
6.00%
|
|
6.00%
|
Ultimate medical cost trend rate
|
3.50%
|
|
3.50%
|
Medical cost trend rate decreases to ultimate rate in year
|
2029
|
|
2029
|
|
As of the years ended October 31,
|
|||
|
2018
|
|
2017
|
|
U.S. Defined Benefit Plans:
|
|
|
|
|
Discount rate
|
4.50%
|
|
3.75
|
%
|
Average increase in compensation levels
|
3.00%
|
|
3.00
|
%
|
Non-U.S. Defined Benefit Plans:
|
|
|
|
|
Discount rate
|
0.83-2.83%
|
|
0.59-2.52%
|
|
Average increase in compensation levels
|
2.50-3.00%
|
|
2.50-3.25%
|
|
U.S. Post-Retirement Benefits Plan:
|
|
|
|
|
Discount rate
|
4.25%
|
|
3.50
|
%
|
Current medical cost trend rate
|
6.00%
|
|
6.00
|
%
|
Ultimate medical cost trend rate
|
4.00%
|
|
3.50
|
%
|
Medical cost trend rate decreases to ultimate rate in year
|
2029
|
|
2029
|
|
15.
|
GUARANTEES
|
|
Year Ended October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Beginning balance
|
$
|
45
|
|
|
$
|
44
|
|
Accruals for warranties, including change in estimates
|
36
|
|
|
33
|
|
||
Settlements made during the period
|
(36
|
)
|
|
(32
|
)
|
||
Ending balance
|
45
|
|
|
$
|
45
|
|
Accruals for warranties due within one year
|
$
|
25
|
|
|
$
|
24
|
|
Accruals for warranties due after one year
|
20
|
|
|
21
|
|
||
Ending balance
|
$
|
45
|
|
|
$
|
45
|
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
17.
|
DEBT
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
|
|
|
|
||||
2019 Senior Notes at 3.30% ($500 face amount less unamortized costs of $1 and $2)
|
$
|
499
|
|
|
$
|
498
|
|
2024 Senior Notes at 4.55% ($600 face amount less unamortized costs of $3 and $4)
|
597
|
|
|
596
|
|
||
2027 Senior Notes at 4.60% ($700 face amount less unamortized costs of $6 and $6)
|
694
|
|
|
694
|
|
||
Senior Unsecured Term loan
|
—
|
|
|
260
|
|
||
Total Debt
|
1,790
|
|
|
2,048
|
|
||
Less: Short-term and current portion of long-term debt
|
499
|
|
|
10
|
|
||
Long-Term Debt
|
$
|
1,291
|
|
|
$
|
2,038
|
|
18.
|
STOCKHOLDERS' EQUITY
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Unrealized gain on equity securities, net of tax (expense) of $(2) and $(5)
|
$
|
—
|
|
|
$
|
14
|
|
Foreign currency translation, net of tax (expense) of $(63) and $(63)
|
(60
|
)
|
|
(39
|
)
|
||
Unrealized losses on defined benefit plans, net of tax benefit of $81 and $82
|
(426
|
)
|
|
(433
|
)
|
||
Unrealized losses on derivative instruments, net of tax benefit (expense) of $(1) and $(2)
|
(2
|
)
|
|
1
|
|
||
Total accumulated other comprehensive loss
|
$
|
(488
|
)
|
|
$
|
(457
|
)
|
|
|
|
|
|
Net defined benefit pension cost and post retirement plan costs:
|
|
|
|
|
||||||||||||||
|
Unrealized gain (loss) on equity securities
|
|
Foreign currency translation
|
|
Actuarial Losses
|
|
Prior service credits
|
|
Unrealized gains (losses) on derivatives
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
At October 31, 2016
|
$
|
10
|
|
|
$
|
(29
|
)
|
|
$
|
(646
|
)
|
|
$
|
50
|
|
|
$
|
(3
|
)
|
|
$
|
(618
|
)
|
Other comprehensive income (loss) before reclassifications
|
5
|
|
|
(10
|
)
|
|
177
|
|
|
—
|
|
|
6
|
|
|
178
|
|
||||||
Amounts reclassified out of accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
69
|
|
|
(24
|
)
|
|
1
|
|
|
46
|
|
||||||
Tax (expense) benefit
|
(1
|
)
|
|
—
|
|
|
(68
|
)
|
|
9
|
|
|
(3
|
)
|
|
(63
|
)
|
||||||
Other comprehensive income (loss) for the twelve months ended October 31, 2017
|
4
|
|
|
(10
|
)
|
|
178
|
|
|
(15
|
)
|
|
4
|
|
|
161
|
|
||||||
At October 31, 2017
|
14
|
|
|
(39
|
)
|
|
(468
|
)
|
|
35
|
|
|
1
|
|
|
(457
|
)
|
||||||
Other comprehensive income (loss) before reclassifications
|
(17
|
)
|
|
(21
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
||||||
Amounts reclassified out of accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
53
|
|
|
(22
|
)
|
|
(4
|
)
|
|
27
|
|
||||||
Tax (expense) benefit
|
3
|
|
|
—
|
|
|
(7
|
)
|
|
6
|
|
|
1
|
|
|
3
|
|
||||||
Other comprehensive income (loss) for the twelve months ended October 31, 2018
|
(14
|
)
|
|
(21
|
)
|
|
23
|
|
|
(16
|
)
|
|
(3
|
)
|
|
(31
|
)
|
||||||
At October 31, 2018
|
$
|
—
|
|
|
$
|
(60
|
)
|
|
$
|
(445
|
)
|
|
$
|
19
|
|
|
$
|
(2
|
)
|
|
$
|
(488
|
)
|
Details about accumulated other comprehensive loss components
|
|
Amounts reclassified from other comprehensive loss
|
|
Affected line item in statement of operations
|
||||||
|
|
Year Ended October 31,
|
|
|
||||||
|
|
2018
|
|
2017
|
|
|
||||
|
|
(in millions)
|
|
|
||||||
Unrealized gain (loss) on derivatives
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
Cost of products
|
|
|
(1
|
)
|
|
1
|
|
|
Provision for income tax
|
||
|
|
3
|
|
|
—
|
|
|
Net of Income Tax
|
||
|
|
|
|
|
|
|
||||
Net defined benefit pension cost and post retirement plan costs:
|
|
|
|
|
|
|
||||
Net actuarial loss
|
|
(53
|
)
|
|
(69
|
)
|
|
|
||
Prior service credit
|
|
22
|
|
|
24
|
|
|
|
||
|
|
(31
|
)
|
|
(45
|
)
|
|
Total before income tax
|
||
|
|
9
|
|
|
14
|
|
|
Provision for income tax
|
||
|
|
(22
|
)
|
|
(31
|
)
|
|
Net of income tax
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
$
|
(19
|
)
|
|
$
|
(31
|
)
|
|
|
19.
|
SEGMENT INFORMATION
|
|
Communications Solutions Group
|
|
Electronic Industrial Solutions Group
|
|
Ixia Solutions Group
|
|
Services Solutions Group
|
|
Total
Segments
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Year ended October 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
$
|
2,036
|
|
|
$
|
965
|
|
|
$
|
416
|
|
|
$
|
461
|
|
|
$
|
3,878
|
|
Amortization of acquisition-related balances
|
1
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
36
|
|
|||||
Total segment revenue
|
$
|
2,037
|
|
|
$
|
965
|
|
|
$
|
451
|
|
|
$
|
461
|
|
|
$
|
3,914
|
|
Segment income from operations
|
$
|
454
|
|
|
$
|
241
|
|
|
$
|
21
|
|
|
$
|
68
|
|
|
$
|
784
|
|
Depreciation expense
|
$
|
51
|
|
|
$
|
20
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
103
|
|
Year ended October 31, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
$
|
1,737
|
|
|
$
|
836
|
|
|
$
|
197
|
|
|
$
|
419
|
|
|
$
|
3,189
|
|
Amortization of acquisition-related balances
|
1
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
60
|
|
|||||
Total segment revenue
|
$
|
1,738
|
|
|
$
|
836
|
|
|
$
|
256
|
|
|
$
|
419
|
|
|
$
|
3,249
|
|
Segment income from operations
|
$
|
311
|
|
|
$
|
199
|
|
|
$
|
42
|
|
|
$
|
68
|
|
|
$
|
620
|
|
Depreciation expense
|
$
|
52
|
|
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
92
|
|
Year ended October 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
$
|
1,740
|
|
|
$
|
776
|
|
|
$
|
—
|
|
|
$
|
402
|
|
|
$
|
2,918
|
|
Amortization of acquisition-related balances
|
12
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
12
|
|
|||
Total segment revenue
|
$
|
1,752
|
|
|
$
|
776
|
|
|
$
|
—
|
|
|
$
|
402
|
|
|
$
|
2,930
|
|
Segment income from operations
|
$
|
314
|
|
|
$
|
169
|
|
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
546
|
|
Depreciation expense
|
$
|
53
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
85
|
|
|
Year Ended October 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Total reportable segments' income from operations
|
$
|
784
|
|
|
$
|
620
|
|
|
$
|
546
|
|
Share-based compensation expense
|
(59
|
)
|
|
(56
|
)
|
|
(49
|
)
|
|||
Restructuring and related costs
|
(17
|
)
|
|
(11
|
)
|
|
—
|
|
|||
Amortization of acquisition-related balances
|
(265
|
)
|
|
(256
|
)
|
|
(56
|
)
|
|||
Acquisition and integration costs
|
(49
|
)
|
|
(57
|
)
|
|
(18
|
)
|
|||
Acquisition-related compensation expense
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||
Separation and related costs
|
(2
|
)
|
|
(20
|
)
|
|
(24
|
)
|
|||
Pension curtailment and settlement loss (gain)
|
(1
|
)
|
|
69
|
|
|
—
|
|
|||
Northern California wildfire-related costs
|
(7
|
)
|
|
(16
|
)
|
|
—
|
|
|||
Goodwill impairment
|
(709
|
)
|
|
—
|
|
|
—
|
|
|||
Legal settlement
|
(25
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on divestitures
|
20
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(16
|
)
|
|
(6
|
)
|
|
7
|
|
|||
Income (loss) from operations, as reported
|
(346
|
)
|
|
239
|
|
|
406
|
|
|||
Interest income
|
12
|
|
|
7
|
|
|
3
|
|
|||
Interest expense
|
(83
|
)
|
|
(80
|
)
|
|
(47
|
)
|
|||
Other income (expense), net
|
6
|
|
|
13
|
|
|
4
|
|
|||
Income (loss) before taxes, as reported
|
$
|
(411
|
)
|
|
$
|
179
|
|
|
$
|
366
|
|
|
Communications Solutions Group
|
|
Electronic Industrial Solutions Group
|
|
Ixia Solutions Group
|
|
Services Solutions Group
|
|
Total
Segments |
||||||||||
|
(in millions)
|
||||||||||||||||||
As of October 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
1,854
|
|
|
$
|
811
|
|
|
$
|
1,327
|
|
|
$
|
338
|
|
|
$
|
4,330
|
|
Capital expenditures
|
$
|
63
|
|
|
$
|
27
|
|
|
$
|
10
|
|
|
$
|
32
|
|
|
$
|
132
|
|
As of October 31, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
1,739
|
|
|
$
|
799
|
|
|
$
|
2,063
|
|
|
$
|
304
|
|
|
$
|
4,905
|
|
Capital expenditures
|
$
|
36
|
|
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
72
|
|
|
October 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Total reportable segments' assets
|
$
|
4,330
|
|
|
$
|
4,905
|
|
Cash and cash equivalents
|
913
|
|
|
818
|
|
||
Prepaid expenses
|
106
|
|
|
113
|
|
||
Other current assets
|
9
|
|
|
7
|
|
||
Investments
|
46
|
|
|
63
|
|
||
Long-term and other receivables
|
118
|
|
|
118
|
|
||
Other
|
302
|
|
|
(91
|
)
|
||
Total assets
|
$
|
5,824
|
|
|
$
|
5,933
|
|
|
United
States
|
|
China
|
|
Japan
|
|
Rest of the
World
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended October 31, 2018
|
$
|
1,398
|
|
|
$
|
710
|
|
|
$
|
342
|
|
|
$
|
1,428
|
|
|
$
|
3,878
|
|
Year ended October 31, 2017
|
$
|
1,054
|
|
|
$
|
608
|
|
|
$
|
338
|
|
|
$
|
1,189
|
|
|
$
|
3,189
|
|
Year ended October 31, 2016
|
$
|
1,009
|
|
|
$
|
572
|
|
|
$
|
323
|
|
|
$
|
1,014
|
|
|
$
|
2,918
|
|
|
United
States
|
|
Japan
|
|
Malaysia
|
|
UK
|
Rest of the
World
|
|
Total
|
||||||||||||
|
(in millions)
|
|||||||||||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
October 31, 2018
|
$
|
310
|
|
|
$
|
222
|
|
|
$
|
72
|
|
|
$
|
145
|
|
$
|
121
|
|
|
$
|
870
|
|
October 31, 2017
|
$
|
280
|
|
|
$
|
234
|
|
|
$
|
73
|
|
|
$
|
106
|
|
$
|
126
|
|
|
$
|
819
|
|
20.
|
IMPACT OF NORTHERN CALIFORNIA WILDFIRES
|
|
Year Ended October 31, 2018
|
Year Ended October 31, 2017
|
||||
|
(in millions)
|
|||||
Cost of products and services
|
$
|
5
|
|
$
|
5
|
|
Research and development
|
1
|
|
1
|
|
||
Selling, general and administrative
|
1
|
|
8
|
|
||
Other operating expense (income), net
|
—
|
|
2
|
|
||
Total
|
$
|
7
|
|
$
|
16
|
|
21.
|
SUBSEQUENT EVENT
|
|
Three Months Ended
|
||||||||||||||
|
January 31,
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
837
|
|
|
$
|
990
|
|
|
$
|
1,004
|
|
|
$
|
1,047
|
|
Gross profit
|
$
|
427
|
|
|
$
|
543
|
|
|
$
|
565
|
|
|
$
|
587
|
|
Income (loss) from operations
|
$
|
(5
|
)
|
|
$
|
100
|
|
|
$
|
128
|
|
|
$
|
(569
|
)
|
Net income (loss)
|
$
|
94
|
|
|
$
|
64
|
|
|
$
|
121
|
|
|
$
|
(114
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.50
|
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
(0.61
|
)
|
Diluted
|
$
|
0.50
|
|
|
$
|
0.34
|
|
|
$
|
0.63
|
|
|
$
|
(0.61
|
)
|
Weighted average shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
187
|
|
|
188
|
|
|
188
|
|
|
187
|
|
||||
Diluted
|
189
|
|
|
190
|
|
|
191
|
|
|
187
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
726
|
|
|
$
|
753
|
|
|
$
|
832
|
|
|
$
|
878
|
|
Gross profit
|
$
|
404
|
|
|
$
|
413
|
|
|
$
|
411
|
|
|
$
|
474
|
|
Income (loss) from operations
|
$
|
162
|
|
|
$
|
42
|
|
|
$
|
(4
|
)
|
|
$
|
39
|
|
Net income (loss)
|
$
|
109
|
|
|
$
|
49
|
|
|
$
|
(18
|
)
|
|
$
|
(38
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.64
|
|
|
$
|
0.28
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
Diluted
|
$
|
0.63
|
|
|
$
|
0.27
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
Weighted average shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
171
|
|
|
177
|
|
|
186
|
|
|
186
|
|
||||
Diluted
|
173
|
|
|
179
|
|
|
186
|
|
|
186
|
|
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
||||
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders (1)(2)(3)
|
4,665,250
|
|
|
$
|
27
|
|
|
30,275,239
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
4,665,250
|
|
|
|
|
30,275,239
|
|
(1)
|
The number of securities remaining available for future issuance in column (c) includes 21,302,108 shares of common stock authorized and available for issuance under the Keysight Technologies, Inc. Employee Stock Purchase Plan ("423(b) Plan"). The number of shares authorized for issuance under the 423(b) Plan is subject to an automatic annual increase of the lesser of one percent of the outstanding common stock of Keysight or an amount determined by the Compensation Committee of our Board of Directors. Under the terms of the 423(b) Plan, in no event shall the aggregate number of shares issued under the Plan exceed 75 million shares. The number of securities remaining available for future issuance in column (c) is before the issuance of shares of common stock to participants in consideration of the aggregate participant contribution under 423(b) plan totaling $23 million as of October 31, 2018.
|
(2)
|
We issue securities under our equity compensation plans in forms other than options, warrants or rights. Those are issued under the 2014 Equity and Incentive Compensation Plan which was originally adopted by the Board on July 16, 2014, subsequently amended and restated by the Board on September 29, 2014 and January 22, 2015 and became effective as of November 1, 2014 (the “Effective Date”). The Plan was further amended and restated by the Board on November 16, 2017. The 2014 Plan provides for the grant of awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units with performance-based conditions to vesting or exercisability, and cash awards. The 2014 Plan has a term of ten years.
|
(3)
|
We issue securities under our equity compensation plans in forms which do not require a payment by the recipient to us at the time of exercise or vesting, including restricted stock, restricted stock units and performance units. Accordingly, the weighted-average exercise price in column (b) does not take these awards into account.
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial Statements.
|
2.
|
Financial Statement Schedule.
|
Description
|
|
Balance at
Beginning of Period |
|
Additions Charged to
Expenses or Other Accounts* |
|
Deductions Credited to Expenses or Other Accounts**
|
|
Balance at
End of Period |
||||||||
|
|
(in millions)
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Tax valuation allowance
|
|
$
|
63
|
|
|
$
|
18
|
|
|
$
|
(2
|
)
|
|
$
|
79
|
|
2017
|
|
|
|
|
|
|
|
|
||||||||
Tax valuation allowance
|
|
$
|
38
|
|
|
$
|
31
|
|
|
$
|
(6
|
)
|
|
$
|
63
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||
Tax valuation allowance
|
|
$
|
46
|
|
|
$
|
4
|
|
|
$
|
(12
|
)
|
|
$
|
38
|
|
3.
|
Exhibits.
|
|
|
|
|
Incorporation by Reference
|
|||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
Date
|
|
Exhibit
Number
|
|
Filed
Herewith
|
|
2.1
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
2.1
|
|
|
|
2.2
|
|
|
|
|
8-K
|
|
2/1/2017
|
|
2.1
|
|
|
3.1
|
|
|
|
8-K
|
|
11/3/2014
|
|
3.1
|
|
|
|
3.2
|
|
|
|
8-K
|
|
11/3/2014
|
|
3.2
|
|
|
|
4.1
|
|
|
|
8-K
|
|
10/17/2014
|
|
4.1
|
|
|
|
4.2
|
|
|
|
8-K
|
|
10/17/2014
|
|
4.2
|
|
|
|
4.3
|
|
|
|
8-K
|
|
4/6/2017
|
|
4.2
|
|
|
|
10.1
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.8
|
|
|
|
10.9
|
|
|
|
8-K
|
|
11/3/2014
|
|
10.2
|
|
|
|
10.10
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.11
|
|
|
|
10.11
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.12
|
|
|
|
10.12
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.13
|
|
|
10.13
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.14
|
|
|
|
10.14
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.15
|
|
|
|
10.15
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.16
|
|
|
|
10.16
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.17
|
|
|
|
10.17
|
|
|
|
10-12B/A
|
|
7/18/2014
|
|
10.18
|
|
|
|
10.18
|
|
|
|
10-12B/A
|
|
8/13/2014
|
|
10.19
|
|
|
|
10.19
|
|
|
|
8-K
|
|
11/3/2014
|
|
10.1
|
|
|
|
10.20
|
|
|
|
8-K
|
|
11/3/2014
|
|
10.3
|
|
|
|
10.21
|
|
|
|
8-K
|
|
3/24/2015
|
|
10.1
|
|
|
|
10.22
|
|
|
|
DEF 14A
|
|
2/6/2015
|
|
APPENDIX B
|
|
|
|
10.23
|
|
|
|
10-K
|
|
12/21/2015
|
|
10.27
|
|
|
|
10.24
|
|
|
|
10-K
|
|
12/21/2015
|
|
10.28
|
|
|
|
10.25
|
|
|
|
10-K
|
|
12/21/2015
|
|
10.29
|
|
|
|
10.26
|
|
|
|
10-K
|
|
12/21/2015
|
|
10.30
|
|
|
|
10.27
|
|
|
|
10-K
|
|
12/21/2015
|
|
10.31
|
|
|
|
10.28
|
|
|
|
10-K
|
|
12/19/2016
|
|
10.32
|
|
|
|
10.29
|
|
|
|
8-K
|
|
2/22/2017
|
|
10.1
|
|
|
|
10.30
|
|
|
|
DEF 14A
|
|
2/9/2018
|
|
APPENDIX A
|
|
|
|
11.1
|
|
|
|
|
|
|
|
|
|
X
|
|
14.1
|
|
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
|
XBRL Schema Document
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
|
XBRL Calculation Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
|
XBRL Labels Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
|
XBRL Presentation Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
|
XBRL Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
99.1
|
|
|
|
8-K
|
|
11/3/2014
|
|
99.1
|
|
|
*
|
Indicates management contract or compensatory plan, contract or arrangement.
|
**
|
Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Keysight will furnish supplemental copies of any such schedules or exhibits to the U.S. Securities and Exchange Commission upon request.
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
||
|
|
|
|
|
|
|
BY
|
|
/s/ Neil Dougherty
|
|
|
|
|
Neil Dougherty
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ RONALD S. NERSESIAN
|
|
Director, President and Chief Executive Officer
|
|
December 18, 2018
|
Ronald S. Nersesian
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ NEIL DOUGHERTY
|
|
Senior Vice President and Chief Financial Officer
|
|
December 18, 2018
|
Neil Dougherty
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ JOHN C. SKINNER
|
|
Vice President and Corporate Controller
|
|
December 18, 2018
|
John C. Skinner
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ PAUL N. CLARK
|
|
Chairman of the Board
|
|
December 18, 2018
|
Paul N. Clark
|
|
|
|
|
|
|
|
|
|
/s/ JAMES G. CULLEN
|
|
Director
|
|
December 18, 2018
|
James G. Cullen
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES J. DOCKENDORFF
|
|
Director
|
|
December 18, 2018
|
Charles J. Dockendorff
|
|
|
|
|
|
|
|
|
|
/s/ JEAN M. HALLORAN
|
|
Director
|
|
December 18, 2018
|
Jean M. Halloran
|
|
|
|
|
|
|
|
|
|
/s/ RICHARD HAMADA
|
|
Director
|
|
December 18, 2018
|
Richard Hamada
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT A. RANGO
|
|
Director
|
|
December 18, 2018
|
Robert A. Rango
|
|
|
|
|
|
|
|
|
|
Name of subsidiary
|
Organized Under the Laws of
|
Keysight Technologies Netherlands B.V.
|
The Netherlands
|
Keysight Technologies Luxembourg Sarl
|
Luxembourg
|
Keysight Technologies Singapore (Holdings) Pte. Ltd.
|
Singapore
|
Keysight Technologies Singapore (International) Pte. Ltd.
|
Singapore
|
Keysight Technologies Singapore (Sales) Pte. Ltd.
|
Singapore
|
Keysight Technologies World Trade, Inc.
|
Delaware
|
Keysight Technologies UK Limited
|
United Kingdom
|
Ixia
|
California
|
Ixia Technologies International Limited
|
Ireland
|
Catapult Communications Corporation
|
Nevada
|
1.
|
I have reviewed this Form 10-K of Keysight Technologies, Inc. ("the Registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f))
for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
Date:
|
December 18, 2018
|
|
/s/ Ronald S. Nersesian
|
|
|
|
Ronald S. Nersesian
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Form 10-K of Keysight Technologies, Inc. ("the Registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f))
for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
Date:
|
December 18, 2018
|
|
/s/ Neil Dougherty
|
|
|
|
Neil Dougherty
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Date:
|
December 18, 2018
|
|
/s/ Ronald S. Nersesian
|
|
|
|
Ronald S. Nersesian
|
|
|
|
President and Chief Executive Officer
|
Date:
|
December 18, 2018
|
|
/s/ Neil Dougherty
|
|
|
|
Neil Dougherty
|
|
|
|
Senior Vice President and Chief Financial Officer
|