Highlights:
-
GAAP net income of $277 million, or $1.61 per share
-
Non-GAAP net income of $122 million, or $0.71 per share(1)
-
Q4 GAAP revenue of $750 million, $2.9 billion for FY15
-
Q4 non-GAAP revenue of $756 million, $2.9 billion for FY15(2)
-
First-quarter fiscal year 2016 non-GAAP revenue guidance of $702
million to $742 million(2); non-GAAP earnings guidance of
$0.44 to $0.58 per share(3)
SANTA ROSA, Calif.--(BUSINESS WIRE)--
Keysight Technologies, Inc. (NYSE: KEYS) today reported strong operating
results despite mixed end market conditions. Non-GAAP revenue of $756
million for the fourth fiscal quarter ended Oct. 31, 2015, declined 1
percent compared with one year ago.(2) Currency had a
negative year-over-year impact of 4 percentage points on revenue, while
acquisitions contributed 4 percentage points of growth.
Compared to last year, results across end markets were mixed.
Communications market revenues grew 3 percent, while aerospace & defense
market revenues declined 5 percent versus a high point driven by the
post-sequestration recovery. Industrial, computer, and semiconductor
market revenues declined 2 percent as strength in computer and
semiconductor markets was offset by softer industrial spending.
Regionally, sales grew on a core basis in Asia Pacific and Japan with
declines in the Americas and Europe.
Fourth-quarter GAAP gross margin of 56 percent increased 1.5 percentage
points year-over-year. Non-GAAP gross margin of 58 percent increased 1.9
percentage points as the mix of R&D and software revenues improved.(1)
Expenses increased due to acquisitions and higher R&D investment in
support of key growth initiatives.
Fourth-quarter non-GAAP operating income was $157 million, or 20.7
percent of revenue.(1) Non-GAAP net income was $122 million,
or $0.71 per share,(1) which excludes a tax benefit of $201
million and other net adjustments of $46 million. The tax benefit
resulted primarily from a tax ruling obtained from Singapore that allows
Keysight to amortize the value of the intellectual property acquired
from Agilent in the separation. Fourth-quarter GAAP operating income was
$111 million, or 14.8 percent of revenue. GAAP net income was $277
million, or $1.61 per share.
For fiscal 2015, non-GAAP revenue of $2.9 billion declined 2 percent and
was flat on a core basis as currency had a negative year-over-year
impact of 3 percentage points, while acquisitions contributed 1
percentage point of growth.(2) Fiscal 2015 non-GAAP operating
income was $559 million, or 19.5 percent of revenue.(1)
Full-year non-GAAP net income was $432 million, or $2.52 per share,(1)
which excludes GAAP to non-GAAP net adjustments of $81 million. Fiscal
2015 GAAP operating income was $431 million, or 15.1 percent of revenue.
Full-year GAAP net income was $513 million, or $3.00 per share.
“Our strong Q4 performance contributed to a solid first year as an
independent company,” said Ron Nersesian, Keysight president and CEO.
“Our team’s operational discipline drove excellent earnings results in
Q4 and throughout the year, while we completed the separation and closed
our first major acquisition with Anite. We have also established a
consistent track record of meeting our guidance commitments over the
past several quarters.”
“Looking forward, our recently announced organizational structure is the
next step in driving increased focus on customer solutions and
accelerating our growth initiatives in 2016,” added Nersesian. “While we
maintain our expectations for market growth of 2 percent in 2016, recent
macro data has tempered our expectations for the first half of the year.”
Revenues and earnings are typically softer in Keysight’s first fiscal
quarter. Consistent with this seasonality, first-quarter 2016 non-GAAP
revenue is expected to be in the range of $702 million to $742 million.(2)
First-quarter non-GAAP earnings per share are expected to be in the
range of $0.44 to $0.58.(3)
Webcast
Keysight’s management will present more details about its fourth-quarter
FY2015 financial results on a conference call with investors today at
1:30 p.m. PT. This event will be webcast in listen-only mode. Listeners
may log on and select Q4 2015 Keysight Technologies Inc. Earnings
Conference Call in the Investor News & Events – Upcoming Events section
at www.investor.keysight.com.
The webcast will remain on the company site for 90 days.
A telephone replay of the conference call will be available at
approximately 4:30 p.m. PT, Nov. 19 through Nov. 24 by dialing +1 855
859 2056 (or +1 404 537 3406 from outside the U.S.) and entering pass
code 47979140.
About Keysight Technologies
Keysight Technologies (NYSE:KEYS) is a global electronic measurement
technology and market leader helping to transform its customers’
measurement experience through innovations in wireless, modular, and
software solutions. Keysight’s electronic measurement instruments,
systems, software and services are used in the design, development,
manufacture, installation, deployment and operation of electronic
equipment. The business had revenues of $2.9 billion in fiscal year
2014. Information about Keysight is available at www.keysight.com.
Forward-Looking Statements
This news release contains forward-looking statements as defined in the
Securities Exchange Act of 1934 and is subject to the safe harbors
created therein. The forward-looking statements contained herein
include, but are not limited to, information regarding Keysight’s future
revenues, earnings and profitability; the future demand for the
company’s products and services; and customer expectations. These
forward-looking statements involve risks and uncertainties that could
cause Keysight’s results to differ materially from management’s current
expectations. Such risks and uncertainties include, but are not limited
to, unforeseen changes in the strength of our customers’ businesses;
unforeseen changes in the demand for current and new products,
technologies, and services; customer purchasing decisions and timing,
and the risk that we are not able to realize the savings or benefits
expected from integration and restructuring activities.
In addition, other risks that Keysight faces include those detailed in
Keysight’s filings with the Securities and Exchange Commission,
including our Form 10-Q for the fiscal quarter ended July 31, 2015.
Forward-looking statements are based on the beliefs and assumptions of
Keysight’s management and on currently available information. Keysight
undertakes no responsibility to publicly update or revise any
forward-looking statement.
Non-GAAP Measures
Keysight uses a number of different financial measures, both GAAP and
non-GAAP, in analyzing and assessing the overall performance of the
business, for making operating decisions and for forecasting and
planning for future periods. The definition of these non-GAAP financial
measures may differ from similarly titled measures used by others, and
such non-GAAP measures should be considered supplemental to and not a
substitute for financial information prepared in accordance with GAAP.
Keysight generally uses non-GAAP financial measures to facilitate
management’s comparisons to historic operating results, to competitors’
operating results and to guidance provided to investors. In addition,
Keysight believes that the use of these non-GAAP financial measures
provides greater transparency to investors of information used by
management in its financial and operational decision-making.
(1) Non-GAAP gross margin, non-GAAP operating income,
non-GAAP net income, and non-GAAP net income per share exclude primarily
the impacts of share-based compensation, restructuring and related
costs, separation and related costs, acquisition and integration costs,
acquisition-related fair value adjustments, asset impairments and
non-cash intangible amortization. In addition, non-GAAP net income and
non-GAAP net income per share also excludes any tax benefits or expenses
that are not directly related to ongoing operations and which are either
isolated or cannot be expected to occur again with any regularity or
predictability. Earnings per share is based on diluted shares.
Reconciliation between non-GAAP gross margin and GAAP gross margin,
non-GAAP net income and GAAP net income for Q4’15 and FY2015, is set
forth on pages 5-6 of the attached tables, along with additional
information regarding the use of this non-GAAP measure.
(2) Revenues, excluding the impact of fair value adjustment
to acquisition-related deferred revenue balances for the Anite
acquisition are a non-GAAP measure. A reconciliation between GAAP
revenue and non-GAAP revenue and non-GAAP revenue excluding currency and
acquisitions (core basis) is provided on page 8 of the attached tables,
along with additional information regarding the use of this non-GAAP
measure.
(3) Non-GAAP earnings per share as projected for Q1 FY16
exclude primarily the impacts of share-based compensation, restructuring
and related costs, separation and related costs, acquisition and
integration costs, acquisition-related fair value adjustments, asset
impairments and non-cash intangible amortization. Beginning in Q1 FY16,
Keysight intends to utilize a fixed long-term projected non-GAAP tax
rate. When projecting this long-term rate, Keysight will exclude any tax
benefits or expenses that are not directly related to ongoing operations
and which are either isolated or cannot be expected to occur again with
any regularity or predictability. Additionally, Keysight will evaluate
its current long-term projections, current tax structure and other
factors such as existing tax positions in various jurisdictions and key
tax holidays in major jurisdictions where Keysight operates. This
long-term non-GAAP tax rate should eliminate the effects of
non-recurring and period specific items. This tax rate could be subject
to change in the future for a variety of reasons, including but not
limited to significant changes in geographic earnings mix including
acquisition activity, or fundamental tax law changes in major
jurisdictions where Keysight operates. Most of these excluded amounts
pertain to events that have not yet occurred and are not currently
possible to estimate with a reasonable degree of accuracy. Therefore, no
reconciliation to GAAP amounts has been provided.
Additional information about Keysight Technologies is available in the
newsroom at www.keysight.com/go/news.
Source: IR-KEYS
|
KEYSIGHT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(In millions, except per share amounts)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
October 31,
|
|
Percent
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
Orders
|
|
$
|
780
|
|
|
$
|
760
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
750
|
|
|
$
|
762
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of products and services
|
|
|
327
|
|
|
|
343
|
|
|
(5
|
%)
|
Research and development
|
|
|
105
|
|
|
|
91
|
|
|
16
|
%
|
Selling, general and administrative
|
|
|
212
|
|
|
|
198
|
|
|
7
|
%
|
Other operating expense (income), net
|
|
|
(5
|
)
|
|
|
—
|
|
|
—
|
|
Total costs and expenses
|
|
|
639
|
|
|
|
632
|
|
|
1
|
%
|
|
|
|
|
|
|
|
Income from operations
|
|
|
111
|
|
|
|
130
|
|
|
(15
|
%)
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(11
|
)
|
|
|
(3
|
)
|
|
267
|
%
|
Other income (expense), net
|
|
|
1
|
|
|
|
6
|
|
|
(83
|
%)
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
101
|
|
|
|
133
|
|
|
(24
|
%)
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes
|
|
|
(176
|
)
|
|
|
32
|
|
|
(650
|
%)
|
|
|
|
|
|
|
|
Net income
|
|
$
|
277
|
|
|
$
|
101
|
|
|
174
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
1.63
|
|
|
$
|
0.60
|
|
|
|
Diluted
|
|
$
|
1.61
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:(a)
|
|
|
|
|
|
Basic
|
|
|
170
|
|
|
|
167
|
|
|
|
Diluted
|
|
|
172
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) On November 1, 2014, Agilent Technologies, Inc.
distributed 167 million shares of Keysight common stock to existing
holders of Agilent common stock. Basic and diluted net income per
share for all periods through October 31, 2014 is calculated using
the shares distributed on November 1, 2014.
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 1
|
|
|
|
|
|
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS
|
(In millions, except per share amounts)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
October 31,
|
|
Percent
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Inc/(Dec)
|
|
|
(unaudited)
|
|
|
|
|
Orders
|
|
$
|
2,853
|
|
|
$
|
2,963
|
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
2,856
|
|
|
$
|
2,933
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of products and services
|
|
|
1,264
|
|
|
|
1,313
|
|
|
(4
|
%)
|
Research and development
|
|
|
387
|
|
|
|
361
|
|
|
7
|
%
|
Selling, general and administrative
|
|
|
793
|
|
|
|
790
|
|
|
—
|
%
|
Other operating expense (income), net
|
|
|
(19
|
)
|
|
|
—
|
|
|
—
|
|
Total costs and expenses
|
|
|
2,425
|
|
|
|
2,464
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
Income from operations
|
|
|
431
|
|
|
|
469
|
|
|
(8
|
%)
|
|
|
|
|
|
|
|
Interest income
|
|
|
1
|
|
|
|
—
|
|
|
—
|
|
Interest expense
|
|
|
(46
|
)
|
|
|
(3
|
)
|
|
1433
|
%
|
Other income (expense), net
|
|
|
2
|
|
|
|
9
|
|
|
(78
|
%)
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
388
|
|
|
|
475
|
|
|
(18
|
%)
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes
|
|
|
(125
|
)
|
|
|
83
|
|
|
(251
|
%)
|
|
|
|
|
|
|
|
Net income
|
|
$
|
513
|
|
|
$
|
392
|
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
Basic
|
|
$
|
3.04
|
|
|
$
|
2.35
|
|
|
|
Diluted
|
|
$
|
3.00
|
|
|
$
|
2.35
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:(a)
|
|
|
|
|
|
|
Basic
|
|
|
169
|
|
|
|
167
|
|
|
|
Diluted
|
|
|
171
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) On November 1, 2014, Agilent Technologies, Inc.
distributed 167 million shares of Keysight common stock to existing
holders of Agilent common stock. Basic and diluted net income per
share for all periods through October 31, 2014 is calculated using
the shares distributed on November 1, 2014.
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 2
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
(In millions, except par value and share amounts)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31,
|
|
October 31,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
483
|
|
|
$
|
810
|
|
|
|
Accounts receivable, net
|
|
|
398
|
|
|
|
357
|
|
|
|
Receivable from Agilent
|
|
|
—
|
|
|
|
23
|
|
|
|
Inventory
|
|
|
487
|
|
|
|
498
|
|
|
|
Deferred tax assets
|
|
|
74
|
|
|
|
83
|
|
|
|
Other current assets
|
|
|
137
|
|
|
|
79
|
|
|
|
|
|
Total current assets
|
|
|
1,579
|
|
|
|
1,850
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
518
|
|
|
|
470
|
|
Goodwill
|
|
|
|
|
700
|
|
|
|
392
|
|
Other intangible assets, net
|
|
|
246
|
|
|
|
18
|
|
Long-term investments
|
|
|
70
|
|
|
|
63
|
|
Long-term deferred tax assets
|
|
|
295
|
|
|
|
163
|
|
Other assets
|
|
|
100
|
|
|
|
94
|
|
|
|
|
|
Total assets
|
|
$
|
3,508
|
|
|
$
|
3,050
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
209
|
|
|
$
|
173
|
|
|
|
Payable to Agilent
|
|
|
—
|
|
|
|
125
|
|
|
|
Employee compensation and benefits
|
|
|
168
|
|
|
|
167
|
|
|
|
Deferred revenue
|
|
|
175
|
|
|
|
175
|
|
|
|
Income and other taxes payable
|
|
|
50
|
|
|
|
72
|
|
|
|
Other accrued liabilities
|
|
|
93
|
|
|
|
57
|
|
|
|
|
|
Total current liabilities
|
|
|
695
|
|
|
|
769
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,099
|
|
|
|
1,099
|
|
Retirement and post-retirement benefits
|
|
|
280
|
|
|
|
213
|
|
Long-term deferred revenue
|
|
|
61
|
|
|
|
69
|
|
Other long-term liabilities
|
|
|
71
|
|
|
|
131
|
|
|
|
|
|
Total liabilities
|
|
|
2,206
|
|
|
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
Total 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; 170
million shares at October 31, 2015 and 167 million shares at
October 31, 2014, issued and outstanding
|
|
|
2
|
|
|
|
2
|
|
|
|
Additional paid-in-capital
|
|
|
1,156
|
|
|
|
1,002
|
|
|
|
Retained earnings
|
|
|
614
|
|
|
|
101
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(470
|
)
|
|
|
(336
|
)
|
|
|
|
|
Total stockholders' equity
|
|
|
1,302
|
|
|
|
769
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
3,508
|
|
|
$
|
3,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary balance sheet is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 3
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF CASH FLOWS
|
(In millions)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
|
|
|
|
|
October 31,
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
513
|
|
|
$
|
392
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
99
|
|
|
|
84
|
|
|
|
Share-based compensation
|
|
|
55
|
|
|
|
43
|
|
|
|
Excess tax benefit from share-based plans
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
Deferred taxes
|
|
|
(158
|
)
|
|
|
23
|
|
|
|
Excess and obsolete inventory related charges
|
|
|
28
|
|
|
|
33
|
|
|
|
Other non-cash expenses, net
|
|
|
14
|
|
|
|
(1
|
)
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(20
|
)
|
|
|
(25
|
)
|
|
|
|
|
Inventory
|
|
|
(25
|
)
|
|
|
(31
|
)
|
|
|
|
|
Accounts payable
|
|
|
18
|
|
|
|
32
|
|
|
|
|
|
Payment to Agilent, net
|
|
|
(28
|
)
|
|
|
23
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
6
|
|
|
|
30
|
|
|
|
|
|
Income and other taxes payable
|
|
|
(6
|
)
|
|
|
63
|
|
|
|
|
|
Retirement and post-retirement benefits
|
|
|
(38
|
)
|
|
|
(32
|
)
|
|
|
|
|
Other assets and liabilities
|
|
|
(78
|
)
|
|
|
(67
|
)
|
Net cash provided by operating activities (a)
|
|
|
376
|
|
|
|
563
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Investments in property, plant and equipment
|
|
|
(92
|
)
|
|
|
(70
|
)
|
|
|
Proceeds from sale of property, plant and equipment
|
|
|
1
|
|
|
|
—
|
|
|
|
Purchase of Investments
|
|
|
(7
|
)
|
|
|
—
|
|
|
|
Acquisition of businesses and intangible assets, net of cash acquired
|
|
|
(574
|
)
|
|
|
(11
|
)
|
|
|
Change in restricted cash and cash equivalents, net
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
Proceeds from sale of investment securities
|
|
|
1
|
|
|
|
-
|
|
|
|
Other
|
|
|
—
|
|
|
|
1
|
|
Net cash used in investing activities
|
|
|
(671
|
)
|
|
|
(82
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Issuance of common stock under employee stock plans
|
|
|
26
|
|
|
|
—
|
|
|
|
Proceeds from short term borrowings
|
|
|
—
|
|
|
|
2
|
|
|
|
Repayment of debts and credit facility
|
|
|
—
|
|
|
|
(37
|
)
|
|
|
Issuance of senior notes
|
|
|
—
|
|
|
|
1,099
|
|
|
|
Debt issuance costs
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
Net transfers from Agilent
|
|
|
—
|
|
|
|
217
|
|
|
|
Excess tax benefit from share-based plans
|
|
|
4
|
|
|
|
4
|
|
|
|
Return of Capital to Agilent
|
|
|
(49
|
)
|
|
|
(940
|
)
|
Net cash provided by/(used in) financing activities
|
|
|
(19
|
)
|
|
|
335
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate movements
|
|
|
(13
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
(327
|
)
|
|
|
810
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
810
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
483
|
|
|
$
|
810
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Cash payments included in operating activities:
|
|
|
|
|
|
|
|
|
Income tax payments, net
|
|
$
|
(40
|
)
|
|
$
|
(4
|
)
|
|
|
|
|
Interest payments
|
|
$
|
(46
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary cash flow is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 4
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
RECONCILIATION FROM GAAP TO NON-GAAP
|
THREE MONTHS ENDED OCTOBER 31, 2015
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
NON-GAAP ADJUSTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
GAAP
|
|
Restructuring and Related Costs
|
|
Intangible Amortization
|
|
Acquisition and Integration Costs
|
|
Acquisition related fair value adjustments
|
|
Separation Costs
|
|
Share Based Compensation
|
|
Asset Impairment
|
|
Adjustment for Taxes (a)
|
|
Non-GAAP
|
|
|
|
|
% of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of revenue
|
Net Revenue
|
|
$
|
750
|
|
|
100
|
%
|
|
-
|
|
-
|
|
-
|
|
|
6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$
|
756
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
327
|
|
|
43.5
|
%
|
|
|
(1)
|
|
|
(2)
|
|
|
(1)
|
|
|
(3)
|
|
|
(1)
|
|
|
(2)
|
|
-
|
|
-
|
|
|
317
|
|
42.0
|
%
|
Gross Profit
|
|
|
423
|
|
|
56.5
|
%
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
9
|
|
|
1
|
|
|
2
|
|
-
|
|
-
|
|
|
439
|
|
58.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
105
|
|
|
14.0
|
%
|
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(1)
|
|
-
|
|
-
|
|
|
103
|
|
13.6
|
%
|
Selling, general and administrative
|
|
|
212
|
|
|
28.2
|
%
|
|
|
(2)
|
|
|
(6)
|
|
|
(13)
|
|
-
|
|
|
(5)
|
|
|
(3)
|
|
-
|
|
-
|
|
|
183
|
|
24.2
|
%
|
Other operating expense (income), net
|
|
|
(5
|
)
|
|
-0.5
|
%
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
1
|
|
|
-
|
|
-
|
|
-
|
|
|
(4)
|
|
-0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
111
|
|
|
14.8
|
%
|
|
|
4
|
|
|
8
|
|
|
14
|
|
|
9
|
|
|
5
|
|
|
6
|
|
-
|
|
-
|
|
|
157
|
|
20.7
|
%
|
Other income(expense), net
|
|
|
(10
|
)
|
|
-1.4
|
%
|
|
-
|
|
-
|
|
|
(2)
|
|
-
|
|
-
|
|
-
|
|
|
2
|
|
-
|
|
|
(10)
|
|
-1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
101
|
|
|
13.4
|
%
|
|
|
4
|
|
|
8
|
|
|
12
|
|
|
9
|
|
|
5
|
|
|
6
|
|
|
2
|
|
-
|
|
|
147
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for taxes
|
|
|
(176
|
)
|
|
-23.5
|
%
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
201
|
|
|
25
|
|
3.3
|
%
|
Effective tax rate
|
|
|
-175
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
277
|
|
|
36.9
|
%
|
|
|
4
|
|
|
8
|
|
|
12
|
|
|
9
|
|
|
5
|
|
|
6
|
|
|
2
|
|
|
(201)
|
|
$
|
122
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Basic and Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.63
|
|
|
|
|
$
|
0.02
|
|
$
|
0.05
|
|
$
|
0.07
|
|
$
|
0.05
|
|
$
|
0.03
|
|
$
|
0.04
|
|
$
|
0.01
|
|
$
|
(1.18)
|
|
$
|
0.72
|
|
|
Diluted
|
|
$
|
1.61
|
|
|
|
|
$
|
0.02
|
|
$
|
0.05
|
|
$
|
0.07
|
|
$
|
0.05
|
|
$
|
0.03
|
|
$
|
0.03
|
|
$
|
0.01
|
|
$
|
(1.16)
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
170
|
|
|
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
170
|
|
|
Diluted
|
|
|
172
|
|
|
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment for taxes excludes tax benefits that
management believes are not directly related to ongoing operations
and which are either isolated or cannot be expected to occur again
with any regularity or predictability, including a tax benefit of
$197M resulted from a tax ruling obtained from Singapore that
allows Keysight to amortize the value of the intellectual property
acquired from Agilent in the separation. For the three months
ended October 31, 2015 and 2014, management uses a non-GAAP
effective tax rate of 17% and 16%, respectively, that we believe
to be indicative of on-going operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical amounts are reclassified to conform with current
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We provide non-GAAP net income and non-GAAP net income per share
amounts in order to provide meaningful supplemental information
regarding our operational performance and our prospects for the
future. These supplemental measures exclude, among other things,
charges related to the amortization of intangibles, the impact of
restructuring and related costs, asset impairments, acquisition and
integration costs, share based compensation, separation and related
costs and acquisition related fair value adjustments. Some of the
exclusions, such as impairments, may be beyond the control of
management. Further, some may be less predictable than revenue
derived from our core businesses (the day to day business of selling
our products and services). These reasons provide the basis for
management's belief that the measures are useful.
|
Restructuring and related costs include incremental expenses
incurred in the period associated with publicly announced major
restructuring programs, usually aimed at material changes in
business and/or cost structure. Such costs may include one-time
termination benefits, asset impairments, facility-related costs and
contract termination fees. and other one time reorganization costs.
|
Intangible amortization include non-cash intangible
amortization recognized in connection with acquisitions.
|
Asset impairments and write-downs include assets that have
been written-down to their fair value.
|
Share-based compensation includes expense for all share-based
payment awards made to our employees and directors including
employee stock option awards, restricted stock units, employee stock
purchases made under our employee stock purchase plan (“ESPP”) and
performance share awards granted to selected members of our senior
management under the long-term performance plan (“LTPP”) based on
estimated fair values.
|
Acquisition and Integration costs include all incremental
expenses incurred to effect a business combination which have been
expensed during the period. Such acquisition costs may include
advisory, legal, accounting, valuation, and other professional or
consulting fees. Such integration costs may include expenses
directly related to integration of business and facility operations,
information technology systems and infrastructure and other
employee-related costs.
|
Acquisition related fair value adjustments includes business
combination accounting effects from the acquisition including
reduction in revenue and increase in cost of sales due to the
respective estimated fair value adjustments to deferred revenue and
inventory.
|
Separation and related costs include all incremental
expenses incurred in order to effect the separation of Keysight
from Agilent, including the cost of new hires specifically
required to operate two separate companies. The intent is to only
include in non-GAAP expenses what would not have been incurred if
we had no plan to spin-off. These costs include, among other
things, branding, legal, accounting and other advisory fees and
other costs to separate and transition from Agilent.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management uses non-GAAP measures to evaluate the performance of
our core businesses, to estimate future core performance and to
compensate employees. Since management finds this measure to be
useful, we believe that our investors benefit from seeing our
results “through the eyes” of management in addition to seeing our
GAAP results. This information facilitates our management’s internal
comparisons to our historical operating results as well as to the
operating results of our competitors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management recognizes items such as amortization of intangibles,
restructuring charges etc. that can have a material impact on our
cash flows and/or our net income. Our GAAP financial statements
including our statement of cash flows portray those effects.
Although we believe it is useful for investors to see core
performance free of special items, investors should understand that
the excluded items are actual expenses that may impact the cash
available to us for other uses. To gain a complete picture of all
effects on the company’s profit and loss from any and all events,
management does (and investors should) rely upon the GAAP income
statement. The non-GAAP numbers focus instead upon the core business
of the company, which is only a subset, albeit a critical one, of
the company’s performance.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
|
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|
The preliminary reconciliation from GAAP to Non-GAAP net income is
estimated based on our current information.
|
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Page 5
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|
|
KEYSIGHT TECHNOLOGIES, INC.
|
RECONCILIATION FROM GAAP TO NON-GAAP
|
YEAR ENDED OCTOBER 31, 2015
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
NON-GAAP ADJUSTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
GAAP
|
|
Restructuring and Related Costs
|
|
Intangible Amortization
|
|
Acquisition and Integration Costs
|
|
Acquisition related fair value adjustments
|
|
Separation Costs
|
|
Share Based Compensation
|
|
Asset Impairment
|
|
Other
|
|
Adjustment for Taxes (a)
|
|
Non-GAAP
|
|
|
|
|
% of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of revenue
|
Net Revenue
|
|
$
|
2,856
|
|
|
100
|
%
|
|
-
|
|
-
|
|
-
|
|
|
6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
$
|
2,862
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
1,264
|
|
|
44.3
|
%
|
|
|
(4)
|
|
|
(7)
|
|
|
(1)
|
|
|
(3)
|
|
|
(2)
|
|
|
(12)
|
|
|
(1)
|
|
-
|
|
-
|
|
|
1,234
|
|
43.1
|
%
|
Gross Profit
|
|
|
1,592
|
|
|
55.7
|
%
|
|
|
4
|
|
|
7
|
|
|
1
|
|
|
9
|
|
|
2
|
|
|
12
|
|
|
1
|
|
-
|
|
-
|
|
|
1,628
|
|
56.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
387
|
|
|
13.5
|
%
|
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
|
(1)
|
|
|
(9)
|
|
-
|
|
-
|
|
-
|
|
|
376
|
|
13.1
|
%
|
Selling, general and administrative
|
|
|
793
|
|
|
27.8
|
%
|
|
|
(9)
|
|
|
(7)
|
|
|
(15)
|
|
-
|
|
|
(19)
|
|
|
(34)
|
|
-
|
|
|
(1)
|
|
-
|
|
|
708
|
|
24.7
|
%
|
Other operating expense (income), net
|
|
|
(19
|
)
|
|
-0.6
|
%
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
2
|
|
-
|
|
-
|
|
|
2
|
|
-
|
|
|
(15)
|
|
-0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
431
|
|
|
15.1
|
%
|
|
|
14
|
|
|
14
|
|
|
16
|
|
|
9
|
|
|
20
|
|
|
55
|
|
|
1
|
|
|
(1)
|
|
-
|
|
|
559
|
|
19.5
|
%
|
Other income(expense), net
|
|
|
(43
|
)
|
|
-1.5
|
%
|
|
-
|
|
-
|
|
|
(1)
|
|
-
|
|
-
|
|
-
|
|
|
4
|
|
|
1
|
|
-
|
|
|
(39)
|
|
-1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
388
|
|
|
13.6
|
%
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
9
|
|
|
20
|
|
|
55
|
|
|
5
|
|
-
|
|
-
|
|
|
520
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for taxes
|
|
|
(125
|
)
|
|
-4.4
|
%
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
213
|
|
|
88
|
|
3.1
|
%
|
Effective tax rate
|
|
|
-32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
513
|
|
|
18.0
|
%
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
9
|
|
|
20
|
|
|
55
|
|
|
5
|
|
-
|
|
|
(213)
|
|
$
|
432
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share - Basic and Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
3.04
|
|
|
|
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
0.09
|
|
$
|
0.05
|
|
$
|
0.12
|
|
$
|
0.33
|
|
$
|
0.03
|
|
$
|
-
|
|
$
|
(1.27)
|
|
$
|
2.55
|
|
|
Diluted
|
|
$
|
3.00
|
|
|
|
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
0.09
|
|
$
|
0.05
|
|
$
|
0.12
|
|
$
|
0.32
|
|
$
|
0.03
|
|
$
|
-
|
|
$
|
(1.25)
|
|
$
|
2.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
169
|
|
|
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
169
|
|
|
Diluted
|
|
|
171
|
|
|
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment for taxes excludes tax benefits that
management believes are not directly related to ongoing operations
and which are either isolated or cannot be expected to occur again
with any regularity or predictability, including a tax benefit of
$197M resulted from a tax ruling obtained from Singapore that
allows Keysight to amortize the value of the intellectual property
acquired from Agilent in the separation. For the year ended
October 31, 2015 and 2014, management uses a non-GAAP effective
tax rate of 17% and 16%, respectively, that we believe to be
indicative of on-going operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical amounts are reclassified to conform with current
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We provide non-GAAP net income and non-GAAP net income per share
amounts in order to provide meaningful supplemental information
regarding our operational performance and our prospects for the
future. These supplemental measures exclude, among other things,
charges related to the amortization of intangibles, the impact of
restructuring and related costs, asset impairments, acquisition and
integration costs, share based compensation, separation and related
costs and acquisition related fair value adjustments. Some of the
exclusions, such as impairments, may be beyond the control of
management. Further, some may be less predictable than revenue
derived from our core businesses (the day to day business of selling
our products and services). These reasons provide the basis for
management's belief that the measures are useful.
|
Restructuring and related costs include incremental expenses
incurred in the period associated with publicly announced major
restructuring programs, usually aimed at material changes in
business and/or cost structure. Such costs may include one-time
termination benefits, asset impairments, facility-related costs and
contract termination fees. and other one time reorganization costs.
|
Intangible amortization include non-cash intangible
amortization recognized in connection with acquisitions.
|
Asset impairments and write-downs include assets that have
been written-down to their fair value.
|
Share-based compensation includes expense for all share-based
payment awards made to our employees and directors including
employee stock option awards, restricted stock units, employee stock
purchases made under our employee stock purchase plan (“ESPP”) and
performance share awards granted to selected members of our senior
management under the long-term performance plan (“LTPP”) based on
estimated fair values.
|
Acquisition and Integration costs include all incremental
expenses incurred to effect a business combination which have been
expensed during the period. Such acquisition costs may include
advisory, legal, accounting, valuation, and other professional or
consulting fees. Such integration costs may include expenses
directly related to integration of business and facility operations,
information technology systems and infrastructure and other
employee-related costs.
|
Acquisition related fair value adjustments includes business
combination accounting effects from the acquisition including
reduction in revenue and increase in cost of sales due to the
respective estimated fair value adjustments to deferred revenue and
inventory.
|
Separation and related costs include all incremental
expenses incurred in order to effect the separation of Keysight
from Agilent, including the cost of new hires specifically
required to operate two separate companies. The intent is to only
include in non-GAAP expenses what would not have been incurred if
we had no plan to spin-off. These costs include, among other
things, branding, legal, accounting and other advisory fees and
other costs to separate and transition from Agilent.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management uses non-GAAP measures to evaluate the performance of
our core businesses, to estimate future core performance and to
compensate employees. Since management finds this measure to be
useful, we believe that our investors benefit from seeing our
results “through the eyes” of management in addition to seeing our
GAAP results. This information facilitates our management’s internal
comparisons to our historical operating results as well as to the
operating results of our competitors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our management recognizes items such as amortization of intangibles,
restructuring charges etc. that can have a material impact on our
cash flows and/or our net income. Our GAAP financial statements
including our statement of cash flows portray those effects.
Although we believe it is useful for investors to see core
performance free of special items, investors should understand that
the excluded items are actual expenses that may impact the cash
available to us for other uses. To gain a complete picture of all
effects on the company’s profit and loss from any and all events,
management does (and investors should) rely upon the GAAP income
statement. The non-GAAP numbers focus instead upon the core business
of the company, which is only a subset, albeit a critical one, of
the company’s performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
|
The preliminary reconciliation from GAAP to Non-GAAP net income is
estimated based on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
NON-GAAP SEGMENT INFORMATION
|
(In millions, except where noted)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
Measurement Solutions
|
|
|
|
|
|
|
|
|
Q4'15
|
|
Q4'14
|
|
Q3'15
|
Revenue
|
|
$
|
653
|
|
|
$
|
663
|
|
|
$
|
564
|
|
Gross Margin, %
|
|
|
60.3
|
%
|
|
|
57.7
|
%
|
|
|
59.1
|
%
|
Income from Operations
|
|
$
|
137
|
|
|
$
|
145
|
|
|
$
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Support and Services
|
|
|
|
|
|
|
|
|
Q4'15
|
|
Q4'14
|
|
Q3'15
|
Revenue
|
|
$
|
103
|
|
|
$
|
99
|
|
|
$
|
101
|
|
Gross Margin, %
|
|
|
43.1
|
%
|
|
|
45.0
|
%
|
|
|
42.7
|
%
|
Income from Operations
|
|
$
|
20
|
|
|
$
|
23
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations reflect the results of our reportable
segments under Keysight's management reporting system which are not
necessarily in conformity with GAAP financial measures. Income from
operations of our reporting segments exclude, among other things,
charges related to the amortization of intangibles, share based
compensation, the impact of restructuring charges, asset impairment,
acquisition and integration costs, acquisition related fair value
adjustments and separation and related costs.
|
|
Readers are reminded that non-GAAP numbers are merely a supplement
to, and not a replacement for, GAAP financial measures. They should
be read in conjunction with the GAAP financial measures. It should
be noted as well that our non-GAAP information may be different from
the non-GAAP information provided by other companies.
|
|
|
|
|
|
|
|
The preliminary segment information is estimated based on our
current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 7
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
RECONCILIATION OF REVENUE EXCLUDING THE IMPACT OF ACQUISITION AND
CURRENCY
|
(In Millions)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
Percent
|
|
|
Q4'15
|
|
Q4'14
|
|
Inc/(Dec)
|
|
FY15
|
|
FY14
|
|
Inc/(Dec)
|
GAAP Revenue
|
|
$
|
750
|
|
|
$
|
762
|
|
-2
|
%
|
|
$
|
2,856
|
|
|
$
|
2,933
|
|
-3
|
%
|
Acquisition related fair value adjustments
|
|
|
6
|
|
|
|
—
|
|
—
|
|
|
|
6
|
|
|
|
—
|
|
—
|
|
Non-GAAP Revenue
|
|
$
|
756
|
|
|
$
|
762
|
|
-1
|
%
|
|
$
|
2,862
|
|
|
$
|
2,933
|
|
-2
|
%
|
Less Currency Impacts
|
|
|
28
|
|
|
|
—
|
|
—
|
|
|
|
99
|
|
|
|
—
|
|
—
|
|
Non-GAAP Revenue excluding currency impacts
|
|
$
|
784
|
|
|
$
|
762
|
|
3
|
%
|
|
$
|
2,961
|
|
|
$
|
2,933
|
|
1
|
%
|
Less revenue from acquisitions included in segment results
|
|
|
(32
|
)
|
|
|
—
|
|
—
|
|
|
|
(36
|
)
|
|
|
—
|
|
—
|
|
Core Revenue
|
|
$
|
752
|
|
|
$
|
762
|
|
-1
|
%
|
|
$
|
2,925
|
|
|
$
|
2,933
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non GAAP Revenue is defined to exclude the fair value adjustments to
acquisition related deferred revenue balances for the Anite
acquisition.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core revenue is defined as Non- GAAP revenue excluding the impact of
currency and acquisitions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management believes that these measures provide useful information
to investors by reflecting an additional way of viewing aspects of
Keysight's operations that, when reconciled to the corresponding
GAAP measures, help our investors to better identify underlying
growth trends in our business and facilitate easier comparisons of
our revenue performance with prior and future periods and to our
peers. We excluded the effect of recent acquisitions and
divestitures because the nature, size and number of these can vary
dramatically from period to period and between us and our peers,
which we believe may obscure underlying business trends and make
comparisons of long-term performance difficult.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary reconciliation of GAAP to Core revenue is based on
our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 8
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
RECONCILIATIONS OF CORE REVENUE BY REGION
RECONCILIATION OF REVENUE EXCLUDING THE IMPACT OF ACQUISITION
AND CURRENCY
(in millions)
(Unaudited)
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
NON GAAP Revenue
|
|
Revenue from acquisition and divestitures
(a)
|
|
Currency Adjustments (a)
|
|
Core Revenue
|
|
|
|
|
|
Year-over-Year
|
|
|
|
|
|
|
|
|
Year-over-Year
|
Revenue by Region
|
|
Q4'15
|
|
Q4'14
|
% Change
|
|
|
Q4'15
|
|
Q4'15
|
|
Q4'15
|
|
Q4'14
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
294
|
|
$
|
304
|
-3
|
%
|
|
$
|
10
|
|
$
|
(2
|
)
|
|
$
|
286
|
|
$
|
304
|
|
-6
|
%
|
Europe
|
|
|
137
|
|
|
144
|
-5
|
%
|
|
|
8
|
|
|
(10
|
)
|
|
|
139
|
|
|
144
|
|
-3
|
%
|
Japan
|
|
|
79
|
|
|
86
|
-8
|
%
|
|
|
-
|
|
|
(10
|
)
|
|
|
89
|
|
|
86
|
|
2
|
%
|
Asia Pacific ex-Japan
|
|
|
246
|
|
|
228
|
8
|
%
|
|
|
14
|
|
|
(6
|
)
|
|
|
238
|
|
|
228
|
|
5
|
%
|
Total Revenue
|
|
$
|
756
|
|
$
|
762
|
-1
|
%
|
|
$
|
32
|
|
$
|
(28
|
)
|
|
$
|
752
|
|
$
|
762
|
|
-1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) We compare the year-over-year change in revenue
excluding the effect of M&A and foreign currency rate fluctuations
to assess the performance of our underlying business. To determine
the impact of currency fluctuations, current period results for
entities reporting in currencies other than United States dollars
are converted into United States dollars at the actual exchange rate
in effect during the respective prior periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core revenue is defined as Non- GAAP revenue excluding the impact of
currency and M&A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary reconciliation of Core revenue by region excluding
the impact of M&A and currency adjustments is estimated based on our
current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 9
|
|
|
|
KEYSIGHT TECHNOLOGIES, INC.
|
RECONCILIATION OF NON GAAP REVENUE BY MARKET
|
(In Millions)
|
(Unaudited)
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
Q4'15
|
|
Q4'14
|
|
Inc/(Dec)
|
Aerospace & Defense
|
|
$
|
168
|
|
$
|
177
|
|
-5
|
%
|
Industrial/Computer/Semi-conductor
|
|
|
332
|
|
|
337
|
|
-2
|
%
|
Communications
|
|
|
256
|
|
|
248
|
|
3
|
%
|
Non-GAAP Revenue
|
|
$
|
756
|
|
$
|
762
|
|
-1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The preliminary Non GAAP revenue by market information is estimated
based on our current information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 10
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151119006664/en/
Source: Keysight Technologies, Inc.