Agilent Technologies Reports First-Quarter 2013 Results

  Agilent Technologies Reports First-Quarter 2013 Results

Highlights:

  *GAAP net income of $179 million, or $0.51 per share
  *Non-GAAP net income of $222 million, or $0.63 per share^(1)
  *Orders of $1.71 billion, up 5 percent over a year ago. Revenues of $1.68
    billion, up 3 percent from one year ago
  *Second-quarter fiscal year 2013 revenue guidance of $1.74 billion to $1.77
    billion and non-GAAP earnings guidance of $0.64 to $0.70 per share^(2)
  *Fiscal year 2013 revenue guidance of $6.9 billion to $7.1 billion.
    Non-GAAP earnings guidance at $2.70 to $3.00 per share^(2)

Business Wire

SANTA CLARA, Calif. -- February 14, 2013

Agilent Technologies Inc. (NYSE:A) today reported revenues of $1.68 billion
for the first fiscal quarter ended Jan. 31, 2013, 3 percent above one year
ago. First-quarter GAAP net income was $179 million, or $0.51 per share. Last
year’s first-quarter GAAP net income was $230 million, or $0.65 per share.

During the first quarter, Agilent had intangible amortization of $52 million
and acquisition, integration and transformation costs of $13 million. The
company also recognized a tax benefit of $27 million. Excluding these items
and $5 million of other net charges, Agilent reported first-quarter adjusted
net income of $222 million, or $0.63 per share^(1).

Agilent CEO Bill Sullivan said, “While we currently face some volatility in
our end-markets, we remain excited by our long-term prospects, including
opportunities in emerging markets. Agilent will continue to invest in R&D to
ensure that we maintain the cutting-edge products and technology leadership
that our customers expect from us.”

Electronic Measurement first-quarter revenues declined 7 percent compared with
the prior year, primarily due to an anticipated decrease in the communications
market. Operating margins were 17 percent.

Chemical Analysis revenues were down 1 percent compared with a year ago,
driven by soft environmental markets. Operating margins were 21 percent.

Life Sciences revenues were up 2 percent over a year ago. Pharma saw modest
growth, while academic/government markets were flat. Operating margins were 15
percent.

Diagnostics and Genomics grew 145 percent, 4 percent excluding the effects of
the Dako acquisition. Operating margins were 13 percent.

Agilent generated $245 million of cash from operations in the quarter.
First-quarter ROIC was 14 percent^(3).

Second-quarter 2013 revenues are expected to be in the range of $1.74 billion
to $1.77 billion. Second-quarter non-GAAP earnings are expected to be in the
range of $0.64 to $0.70 per share^(2).

For the full fiscal year 2013, Agilent now expects revenue of $6.9 billion to
$7.1 billion and non-GAAP earnings of $2.70 to $3.00 per share^(2).

About Agilent Technologies

Agilent Technologies, Inc. (NYSE: A) is the world’s premier measurement
company and a technology leader in chemical analysis, life sciences,
diagnostics, electronics and communications. The company’s 20,500 employees
serve customers in more than 100 countries. Agilent had revenues of $6.9
billion in fiscal 2012. Information about Agilent is available at
www.agilent.com.

Agilent’s management will present more details about its first-quarter FY2013
financial results on a conference call with investors today at 1:30 p.m. PST.
This event will be webcast live in listen-only mode. Listeners may log on at
www.investor.agilent.com and select “Q1 2013 Agilent Technologies Inc.
Earnings Conference Call” in the “News & Events Calendar of Events” section.
The webcast will remain available on the company’s website for 90 days.

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

A telephone replay of the conference call will be available at 3:30 p.m. PST
today through Feb. 21. The replay number is +1 888 286-8010; international
callers may dial (617) 801-6888. The passcode is 17893997.

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 Agilent’s future revenues, earnings and
profitability; the future demand for the company’s products and services;
customer expectations; and revenue and non-GAAP earnings guidance for the
second quarter and full fiscal year 2013. These forward-looking statements
involve risks and uncertainties that could cause Agilent’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, and the risk that we are
not able to realize the savings expected from integration and restructuring
activities.

In addition, other risks that Agilent faces in running its operations include
the ability to execute successfully through business cycles; the ability to
meet and achieve the benefits of its cost-reduction goals and otherwise
successfully adapt its cost structures to continuing changes in business
conditions; ongoing competitive, pricing and gross-margin pressures; the risk
that our cost-cutting initiatives will impair our ability to develop products
and remain competitive and to operate effectively; the impact of geopolitical
uncertainties and global economic conditions on our operations, our markets
and our ability to conduct business; the ability to improve asset performance
to adapt to changes in demand; the ability of our supply chain to adapt to
changes in demand; the ability to successfully introduce new products at the
right time, price and mix; the ability of Agilent to successfully integrate
recent acquisitions; and other risks detailed in Agilent’s filings with the
Securities and Exchange Commission, including our Annual Report on Form 10-K
for the year ended October 31, 2012. Forward-looking statements are based on
the beliefs and assumptions of Agilent’s management and on currently available
information. Agilent undertakes no responsibility to publicly update or revise
any forward-looking statement.

^(1) Non-GAAP net income and non-GAAP net income per share exclude primarily
the impacts of acquisition and integration costs, acquisition fair value
adjustments, transformation initiatives and restructuring costs, and non-cash
intangibles amortization. We also exclude any tax benefits 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. A
reconciliation between non-GAAP net income and GAAP net income is set forth on
page 5 of the attached tables along with additional information regarding the
use of this non-GAAP measure.

^(2) Non-GAAP earnings per share as projected for Q2FY13 and full fiscal year
2013 excludes primarily the impacts of acquisition and integration costs,
future restructuring costs, asset impairment charges, and non-cash intangibles
amortization. We also exclude any tax benefits 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. 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. Future amortization of
intangibles is expected to be approximately $50 million per quarter.

^(3) Return on invested capital (ROIC) is a non-GAAP measure and is defined as
income from operations less other (income) expense and taxes, annualized,
divided by the average of the two most recent quarter-end balances of assets
less net current liabilities. The reconciliation of ROIC can be found on page
7 of the attached tables, along with additional information regarding the use
of this non-GAAP measure.

NOTE TO EDITORS: Further technology, corporate citizenship and executive news
is available on the Agilent news site at www.agilent.com/go/news.


AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                                                                 
                                                                     
                                             Three Months Ended
                                             January 31,             Percent
                                              2013      2012     Inc/(Dec)
                                                                     
Orders                                       $ 1,710     $ 1,623     5     %
                                                                     
Net revenue                                  $ 1,680     $ 1,635     3     %
                                                                     
Costs and expenses:
Cost of products and services                  800         761       5     %
Research and development                       179         162       10    %
Selling, general and administrative           484       441      10    %
Total costs and expenses                      1,463     1,364    7     %
                                                                     
Income from operations                         217         271       (20   %)
                                                                     
Interest income                                2           3         (33   %)
Interest expense                               (25   )     (26   )   (4    %)
Other income (expense), net                   1         8        (88   %)
                                                                     
Income before taxes                            195         256       (24   %)
                                                                     
Provision for income taxes                    16        26       (38   %)
                                                                     
Net income                                   $ 179      $ 230      (22   %)
                                                                     
                                                                     
                                                                     
Net income per share:
Basic                                        $ 0.52      $ 0.66
Diluted                                      $ 0.51      $ 0.65
                                                                     
Weighted average shares used in computing
net income per share:
Basic                                          347         348
Diluted                                        352         352
                                                                     
Cash dividends declared per common share     $ 0.22      $ 0.10
                                             
                                                                     
The preliminary income statement is
estimated based on our current
information.
                                                                     
Page 1


AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
PRELIMINARY
                                                                  
                                                                      
                                                       Three Months Ended
                                                       January 31,
                                                         2013        2012 
                                                                      
Net Income                                             $  179         $ 230
                                                                      
Other comprehensive income, net of tax:
                                                                      
Change in unrealized gain on investments                  3             6
Change in unrealized gain on derivative instruments       6             4
Amounts reclassified into earnings related to             (1    )       (1   )
derivative instruments
Foreign currency translation                              56            (39  )
Net defined benefit pension cost and post
retirement plan costs:
Change in actuarial net loss                              18            12
Change in net prior service benefit                      (12   )      (11  )
Other comprehensive income (loss)                        70          (29  )
                                                                      
Total comprehensive income                             $  249        $ 201  
                                                       
                                                                      
The preliminary statement of comprehensive income is estimated based on our
current information.
                                                                      
Page 2


AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
PRELIMINARY
                                                              
                                                                   
                                                     January 31,   October 31,
                                                       2013        2012   
ASSETS
                                                                   
Current assets:
     Cash and cash equivalents                       $  2,450      $  2,351
     Accounts receivable, net                           874           923
     Inventory                                          1,040         1,014
     Other current assets                              348         341    
               Total current assets                     4,712         4,629
                                                                   
Property, plant and equipment, net                      1,163         1,164
Goodwill                                                3,071         3,025
Other intangible assets, net                            1,069         1,086
Long-term investments                                   128           109
Other assets                                           510         523    
                        Total assets                 $  10,653    $  10,536 
                                                                   
LIABILITIES AND EQUITY
                                                                   
Current liabilities:
     Accounts payable                                $  454        $  461
     Employee compensation and benefits                 318           387
     Deferred revenue                                   465           420
     Short-term debt                                    250           250
     Other accrued liabilities                         359         375    
               Total current liabilities                1,846         1,893
                                                                   
Long-term debt                                          2,111         2,112
Retirement and post-retirement benefits                 554           554
Other long-term liabilities                            791         792    
               Total liabilities                       5,302       5,351  
                                                                   
Total Equity:
     Stockholders’ equity:
     Preferred stock; $0.01 par value; 125 million
     shares authorized; none issued and                 —             —
     outstanding
     Common stock; $0.01 par value; 2 billion
     shares authorized; 598  million shares at          6             6
     January 31, 2013 and 595 million shares at
     October 31, 2012, issued
     Treasury stock at cost; 251 million shares at
     January 31, 2013 and 249 million shares at         (8,786 )      (8,707 )
     October 31, 2012
     Additional paid-in-capital                         8,562         8,489
     Retained earnings                                  5,607         5,505
     Accumulated other comprehensive loss              (41    )     (111   )
               Total stockholders' equity               5,348         5,182
     Non-controlling interest                          3           3      
               Total equity                            5,351       5,185  
                        Total liabilities and        $  10,653    $  10,536 
                        equity
                                                                   
                                                                   
The preliminary balance sheet is estimated based on our current information.
                                                                   
Page 3


AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY
                                                              
                                                                  
                                                                  Three Months
                                                                  Ended
                                                                  January 31,
                                                                    2013   
Cash flows from operating activities:
    Net income                                                    $  179
                                                                  
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
    Depreciation and amortization                                    94
    Share-based compensation                                         31
    Excess tax benefit from share-based plans                        (2     )
    Excess and obsolete inventory and inventory related charges      10
    Other non-cash expenses, net                                     2
    Changes in assets and liabilities:
                 Accounts receivable                                 53
                 Inventory                                           (34    )
                 Accounts payable                                    (7     )
                 Employee compensation and benefits                  (70    )
                 Other assets and liabilities                       (11    )
Net cash provided by operating activities ^(a)                       245
                                                                  
Cash flows from investing activities:
    Investments in property, plant and equipment                     (59    )
    Proceeds from sale of property, plant and equipment              1
    Proceeds from sale of investment securities                      11
    Purchase of investments                                          (15    )
    Payments to prior non-controlling interest                       (3     )
    Acquisition of businesses and intangible assets, net of         (10    )
    cash acquired
Net cash used in investing activities                                (75    )
                                                                  
Cash flows from financing activities:
    Issuance of common stock under employee stock plans              52
    Payment of dividends                                             (35    )
    Excess tax benefit from share-based plans                        2
    Treasury stock repurchases                                      (79    )
Net cash used in financing activities                                (60    )
                                                                  
Effect of exchange rate movements                                    (11    )
                                                                  
Net increase in cash and cash equivalents                            99
                                                                  
Cash and cash equivalents at beginning of period                    2,351  
                                                                  
Cash and cash equivalents at end of period                        $  2,450  
                                                                  
    ^(a) Cash payments included in operating activities:
                 Restructuring payments                              (8     )
                 Income tax payments, net                            (43    )
                                                                  
                                                                  
    The preliminary cash flow is estimated based on our current information.
                                                                  
                                                                  
Page 4
                                                                  

AGILENT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                                                              
                           Three Months Ended
                           January 31,
                             2013      Diluted          2012   Diluted
                                          EPS                        EPS
                                                                     
GAAP Net income            $  179         $  0.51         $ 230      $ 0.65
   Non-GAAP
   adjustments:
      Asset impairments       1              —              —          —
      Intangible              52             0.15           27         0.08
      amortization
      Transformational        3              0.01           8          0.02
      initiatives
      Acquisition and         10             0.03           7          0.02
      integration costs
      Other                   4              0.01           (4   )     (0.01 )
      Adjustment for         (27   )      (0.08  )      (24  )   (0.07 )
      taxes ^ (a)
Non-GAAP Net Income        $  222       $  0.63        $ 244    $ 0.69  
                                                                     
                                                                     
(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.
For the three months ended January 31, 2013, management uses a non-GAAP
effective tax rate of 16% that we believe to be indicative of on-going
operations.
                                                                     
Historical amounts are reclassified to conform with current period
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 charges and acquisition and
integration costs. 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.
                                                                     
Our management uses non-GAAP measures to evaluate the performance of our core
businesses, to estimate future core performance and to compensate employees.
Since management finds this measure to be useful, we believe that our
investors benefit from seeing our results “through the eyes” of management in
addition to seeing our GAAP results. This information facilitates our
management’s internal comparisons to our historical operating results as well
as to the operating results of our competitors.
                                                                     
Our management recognizes that items such as amortization of intangibles and
restructuring charges can have a material impact on our cash flows and/or our
net income. Our GAAP financial statements including our statement of cash
flows portray those effects. Although we believe it is useful for investors to
see core performance free of special items, investors should understand that
the excluded items are actual expenses that may impact the cash available to
us for other uses. To gain a complete picture of all effects on the company’s
profit and loss from any and all events, management does (and investors
should) rely upon the GAAP income statement. The non-GAAP numbers focus
instead upon the core business of the company, which is only a subset, albeit
a critical one, of the company’s performance.
                                                                     
Readers are reminded that non-GAAP numbers are merely a supplement to, and not
a replacement for, GAAP financial measures. They should be read in conjunction
with the GAAP financial measures. It should be noted as well that our non-GAAP
information may be different from the non-GAAP information provided by other
companies.
                                                                     
The preliminary non-GAAP net income and diluted EPS reconciliation is
estimated based on our current information.
                                                                     
                                                                     
Page 5


AGILENT TECHNOLOGIES, INC.
SEGMENT INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY
                                                         
Life Sciences
                       Q1'13               Q1'12               Q4'12
Orders                 $   397             $   394             $   417
Revenues               $   401             $   395             $   401
Gross Margin, %            52      %           51      %           53      %
Income from            $   61              $   58              $   71
Operations
Segment Assets         $   1,392           $   1,439           $   1,477
Return On
Invested Capital           18      %           17      %           21      %
^(a) , %
                                                               
                                                               
Chemical Analysis
                       Q1'13               Q1'12               Q4'12
Orders                 $   399             $   403             $   421
Revenues               $   394             $   396             $   394
Gross Margin, %            51      %           52      %           53      %
Income from            $   81              $   88              $   97
Operations
Segment Assets         $   1,721           $   1,726           $   1,768
Return On
Invested Capital           18      %           20      %           22      %
^(a) , %
                                                               
                                                               
Electronic
Measurement
                       Q1'13               Q1'12               Q4'12
Orders                 $   749             $   757             $   755
Revenues               $   722             $   778             $   816
Gross Margin, %            57      %           58      %           57      %
Income from            $   125             $   160             $   189
Operations
Segment Assets         $   1,962           $   2,029           $   2,157
Return On
Invested Capital           28      %           35      %           41      %
^(a) , %
                                                               
                                                               
Diagnostics and
Genomics
                       Q1'13               Q1'12               Q4'12
Orders                 $   165             $   69              $   158
Revenues               $   163             $   66              $   156
Gross Margin, %            60      %           63      %           63      %
Income from            $   21              $   8               $   26
Operations
Segment Assets         $   2,841           $   381             $   2,595
Return On
Invested Capital           3       %           9       %           3       %
^(a) , %
                                                               
                                                               
Income from operations reflect the results of our reportable segments under
Agilent's management reporting system which are not necessarily in conformity
with GAAP financial measures. Income from operations of our reporting segments
exclude, among other things, charges related to the amortization of
intangibles, the impact of restructuring charges, acquisition and integration
costs.
                                                               
In general, recorded orders represent firm purchase commitments from our
customers with established terms and conditions for products and services that
will be delivered within six months.
                                                               
^(a) Return On Invested Capital is a non-GAAP measure and is defined as income
from operations less other (income) expense and taxes, annualized, divided by
the average of the two most recent quarter-end balances of assets less net
current liabilities. The reconciliation of ROIC can be found on page 7 of
these tables, along with additional information regarding the use of this
non-GAAP measure.
                                                               
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 6
                                                               

AGILENT TECHNOLOGIES, INC.
RECONCILIATION OF ROIC
(In millions)
(Unaudited)
PRELIMINARY
                                                                                                                                                                      
                                                                                                                                                                                   
                   LSG         CAG         EMG         DGG         Agilent        LSG         CAG         EMG         DGG       Agilent        LSG         CAG         EMG         DGG
Numerator:         Q1'13      Q1'13      Q1'13      Q1'13      Q1'13          Q1'12      Q1'12      Q1'12      Q1'12    Q1'12          Q4'12      Q4'12      Q4'12      Q4'12
Non-GAAP income    $ 61        $ 81        $ 125       $ 21        $ 288          $ 58        $ 88        $ 160       $ 8       $ 314          $ 71        $ 97        $ 189       $ 26
from operations
Less:
Taxes and Other     9        13       20       4        46           10       15       27       1      52           11       15       28       5     
(income)/expense
                                                                                                                                                                                   
Segment return       52          68          105         17          242     ^(a)   48          73          133         7         262     ^(a)   60          82          161         21
                                                                                                                                                           
Segment return     $ 208     $ 272     $ 420     $ 68      $ 968         $ 192     $ 293     $ 532     $ 28    $ 1,048       $ 240     $ 328     $ 644     $ 84    
annualized
                                                                                                                                                                                   
Denominator:
Segment assets     $ 1,392     $ 1,721     $ 1,962     $ 2,841     $ 7,915        $ 1,439     $ 1,726     $ 2,029     $ 381     $ 5,576        $ 1,477     $ 1,768     $ 2,157     $ 2,595
^(b)
Less:
Net current         303      238      550      93       1,175        284      236      548      40     1,108        312      246      584      91    
liabilities ^(c)
Invested capital   $ 1,089   $ 1,483   $ 1,412   $ 2,748   $ 6,740       $ 1,155   $ 1,490   $ 1,481   $ 341   $ 4,468       $ 1,165   $ 1,522   $ 1,573   $ 2,504 
                                                                                                                                                                                   
Average invested   $ 1,127     $ 1,502     $ 1,493     $ 2,626     $ 6,752        $ 1,157     $ 1,500     $ 1,511     $ 327     $ 4,496        $ 1,164     $ 1,513     $ 1,579     $ 2,536
capital
                                                                                                                                                                                   
ROIC                 18    %     18    %     28    %     3     %     14    %        17    %     20    %     35    %     9   %     23    %        21    %     22    %     41    %     3     %
                                                                                                                                                                                   
                                                                                                                                                                                   
ROIC calculation:(annualized current quarter segment return)/(average of the two most recent quarter-end balances of Segment Invested Capital)
                                                                                                                                                                                   
^(a) Agilent return is equal to non-GAAP net income of $222 million plus net interest expense after tax of $20 million for Q1'13, and $244 million plus net interest expense after tax of
$18 million for Q1'12. Please see "Non-GAAP Net Income and Diluted EPS Reconciliations" for a reconciliation of non-GAAP net income to GAAP net income.
                                                                                                                                                                                   
^(b) Segment assets consist of inventory, accounts receivable, property plant and equipment, gross goodwill and other intangibles, deferred taxes and allocated corporate assets.
                                                                                                                                                                                   
^(c) Includes accounts payable, employee compensation and benefits, deferred revenue, certain other accrued liabilities and allocated corporate liabilities.
                                                                                                                                                                                   
Return on Invested Capital (ROIC) is a non-GAAP measure that management believes provides useful supplemental information for management and the investor. ROIC is a tool by which we track
how much value we are creating for our shareholders. Management uses ROIC as a performance measure for our businesses, and our senior managers' compensation is linked to ROIC improvements
as well as other performance criteria. We believe that ROIC provides our management with a means to analyze and improve their business, measuring segment profitability in relation to net
asset investments. We acknowledge that ROIC may not be calculated the same way by every company. When we complete major acquisitions, we may adjust invested capital for the relevant
segment in the quarter when the acquisition occurred. We compensate for this limitation by monitoring and providing to the reader a full GAAP income statement and balance sheet.
                                                                                                                                                                                   
                                                                                                                                                                                   
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 of ROIC is estimated based on our current information.
                                                                                                                                                                                   
                                                                                                                                                                                   
Page 7

Contact:

Agilent Technologies Inc.
Amy Flores, +1 408-345-8194
amy_flores@agilent.com
or
INVESTOR CONTACT:
Alicia Rodriguez, +1 408-345-8948
alicia_rodriguez@agilent.com