Agilent Technologies Reports Third-Quarter 2013 Results

  Agilent Technologies Reports Third-Quarter 2013 Results

Highlights:

  *GAAP net income of $168 million, or $0.49 per share
  *Non-GAAP net income of $233 million, or $0.68 per share^(1)
  *Orders of $1.60 billion and revenues of $1.65 billion
  *Fourth-quarter fiscal year 2013 revenue guidance of $1.7 billion to $1.72
    billion, and non-GAAP earnings guidance of $0.75 to $0.77 per share^(2)
  *Fiscal year 2013 revenue guidance of $6.76 billion to $6.78 billion.
    Non-GAAP earnings guidance at $2.83 to $2.85 per share^(2)

Business Wire

SANTA CLARA, Calif. -- August 14, 2013

Agilent Technologies Inc. (NYSE:A) today reported orders of $1.60 billion,
down 4 percent compared with one year ago, and revenues of $1.65 billion for
the third fiscal quarter ended July 31, 2013, down 4 percent over one year
ago. Third-quarter GAAP net income was $168 million, or $0.49 per share. Last
year’s third-quarter GAAP net income was $243 million, or $0.69 per share.

During the third quarter, Agilent had intangible amortization of $48 million
and integration and transformation costs of $14 million. Excluding these items
and $3 million of other net charges, Agilent reported third-quarter adjusted
net income of $233 million, or $0.68 per share^(1).

Agilent CEO Bill Sullivan said, “Although we are operating in a very
challenging economic environment, we are pleased with our operational
performance, as we continue to make progress improving our manufacturing
efficiency and streamlining our expense structure. The result has been better
than forecasted operating margins.”

Electronic Measurement third-quarter revenues were down 17 percent compared
with the prior year, with continuing weakness in wireless manufacturing.
Operating margins were 18 percent.

Chemical Analysis revenues were up 1 percent compared with a year ago, led by
growth in food and energy markets. Operating margins were 22 percent.

Life Sciences revenues were up 3 percent over a year ago, with strength in
pharmaceutical end-markets. Operating margins were 17 percent.

Diagnostics and Genomics revenues grew 54 percent, up 6 percent adjusting for
the effects of the Dako acquisition. Operating margins were 15 percent.

Agilent generated $215 million of cash from operations in the quarter.
Third-quarter ROIC was 15 percent^(3).

Fourth-quarter 2013 revenues are expected to be in the range of $1.7 billion
to $1.72 billion. Fourth-quarter non-GAAP earnings are expected to be in the
range of $0.75 to $0.77 per share^(2).

For the full fiscal year 2013, Agilent expects revenue of $6.76 billion to $6.
78 billion and non-GAAP earnings of $2.83 to $2.85 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 third-quarter FY2013
financial results on a conference call with investors today at 1:30 p.m. PDT.
This event will be webcast live in listen-only mode. Listeners may log on at
www.investor.agilent.com and select “Q3 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 4:30 p.m.
(Pacific Time) after the call through Aug. 21. The replay number is: (888)
286-8010, or for international, dial (617) 801-6888; enter passcode 87350915.

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
fourth 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; customer purchasing
decisions and timing, 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 Quarterly Report on Form
10-Q for the quarter ended April 30, 2013. 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, 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 6 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 Q4FY13 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
8 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
                                             July 31,                Percent
                                              2013      2012     Inc/(Dec)
                                                                     
Orders                                       $ 1,600     $ 1,662     (4    %)
                                                                     
Net revenue                                  $ 1,652     $ 1,723     (4    %)
                                                                     
Costs and expenses:
Cost of products and services                  796         833       (4    %)
Research and development                       171         162       6     %
Selling, general and administrative           449       458      (2    %)
Total costs and expenses                      1,416     1,453    (3    %)
                                                                     
Income from operations                         236         270       (13   %)
                                                                     
Interest income                                2           2         –
Interest expense                               (27   )     (24   )   13    %
Other income (expense), net                   1         (10   )   (110  %)
                                                                     
Income before taxes                            212         238       (11   %)
                                                                     
Provision (benefit) for income taxes          44        (5    )   (980  %)
                                                                     
Net income                                   $ 168      $ 243      (31   %)
                                                                     
                                                                     
                                                                     
Net income per share:
Basic                                        $ 0.50      $ 0.70
Diluted                                      $ 0.49      $ 0.69
                                                                     
Weighted average shares used in computing
net income per share:
Basic                                          339         348
Diluted                                        343         353
                                                                     
Cash dividends declared per common share     $ 0.12      $ 0.10
                                                                     
                                                                     
The preliminary income statement is estimated based on our current
information.
                                                                     
                                                                     
Page 1
                                                                     
                                                                     

AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                                                                 
                                                                     
                                             Nine Months Ended
                                             July 31,                Percent
                                              2013      2012     Inc/(Dec)
                                                                     
Orders                                       $ 4,998     $ 5,126     (2    %)
                                                                     
Net revenue                                  $ 5,064     $ 5,091     (1    %)
                                                                     
Costs and expenses:
Cost of products and services                  2,437       2,409     1     %
Research and development                       531         490       8     %
Selling, general and administrative           1,430     1,351    6     %
Total costs and expenses                      4,398     4,250    3     %
                                                                     
Income from operations                         666         841       (21   %)
                                                                     
Interest income                                5           7         (29   %)
Interest expense                               (77   )     (75   )   3     %
Other income (expense), net                   11        14       (21   %)
                                                                     
Income before taxes                            605         787       (23   %)
                                                                     
Provision for income taxes                    92        59       56    %
                                                                     
Net income                                   $ 513      $ 728      (30   %)
                                                                     
                                                                     
                                                                     
Net income per share:
Basic                                        $ 1.49      $ 2.09
Diluted                                      $ 1.47      $ 2.06
                                                                     
Weighted average shares used in computing
net income per share:
Basic                                          344         348
Diluted                                        348         353
                                                                     
Cash dividends declared per common share     $ 0.34      $ 0.20
                                                                     
                                                                     
The preliminary income statement is estimated based on our current
information.
                                                                     
                                                                     
Page 2
                                                                     
                                                                     

AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
PRELIMINARY
                                                                 
                                                                      
                                     Three Months Ended    Nine Months Ended
                                     July 31,              July 31,
                                      2013     2012     2013     2012 
                                                                      
Net income                           $ 168      $ 243      $ 513      $ 728
                                                                      
Other comprehensive income (loss),
net of tax:
                                                                      
Change in unrealized gain on           4          -          5          6
investments
Change in unrealized gain on           (4   )     (2   )     7          2
derivative instruments
Amounts reclassified into earnings     (3   )     -          (8   )     (4   )
related to derivative instruments
Foreign currency translation           (32  )     (102 )     (87  )     (160 )
Net defined benefit pension cost
and post retirement plan costs:
Change in actuarial net loss           15         13         45         41
Change in net prior service           (8   )    (12  )    (24  )    (36  )
benefit
Other comprehensive loss              (28  )    (103 )    (62  )    (151 )
                                                                      
Total comprehensive income           $ 140     $ 140     $ 451     $ 577  
                                                                      
                                                                      
The preliminary statement of comprehensive income is estimated based on our
current information.
                                                                      
                                                                      
Page 3



AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
PRELIMINARY
                                                              
                                                                   
                                                July 31,   October 31,
                                                   2013            2012   
ASSETS
                                                                   
Current assets:
     Cash and cash equivalents                  $   2,330          $  2,351
     Accounts receivable, net                       875               923
     Inventory                                      1,054             1,014
     Other current assets                          325             341    
            Total current assets                    4,584             4,629
                                                                   
Property, plant and equipment, net                  1,139             1,164
Goodwill                                            2,995             3,025
Other intangible assets, net                        945               1,086
Long-term investments                               124               109
Other assets                                       491             523    
            Total assets                        $   10,278        $  10,536 
                                                                   
LIABILITIES AND EQUITY
                                                                   
Current liabilities:
     Accounts payable                           $   407            $  461
     Employee compensation and benefits             345               387
     Deferred revenue                               463               420
     Short-term debt                                —                 250
     Other accrued liabilities                     335             375    
            Total current liabilities               1,550             1,893
                                                                   
Long-term debt                                      2,701             2,112
Retirement and post-retirement benefits             463               554
Other long-term liabilities                        774             792    
            Total liabilities                      5,488           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; 600 million shares at       6                 6
     July 31, 2013 and 595 million shares at
     October 31, 2012, issued
     Treasury stock at cost; 269 million
     shares at July 31, 2013 and 249 million        (9,607   )        (8,707 )
     shares at October 31, 2012
     Additional paid-in-capital                     8,660             8,489
     Retained earnings                              5,901             5,505
     Accumulated other comprehensive loss          (173     )       (111   )
            Total stockholders' equity              4,787             5,182
     Non-controlling interest                      3               3      
            Total equity                           4,790           5,185  
                    Total liabilities and       $   10,278        $  10,536 
                    equity
                                                                   
                                                                   
                                                                   
The preliminary balance sheet is estimated based on our current information.
                                                                   

Page 4



AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY
                                                          
                                                                   
                                                Three Months       Nine Months
                                                Ended              Ended
                                                July 31,           July 31,
                                                  2013             2013   
Cash flows from operating activities:
         Net income                             $  168             $  513
                                                                   
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
         Depreciation and amortization             91                 277
         Share-based compensation                  17                 66
         Excess tax benefit from share-based       -                  (2     )
         plans
         Excess and obsolete inventory and         14                 36
         inventory related charges
         Other non-cash expenses, net              3                  8
         Changes in assets and liabilities:
                    Accounts receivable            34                 31
                    Inventory                      (28    )           (81    )
                    Accounts payable               (40    )           (47    )
                    Employee compensation and      (36    )           (37    )
                    benefits
                    Other assets and              (8     )          11     
                    liabilities
Net cash provided by operating activities          215                775
^(a)
                                                                   
Cash flows from investing activities:
         Investments in property, plant and        (53    )           (163   )
         equipment
         Proceeds from sale of property,           -                  2
         plant and equipment
         Purchase of other investments             -                  (15    )
         Payment to acquire equity method          -                  (21    )
         investment
         Proceeds from sale of investment          -                  11
         securities
         Acquisition of businesses and
         intangible assets, net of cash           (1     )          (11    )
         acquired
Net cash used in investing activities              (54    )           (197   )
                                                                   
Cash flows from financing activities:
         Issuance of common stock under            48                 116
         employee stock plans
         Treasury stock repurchases                (681   )           (900   )
         Payment of dividends                      (41    )           (117   )
         Issuance of senior notes                  597                597
         Debt issuance cost                        (5     )           (5     )
         Repayment of senior notes                 (250   )           (250   )
         Payments to prior non-controlling         -                  (3     )
         interest
         Excess tax benefit from share-based      -                2      
         plans
Net cash used in financing activities              (332   )           (560   )
                                                                   
Effect of exchange rate movements                  (18    )           (39    )
                                                                   
Net decrease in cash and cash equivalents          (189   )           (21    )
                                                                   
Cash and cash equivalents at beginning of         2,519            2,351  
period
                                                                   
Cash and cash equivalents at end of period      $  2,330          $  2,330  
                                                                   
         ^(a) Cash payments included in
         operating activities:
                    Restructuring payments         15                 26
                    Income tax payments, net       39                 93
                                                                   
                                                                   
         The preliminary cash flow is estimated based on our current
         information.
                                                                   
                                                                   
Page 5
                                                                   
                                                                   

AGILENT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                                                                                            
                           Three Months Ended                          Nine Months Ended
                           July 31,                                    July 31,
                            2013   Diluted    2012   Diluted      2013   Diluted      2012   Diluted
                                      EPS                  EPS                    EPS                    EPS
                                                                                                         
GAAP Net income            $ 168      $  0.49   $ 243      $ 0.69      $ 513      $ 1.47      $ 728      $ 2.06
    Non-GAAP
    adjustments:
        Restructuring
        and other            1           -        -          -           56         0.16        -          -
        related costs
        Asset
        impairments and      1           -        15         0.04        3          0.01        15         0.04
        writes downs
        Intangible           48          0.14     32         0.09        151        0.43        85         0.24
        amortization
        Transformational     8           0.02     3          0.01        14         0.04        19         0.05
        initiatives
        Acquisition and
        integration          6           0.02     41         0.12        22         0.06        54         0.15
        costs
        Other                2           0.01     2          0.01        11         0.03        (11  )     (0.03 )
        Adjustment for      (1   )    -       (58  )   (0.17 )    (46  )   (0.12 )    (93  )   (0.25 )
        taxes ^(a)
Non-GAAP Net income        $ 233    $  0.68   $ 278    $ 0.79     $ 724    $ 2.08     $ 797    $ 2.26  
                                                                                                         
                                                                                                         
^(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 and nine months ended July 31, 2013, management uses a non-GAAP effective tax rate
of 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 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 6



AGILENT TECHNOLOGIES, INC.
SEGMENT INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY
                                                         
Life Sciences
                       Q3'13               Q3'12               Q2'13
Orders                 $   376             $   373             $   416
Revenue                $   401             $   391             $   405
Gross Margin, %            51      %           51      %           51      %
Income from            $   67              $   57              $   61
Operations
Segment Assets         $   1,381           $   1,462           $   1,402
Return On
Invested Capital           21      %           17      %           20      %
^ (a), %
                                                               
                                                               
Chemical Analysis
                       Q3'13               Q3'12               Q2'13
Orders                 $   390             $   372             $   408
Revenue                $   387             $   381             $   401
Gross Margin, %            51      %           50      %           51      %
Income from            $   83              $   80              $   89
Operations
Segment Assets         $   1,732           $   1,739           $   1,739
Return On
Invested Capital           19      %           18      %           20      %
^ (a), %
                                                               
                                                               
Electronic
Measurement
                       Q3'13               Q3'12               Q2'13
Orders                 $   674             $   811             $   701
Revenue                $   701             $   845             $   760
Gross Margin, %            57      %           56      %           57      %
Income from            $   129             $   197             $   156
Operations
Segment Assets         $   2,008           $   2,184           $   2,019
Return On
Invested Capital           30      %           43      %           38      %
^ (a), %
                                                               
                                                               
Diagnostics and
Genomics
                       Q3'13               Q3'12               Q2'13
Orders                 $   160             $   106             $   163
Revenue                $   163             $   106             $   166
Gross Margin, %            59      %           61      %           63      %
Income from            $   24              $   16              $   28
Operations
Segment Assets         $   2,871           $   2,645           $   2,854
Return On
Invested Capital           3       %           2       %           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 8 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 7



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:         Q3'13      Q3'13      Q3'13      Q3'13      Q3'13          Q3'12      Q3'12      Q3'12      Q3'12      Q3'12          Q2'13      Q2'13      Q2'13      Q2'13
Non-GAAP income    $ 67        $ 83        $ 129       $ 24        $ 303          $ 57        $ 80        $ 197       $ 16        $ 350          $ 61        $ 89        $ 156       $ 28
from operations
Less:
Taxes and Other     11       13       20       6        49           8        12       30       3        53           8        13       22       4     
(income)/expense
                                                                                                                                                                                     
Segment return       56          70          109         18          254     ^(a)   49          68          167         13          297     ^(a)   53          76          134         24
                                                                                                                                                             
Segment return     $ 224     $ 280     $ 436     $ 72      $ 1,016       $ 196     $ 272     $ 668     $ 52      $ 1,188       $ 212     $ 304     $ 536     $ 96    
annualized
                                                                                                                                                                                     
Denominator:
Segment assets     $ 1,381     $ 1,732     $ 2,008     $ 2,871     $ 7,994        $ 1,462     $ 1,739     $ 2,184     $ 2,645     $ 8,032        $ 1,402     $ 1,739     $ 2,019     $ 2,854
^(b)
Less:
Net current         308      235      522      102      1,167        299      235      600      77       1,219        329      253      572      96    
liabilities ^(c)
Invested capital   $ 1,073   $ 1,497   $ 1,486   $ 2,769   $ 6,827       $ 1,163   $ 1,504   $ 1,584   $ 2,568   $ 6,813       $ 1,073   $ 1,486   $ 1,447   $ 2,758 
                                                                                                                                                                                     
Average invested   $ 1,073     $ 1,491     $ 1,467     $ 2,763     $ 6,796        $ 1,149     $ 1,488     $ 1,555     $ 2,551     $ 6,741        $ 1,081     $ 1,484     $ 1,430     $ 2,753
capital
                                                                                                                                                                                     
ROIC                 21    %     19    %     30    %     3     %     15    %        17    %     18    %     43    %     2     %     18    %        20    %     20    %     38    %     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 $233 million plus net interest expense after tax of $21 million for Q3'13 and $278 million plus net interest expense after tax of $19
million for Q3'12. 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 a major acquisition, 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 based on our current information.
                                                                                                                                                                                     
                                                                                                                                                                                     
Page 8

Contact:

Agilent Technologies Inc.
Amy Flores, +1 408-345-8194 (Editorial)
amy_flores@agilent.com
Alicia Rodriguez, +1 408-345-8948 (Investor)
alicia_rodriguez@agilent.com