10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2016

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE TRANSITION PERIOD FROM              TO        

COMMISSION FILE NUMBER: 001-36334

KEYSIGHT TECHNOLOGIES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE	46-4254555
(State or other jurisdiction of	(IRS employer
incorporation or organization)	Identification no.)
1400 FOUNTAINGROVE PARKWAY
SANTA ROSA, CALIFORNIA	95403
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 829-4444

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes T  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes T  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the exchange act.

Large accelerated filer T	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No T

The number of shares of common stock outstanding at March 1, 2016 was 171,310,827. 

KEYSIGHT TECHNOLOGIES, INC.

TABLE OF CONTENTS

			Page Number
Part I.	Financial Information		3
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
		Condensed Consolidated Statement of Operations	3
		Condensed Consolidated Statement of Comprehensive Income	4
		Condensed Consolidated Balance Sheet	5
		Condensed Consolidated Statement of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	32
Part II.	Other Information		32
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 6.	Exhibits	43
Signature			44
Exhibit Index			45

2

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

	Three Months Ended
	January 31,
	2016			2015
Net revenue:
Products	$	601		$	596
Services and other	120			105
Total net revenue	721			701
Costs and expenses:
Cost of products	260			260
Cost of services and other	69			58
Total costs	329			318
Research and development	108			96
Selling, general and administrative	200			206
Other operating expense (income), net	(14		)	(6		)
Total costs and expenses	623			614
Income from operations	98			87
Interest income	1			—
Interest expense	(12		)	(12		)
Other income (expense), net	(3		)	3
Income before taxes	84			78
Provision for income taxes	20			8
Net income	$	64		$	70
Net income per share:
Basic	$	0.37		$	0.42
Diluted	$	0.37		$	0.41
Weighted average shares used in computing net income per share:
Basic	171			168
Diluted	172			170

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2016			2015
Net income	$	64		$	70
Other comprehensive income (loss):
Unrealized loss on investments, net of tax benefit of $1 and zero	(6		)	—
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $(1) and $2	1			(3		)
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $(1) and zero	3			(1		)
Foreign currency translation, net of tax benefit (expense) of zero	(25		)	(33		)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $6 and $3	12			8
Change in net prior service benefit, net of tax benefit of $3 and $3	(3		)	(4		)
Other comprehensive income (loss)	(18		)	(33		)
Total comprehensive income	$	46		$	37

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

	January 31, 2016			October 31, 2015
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	572		$	483
Accounts receivable, net	361			398
Inventory	481			487
Deferred tax assets	74			74
Other current assets	138			137
Total current assets	1,626			1,579
Property, plant and equipment, net	514			518
Goodwill	696			700
Other intangible assets, net	233			246
Long-term investments	56			70
Long-term deferred tax assets	256			295
Other assets	100			100
Total assets	$	3,481		$	3,508
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	175		$	209
Employee compensation and benefits	135			168
Deferred revenue	185			175
Income and other taxes payable	28			50
Other accrued liabilities	79			84
Total current liabilities	602			686
Long-term debt	1,099			1,099
Retirement and post-retirement benefits	255			280
Long-term deferred revenue	62			61
Other long-term liabilities	81			80
Total liabilities	2,099			2,206
Warranty and contingencies (Note 13)
Total equity:
Stockholders’ equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	—			—
Common stock; $0.01 par value; 1 billion shares authorized; 171 million shares at January 31, 2016 and 170 million shares at October 31, 2015 issued and outstanding	2			2
Additional paid-in-capital	1,199			1,165
Retained earnings	678			614
Accumulated other comprehensive loss	(497		)	(479		)
Total stockholders' equity	1,382			1,302
Total liabilities and equity	$	3,481		$	3,508

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2016			2015
Cash flows from operating activities:
Net income	$	64		$	70
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33			23
Share-based compensation	16			29
Excess tax benefit from share-based plans	(1		)	(3		)
Deferred taxes	4			(1		)
Excess and obsolete inventory related charges	8			10
Gain on sale of land	(10		)	—
Other non-cash expenses (income), net	2			(1		)
Changes in assets and liabilities:
Accounts receivable	33			36
Inventory	(4		)	(9		)
Accounts payable	(22		)	(13		)
Payment to Agilent, net	—			(14		)
Employee compensation and benefits	(29		)	(22		)
Retirement and post-retirement benefits	(11		)	(17		)
Income tax payable	2			9
Other assets and liabilities	7			(5		)
Net cash provided by operating activities	92			92
Cash flows from investing activities:
Investments in property, plant and equipment	(34		)	(15		)
Proceeds from sale of investments	—			1
Proceeds from sale of land	10			—
Net cash used in investing activities	(24		)	(14		)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	24			4
Excess tax benefit from share-based plans	1			3
Net cash provided by financing activities	25			7
Effect of exchange rate movements	(4		)	(8		)
Net increase in cash and cash equivalents	89			77
Cash and cash equivalents at beginning of period	483			810
Cash and cash equivalents at end of period	$	572		$	887
Cash paid during the period for:
Income taxes, net of refunds	$	8		$	14

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

KEYSIGHT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

On November 1, 2014, Keysight became an independent publicly-traded company through the distribution by Agilent Technologies, Inc. ("Agilent") of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation"). Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date, resulting in the distribution of approximately 167 million shares of Keysight common stock. Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014. Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

Basis of Presentation. We have prepared the accompanying financial statements for the three months ended January 31, 2016 and 2015 pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements and information should be read in conjunction with our Annual Report on Form 10-K.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2016 and October 31, 2015, condensed consolidated statement of comprehensive income for the three months ended January 31, 2016 and 2015, condensed consolidated statement of operations for the three months ended January 31, 2016 and 2015, and condensed consolidated statement of cash flows for the three months ended January 31, 2016 and 2015.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, valuation of goodwill and other intangible assets, share-based compensation, retirement and post-retirement plan assumptions, restructuring, warranty and accounting for income taxes.

Land Sale. On April 30, 2014 we entered into a binding sales contract with real estate developers to sell land in the U.K. The contract calls for proportionate transfers and payments of three separate land tracts totaling approximately $34 million in May 2014, November 2015 and November 2016. In the three months ended January 31, 2016 we recognized a $10 million gain on the sale in respect of the second of three land tracts in other operating expense (income), net.

Reclassifications. Other operating expense (income), net for the three months ended January 31, 2015 includes $6 million of miscellaneous income and expense that was previously classified as other income (expense), net in the condensed consolidated statement of operations, primarily representing rental income, as management believes this is more appropriately classified within our operating results. This change had no effect on reported net income for any period presented.

Update to Significant Accounting Policies. There have been no material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2015.

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2. NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance related to revenue recognition. The amendment was the result of a joint project between the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards ("IFRS"). To meet those objectives, the FASB amended the FASB Accounting Standards Codification and created a new Topic 606, Revenue from Contracts with Customers, and the IASB issued IFRS 15, Revenue from Contracts with Customers. On July 9, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In June 2014, the FASB issued an amendment to the accounting guidance relating to share-based compensation to resolve what it saw as diverse accounting treatment of certain awards. With this amendment, the FASB has given explicit guidance to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting rather than as a non-vesting condition that affects the grant-date fair value of an award. The new guidance is effective for annual periods beginning after December 15, 2015 and for the interim periods within those annual periods. Earlier adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In August 2014, the FASB issued guidance related to the disclosures around going concern. The standard provided guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In February 2015, the FASB issued guidance with respect to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The new guidance affects the following areas: (1) limited partnerships and similar legal entities, (2) evaluating fees paid to a decision maker or a service provider as a variable interest, (3) the effect of fee arrangements on the primary beneficiary determination, (4) the effect of related parties on the primary beneficiary determination, and (5) certain investment funds. The new guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In April 2015, the FASB issued guidance to simplify presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In April 2015, the FASB issued guidance that clarifies the circumstances under which a cloud computing customer would account for an arrangement as a license of internal-use software. The standard is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In May 2015, the FASB issued guidance that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The standard also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The standard is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In July 2015, the FASB issued guidance to simplify the subsequent measurement of inventory. The standard requires most inventory to be measured at the lower of cost and net realizable value, thereby simplifying the current guidance under which inventory must be measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

8

In August 2015, the FASB issued guidance to simplify presentation of debt issuance costs associated with line of credit arrangements. The standard clarifies the SEC's position on presenting and measuring debt issuance costs incurred in connection with line of credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In September 2015, the FASB issued guidance that requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Under the standard, if the initial accounting for a business combination is incomplete at the end of the reporting period in which the combination occurs, the acquirer would no longer be required to revise its comparative information for changes to the provisional amounts recognized as of the acquisition date during the measurement period. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance in the fourth quarter of 2015. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In November 2015, the FASB issued guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have not yet selected an adoption method and are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In January 2016, the FASB issued guidance that amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. The standard generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for various provisions of the standard. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In February 2016, the FASB issued guidance that will require organizations that lease assets to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

3.    ACQUISITION OF ANITE

On August 13, 2015, we acquired all share capital of Anite for a cash price of approximately $558 million, net of $43 million of cash acquired. Anite was a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions. As a result of the acquisition, Anite has become a wholly-owned subsidiary of Keysight. Accordingly, the results of Anite are included in Keysight's consolidated financial statements from the date of the acquisition. There have been no revisions to the preliminary purchase price allocation during the three months ended January 31, 2016. As additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Acquisition and integration costs directly related to the Anite acquisition totaled $3 million and zero for the three months ended January 31, 2016 and 2015, respectively, and were recorded in selling, general and administrative expenses.

9

The following represents pro forma operating results as if Anite had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2014 (in millions, except per share amounts):

	Three Months Ended January 31, 2015
Net revenue	$	752
Net income	$	68
Net income per share - Basic	$	0.41
Net income per share - Diluted	$	0.40

The pro forma financial information assumes that the companies were combined as of November 1, 2013 and include business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, the impact on cost of sales due to the respective estimated fair value adjustments to inventory, and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014.

The unaudited pro forma financial information for the three months ended January 31, 2015 combines the historical results of Keysight and Anite for the three months ended January 31, 2015.

4.     SHARE-BASED COMPENSATION

Keysight accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock option awards, restricted stock units ("RSUs"), 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 (“LTP”) Program based on estimated fair values. 

The impact of share-based compensation on our results was as follows:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Cost of products and services	$	3	$	4
Research and development	3		4
Selling, general and administrative	10		21
Total share-based compensation expense	$	16	$	29

At January 31, 2016 and 2015, share-based compensation capitalized within inventory was $1 million and $2 million, respectively. The income tax benefit realized from the exercised stock options and similar awards recognized was $1 million and $3 million for the three months ended January 31, 2016 and 2015, respectively. The expense for the three months ended January 31, 2016 and 2015 includes expense of $1 million and $14 million, respectively, related to special inaugural RSU awards granted during the three months ended January 31, 2015. These awards will vest over three years from the date of grant.

10

The following assumptions were used to estimate the fair value of employee stock options and LTP Program grants.

	Three Months Ended
	January 31,
	2016		2015
Stock Option Plans:
Weighted average risk-free interest rate	—		1.6	%
Dividend yield	—		—	%
Weighted average volatility	—		31	%
Expected life	—		4.9 years
LTP Program:
Volatility of Keysight shares	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%

The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the LTP Program were valued using a Monte Carlo simulation model. Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.

We did not grant any option awards for the three months ended January 31, 2016. For the three months ended January 31, 2015, we used the average historical volatility of eleven peer companies to estimate the volatility for our stock option awards. We considered our ability to find traded options of peer companies in the current market with similar terms and prices to our options. In estimating the expected life of our options, we considered the historical option exercise behavior of our executives, which we believe is representative of future behavior.

5.     INCOME TAXES

As of January 31, 2016, we continue to include a best estimate of the deferred tax liability for foreign unremitted earnings due to the Separation as zero. Excess foreign tax credits associated with unremitted earnings are not recorded as an asset as they do not represent a separate deferred asset until earnings are remitted. However, unremitted foreign taxes reduce deferred tax liabilities associated with outside basis differences related to the investment in a foreign subsidiary to the extent the credit reduces a deferred tax liability of the investment. We continue to have ongoing discussions with Agilent regarding the allocation of certain deferred tax liability balances related to foreign unremitted earnings in accordance with the Separation agreements.

The company’s effective tax rate was 23.7 percent and 10.1 percent for the three months ended January 31, 2016 and 2015, respectively. Income tax expense was $20 million and $8 million for the three months ended January 31, 2016 and 2015, respectively.

The income tax provision for the three months ended January 31, 2016 and 2015 included a net discrete expense of $1 million and a net discrete benefit of $10 million, respectively.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months period ended January 31, 2016 by $8 million, resulting in a net income per share (diluted) benefit of approximately $0.05 per share for the three months ended January 31, 2016. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014, through the current tax year. For certain historical Agilent foreign entities that Keysight retained as part of the separation, the tax years generally remain open back to the year 2006. For certain entities acquired during 2015, the tax years also remain open back to the year 2006. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

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6. NET INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Numerator:
Net income	$	64	$	70
Denominator:
Basic weighted-average shares	171		168
Potential common shares— stock options and other employee stock plans	1		2
Diluted weighted-average shares	172		170

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense, the tax benefits or shortfalls recorded to additional paid-in capital and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense and tax benefits or shortfalls collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For the three months ended January 31, 2016, 1.7 million options to purchase shares were excluded from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP Program and restricted stock awards, whose combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three months ended January 31, 2016, we excluded 16,100 shares.

7. INVENTORY

	January 31, 2016		October 31, 2015
	(in millions)
Finished goods	$	237	$	235
Purchased parts and fabricated assemblies	244		252
Total Inventory	$	481	$	487

8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments during the three months ended January 31, 2016:

	Measurement Solutions			Customer Support and Services			Total
	(in millions)
Goodwill as of October 31, 2015	$	637		$	63		$	700
Foreign currency translation impact	(3		)	(1		)	(4		)
Goodwill as of January 31, 2016	$	634		$	62		$	696

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The components of other intangible assets as of January 31, 2016 and October 31, 2015 are shown in the table below:

	Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
As of October 31, 2015:
Developed technology	$	305	$	125	$	180
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	64		28		36
Total amortizable intangible assets	393		159		234
In-Process R&D	12		—		12
Total	$	405	$	159	$	246
As of January 31, 2016:
Developed technology	$	305	$	136	$	169
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	63		29		34
Total amortizable intangible assets	392		171		221
In-Process R&D	12		—		12
Total	$	404	$	171	$	233

During the three months ended January 31, 2016, we recorded no additions to goodwill or other intangible assets. During the three months ended January 31, 2016, we recorded $1 million of foreign exchange translation impact to other intangible assets.

Amortization of other intangible assets was $12 million and $2 million for the three months ended January 31, 2016 and 2015, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $31 million for the remainder of 2016, $39 million for 2017, $36 million for 2018, $36 million for 2019, $36 million for 2020 and $43 million thereafter.

9. FAIR VALUE MEASUREMENTS

The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The guidance establishes a fair value hierarchy that prioritizes inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2- applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data.

Level 3- applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

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Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at January 31, 2016								Fair Value Measurements at October 31, 2015
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	329	$	329	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	374	$	371	$	3	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	16	$	—	$	16	$	—	$	22	$	—	$	22	$	—

Our money market funds, trading securities, and available-for-sale investments are generally valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. Our derivative financial instruments are classified within Level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as Level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable.

Trading securities and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income. Investments designated as available-for-sale and certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss). Realized gains and losses from the sale of these instruments are recorded in net income.

10. DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. Prior to the Capitalization, there were no derivatives contracts legally held by us and the below disclosures represent the activity pertaining to the contracts entered into by us subsequently.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. The changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income. Amounts associated with cash flow hedges are reclassified to cost of products in the condensed consolidated statement of operations when the forecasted transaction occurs. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments

14

are recognized in other income (expense), net in the condensed consolidated statement of operations in the current period. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in other income (expense), net over the life of the option contract. Ineffectiveness in the three months ended January 31, 2016 and 2015 was not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in value of the derivative are recognized in other income (expense), net in the condensed consolidated statement of operations, in the current period, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions that are selected based on their credit ratings and other factors. We have established policies and procedures for mitigating credit risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties.

A number of our derivative agreements contain threshold limits to the net liability position with counterparties and are dependent on our corporate credit rating determined by the major credit rating agencies. The counterparties to the derivative instruments may request collateralization, in accordance with derivative agreements, on derivative instruments in net liability positions.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2016 was $3 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2016.

There were 103 foreign exchange forward contracts open as of January 31, 2016 that were designated as cash flow hedges. There were 68 foreign exchange forward contracts and 1 foreign exchange option contract open as of January 31, 2016 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2016 were as follows:

	Derivatives in Cash Flow Hedging Relationships					Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Option Contracts		Forward Contracts			Option Contracts
Currency	Buy/(Sell)			Buy/(Sell)		Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	—	$	35		42
British Pound	—			—		(36		)	—
Singapore Dollar	9			—		(1		)	—
Malaysian Ringgit	71			—		(7		)	—
Japanese Yen	(69		)	—		(59		)	—
Other	—			—		(9		)	—
Totals	$	11		$	—	$	(77	)	$	42

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Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2016		October 31, 2015		Balance Sheet Location	January 31, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	—	Other accrued liabilities	$	3	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	1		$	5	$	10

The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2		$	(5	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of products	$	(4	)	$	1
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(2	)	$	(6	)

The estimated amount of existing net loss at January 31, 2016 expected to be reclassified from other comprehensive income to cost of sales within the next twelve months is $2 million.

11. RESTRUCTURING

We initiated a targeted workforce reduction program in July 2015 that was designed to restructure our operations and cost structure for optimization of resources and cost savings.

In 2015, we also announced a voluntary pre-retirement notification program for retirement-eligible employees to provide early notice of their planned retirement in return for severance benefits. Approximately 156 employees of our total workforce opted for this program as of January 31, 2016.

The restructuring programs are expected to result in operational savings and efficiency while maintaining our focus on growing the business. Severance payments under both programs were largely complete at January 31, 2016.

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A summary of balances and restructuring activity is shown in the table below:

	Workforce reduction			U.S. Pre-retirement Plan
	(in millions)
Balance as of October 31, 2015	$	4		$	2
Cash payments	(3		)	(2		)
Balance as of January 31, 2016	$	1		$	—

The restructuring accrual of $1 million at January 31, 2016 relating to workforce reduction is recorded in other accrued liabilities in the condensed consolidated balance sheet. Income statement charges were immaterial for the three months ended January 31, 2016.

12. RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2016 and 2015, our net pension and post-retirement benefit costs were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			8			11			2			2
Expected return on plan assets	(9		)	(9		)	(19		)	(19		)	(3		)	(4		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(2		)	—			—			(4		)	(5		)
Total periodic benefit cost (benefit)	$	2		$	—		$	—		$	3		$	—		$	(4	)

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2016 and 2015. We contributed $10 million and $14 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2016 and 2015, respectively.

We do not expect to contribute to our U.S. Defined Benefit Plans during the remainder of 2016, and we expect to contribute $29 million to our Non-U.S. Defined Benefit Plans during the remainder of 2016.

Employees hired on or after August 1, 2015 are not eligible to participate in the U.S. Defined Benefit Plans or the U.S. Post-Retirement Benefit Plan. We provide matching contributions to these employees under the Keysight Technologies, Inc. 401(k) Plan up to a maximum of 6 percent of the employee's annual eligible compensation.

13. WARRANTY AND CONTINGENCIES

Standard Warranty

Our standard warranty term for most of our products from the date of delivery is typically three years. We accrue for standard warranty costs based on historical trends in warranty charges as a percentage of net product shipments. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

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Activity related to the standard warranty accrual, which is included in other accrued and other long-term liabilities in our condensed consolidated balance sheet, is as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	8			9
Settlements made during the period	(8		)	(9		)
Ending balance	$	53		$	51
Accruals for warranties due within one year	$	34		$	36
Accruals for warranties due after one year	19			15
Ending balance	$	53		$	51

Contingencies

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

14. DEBT

Short-Term Debt

On September 15, 2014, we entered into a five year credit agreement, which provides for a $300 million unsecured credit facility that will expire on November 1, 2019. On July 21, 2015, the total amount available under the credit facility was increased to $450 million. The company may use amounts borrowed under the facility for general corporate purposes. As of January 31, 2016, we had no borrowings outstanding under the credit facility. We were in compliance with the covenants of the credit facility during the three months ended January 31, 2016.

As a result of the Anite acquisition, we have an overdraft facility of £25 million that will expire on July 31, 2016. As of January 31, 2016, we had no borrowings outstanding under the facility.  We were in compliance with the covenants of the credit facility during the three months ended January 31, 2016.

Long-Term Debt

The following table summarizes the components of our long-term debt:

	January 31, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Total	$	1,099	$	1,099

The notes issued are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. There have been no changes to the principal, maturity, interest rates and interest payment terms of the senior notes, detailed in the table above, in the three months ended January 31, 2016 as compared to the senior notes described in our Annual Report on Form 10-K for fiscal year ended October 31, 2015.

As of January 31, 2016 and October 31, 2015, we had $17 million and $19 million, respectively, of outstanding letters of credit unrelated to the credit facility that were issued by various lenders.

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The fair value of our long-term debt, calculated from quoted prices that are primarily Level 1 inputs under the accounting guidance fair value hierarchy, was below the carrying value by approximately $29 million and $8 million as of January 31, 2016 and October 31, 2015, respectively.

15. ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2016 and 2015 were as follows:

							Net defined benefit pension cost and post retirement plan costs
	Unrealized gain on investments			Foreign currency translation			Actuarial losses			Prior service costs			Unrealized gains (losses) on derivatives			Total
	(in millions)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	—			(33		)	—			—			(5		)	(38		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	—			—			(3		)	3			2			2
Other comprehensive income (loss)	—			(33		)	8			(4		)	(4		)	(33		)
As of January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2016 and 2015 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Unrealized gain (loss) on derivatives	$	(4	)	$	1		Cost of products
	1			—			Provision for income taxes
	(3		)	1			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)
Prior service benefit	6			7
	(8		)	(4		)	Total before income tax
	3			—			Provision for income taxes
	(5		)	(4		)	Net of income tax
Total reclassifications for the period	$	(8	)	$	(3	)

An amount in parentheses indicates a reduction to income and an increase to the accumulated other comprehensive income.

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Reclassifications of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost (see Note 12, "Retirement Plans and Post Retirement Pension Plans").

16. SEGMENT INFORMATION

We provide electronic design and test solutions to the communications and electronics industries.

We have two reportable operating segments, measurement solutions and customer support and services. The two operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

A description of our two reportable segments is as follows:

Our measurement solutions business provides electronic design and test instruments and systems with related software and software design tools that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. We provide startup assistance, consulting, optimization and application support throughout the customer's product lifecycle.

Our customer support and services business provides hardware repair and calibration services and facilitates the resale of used equipment. Our customer support and services business enables our customers to maximize the value from their electronic measurement equipment and strengthens customer loyalty. Providing these services assures a high level of instrument performance and availability, while minimizing the cost of ownership and downtime.

A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include costs of centralized research and development, legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments.

The following tables reflect the results of our reportable segments under our management reporting system. These results are not necessarily in conformity with GAAP. The performance of each segment is measured based on several metrics, including income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding, 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, acquisition related fair value adjustments, interest income and interest expense as noted in the reconciliations below.

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Three Months Ended January 31, 2016:
Total segment revenue	$	631		$	95	$	726
Acquisition related fair value adjustments	(5		)	—		(5		)
Total net revenue	$	626		$	95	$	721
Segment income from operations	$	116		$	13	$	129
Three Months Ended January 31, 2015:
Total net revenue	$	606		$	95	$	701
Segment income from operations	$	110		$	14	$	124

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The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Total reportable segments' income from operations	$	129		$	124
Share-based compensation expense	(16		)	(29		)
Amortization of intangibles	(11		)	(2		)
Acquisition and integration costs	(2		)	—
Separation and related costs	(5		)	(7		)
Acquisition related fair value adjustments	(5		)	—
Other	8			1
Interest income	1			—
Interest expense	(12		)	(12		)
Other income (expense), net	(3		)	3
Income before taxes, as reported	$	84		$	78

The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments, long-term and other receivables and other assets.

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of January 31, 2016	$	2,492	$	257	$	2,749
As of October 31, 2015	$	2,531	$	265	$	2,796

17. SUBSEQUENT EVENTS

Share Repurchase Authorization. Keysight’s Board of Directors authorized a new share repurchase program for up to $200 million of its common stock. The new repurchase program goes into effect immediately and shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, our future effective tax rate and tax valuation allowance, earnings from our foreign subsidiaries, remediation activities, new product and service introductions, the ability of our products to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of local government regulations on our ability to pay vendors or conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our acquisitions and other transactions, our transition to lower-cost regions, and the existence of economic instability, that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations, comprehensive income or cash flows. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarter periods.

Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic test and design solutions to communications and electronics industries.

On November 1, 2014, Keysight became an independent publicly-traded company through the distribution by Agilent Technologies, Inc. ("Agilent") of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation"). Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date, resulting in the distribution of approximately 167 million shares of Keysight common stock. Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014. Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

For the three months ended January 31, 2016 and 2015, we recognized non-recurring separation and related costs of $5 million and $7 million, respectively, associated with our separation from Agilent. We expect to recognize additional non-recurring separation and related costs, which are currently estimated to range from $7 million to $12 million, through the remainder of fiscal 2016. These costs are expected to include primarily costs related to infrastructure resizing and optimization.

Reclassifications. Other operating expense (income), net for the three months ended January 31, 2015 includes $6 million of miscellaneous income and expense that was previously classified as other income (expense), net in the condensed consolidated statement of operations, primarily representing rental income, as management believes this is more appropriately classified within our operating results. This change had no effect on reported net income for the periods presented. 

Executive Summary

We provide electronic design and test instruments and systems and related software, software design tools, and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. Related services include start-up assistance, instrument productivity and application services and instrument calibration and repair. We also offer customization, consulting and optimization services throughout the customer's product lifecycle.

We plan to invest in product development to address the changing needs of the market and facilitate growth. We are investing in research and development to design measurement solutions that will satisfy the changing needs of our customers. These opportunities are being driven by the need for faster data rates and new form factors, and by evolving technology standards.

We have two reportable operating segments, measurement solutions and customer support and services. The measurement solutions segment is primarily the hardware and associated software businesses serving the electronic design and test market. The customer support and services segment provides hardware repair and calibration services and facilitates the resale of used instrument

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equipment.

On November 3, 2015, we announced an organizational structure change to orient our efforts towards complete customer solutions with the creation of Communications Solutions Group, Industrial Solutions Group and Services Solutions Group. This change will support our solutions-oriented approach to more closely align our organization and people to meet the needs of our customers. We are currently in the process of aligning the organization to this new structure and evaluating the impact, if any, on our financial reporting.

Three months ended January 31, 2016 and 2015

Total orders for the three months ended January 31, 2016 were $679 million, a decrease of 2 percent when compared to the same period last year. Order declines in the industrial, computer, and semiconductor market were partially offset by an increase in the aerospace and defense and communications markets. Foreign currency movements had an unfavorable impact of 3 percentage points on the year‑over‑year comparison. Orders associated with acquisitions accounted for 6 percentage points of order growth for the three months ended January 31, 2016 when compared to the same period last year.

Net revenue of $721 million for the three months ended January 31, 2016 increased 3 percent when compared to the same period last year, with the communications market contributing 2 percentage points of the increase and the industrial, computer and semiconductor market contributing 1 percentage point of the increase, while the aerospace and defense market revenue was flat. Foreign currency movements had an unfavorable impact of 2 percentage points on the year-over-year comparison. The revenue associated with acquisitions accounted for approximately 6 percentage points to the increase for the three months ended January 31, 2016 when compared to the same period last year.

Net income for the three months ended January 31, 2016 was $64 million compared to $70 million for the corresponding period last year.

Looking forward, we believe the long-term growth rate of our markets is 2 to 3 percent, although current macroeconomic indicators remain mixed. Our focus is on delivering value through innovative electronic design and test solutions as well as continuously improving our operational efficiency as an independent company.

We accelerated our efforts in both wireless communications and software by acquiring Anite in August 2015. This acquisition expands our solutions offering in wireless communications design and test, specifically into the software layer for design and validation and provides an adjacent market opportunity in the Network Test business.

Restructuring Activities

We initiated a targeted workforce reduction program in July 2015 that was designed to restructure our operations and cost structure for optimization of resources and cost savings. Income statement charges were immaterial for the current quarter. As of January 31, 2016, approximately 94 employees have left and $3 million was paid in severance under the above actions.

In 2015, we also announced a voluntary pre-retirement notification program for retirement-eligible employees to provide early notice of their planned retirement in return for severance benefits. Approximately 156 employees of our total workforce opted for this program as of January 31, 2016. Income statement charges were immaterial for the current quarter associated with the headcount reductions. In the current quarter, we paid $2 million in severance under the program.

These restructuring programs are expected to result in operational efficiency and net annual savings of approximately $18 million, while maintaining our focus on growing the business. Severance payments under both programs were largely complete at January 31, 2016.

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles ("GAAP") in the U.S. The preparation of financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, restructuring, warranty, valuation of goodwill and other intangible assets and accounting for income taxes. For a detailed description of our critical accounting policies and estimates, see "Item 7. Management's

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Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2015. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management's best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates.

Adoption of New Pronouncements

See Note 2, “New Accounting Pronouncements,” to the condensed consolidated financial statements for a description of new accounting pronouncements.

Foreign Currency

Our revenues, costs and expenses, and monetary assets and liabilities are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities. We hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short-term and anticipated basis. The result of the hedging has been included in our condensed consolidated statement of operations. We do experience some fluctuations within individual lines of the condensed consolidated balance sheet and condensed consolidated statement of operations because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our hedging program is designed to hedge currency movements on a relatively short-term basis (twelve-month period). Therefore, we are exposed to currency fluctuations over the longer term. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Results from Operations

Orders and Net Revenue

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. Revenue reflects the delivery and acceptance of the products and services as defined on the customer's terms and conditions. Cancellations are recorded in the period received from the customer and historically have not been material.

	Three Months Ended				Year over Year Change
	January 31,				Three
	2016		2015		Months
	(in millions)
Orders	$	679	$	691	(2)%
Net revenue:
Products	$	601	$	596	1%
Services and other	120		105		14%
Total net revenue	$	721	$	701	3%

Orders

The following table provides the percent change in orders for the three months ended January 31, 2016 by geographic region including and excluding the impact of currency changes as compared to the same periods last year.

	Year over Year % Change
	Three Months Ended
	January 31, 2016
Geographic Region	actual		currency adjusted
Americas	(4	)%	(3	)%
Europe	4	%	9	%
Japan	4	%	7	%
Asia Pacific ex-Japan	(4	)%	(2	)%
Total orders	(2	)%	1	%

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Total orders for the three months ended January 31, 2016 decreased 2 percent compared to the same period last year. Order declines in the industrial, computer and semiconductor market were partially offset by an increase in aerospace and defense and communications markets. Foreign currency movements had an unfavorable impact of 3 percentage points on the year-over-year compare. The orders associated with acquisitions accounted for 6 percentage points of order growth for the three months ended January 31, 2016 when compared to the same period last year.

Net Revenue

The following table provides the percent change in net revenue for the three months ended January 31, 2016 by geographic region including and excluding the impact of currency changes as compared to the same periods last year.

	Year over Year % Change
	Three Months Ended
	January 31, 2016
Geographic Region	actual		currency adjusted
Americas	3	%	3	%
Europe	6	%	11	%
Japan	13	%	17	%
Asia Pacific ex-Japan	(2	)%	—	%
Total net revenue	3	%	5	%

Net revenue of $721 million for the three months ended January 31, 2016 increased 3 percent when compared to the same period last year. Foreign currency movements had an unfavorable impact of 2 percentage points on the year-over-year compare. Acquisitions added approximately 6 percentage points to the revenue for the three months ended January 31, 2016. Revenue from the Americas grew 3 percent, driven by strength in the aerospace and defense market and industrial, computer and semiconductor market, while the communications market was relatively flat. Revenue from Europe grew 6 percent with growth in the communications market, partially offset by decline in the aerospace and defense market, while the industrial, computer and semiconductor market was relatively flat. Japan revenues increased 13 percent driven by growth in all market segments. Revenue from Asia Pacific excluding Japan declined 2 percent with declines in the aerospace and defense market and industrial, computer and semiconductor market, partially offset by strength in the communications market.

Revenue from the communications market, including revenue from Anite, represents approximately 33 percent of total revenue for the three months ended January 31, 2016, grew 5 percent year-over-year. It contributed 2 percentage points to our total revenue growth. Excluding Anite, communications revenue declined year-over-year as softness from customers in the smartphone supply chain along with the impact on spending patterns of restructuring and consolidation activities within our customer base outweighed growth in LTE-advanced and 5G technology.

Aerospace and defense market revenue, representing approximately 24 percent of total revenue for the three months ended January 31, 2016, decreased 1 percent year-over-year with continued softness in Asia Pacific excluding Japan and Europe, partially offset by growth in Americas and Japan.

Industrial, computer and semiconductor market revenue, representing approximately 43 percent of total revenue for the three months ended January 31, 2016, grew 3 percent year-over-year driven by strong sales of our instrument and parametric test products and next generation processor testing. It contributed 1 percentage point to the total revenue growth for the three months ended January 31, 2016. Increases in Japan, Americas and Europe were partially offset by a decline in Asia Pacific excluding Japan.

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Costs and Expenses

	Three Months Ended						Year over year change
	January 31,						Three
	2016			2015			Months
Total gross margin	54.3		%	54.6		%	— ppt
Operating margin	13.6		%	12.4		%	1 ppt
in millions
Research and development	$	108		$	96		13%
Selling, general and administrative	$	200		$	206		(3)%
Other operating expense (income), net	$	(14	)	$	(6	)	136%

Gross margin was flat for the three months ended January 31, 2016 compared to the same period last year as the impact of acquisition related intangible amortization and unfavorable foreign currency was offset by lower inventory and warranty charges.

Research and development expense increased 13 percent for the three months ended January 31, 2016 compared to the same period last year, driven by the Anite acquisition. As a percentage of revenue, research and development expense has increased to 15 percent for the three months ended January 31, 2016 from 14 percent in the same period last year. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities in order to capture future growth.

Selling, general and administrative expenses decreased 3 percent for the three months ended January 31, 2016, compared to the same period last year, primarily driven by lower share-based compensation, favorable impact of foreign currency movements and lower people-related costs, partially offset by increases due to the acquisition of Anite.

Other operating expense (income), net for the three months ended January 31, 2016 and 2015 was $14 million and $6 million, respectively; the increase is largely driven by a gain on the sale of land.

Operating margin for the three months ended January 31, 2016 increased 1 percentage point when compared to the same period last year, primarily due to lower share-based compensation expense and a gain from the sale of land offset by lower gross margins.

At January 31, 2016, our headcount was approximately 10,300 as compared to approximately 9,500 at January 31, 2015, primarily driven by acquisitions.

Interest Expense

Interest expense for the three months ended January 31, 2016 and 2015 was $12 million and relates to interest on our senior notes.

Income Taxes

As of January 31, 2016, we continue to include a best estimate of the deferred tax liability for foreign unremitted earnings due to the Separation as zero. Excess foreign tax credits associated with unremitted earnings are not recorded as an asset as they do not represent a separate deferred asset until earnings are remitted. However, unremitted foreign taxes reduce deferred tax liabilities associated with outside basis differences related to the investment in a foreign subsidiary to the extent the credit reduces a deferred tax liability of the investment. We continue to have ongoing discussions with Agilent regarding the allocation of certain deferred tax liability balances related to foreign unremitted earnings in accordance with the Separation agreements.

The company’s effective tax rate was 23.7 percent and 10.1 percent for the three months ended January 31, 2016 and 2015, respectively. Income tax expense was $20 million and $8 million for the three months ended January 31, 2016 and 2015, respectively.

The income tax provision for the three months ended January 31, 2016 and 2015 included a net discrete expense of $1 million and a net discrete benefit of $10 million, respectively.

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Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months period ended January 31, 2016 by $8 million, resulting in a net income per share (diluted) benefit of approximately $0.05 per share for the three months ended January 31, 2016. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014, through the current tax year. For certain historical Agilent foreign entities that Keysight retained as part of the separation, the tax years generally remain open back to the year 2006. For certain entities acquired during 2015, the tax years also remain open back to the year 2006. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

At January 31, 2016, our estimate of annual effective tax rate is 22 percent excluding discrete items and 23.7 percent including discrete items. We determine our interim tax provision using an estimated annual effective tax rate methodology except in jurisdictions where we anticipate a full year loss or we have a year-to-date ordinary loss for which no tax benefit can be recognized. In these jurisdictions, tax expense is computed separately. Our effective tax rate differs from the U.S. statutory rate primarily due to the mix of earnings in non-U.S. jurisdictions taxed at lower rates, our permanent reinvestment assertion of foreign subsidiary earnings outside of the U.S., reserves for uncertain tax positions, the extension of the U.S. federal research and development tax credit for part of fiscal year 2015 and all of fiscal year 2016 and the impact of permanent differences.

On July 27, 2015, the Tax Court issued an opinion (Altera Corp. et al. v. Commissioner), which invalidated the 2003 final Treasury rule that requires participants in qualified cost-sharing arrangements to share stock-based compensation costs. However, the regulations continue to retain the requirement to include stock-based compensation. The IRS has filed notice of appeal of the Tax Court opinion, and thus, there is uncertainty related to the final resolution of this issue, and the potential favorable benefits to the company. As such, no impact has been recorded at this time. We will continue to monitor developments related to this opinion and the potential impact of those developments on our current and prior fiscal years.

Segment Overview

We have two reportable operating segments, measurement solutions and customer support and services. The measurement solutions segment is primarily the hardware and associated software businesses serving the electronic design and test market. The customer support and services segment provides hardware repair and calibration services and facilitates the resale of used instrument equipment.

The profitability of each of the segments is measured after excluding, 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, acquisition related fair value adjustments, interest income and interest expense.

Measurement Solutions Business

Our measurement solutions business provides electronic design and test instruments and systems with related software and software design tools that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. We provide startup assistance, consulting, optimization and application support throughout the customer’s product lifecycle. Our electronic design and test solutions serve the following markets: communications test, aerospace and defense test, and industrial, computer and semiconductor test.

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2016		2015		Months
	(in millions)
Net revenue	$	631	$	606	4%

Measurement solutions revenue for the three months ended January 31, 2016 increased 4 percent when compared to the same period last year, increasing 6 percent excluding the impact of currency fluctuations. Revenue from acquisitions added

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approximately 7 percentage points to the total segment's revenue for the three months ended January 31, 2016. Growth in communications and industrial, computer and semiconductors test markets were partially offset by decline in the aerospace and defense test market.

Looking forward, near term we believe we are in a slow-growth environment within electronic design and test solutions. In aerospace and defense we expect steady growth in the Americas and continued uncertainty internationally. We expect the industrial, computer and semiconductor market to remain soft impacted by uncertain global economic conditions. We expect all segments within the communications market to remain soft with cautious spending in wireless R&D and manufacturing. Softness from customers in the smartphone supply chain along with the impact on spending patterns of restructuring and consolidation activities within our customer base are outweighing growth in LTE-advanced and 5G technology.

Gross Margin and Operating Margin

The following table shows the measurement solutions business' margins, expenses and income from operations for the three months ended January 31, 2016 versus three months ended January 31, 2015.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2016			2015			Months
Total gross margin	59.2		%	57.6		%	2 ppts
Operating margin	18.3		%	18.2		%	— ppt
in millions
Research and development	$	103		$	89		16%
Selling, general and administrative	$	159		$	153		4%
Other operating expense (income), net	$	(4	)	$	(3	)	19%
Income from operations	$	116		$	110		5%

Gross margin increased 2 percentage points for the three months ended January 31, 2016, compared to the same period last year, primarily due to lower people-related costs, lower inventory charges and lower warranty, partially offset by unfavorable foreign currency impact.

Research and development expense increased 16 percent for the three months ended January 31, 2016, compared to the same period last year, primarily driven by the Anite acquisition. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities in order to capture future growth.

Selling, general and administrative expenses increased 4 percent for the three months ended January 31, 2016, compared to the same period last year, primarily driven by increases due to the acquisition of Anite, partially offset by the favorable impact of currency movements and lower people-related costs.

Other operating expense (income), net for the three months ended January 31, 2016 and 2015 was $4 million and $3 million, respectively, and primarily represents rental income.

Operating margin for the three months ended January 31, 2016 was flat compared to the same period last year. Growth in the gross margin was offset by an increase in operating expenses primarily due to the acquisition of Anite.

Income from Operations

Income from operations for the three months ended January 31, 2016 increased $6 million on a corresponding revenue increase of $6 million when compared to the same period last year.

Customer Support and Services Business

The customer support and services business provides hardware repair and calibration services and facilitates the resale of used equipment. Our customer support and services business broadly addresses the same markets as the measurement solutions business, which includes the communications, aerospace and defense and industrial, computer and semiconductor test markets.

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Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2016		2015		Months
	(in millions)
Net revenue	$	95	$	95	—%

Customer support and services revenue for the three months ended January 31, 2016 was flat when compared to the same period last year and increased 4 percent excluding the impact of currency fluctuations. The revenue increase associated with acquisitions accounted for approximately 2 percentage points for the three months ended January 31, 2016 when compared to the same period last year. Increases in calibration services and re-marketing sales of used equipment was partially offset by declines in the equipment repair business. Revenue growth in Americas and Japan was offset by declines in Asia pacific excluding Japan.

Looking forward, while the customer support and services business will be impacted by the same market trends as the measurement solutions business, it is typically less cyclical as orders and revenue are primarily driven from the existing installed base of previously purchased measurement solutions products and less impacted by economic cycles.

Gross Margin and Operating Margin

The following table shows the customer support and services business' margins, expenses and income from operations for the three months ended January 31, 2016 versus the three months ended January 31, 2015.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2016			2015			Months
Total gross margin	39.6		%	42.0		%	(2) ppts
Operating margin	13.9		%	14.3		%	— ppt
in millions
Research and development	$	2		$	3		(24)%
Selling, general and administrative	$	23		$	24		(5)%
Other operating expense (income), net	$	(1	)	$	(1	)	(12)%
Income from operations	$	13		$	14		(3)%

Gross margin for the three months ended January 31, 2016 decreased 2 percentage points compared to the same period last year primarily reflecting the investments we are making in additional capacity to expand our multi-vendor calibration and asset management services.

Research and development expense for customer support and services represents the segment's share of centralized investment. Research and development expenses for the three months ended January 31, 2016 decreased 24 percent compared to the same period last year.

Selling, general and administrative expenses for the three months ended January 31, 2016 decreased 5 percent when compared to the same period last year due to lower field selling costs.

Operating margin for the three months ended January 31, 2016 was flat. The gross margin decline was offset by lower operating expenses.

Income from Operations

Income from operations for the three months ended January 31, 2016 decreased $1 million on a corresponding flat revenue when compared to the same period last year. The gross margin decline was partially offset by lower operating expenses.

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FINANCIAL CONDITION

Liquidity and Capital Resources

Our financial position as of January 31, 2016 consisted of cash and cash equivalents of $572 million as compared to $483 million as of October 31, 2015.

As of January 31, 2016, approximately $410 million of our cash and cash equivalents was held outside of the U.S. in our foreign subsidiaries. Much of the non-U.S. cash will be needed for non-U.S. growth and expansion. However, some non-U.S. cash could be repatriated to the U.S. Under current law, such repatriation would be subject to U.S. federal and state income taxes, less applicable foreign tax credits. We continue to be in discussions with Agilent regarding the allocation of certain deferred tax liability balances related to foreign unremitted earnings in accordance with the separation agreements. Excess foreign tax credits associated with unremitted earnings are not recorded as an asset as they do not represent a separate deferred asset until earnings are remitted. We utilize a variety of funding strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. All significant international locations have access to internal funding through an offshore cashpool for working capital needs, in addition to temporary local overdraft and short-term working capital lines of credit.

We believe our cash and cash equivalents, cash generated from operations, and ability to access capital markets and credit lines will satisfy, for at least the next twelve months, our liquidity requirements, both globally and domestically, including the following: working capital needs, capital expenditures, business acquisitions, contractual obligations, commitments, principal and interest payments on debt, and other liquidity requirements associated with our operations.

Net Cash Provided by Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities, pension funding, variable pay and other items impact reported cash flows.

Net cash provided by operating activities was $92 million for the three months ended January 31, 2016 compared to cash provided of $92 million for the same period in 2015.

• Net income for the first three months of fiscal 2016 decreased $6 million. Changes to non-cash income and expenses included a $10 million increase to amortization expense as compared to the same period last year due to the impact of recently acquired businesses, a $13 million decrease to stock-based compensation expense as the first three months of fiscal 2015 included expense associated with one-time inaugural grants, a $10 million gain from a land sale in the first three months of fiscal 2016, a $5 million increase in deferred tax expense and $3 million of higher expense associated with investment losses.

• The aggregate of accounts receivable, inventory and accounts payable provided net operating cash of $7 million during the first three months of fiscal 2016, compared to $14 million provided in the comparable period last year. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory and accounts payable depends upon how effectively we manage the cash conversion cycle, which represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers and can be significantly impacted by the timing of collections and payments in a period.

• Net cash paid to Agilent under separation and distribution agreement was zero for three months ended January 31, 2016 as compared to the $14 million during the corresponding period last year.

• The aggregate of employee compensation and benefits, income tax payable and other assets and liabilities used net operating cash of $20 million during the first three months of fiscal 2016, compared to $18 million used in the comparable period last year. Share purchases of $15 million under the employee stock purchase plan in the first three months of fiscal 2016 were partially offset by lower payments under our variable and incentive pay programs, which were $20 million in the first three months of 2016 compared to $29 million in the same period last year, and lower tax payments during the period.

• We contributed $10 million to our non-U.S. defined benefit plans during the first three months of fiscal 2016, compared to $14 million in the same period last year. We expect to contribute approximately $29 million to our non-U.S. defined benefit plans during the remainder of 2016. For the three months ended January 31, 2016 and 2015, we did not contribute

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to our U.S. defined benefit plans or U.S. post-retirement benefit plan and we do not expect to contribute to our U.S. defined benefit plans during the remainder of 2016.

Net Cash Used in Investing Activities

Net cash used in investing activities was $24 million for the three months ended January 31, 2016 as compared to net cash used in investing activities of $14 million for the same period last year. Investments in property, plant and equipment were $34 million for the three months ended January 31, 2016 compared to $15 million in the same period last year. The increase in capital expenditures is primarily due to the timing of payments. We expect that total capital expenditures for the current year will be approximately $90 million.

We also received $10 million of proceeds from the sale of land in the three months ended January 31, 2016.

Net Cash Provided by Financing Activities

Cash flows related to financing activities consist primarily of cash flows associated with the issuance of common stock and excess tax benefits from share-based plans. Net cash provided by financing activities for the three months ended January 31, 2016 was $25 million compared to cash provided of $7 million for the same period in 2015, primarily due to proceeds from the issuance of common stock under our employee stock purchase plan (“ESPP”). The first issuance of Keysight shares under the ESPP was in May 2015. 

Credit Facility

On September 15, 2014, we entered into a five year credit agreement, which provides for a $300 million unsecured credit facility that will expire on November 1, 2019. On July 21, 2015, we entered into an Accession Agreement, increasing the credit facility from $300 million to $450 million. The company may use amounts borrowed under the facility for general corporate purposes. As of January 31, 2016 the company had no borrowings outstanding under the facility. We were in compliance with the covenants for the credit facility during the three months ended January 31, 2016.

As a result of the Anite acquisition, we have an overdraft facility of £25 million that will expire on July 31, 2016. As of January 31, 2016, the company had no borrowings outstanding under the facility. We were in compliance with the covenants for the credit facility during the three months ended January 31, 2016.

Long-term debt

There have been no changes to the principal, maturity, interest rates and interest payment terms of the outstanding senior notes in the three months ended January 31, 2016 as compared to the senior notes as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2015.

Other

There were no material changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2015, to our contractual commitments in the first three months of 2016. We have contractual commitments for non-cancelable operating leases. We have no other material non-cancelable guarantees or commitments.

Other long-term liabilities include $24 million and $21 million of liabilities related to uncertain tax positions as of January 31, 2016 and October 31, 2015, respectively (See Note 5, "Income Taxes"). We are unable to accurately predict when these amounts will be realized or released. However, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next 12 months due to either the expiration of a statute of limitations or a tax audit settlement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2015. There were no material changes during the three months ended January 31, 2016 to this information reported in the company’s 2015 Annual Report on Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended January 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial, employment and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are probable of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

ITEM 1A.  RISK FACTORS

Risks, Uncertainties and Other Factors That May Affect Future Results

Risks Related to Our Business

Depressed and uncertain general economic conditions may adversely affect our operating results and financial condition.

        Our business is sensitive to negative changes in general economic conditions, both inside and outside the United States. The continued economic downturn may adversely impact our business, resulting in:

• reduced demand for our products, delays in the shipment of orders or increases in order cancellations;

• increased risk of excess and obsolete inventories;

• increased price pressure for our products and services; and

• greater risk of impairment to the value, and a detriment to the liquidity, of our future investment portfolio.

In addition, macroeconomic developments, such as the recent downturn in Europe and the economic slow down in Asia could negatively affect our ability to conduct business in those geographies. Financial difficulties experienced by our suppliers and customers, including distributors, could result in product delays and inventory issues. Risks to accounts receivable could result in delays in collection and greater bad debt expense.

Our operating results and financial condition could be harmed if the markets into which we sell our products decline or do not grow as anticipated.

        Visibility into our markets is limited. Our quarterly sales and operating results are highly dependent on the volume and timing of technology-related spending and orders received during the fiscal quarter, which are difficult to forecast and may be cancelled by our customers. In addition, our revenues and earnings forecasts for future fiscal quarters are often based on the expected seasonality or cyclicality of our markets. However, the markets we serve do not always experience the seasonality or cyclicality that we expect. Any decline in our customers' markets would likely result in a reduction in demand for our products and services. The broader semiconductor market is one of the drivers for our business, and therefore, a decrease in the semiconductor market could harm our business. Also, if our customers' markets decline, we may not be able to collect on outstanding amounts due to us. Such declines could harm our financial position, results of operations, cash flows and stock price, and could limit our profitability. Also, in such an environment, pricing pressures could intensify. Since a significant portion of our operating expenses is relatively fixed in nature due to sales, R&D and manufacturing costs, if we were unable to respond quickly enough, these pricing pressures could further reduce our operating margins.

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If we do not introduce successful new products and services in a timely manner to address increased competition, rapid technological changes and changing industry standards, our products and services will become obsolete, and our operating results will suffer.

        We generally sell our products in industries that are characterized by increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards. In addition, many of the markets in which we operate are seasonal and cyclical. Without the timely introduction of new products, services and enhancements, our products and services will become technologically obsolete over time, in which case our revenue and operating results would suffer. The success of new products and services will depend on several factors, including our ability to:

• properly identify customer needs;

• innovate and develop new technologies, services and applications;

• successfully commercialize new technologies in a timely manner;

• manufacture and deliver our products in sufficient volumes and on time;

• differentiate our offerings from our competitors' offerings;

• price our products competitively;

• anticipate our competitors' development of new products, services or technological innovations; and control product quality in our manufacturing process.

Dependence on contract manufacturing and outsourcing other portions of our supply chain may adversely affect our ability to bring products to market and damage our reputation. Dependence on outsourced information technology and other administrative functions may impair our ability to operate effectively.

        As part of our efforts to streamline operations and to cut costs, we outsource aspects of our manufacturing processes and other functions and continue to evaluate additional outsourcing. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers' orders on a timely basis. The ability of these manufacturers to perform is largely outside of our control. Additionally, changing or replacing our contract manufacturers or other outsourcees could cause disruptions or delays. In addition, we outsource significant portions of our information technology ("IT") and other administrative functions. Since IT is critical to our operations, any failure of our IT providers to perform could impair our ability to operate effectively. In addition to the risks outlined above, problems with manufacturing or IT outsourcing could result in lower revenues and unrealized efficiencies, and could impact our results of operations and stock price. Much of our outsourcing takes place in developing countries and, as a result, may be subject to geopolitical uncertainty.

Failure to adjust our purchases due to changing market conditions or failure to estimate our customers' demand could adversely affect our income.

        Our income could be harmed if we are unable to adjust our purchases to market fluctuations, including those caused by the seasonal or cyclical nature of the markets in which we operate. The sale of our products and services are dependent, to a large degree, on customers whose industries are subject to seasonal or cyclical trends in the demand for their products. For example, the consumer electronics market is particularly volatile, making demand difficult to anticipate. During a market upturn, we may not be able to purchase sufficient supplies or components to meet increasing product demand, which could materially affect our results. In the past, we have seen a shortage of parts for some of our products. In addition, some of the parts that require custom design are not readily available from alternate suppliers due to their unique design or the length of time necessary for design work. Should a supplier cease manufacturing such a component, we would be forced to reengineer our product. In addition to discontinuing parts, suppliers may also extend lead times, limit supplies or increase prices due to capacity constraints or other factors. In order to secure components for the production of products, we may continue to enter into non-cancellable purchase commitments with vendors, or at times make advance payments to suppliers, which could impact our ability to adjust our inventory to declining market demands. Prior commitments of this type have resulted in an excess of parts when demand for communications and electronics products has decreased. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges.

Our operating results may suffer if our manufacturing capacity does not match the demand for our products.

Because we cannot immediately adapt our production capacity and related cost structures to rapidly changing market conditions, when demand does not meet our expectations, our manufacturing capacity will likely exceed our production requirements. If, during a general market upturn or an upturn in our business, we cannot increase our manufacturing capacity to meet product demand, we will not be able to fulfill orders in a timely manner, which could lead to order cancellations, contract breaches or indemnification obligations. This inability could materially and adversely limit our ability to improve our income,

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margin and operating results. By contrast, if, during an economic downturn, we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins and operating results.

Industry consolidation and consolidation among our customer base may lead to increased competition and may harm our operating results.

There is potential for industry consolidation in our markets. As companies attempt to strengthen or hold their market positions in an evolving industry, companies could be acquired or may be unable to continue operations. Companies that are strategic alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their business with us. We believe that industry consolidation may result in stronger competitors and could lead to more variability in our operating results and could have a material adverse effect on our business, operating results, and financial condition. Furthermore, particularly in the service provider market, rapid consolidation would lead to fewer customers, with the effect that loss of a major customer could have a material impact on results not anticipated in a customer marketplace composed of more numerous participants.

Additionally, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could adversely affect our profitability. In addition, if, as a result of increased leverage, customer pressures require us to reduce our pricing such that our gross margins are diminished, we could decide not to sell our products to a particular customer, which would decrease our revenue. Consolidation among our customer base may also lead to reduced demand for our products, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could harm our operating results.

Economic, political and other risks associated with international sales and operations could adversely affect our results of operations.

        Because we sell our products worldwide, our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue. In addition, many of our employees, contract manufacturers, suppliers, job functions and manufacturing facilities are located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including:

• interruption to transportation flows for delivery of parts to us and finished goods to our customers;

• changes in foreign currency exchange rates;

• changes in a specific country's or region's political, economic or other conditions;

• trade protection measures, sanctions, and import or export licensing requirements or restrictions;

• negative consequences from changes in tax laws;

• difficulty in staffing and managing widespread operations;

• differing labor regulations;

• differing protection of intellectual property;

• unexpected changes in regulatory requirements; and

• volatile political environments or geopolitical turmoil, including regional conflicts, terrorism, and war.

        We centralize most of our accounting processes at two locations: India and Malaysia. These processes include general accounting, inventory cost accounting, accounts payable and accounts receivables functions. If conditions change in those countries, it may adversely affect operations, including impairing our ability to pay our suppliers. Our results of operations, as well as our liquidity, may be adversely affected and possible delays may occur in reporting financial results.

        Additionally, we must comply with complex foreign and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other local laws prohibiting corrupt payments to governmental officials, and anti-competition regulations. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our products in one or more countries, and could also materially affect our brand, ability to attract and retain employees, international operations, business and operating results. Although we plan to implement policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors or agents will not violate these policies and procedures.

        In addition, although a substantial amount of our products are priced and paid for in U.S. Dollars, many of our products are priced in local currencies and a significant amount of certain types of expenses, such as payroll, utilities, tax and marketing expenses, are paid in local currencies. Our hedging programs are designed to reduce, but not entirely eliminate, within any given 12-month period, the impact of currency exchange rate movements, including those caused by currency controls, which could impact our business, operating results and financial condition by resulting in lower revenue or increased expenses. However, for expenses beyond a 12-month period, our hedging strategy will not mitigate our exchange rate risk. In addition, our currency hedging programs involve third-party financial institutions as counterparties. The weakening or failure of these counterparties

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may adversely affect our hedging programs and our financial condition through, among other things, a reduction in the number of available counterparties, increasingly unfavorable terms or the failure of counterparties to perform under hedging contracts.

Significant key customers or large orders may expose us to additional business and legal risks that could have a material adverse impact on our operating results and financial condition.

        Certain significant key customers have substantial purchasing power and leverage in negotiating contractual arrangements with us. These customers may demand contract terms that differ considerably from our standard terms and conditions. Large orders may also include severe contractual liabilities for us if we fail to provide the quantity and quality of product at the required delivery times. While we attempt to contractually limit our potential liability under such contracts, we may have to agree to some or all of these types of provisions to secure these orders and to continue to grow our business. Such actions expose us to significant additional risks, which could result in a material adverse impact on our operating results and financial condition.

Our business will suffer if we are not able to retain and hire key personnel.

        Our future success depends partly on the continued service of our key research, engineering, sales, marketing, manufacturing, executive and administrative personnel. If we fail to retain and hire a sufficient number of these personnel, we may not be able to maintain or expand our business. The markets in which we operate are dynamic, and we may need to respond with reorganizations, workforce reductions and site closures from time to time. We believe our pay levels are competitive within the regions that we operate. However, there is also intense competition for certain highly technical specialties in geographic areas in which we operate, and it may become more difficult to retain key employees.

Our acquisitions, strategic alliances, joint ventures and divestitures may result in financial results that are different than expected.

        In the normal course of business, we may engage in discussions with third parties relating to possible acquisitions, strategic alliances, joint ventures and divestitures. As a result of such transactions, our financial results may differ from our own or the investment community's expectations in a given fiscal quarter, or over the long term. If market conditions or other factors lead us to change our strategic direction, we may not realize the expected value from such transactions. Further, such transactions often have post-closing arrangements, including, but not limited to, post-closing adjustments, transition services, escrows or indemnifications, the financial results of which can be difficult to predict. In addition, acquisitions and strategic alliances may require us to integrate a different company culture, management team and business infrastructure. We may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances the performance of our businesses or product lines to realize the value from expected synergies. Depending on the size and complexity of an acquisition, the successful integration of the entity depends on a variety of factors, including:

• the retention of key employees and/or customers;

• the management of facilities and employees in different geographic areas; and

• the compatibility of our infrastructure, policies and organizations with those of the acquired company.

If we do not realize the expected benefits or synergies of such transactions, our combined and consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.        

In addition, effective internal controls are necessary for us to provide reliable and accurate financial reports and to effectively prevent fraud. We are devoting significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes-Oxley Act of 2002. However, we cannot be certain that these measures will ensure that we design, implement and maintain adequate control over our financial processes and reporting in the future, especially in the context of acquisitions of other businesses. Any difficulties in the assimilation of acquired businesses into our control system could harm our operating results or cause us to fail to meet our financial reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock and our access to capital. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

Environmental contamination from past operations could subject us to unreimbursed costs and could harm on-site operations and the future use and value of the properties involved, and environmental contamination caused by ongoing operations could subject us to substantial liabilities in the future.

        Some of our properties are undergoing remediation by Hewlett-Packard Company ("HP") for subsurface contaminations that were known at the time of Agilent's separation from HP in 1999. In connection with Agilent's separation from HP, HP and Agilent entered into an agreement pursuant to which HP agreed to retain the liability for this subsurface contamination, perform the required remediation and indemnify Agilent with respect to claims arising out of that contamination. Agilent has assigned its rights and obligations under this agreement to Keysight in respect of facilities transferred to us in the separation. As a result, HP will have access to a limited number of our properties to perform remediation. Although HP agreed to minimize interference with on-site

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operations at such properties, remediation activities and subsurface contamination may require us to incur unreimbursed costs and could harm on-site operations and the future use and value of the properties. In connection with the separation, Agilent will indemnify us directly for any liabilities related thereto. We cannot be sure that HP will continue to fulfill its remediation obligations or that Agilent will continue to fulfill its indemnification obligations.

        In connection with the separation from Agilent, Agilent also agreed to indemnify us for any liability associated with contamination from past operations at all properties transferred from Agilent to Keysight. We cannot be sure that Agilent will fulfill its indemnification obligations.

        Our current manufacturing processes involve the use of substances regulated under various international, federal, state and local laws governing the environment. As a result, we may become subject to liabilities for environmental contamination, and these liabilities may be substantial. Although our policy is to apply strict standards for environmental protection at our sites inside and outside the United States, even if the sites outside the United States are not subject to regulations imposed by foreign governments, we may not be aware of all conditions that could subject us to liability.

We and our customers are subject to various governmental regulations, compliance with which may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.

        We and our customers are subject to various significant international, federal, state and local regulations, including, but not limited to, health and safety, packaging, product content, labor and import/export regulations. These regulations are complex, change frequently and have tended to become more stringent over time. We may be required to incur significant expenses to comply with these regulations or to remedy violations of these regulations. Any failure by us to comply with applicable government regulations could also result in cessation of our operations or portions of our operations, product recalls or impositions of fines and restrictions on our ability to carry on or expand our operations. If demand for our products is adversely affected or our costs increase, our business would suffer.

        Our products and operations are also often subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies such as the U.S. Federal Communications Commission. We also must comply with work safety rules. If we fail to adequately address any of these regulations, our businesses could be harmed.

Third parties may claim that we are infringing their intellectual property rights, and we could suffer significant litigation or licensing expenses or be prevented from selling products or services.

        From time to time, third parties may claim that one or more of our products or services infringe their intellectual property rights. We analyze and take action in response to such claims on a case-by-case basis. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming due to the complexity of our technology and the uncertainty of intellectual property litigation and could divert our management and key personnel from business operations. A claim of intellectual property infringement could cause us to enter into a costly or restrictive license agreement (which may not be available under acceptable terms, or at all), require us to redesign certain of our products (which would be costly and time-consuming) and/or subject us to significant damages or an injunction against the development and sale of certain products or services. In certain of our businesses, we rely on third-party intellectual property licenses, and we cannot ensure that these licenses will be available to us in the future on terms favorable to us or at all.

Third parties may infringe our intellectual property rights, and we may suffer competitive injury or expend significant resources enforcing our intellectual property rights.

        Our success depends in part on our proprietary technology, including technology we obtained through acquisitions. We rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish our proprietary rights. If we do not enforce our intellectual property rights successfully, our competitive position may suffer, which could harm our operating results.

        Our pending patent, copyright and trademark registration applications may not be allowed or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us with a significant competitive advantage. In preparation for the separation and distribution, we have applied for trademarks related to our new global brand name in various jurisdictions worldwide. Any successful opposition to our applications in material jurisdictions could impose material costs on us or make it more difficult to protect our brand. Different jurisdictions vary widely in the level of protection and priority they give to trademark and other intellectual property rights.

        We may be required to spend significant resources monitoring our intellectual property rights, and we may or may not be able to detect infringement of such rights by third parties. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights in a timely manner, or at all. In some circumstances, we may choose to not pursue enforcement due to a variety of reasons. In addition, competitors may avoid infringement by designing around our intellectual

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property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries, which could make it easier for competitors to capture market share and could result in lost revenues to the company. Furthermore, some of our intellectual property is licensed to others, which allows them to compete with us using that intellectual property.

We are or will be subject to ongoing tax examinations of our tax returns by the IRS and other tax authorities. An adverse outcome of any such audit or examination by the IRS or other tax authority could have a material adverse effect on our results of operations, financial condition and liquidity.

        We are or will be subject to ongoing tax examinations of our tax returns by the IRS and other tax authorities in various jurisdictions. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of our provision for income taxes. These assessments can require considerable estimates and judgments. Intercompany transactions associated with the sale of inventory, services, intellectual property and cost sharing arrangements are complex and affect our tax liabilities. The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in multiple jurisdictions. The outcomes of any tax examinations could have an adverse effect on our operating results and financial condition. Due to the complexity of tax contingencies, the ultimate resolution of any tax matters related to operations post-separation may result in payments greater or less than amounts accrued.

Our operations may be adversely impacted by changes in our business mix or changes in the tax legislative landscape.

        Our effective tax rate may be adversely impacted by, among other things, changes in the mix of our earnings among countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, and changes in tax laws. We cannot give any assurance as to what our effective tax rate will be in the future because, among other things, there is uncertainty regarding the tax policies of the jurisdictions where we operate. Changes in tax laws, such as tax reform in the United States or changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address “base erosion and profit shifting,” could impact our effective tax rate.

If tax incentives change or cease to be in effect, our income taxes could increase significantly.

        We benefit from tax incentives extended to our foreign subsidiaries to encourage investment or employment. Several jurisdictions have granted us tax incentives that require renewal at various times in the future, the most significant being Singapore. We do not expect incentives granted by other jurisdictions to have a material impact on our financial statements. The Singapore tax incentive requires that specific conditions be satisfied, which include achieving thresholds of employment, ownership of certain assets, as well as specific types of investment activities within Singapore. We believe that we will satisfy such conditions in the future. The Singapore tax incentive is due for renewal in fiscal 2024.

        Our taxes could increase if the incentives are not renewed upon expiration. If we cannot or do not wish to satisfy all or portions of the tax incentive conditions, we may lose the related tax incentive and could be required to refund the benefits that the tax incentives previously provided. As a result, our effective tax rate could be higher than it would have been had we maintained the benefits of the tax incentives.

If we suffer a loss to our factories, facilities or distribution system due to a catastrophic event, our operations could be significantly harmed.

        Our factories, facilities and distribution system are subject to catastrophic loss due to fire, flood, terrorism or other natural or manmade disasters. In particular, several of our facilities could be subject to a catastrophic loss caused by earthquake or other natural disasters due to their locations. For example, our production facilities, headquarters and laboratories in California and our production facilities in Japan are all located in areas with above-average seismic activity. If any of these facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. If such a disruption were to occur, we could breach our agreements, our reputation could be harmed and our business and operating results could be adversely affected. In addition, since we have consolidated our manufacturing facilities, we are more likely to experience an interruption to our operations in the event of a catastrophe in any one location. Although we carry insurance for property damage and business interruption, we do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism. Also, our third-party insurance coverage will vary from time to time in both type and amount depending on availability, cost and our decision with respect to risk retention. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which we are able to obtain third-party insurance. If our third-party insurance coverage is adversely affected, or to the extent we have elected to self-insure, we may be at a greater risk that our operations will be harmed by a catastrophic loss.

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If we experience a significant disruption in, or breach in security of, our information technology systems, our business could be adversely affected.

       We rely on several centralized information technology systems to provide products and services, maintain financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. If we experience a prolonged system disruption in the information technology systems that involve our interactions with customers or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. Furthermore, security breaches of our information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to the company or our employees, partners, customers or suppliers, which could result in significant financial or reputational damage to the company.

Man-made problems such as cybersecurity attacks, computer viruses or terrorism may disrupt our operations and harm our business, reputation and operating results

Despite our implementation of network security measures, our network may be vulnerable to cybersecurity attacks, computer viruses, break-ins and similar disruptions. Cybersecurity attacks, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data. Any such event could have a material adverse effect on our business, operating results and financial condition.

 Our daily business operations require us to retain sensitive data such as intellectual property, proprietary business information and data related to customers, suppliers and business partners within our networking infrastructure. The ongoing maintenance and security of this information is pertinent to the success of our business operations and our strategic goals, and organizations like Keysight are susceptible to multiple variations of attacks on our networks on a daily basis.

 Our networking infrastructure and related assets may be subject to unauthorized access by hackers, employee errors, or other unforeseen activities. Such issues could result in the disruption of business processes, network degradation and system downtime, along with the potential that a third party will exploit our critical assets such as intellectual property, proprietary business information and data related to our customers, suppliers and business partners. To the extent that such disruptions occur, they may cause delays in the manufacture or shipment of our products and the cancellation of customer orders and, as a result, our business operating results and financial condition could be materially and adversely affected resulting in a possible loss of business or brand reputation.

In addition, the effects of war or acts of terrorism could have a material adverse effect on our business, operating results and financial condition. The continued threat of terrorism and heightened security and military action in response to this threat, or any future acts of terrorism, may cause further disruption to the economy and create further uncertainties in the economy. Energy shortages, such as gas or electricity shortages, could have similar negative impacts. To the extent that such disruptions or uncertainties result in delays or cancellations of customer orders or the manufacture or shipment of our products, our business, operating results and financial condition could be materially and adversely affected.

Our business and financial results may be adversely affected by various legal and regulatory proceedings.

        We are subject to legal proceedings, lawsuits and other claims in the normal course of business and could become subject to additional claims in the future, some of which could be material. The outcome of existing proceedings, lawsuits and claims may differ from our expectations because the outcomes of litigation are often difficult to reliably predict. Various factors or developments can lead us to change current estimates of liabilities and related insurance receivables where applicable, or permit us to make such estimates for matters previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in charges that could adversely affect our business, operating results or financial condition.

We have substantial cash requirements in the United States, although most of our cash is generated outside of the United States. The failure to maintain a level of cash sufficient to address our cash requirements in the United States could adversely affect our financial condition and results of operations.

        Although the cash generated in the United States from our operations, including any cash and non-permanently invested earnings repatriated to the United States, is expected to cover our normal operating requirements and debt service requirements, a substantial amount of additional cash may be required for special purposes such as the maturity of our current and future debt obligations, any dividends that may be declared, any future stock repurchase programs and any acquisitions. If we encounter a significant need for liquidity domestically that we cannot fulfill through borrowings, equity offerings or other internal or external sources, the transfer of cash into the United States may incur an overall tax rate higher than our tax rates have been in the past and negatively impact after-tax earnings.

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We have outstanding debt and may incur other debt in the future, which could adversely affect our financial condition, liquidity and results of operations.

We currently have outstanding debt as well as availability to borrow under a revolving credit facility. We may borrow additional amounts in the future and use the proceeds from any future borrowing for general corporate purposes, future acquisitions, expansion of our business or repurchases of our outstanding shares of common stock.

Our incurrence of this debt, and increases in our aggregate levels of debt, may adversely affect our operating results and financial condition by, among other things:

• requiring a portion of our cash flow from operations to make interest payments on this debt;

• increasing our vulnerability to general adverse economic and industry conditions;

• reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; and

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry.

Our current revolving credit facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control. In addition, the indenture governing our senior notes contains covenants that may adversely affect our ability to incur certain liens or engage in certain types of sale and leaseback transactions. If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, our outstanding indebtedness could be declared immediately due and payable.

We may need additional financing in the future to meet our capital needs or to make opportunistic acquisitions, and such financing may not be available on terms favorable to us, if at all, and may be dilutive to existing shareholders.

        We may need to seek additional financing for our general corporate purposes. For example, we may need to increase our investment in R&D activities or need funds to make acquisitions. We may be unable to obtain any desired additional financing on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to fund our expansion, successfully develop or enhance products or respond to competitive pressures, any of which could negatively affect our business. If we raise additional funds through the issuance of equity securities, our shareholders will experience dilution of their ownership interest. If we raise additional funds by issuing debt, we may be subject to further limitations on our operations and ability to pay dividends due to restrictive covenants.

Adverse conditions in the global banking industry and credit markets may adversely impact the value of our cash investments or impair our liquidity.

        Our cash and cash equivalents are invested or held in a mix of money market funds, time deposit accounts and bank demand deposit accounts. Disruptions in the financial markets may, in some cases, result in an inability to access assets such as money market funds that traditionally have been viewed as highly liquid. Any failure of our counterparty financial institutions or funds in which we have invested may adversely impact our cash and cash equivalent positions and, in turn, our results and financial condition.

Future investment returns on pension assets may be lower than expected or interest rates may decline, requiring us to make significant additional cash contributions to our future plans.

        We sponsor several defined benefit pension plans that cover many of our salaried and hourly employees. The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each of the U.S. plans, and there may be similar funding requirements in the plans outside the United States. Because it is unknown what the investment return on pension assets will be in future years or what interest rates may be at any point in time, no assurances can be given that applicable law will not require us to make future material plan contributions. Any such contributions could adversely affect our financial condition.

Risks Related to the Separation

Our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly-traded company and may not be a reliable indicator of our future results.

        The historical information about the company prior to fiscal year 2015 refers to our business as operated by and integrated with Agilent. Accordingly, the historical financial information does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly-traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below:

• prior to the separation, our business was operated by Agilent as part of its broader corporate organization, rather than as an independent company. Agilent or one of its affiliates performed various corporate functions for us such as legal, treasury, accounting, auditing, human resources, corporate affairs and finance. Our historical financial results reflect allocations of

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corporate expenses from Agilent for such functions and are likely to be less than the expenses we would have incurred had we operated as a separate publicly-traded company. Following the separation, we are responsible for the cost related to such functions previously performed by Agilent;

• generally, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of Agilent. Following the separation, we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements; and

• our historical financial information does not reflect the debt or the associated interest expense that we have incurred as part of the separation and distribution.

        Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Agilent. For additional information about the past financial performance of our business and the basis of presentation of the historical combined and consolidated financial statements, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and accompanying notes included elsewhere in this Form 10-Q.

Potential indemnification liabilities to Agilent pursuant to the separation and distribution agreement could materially and adversely affect our business, financial condition, results of operations and cash flows.

        The separation and distribution agreement provides for, among other things, indemnification obligations designed to make us financially responsible for any liabilities associated with assets used by our business; our failure to pay, perform or otherwise promptly discharge any such liabilities or contracts, in accordance with their respective terms, whether prior to, at or after the distribution; any guarantee, indemnification obligation, surety bond or other credit support agreement, arrangement, commitment or understanding by Agilent for our benefit, unless they are liabilities related to assets used in the Agilent business; any breach by us of the separation agreement or any of the ancillary agreements or any action by us in contravention of our amended and restated certificate of incorporation or amended and restated bylaws; and any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the registration statement or any other disclosure document that describes the separation or the distribution or the company and its subsidiaries or primarily relates to the transactions contemplated by the separation and distribution agreement, subject to certain exceptions. If we are required to indemnify Agilent under the circumstances set forth in the separation and distribution agreement, we may be subject to substantial liabilities.

In connection with our separation from Agilent, Agilent will indemnify us for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that Agilent's ability to satisfy its indemnification obligation will not be impaired in the future.

        Pursuant to the separation and distribution agreement and certain other agreements with Agilent, Agilent agreed to indemnify us for certain liabilities. However, third parties could also seek to hold us responsible for any of the liabilities that Agilent has agreed to retain, and there can be no assurance that the indemnity from Agilent will be sufficient to protect us against the full amount of such liabilities, or that Agilent will be able to fully satisfy its indemnification obligations. In addition, Agilent's insurers may attempt to deny us coverage for liabilities associated with certain occurrences of indemnified liabilities prior to the separation. Moreover, even if we ultimately succeed in recovering from Agilent or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our business, financial position, results of operations and cash flows.

We will be subject to continuing contingent liabilities of Agilent following the separation.

        After the separation, there are several significant areas where the liabilities of Agilent may become our obligations. For example, under the Internal Revenue Code and the related rules and regulations, each corporation that was a member of the Agilent U.S. consolidated group during a taxable period or portion of a taxable period ending on or before the effective time of the distribution is severally liable for the U.S. federal income tax liability of the entire Agilent U.S. consolidated group for that taxable period. Consequently, if Agilent is unable to pay the consolidated U.S. federal income tax liability for a prior period, we could be required to pay the entire amount of such tax, which could be substantial and in excess of the amount allocated to it under the tax matters agreement between us and Agilent. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

There could be significant liability if the distribution is determined to be a taxable transaction.

        A condition to the distribution is that Agilent received an opinion of Baker & McKenzie LLP, tax counsel to Agilent, regarding the qualification of the separation and the distribution as a reorganization within the meaning of Sections 355(a) and 368(a)(1)(D) of the Code. The opinion relies on certain facts, assumptions, representations and undertakings from Agilent and Keysight, including those regarding the past and future conduct of the companies' respective businesses and other matters. If any of these

40

facts, assumptions, representations or undertakings are incorrect or not satisfied, Agilent and its shareholders may not be able to rely on the opinion, and could be subject to significant tax liabilities. Notwithstanding the opinion of tax counsel, the IRS could determine on audit that the distribution is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion.

        If the distribution were determined to be taxable for U.S. federal income tax purposes, Agilent and its shareholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities. For example, if the distribution failed to qualify for tax-free treatment, Agilent would for U.S. federal income tax purposes be treated as if it had sold the Keysight common stock in a taxable sale for its fair market value, and Agilent's shareholders, who are subject to U.S. federal income tax, would be treated as receiving a taxable distribution in an amount equal to the fair market value of the Keysight common stock received in the distribution. In addition, if the separation and distribution failed to qualify for tax-free treatment under federal, state and local tax law and/or foreign tax law, Agilent (and, under the tax matters agreement described below, Keysight) could incur significant tax liabilities under U.S. federal, state, local and/or foreign tax law.

        Under the tax matters agreement between Agilent and Keysight, we are generally required to indemnify Agilent against taxes incurred by Agilent that arise as a result of our taking or failing to take, as the case may be, certain actions that result in the distribution failing to meet the requirements of a tax-free distribution under Section 355 of the Code. Under the tax matters agreement between Agilent and Keysight, we may also be required to indemnify Agilent for other contingent tax liabilities, which could materially adversely affect our financial position.

We may not be able to engage in certain corporate transactions for a two-year period after the separation.

        To preserve the tax-free treatment for U.S. federal income tax purposes to Agilent of the separation and distribution, under the tax matters agreement that we have entered into with Agilent, we are restricted from taking any action that prevents the separation and distribution from being tax-free for U.S. federal income tax purposes. Under the tax matters agreement, for the two-year period following the distribution, we are prohibited, except in certain circumstances, from entering into acquisition, merger, liquidation, sale and stock redemption transactions with respect to our stock if such transactions, taken as a whole, would result in one or more persons acquiring forty percent (40%) or more of the outstanding Keysight stock.

        These restrictions may limit our ability to pursue certain strategic transactions or other transactions that we may believe to be in the best interests of our shareholders or that might increase the value of our business. In addition, under the tax matters agreement, we may be required to indemnify Agilent against any such tax liabilities as a result of the acquisition of Keysight's stock or assets, even if we did not participate in or otherwise facilitate the acquisition.

Certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Agilent.

        The ownership by our executive officers and some of our directors of common shares of Agilent may create, or may create the appearance of, conflicts of interest. Because of their current or former positions with Agilent, certain of our executive officers and directors own Agilent common shares. The individual holdings of common shares may be significant for some of these persons compared to these persons' total assets. Even though our board of directors consist of a majority of directors who are independent, and our executive officers ceased to be employees of Agilent upon the separation, continuing ownership of Agilent common shares by our executive officers and some of our directors could create, or appear to create, potential conflicts of interest if Keysight and Agilent pursue the same corporate opportunities or face decisions that could have different implications for Keysight and Agilent.

The one-time and ongoing costs of the spin-off may be greater than we expected.

We have and will continue to incur costs in connection with our transition to being a stand-alone public company that relate primarily to accounting, tax, legal and other professional costs; financing costs in connection with obtaining our financing as a stand-alone company; compensation, such as modifications to certain incentive awards as a result of spin-off; recruiting and relocation costs associated with hiring our senior management personnel; and costs to separate assets and information systems. These costs, whether incurred before or after the spin-off, may be greater than anticipated and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Related to Our Common Stock

Our share price may fluctuate significantly.

Our common stock is listed on NYSE under the ticker symbol “KEYS.” The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

• actual or anticipated fluctuations in our operating results due to factors related to our business;

• success or failure of our business strategy;

41

• our quarterly or annual earnings, or those of other companies in our industry;

• our ability to obtain third-party financing as needed;

• announcements by us or our competitors of significant acquisitions or dispositions;

• changes in accounting standards, policies, guidance, interpretations or principles;

• the failure of securities analysts to cover our common stock;

• changes in earnings estimates by securities analysts or our ability to meet those estimates;

• the operating and share price performance of other comparable companies;

• investor perception of our company;

• natural or other disasters that investors believe may affect us;

• overall market fluctuations;

• results from any material litigation or government investigations;

• changes in laws or regulations affecting our business; and

• general economic conditions and other external factors.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common stock.

In addition, when the market price of a company’s shares drops significantly, shareholders often institute securities class action lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of management and other resources.

We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends.

        We do not currently expect to pay dividends on our common stock. The payment of any dividends in the future, and the timing and amount thereof, to our shareholders will fall within the discretion of our board of directors. The board's decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends.

Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of the company, which could decrease the trading price of our common stock.

        Our amended and restated certificate of incorporation and amended and restated bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include, among others:

• the inability of our shareholders to call a special meeting;

• the inability of our shareholders to act without a meeting of shareholders;

• rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;

• the right of our board to issue preferred stock without shareholder approval;

• the division of our board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult;

• a provision that shareholders may only remove directors with cause;

• the ability of our directors, and not shareholders, to fill vacancies on our board of directors; and

• the requirement that the affirmative vote of shareholders holding at least 80% of our voting stock is required to amend certain provisions in our amended and restated certificate of incorporation (relating to the number, term and removal of our directors, the filling of our board vacancies, the advance notice to be given for nominations for elections of directors, the calling of special meetings of shareholders, shareholder action by written consent, the ability of the board of directors to amend the bylaws, elimination of liability of directors to the extent permitted by Delaware law, exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and amendments of the certificate of incorporation) and certain provisions in our amended and restated bylaws (relating to the calling of special meetings of shareholders, the business that may be conducted or considered at annual or special meetings, the advance notice of shareholder business and nominations, shareholder action by written consent, the number, tenure, qualifications and removal of our directors, the filling of our board vacancies, director and officer indemnification and amendments of the bylaws).

42

        In addition, because we have not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the "DGCL"), this provision could also delay or prevent a change of control that some shareholders may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an "interested stockholder") shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

        We believe these provisions will protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of the company and our shareholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

        In addition, an acquisition or further issuance of our stock could trigger the application of Section 355(e) of the Code. Under the tax matters agreement, we would be required to indemnify Agilent for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that some shareholders may consider favorable.

Our amended and restated certificate of incorporation designates that the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against the company and our directors and officers.

Our amended and restated certificate of incorporation provide that unless the board of directors otherwise determines, the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to the company or our shareholders, any action asserting a claim against us or any of our directors or officers arising pursuant to any provision of the DGCL or Keysight's amended and restated certificate of incorporation or bylaws, or any action asserting a claim against us or any of our directors or officers governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.

ITEM 6. EXHIBITS

(a)Exhibits:

A list of exhibits is set forth in the Exhibit Index found on page 45 of this report.

43

KEYSIGHT TECHNOLOGIES, INC.

SIGNATURE

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

Dated:	March 4, 2016	By:	/s/ Neil Dougherty
			Neil Dougherty
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)
Dated:	March 4, 2016	By:	/s/ John C. Skinner
			John C. Skinner
			Vice President and Corporate Controller
			(Principal Accounting Officer)

44

KEYSIGHT TECHNOLOGIES, INC.

EXHIBIT INDEX

Exhibit
Number	Description
11.1	See Note 6, “Net Income Per Share,” to our Condensed Consolidated Financial Statements.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Labels Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

45

EX-31.1

Exhibit 31.1 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 

I, Ronald S. Nersesian, certify that:

1. I have reviewed this Form 10-Q of Keysight Technologies, Inc. ("the Registrant"); 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	March 4, 2016
		/s/ Ronald S. Nersesian
		Ronald S. Nersesian
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 

I, Neil Dougherty, certify that:

1. I have reviewed this Form 10-Q of Keysight Technologies, Inc. ("the Registrant"); 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	March 4, 2016
		/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Annual Report of Keysight Technologies, Inc. (the "Company"), on Form 10-Q for the period ended January 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ronald S. Nersesian, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	March 4, 2016	/s/ Ronald S. Nersesian
		Ronald S. Nersesian
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Annual Report of Keysight Technologies, Inc. (the "Company"), on Form 10-Q for the period ended January 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Neil Dougherty, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	March 4, 2016	/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2016	Mar. 01, 2016
Entity Information [Line Items]
Entity Registrant Name	Keysight Technologies, Inc.
Entity Central Index Key	0001601046
Current Fiscal Year End Date	--10-31
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		171,310,827
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2016
Trading Symbol	KEYS

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Net revenue [Abstract]
Products	$ 601	$ 596
Services and other	120	105
Total net revenue	721	701
Costs and expenses:
Cost of products	260	260
Cost of services and other	69	58
Total costs	329	318
Research and development	108	96
Selling, general and administrative	200	206
Other Operating Expense (Income), Net	(14)	(6)
Total costs and expenses	623	614
Income from operations	98	87
Interest income	1	0
Interest expense	(12)	(12)
Other income (expense), net	(3)	3
Income before taxes, as reported	84	78
Provision for income taxes	20	8
Net income	$ 64	$ 70
Net income per share:
Basic (in dollars per share)	$ 0.37	$ 0.42
Diluted (in dollars per share)	$ 0.37	$ 0.41
Weighted average shares used in computing net income per share:
Basic (in shares)	171	168
Diluted (in shares)	172	170

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Other comprehensive income (loss):
Net Income	$ 64	$ 70
Unrealized gain (loss) on investments, net of tax benefit of $1 and zero	(6)	0
Unrealized gain(loss) on derivative instruments, net of tax benefit (expense) of $(1) and $2	1	(3)
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $(1) and zero	3	(1)
Foreign currency translation, net of tax benefit (expense) of zero	(25)	(33)
Net defined benefit pension cost and post retirement plan costs:
Amortization of actuarial net loss, net of tax expense of $6 and $3	12	8
Amortization of net prior service benefit, net of tax benefit of $3 and $3	(3)	(4)
Other comprehensive income (loss)	(18)	(33)
Total comprehensive income	$ 46	$ 37

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract]
Unrealized gain (loss) on investments,tax	$ 1	$ 0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax	0	0
Unrealized gain (loss) on derivative instruments, Tax	(1)	2
Reclassification of (gains) and losses into earnings related to derivative instruments, tax	(1)	0
Foreign currency translation, tax	0	0
Net defined benefit pension cost and post retirement plan costs, tax [Abstract]
Amortization of net loss, tax expense	(6)	(3)
Amortization of net prior service benefit, tax benefit	$ 3	$ 3

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jan. 31, 2016	Oct. 31, 2015
Current assets:
Cash and cash equivalents	$ 572	$ 483
Accounts receivable, net	361	398
Inventory	481	487
Deferred Tax Assets, Gross, Current	74	74
Other current assets	138	137
Total current assets	1,626	1,579
Property, plant and equipment, net	514	518
Goodwill	696	700
Other intangible assets, net	233	246
Long-term investments	56	70
Deferred Tax Assets, Gross, Noncurrent	256	295
Other assets	100	100
Total assets	3,481	3,508
Current liabilities:
Accounts payable	175	209
Employee compensation and benefits	135	168
Deferred revenue	185	175
Taxes Payable, Current	28	50
Other accrued liabilities	79	84
Total current liabilities	602	686
Long-term debt	1,099	1,099
Retirement and post-retirement benefits	255	280
Deferred Revenue, Noncurrent	62	61
Other long-term liabilities	81	80
Total liabilities	$ 2,099	$ 2,206
Warranty and Contingencies (Note 13)
Stockholders' equity:
Preferred Stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	$ 0	$ 0
Common stock; $0.01 par value; 1 billion shares authorized; 171 million shares outstanding at January 31, 2016 and 170 million shares at October 31, 2015 issued	2	2
Additional paid-in-capital	1,199	1,165
Retained earnings	678	614
Accumulated other comprehensive income (loss)	(497)	(479)
Total stockholder's equity	1,382	1,302
Total liabilities and equity	$ 3,481	$ 3,508

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Jan. 31, 2016	Oct. 31, 2015
Stockholders' Equity Attributable to Parent [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Preferred stock, issued and outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued and outstanding (in shares)	171,000,000	170,000,000

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Net Income	$ 64	$ 70
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33	23
Share-based compensation	16	29
Excess tax benefit from share-based plans	(1)	(3)
Deferred taxes	4	(1)
Excess and obsolete inventory related charges	8	10
Gain on sale of land	(10)	0
Other non-cash expenses (income), net	2	(1)
Changes in assets and liabilities:
Inventory	(4)	(9)
Accounts payable	(22)	(13)
Increase (Decrease) in Due To/From Agilent, Current	0	(14)
Employee compensation and benefits	(29)	(22)
Increase (Decrease) in Pension and Postretirement Obligations	(11)	(17)
Increase (Decrease) in Income Taxes Payable	2	9
Other assets and liabilities	7	(5)
Accounts receivable	33	36
Net cash provided by operating activities	92	92
Cash flows from investing activities:
Investments in property, plant and equipment	(34)	(15)
Proceeds from sale of investments	0	1
Proceeds from Sale of Land Held-for-use	10	0
Net cash used in investing activities	(24)	(14)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	24	4
Excess tax benefit from share-based plans	1	3
Net Cash used in Financing Activities	25	7
Effect of exchange rate movements	(4)	(8)
Net increase in cash and cash equivalents	89	77
Cash and cash equivalents at beginning of period	483	810
Cash and cash equivalents at end of period	572	887
Income Taxes Paid, Net	$ 8	$ 14

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

On November 1, 2014, Keysight became an independent publicly-traded company through the distribution by Agilent Technologies, Inc. ("Agilent") of 100 percent of the outstanding common stock of Keysight to Agilent's shareholders (the "Separation"). Each Agilent shareholder of record as of the close of business on October 22, 2014 received one share of Keysight common stock for every two shares of Agilent common stock held on the record date, resulting in the distribution of approximately 167 million shares of Keysight common stock. Keysight's Registration Statement on Form 10 was declared effective by the U.S. Securities and Exchange Commission ("SEC") on October 6, 2014. Keysight's common stock began trading "regular-way" under the ticker symbol "KEYS" on the New York Stock Exchange on November 3, 2014.

Basis of Presentation. We have prepared the accompanying financial statements for the three months ended January 31, 2016 and 2015 pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements and information should be read in conjunction with our Annual Report on Form 10-K.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2016 and October 31, 2015, condensed consolidated statement of comprehensive income for the three months ended January 31, 2016 and 2015, condensed consolidated statement of operations for the three months ended January 31, 2016 and 2015, and condensed consolidated statement of cash flows for the three months ended January 31, 2016 and 2015.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, valuation of goodwill and other intangible assets, share-based compensation, retirement and post-retirement plan assumptions, restructuring, warranty and accounting for income taxes.

Land Sale. On April 30, 2014 we entered into a binding sales contract with real estate developers to sell land in the U.K. The contract calls for proportionate transfers and payments of three separate land tracts totaling approximately $34 million in May 2014, November 2015 and November 2016. In the three months ended January 31, 2016 we recognized a $10 million gain on the sale in respect of the second of three land tracts in other operating expense (income), net.

Reclassifications. Other operating expense (income), net for the three months ended January 31, 2015 includes $6 million of miscellaneous income and expense that was previously classified as other income (expense), net in the condensed consolidated statement of operations, primarily representing rental income, as management believes this is more appropriately classified within our operating results. This change had no effect on reported net income for any period presented.

Update to Significant Accounting Policies. There have been no material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2015.

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NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jan. 31, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

2. NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance related to revenue recognition. The amendment was the result of a joint project between the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards ("IFRS"). To meet those objectives, the FASB amended the FASB Accounting Standards Codification and created a new Topic 606, Revenue from Contracts with Customers, and the IASB issued IFRS 15, Revenue from Contracts with Customers. On July 9, 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In June 2014, the FASB issued an amendment to the accounting guidance relating to share-based compensation to resolve what it saw as diverse accounting treatment of certain awards. With this amendment, the FASB has given explicit guidance to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting rather than as a non-vesting condition that affects the grant-date fair value of an award. The new guidance is effective for annual periods beginning after December 15, 2015 and for the interim periods within those annual periods. Earlier adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In August 2014, the FASB issued guidance related to the disclosures around going concern. The standard provided guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In February 2015, the FASB issued guidance with respect to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The new guidance affects the following areas: (1) limited partnerships and similar legal entities, (2) evaluating fees paid to a decision maker or a service provider as a variable interest, (3) the effect of fee arrangements on the primary beneficiary determination, (4) the effect of related parties on the primary beneficiary determination, and (5) certain investment funds. The new guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In April 2015, the FASB issued guidance to simplify presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In April 2015, the FASB issued guidance that clarifies the circumstances under which a cloud computing customer would account for an arrangement as a license of internal-use software. The standard is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In May 2015, the FASB issued guidance that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The standard also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The standard is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In July 2015, the FASB issued guidance to simplify the subsequent measurement of inventory. The standard requires most inventory to be measured at the lower of cost and net realizable value, thereby simplifying the current guidance under which inventory must be measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The standard is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early application is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In August 2015, the FASB issued guidance to simplify presentation of debt issuance costs associated with line of credit arrangements. The standard clarifies the SEC's position on presenting and measuring debt issuance costs incurred in connection with line of credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line of credit arrangement. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In September 2015, the FASB issued guidance that requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Under the standard, if the initial accounting for a business combination is incomplete at the end of the reporting period in which the combination occurs, the acquirer would no longer be required to revise its comparative information for changes to the provisional amounts recognized as of the acquisition date during the measurement period. The standard is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. We adopted this guidance in the fourth quarter of 2015. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In November 2015, the FASB issued guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have not yet selected an adoption method and are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

In January 2016, the FASB issued guidance that amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. The standard generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for various provisions of the standard. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

In February 2016, the FASB issued guidance that will require organizations that lease assets to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

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ACQUISITION OF ANITE (Notes)

3 Months Ended

Jan. 31, 2016

Business Acquisition [Line Items]

Business Combination Disclosure [Text Block]

3.    ACQUISITION OF ANITE

On August 13, 2015, we acquired all share capital of Anite for a cash price of approximately $558 million, net of $43 million of cash acquired. Anite was a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions. As a result of the acquisition, Anite has become a wholly-owned subsidiary of Keysight. Accordingly, the results of Anite are included in Keysight's consolidated financial statements from the date of the acquisition. There have been no revisions to the preliminary purchase price allocation during the three months ended January 31, 2016. As additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Acquisition and integration costs directly related to the Anite acquisition totaled $3 million and zero for the three months ended January 31, 2016 and 2015, respectively, and were recorded in selling, general and administrative expenses.

The following represents pro forma operating results as if Anite had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2014 (in millions, except per share amounts):

	Three Months Ended January 31, 2015
Net revenue	$	752
Net income	$	68
Net income per share - Basic	$	0.41
Net income per share - Diluted	$	0.40

The pro forma financial information assumes that the companies were combined as of November 1, 2013 and include business combination accounting effects from the acquisition including amortization charges from acquired intangible assets, the impact on cost of sales due to the respective estimated fair value adjustments to inventory, and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014.

The unaudited pro forma financial information for the three months ended January 31, 2015 combines the historical results of Keysight and Anite for the three months ended January 31, 2015.

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SHARE-BASED COMPENSATION

3 Months Ended

Jan. 31, 2016

Share-based Compensation [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Keysight accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock option awards, restricted stock units ("RSUs"), 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 (“LTP”) Program based on estimated fair values. 

The impact of share-based compensation on our results was as follows:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Cost of products and services	$	3	$	4
Research and development	3		4
Selling, general and administrative	10		21
Total share-based compensation expense	$	16	$	29

At January 31, 2016 and 2015, share-based compensation capitalized within inventory was $1 million and $2 million, respectively. The income tax benefit realized from the exercised stock options and similar awards recognized was $1 million and $3 million for the three months ended January 31, 2016 and 2015, respectively. The expense for the three months ended January 31, 2016 and 2015 includes expense of $1 million and $14 million, respectively, related to special inaugural RSU awards granted during the three months ended January 31, 2015. These awards will vest over three years from the date of grant.

The following assumptions were used to estimate the fair value of employee stock options and LTP Program grants.

	Three Months Ended
	January 31,
	2016		2015
Stock Option Plans:
Weighted average risk-free interest rate	—		1.6	%
Dividend yield	—		—	%
Weighted average volatility	—		31	%
Expected life	—		4.9 years
LTP Program:
Volatility of Keysight shares	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%

The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the LTP Program were valued using a Monte Carlo simulation model. Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.

We did not grant any option awards for the three months ended January 31, 2016. For the three months ended January 31, 2015, we used the average historical volatility of eleven peer companies to estimate the volatility for our stock option awards. We considered our ability to find traded options of peer companies in the current market with similar terms and prices to our options. In estimating the expected life of our options, we considered the historical option exercise behavior of our executives, which we believe is representative of future behavior.

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INCOME TAXES

3 Months Ended

Jan. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

As of January 31, 2016, we continue to include a best estimate of the deferred tax liability for foreign unremitted earnings due to the Separation as zero. Excess foreign tax credits associated with unremitted earnings are not recorded as an asset as they do not represent a separate deferred asset until earnings are remitted. However, unremitted foreign taxes reduce deferred tax liabilities associated with outside basis differences related to the investment in a foreign subsidiary to the extent the credit reduces a deferred tax liability of the investment. We continue to have ongoing discussions with Agilent regarding the allocation of certain deferred tax liability balances related to foreign unremitted earnings in accordance with the Separation agreements.

The company’s effective tax rate was 23.7 percent and 10.1 percent for the three months ended January 31, 2016 and 2015, respectively. Income tax expense was $20 million and $8 million for the three months ended January 31, 2016 and 2015, respectively.

The income tax provision for the three months ended January 31, 2016 and 2015 included a net discrete expense of $1 million and a net discrete benefit of $10 million, respectively.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months period ended January 31, 2016 by $8 million, resulting in a net income per share (diluted) benefit of approximately $0.05 per share for the three months ended January 31, 2016. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014, through the current tax year. For certain historical Agilent foreign entities that Keysight retained as part of the separation, the tax years generally remain open back to the year 2006. For certain entities acquired during 2015, the tax years also remain open back to the year 2006. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

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NET INCOME PER SHARE

3 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Numerator:
Net income	$	64	$	70
Denominator:
Basic weighted-average shares	171		168
Potential common shares— stock options and other employee stock plans	1		2
Diluted weighted-average shares	172		170

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense, the tax benefits or shortfalls recorded to additional paid-in capital and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense and tax benefits or shortfalls collectively are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the company's common stock can result in a greater dilutive effect from potentially dilutive awards.

We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For the three months ended January 31, 2016, 1.7 million options to purchase shares were excluded from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP Program and restricted stock awards, whose combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three months ended January 31, 2016, we excluded 16,100 shares.

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INVENTORY

3 Months Ended

Jan. 31, 2016

Inventory, Net [Abstract]

INVENTORY

INVENTORY

	January 31, 2016		October 31, 2015
	(in millions)
Finished goods	$	237	$	235
Purchased parts and fabricated assemblies	244		252
Total Inventory	$	481	$	487

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Jan. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments during the three months ended January 31, 2016:

	Measurement Solutions			Customer Support and Services			Total
	(in millions)
Goodwill as of October 31, 2015	$	637		$	63		$	700
Foreign currency translation impact	(3		)	(1		)	(4		)
Goodwill as of January 31, 2016	$	634		$	62		$	696

The components of other intangible assets as of January 31, 2016 and October 31, 2015 are shown in the table below:

	Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
As of October 31, 2015:
Developed technology	$	305	$	125	$	180
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	64		28		36
Total amortizable intangible assets	393		159		234
In-Process R&D	12		—		12
Total	$	405	$	159	$	246
As of January 31, 2016:
Developed technology	$	305	$	136	$	169
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	63		29		34
Total amortizable intangible assets	392		171		221
In-Process R&D	12		—		12
Total	$	404	$	171	$	233

During the three months ended January 31, 2016, we recorded no additions to goodwill or other intangible assets. During the three months ended January 31, 2016, we recorded $1 million of foreign exchange translation impact to other intangible assets.

Amortization of other intangible assets was $12 million and $2 million for the three months ended January 31, 2016 and 2015, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $31 million for the remainder of 2016, $39 million for 2017, $36 million for 2018, $36 million for 2019, $36 million for 2020 and $43 million thereafter.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The guidance establishes a fair value hierarchy that prioritizes inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2- applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data.

Level 3- applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at January 31, 2016								Fair Value Measurements at October 31, 2015
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	329	$	329	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	374	$	371	$	3	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	16	$	—	$	16	$	—	$	22	$	—	$	22	$	—

Our money market funds, trading securities, and available-for-sale investments are generally valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. Our derivative financial instruments are classified within Level 2, as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. Our deferred compensation liability is classified as Level 2 because, although the values are not directly based on quoted market prices, the inputs used in the calculations are observable.

Trading securities and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in net income. Investments designated as available-for-sale and certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss). Realized gains and losses from the sale of these instruments are recorded in net income.

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DERIVATIVES

3 Months Ended

Jan. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. Prior to the Capitalization, there were no derivatives contracts legally held by us and the below disclosures represent the activity pertaining to the contracts entered into by us subsequently.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. The changes in fair value of the effective portion of the derivative instrument are recognized in accumulated other comprehensive income. Amounts associated with cash flow hedges are reclassified to cost of products in the condensed consolidated statement of operations when the forecasted transaction occurs. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income will be reclassified to other income (expense), net in the current period. Changes in the fair value of the ineffective portion of derivative instruments are recognized in other income (expense), net in the condensed consolidated statement of operations in the current period. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in other income (expense), net over the life of the option contract. Ineffectiveness in the three months ended January 31, 2016 and 2015 was not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments. Changes in value of the derivative are recognized in other income (expense), net in the condensed consolidated statement of operations, in the current period, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions that are selected based on their credit ratings and other factors. We have established policies and procedures for mitigating credit risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties.

A number of our derivative agreements contain threshold limits to the net liability position with counterparties and are dependent on our corporate credit rating determined by the major credit rating agencies. The counterparties to the derivative instruments may request collateralization, in accordance with derivative agreements, on derivative instruments in net liability positions.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2016 was $3 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2016.

There were 103 foreign exchange forward contracts open as of January 31, 2016 that were designated as cash flow hedges. There were 68 foreign exchange forward contracts and 1 foreign exchange option contract open as of January 31, 2016 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2016 were as follows:

	Derivatives in Cash Flow Hedging Relationships					Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Option Contracts		Forward Contracts			Option Contracts
Currency	Buy/(Sell)			Buy/(Sell)		Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	—	$	35		42
British Pound	—			—		(36		)	—
Singapore Dollar	9			—		(1		)	—
Malaysian Ringgit	71			—		(7		)	—
Japanese Yen	(69		)	—		(59		)	—
Other	—			—		(9		)	—
Totals	$	11		$	—	$	(77	)	$	42

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2016		October 31, 2015		Balance Sheet Location	January 31, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	—	Other accrued liabilities	$	3	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	1		$	5	$	10

The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2		$	(5	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of products	$	(4	)	$	1
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(2	)	$	(6	)

The estimated amount of existing net loss at January 31, 2016 expected to be reclassified from other comprehensive income to cost of sales within the next twelve months is $2 million.

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RESTRUCTURING RESTRUCTURING

3 Months Ended

Jan. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

11. RESTRUCTURING

We initiated a targeted workforce reduction program in July 2015 that was designed to restructure our operations and cost structure for optimization of resources and cost savings.

In 2015, we also announced a voluntary pre-retirement notification program for retirement-eligible employees to provide early notice of their planned retirement in return for severance benefits. Approximately 156 employees of our total workforce opted for this program as of January 31, 2016.

The restructuring programs are expected to result in operational savings and efficiency while maintaining our focus on growing the business. Severance payments under both programs were largely complete at January 31, 2016.

A summary of balances and restructuring activity is shown in the table below:

	Workforce reduction			U.S. Pre-retirement Plan
	(in millions)
Balance as of October 31, 2015	$	4		$	2
Cash payments	(3		)	(2		)
Balance as of January 31, 2016	$	1		$	—

The restructuring accrual of $1 million at January 31, 2016 relating to workforce reduction is recorded in other accrued liabilities in the condensed consolidated balance sheet. Income statement charges were immaterial for the three months ended January 31, 2016.

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

3 Months Ended

Jan. 31, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2016 and 2015, our net pension and post-retirement benefit costs were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			8			11			2			2
Expected return on plan assets	(9		)	(9		)	(19		)	(19		)	(3		)	(4		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(2		)	—			—			(4		)	(5		)
Total periodic benefit cost (benefit)	$	2		$	—		$	—		$	3		$	—		$	(4	)

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2016 and 2015. We contributed $10 million and $14 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2016 and 2015, respectively.

We do not expect to contribute to our U.S. Defined Benefit Plans during the remainder of 2016, and we expect to contribute $29 million to our Non-U.S. Defined Benefit Plans during the remainder of 2016.

Employees hired on or after August 1, 2015 are not eligible to participate in the U.S. Defined Benefit Plans or the U.S. Post-Retirement Benefit Plan. We provide matching contributions to these employees under the Keysight Technologies, Inc. 401(k) Plan up to a maximum of 6 percent of the employee's annual eligible compensation.

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WARRANTIES AND CONTINGENCIES

3 Months Ended

Jan. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

WARRANTIES AND CONTINGENCIES

AND CONTINGENCIES

Standard Warranty

Our standard warranty term for most of our products from the date of delivery is typically three years. We accrue for standard warranty costs based on historical trends in warranty charges as a percentage of net product shipments. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

Activity related to the standard warranty accrual, which is included in other accrued and other long-term liabilities in our condensed consolidated balance sheet, is as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	8			9
Settlements made during the period	(8		)	(9		)
Ending balance	$	53		$	51
Accruals for warranties due within one year	$	34		$	36
Accruals for warranties due after one year	19			15
Ending balance	$	53		$	51

Contingencies

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

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DEBT (Notes)

3 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

DEBT

DEBT

Short-Term Debt

On September 15, 2014, we entered into a five year credit agreement, which provides for a $300 million unsecured credit facility that will expire on November 1, 2019. On July 21, 2015, the total amount available under the credit facility was increased to $450 million. The company may use amounts borrowed under the facility for general corporate purposes. As of January 31, 2016, we had no borrowings outstanding under the credit facility. We were in compliance with the covenants of the credit facility during the three months ended January 31, 2016.

As a result of the Anite acquisition, we have an overdraft facility of £25 million that will expire on July 31, 2016. As of January 31, 2016, we had no borrowings outstanding under the facility.  We were in compliance with the covenants of the credit facility during the three months ended January 31, 2016.

Long-Term Debt

The following table summarizes the components of our long-term debt:

	January 31, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Total	$	1,099	$	1,099

The notes issued are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. There have been no changes to the principal, maturity, interest rates and interest payment terms of the senior notes, detailed in the table above, in the three months ended January 31, 2016 as compared to the senior notes described in our Annual Report on Form 10-K for fiscal year ended October 31, 2015.

As of January 31, 2016 and October 31, 2015, we had $17 million and $19 million, respectively, of outstanding letters of credit unrelated to the credit facility that were issued by various lenders.

The fair value of our long-term debt, calculated from quoted prices that are primarily Level 1 inputs under the accounting guidance fair value hierarchy, was below the carrying value by approximately $29 million and $8 million as of January 31, 2016 and October 31, 2015, respectively.

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STOCKHOLDERS' EQUITY

3 Months Ended

Jan. 31, 2016

Statement of Comprehensive Income [Abstract]

STOCKHOLDERS EQUITY

ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2016 and 2015 were as follows:

							Net defined benefit pension cost and post retirement plan costs
	Unrealized gain on investments			Foreign currency translation			Actuarial losses			Prior service costs			Unrealized gains (losses) on derivatives			Total
	(in millions)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	—			(33		)	—			—			(5		)	(38		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	—			—			(3		)	3			2			2
Other comprehensive income (loss)	—			(33		)	8			(4		)	(4		)	(33		)
As of January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2016 and 2015 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Unrealized gain (loss) on derivatives	$	(4	)	$	1		Cost of products
	1			—			Provision for income taxes
	(3		)	1			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)
Prior service benefit	6			7
	(8		)	(4		)	Total before income tax
	3			—			Provision for income taxes
	(5		)	(4		)	Net of income tax
Total reclassifications for the period	$	(8	)	$	(3	)

An amount in parentheses indicates a reduction to income and an increase to the accumulated other comprehensive income.

Reclassifications of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost (see Note 12, "Retirement Plans and Post Retirement Pension Plans").

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SEGMENT INFORMATION

3 Months Ended

Jan. 31, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We provide electronic design and test solutions to the communications and electronics industries.

We have two reportable operating segments, measurement solutions and customer support and services. The two operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

A description of our two reportable segments is as follows:

Our measurement solutions business provides electronic design and test instruments and systems with related software and software design tools that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. We provide startup assistance, consulting, optimization and application support throughout the customer's product lifecycle.

Our customer support and services business provides hardware repair and calibration services and facilitates the resale of used equipment. Our customer support and services business enables our customers to maximize the value from their electronic measurement equipment and strengthens customer loyalty. Providing these services assures a high level of instrument performance and availability, while minimizing the cost of ownership and downtime.

A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include costs of centralized research and development, legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments.

The following tables reflect the results of our reportable segments under our management reporting system. These results are not necessarily in conformity with GAAP. The performance of each segment is measured based on several metrics, including income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding, 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, acquisition related fair value adjustments, interest income and interest expense as noted in the reconciliations below.

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Three Months Ended January 31, 2016:
Total segment revenue	$	631		$	95	$	726
Acquisition related fair value adjustments	(5		)	—		(5		)
Total net revenue	$	626		$	95	$	721
Segment income from operations	$	116		$	13	$	129
Three Months Ended January 31, 2015:
Total net revenue	$	606		$	95	$	701
Segment income from operations	$	110		$	14	$	124

The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Total reportable segments' income from operations	$	129		$	124
Share-based compensation expense	(16		)	(29		)
Amortization of intangibles	(11		)	(2		)
Acquisition and integration costs	(2		)	—
Separation and related costs	(5		)	(7		)
Acquisition related fair value adjustments	(5		)	—
Other	8			1
Interest income	1			—
Interest expense	(12		)	(12		)
Other income (expense), net	(3		)	3
Income before taxes, as reported	$	84		$	78

The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments, long-term and other receivables and other assets.

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of January 31, 2016	$	2,492	$	257	$	2,749
As of October 31, 2015	$	2,531	$	265	$	2,796

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SUBSEQUENT EVENTS

3 Months Ended

Jan. 31, 2016

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Share Repurchase Authorization. Keysight’s Board of Directors authorized a new share repurchase program for up to $200 million of its common stock. The new repurchase program goes into effect immediately and shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion.

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ACQUISITION OF ANITE (Tables)

3 Months Ended

Jan. 31, 2016

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Three Months Ended January 31, 2015
Net revenue	$	752
Net income	$	68
Net income per share - Basic	$	0.41
Net income per share - Diluted	$	0.40

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Jan. 31, 2016

Share-based Compensation [Abstract]

Allocated Share-based compensation expense disclosure

The impact of share-based compensation on our results was as follows:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Cost of products and services	$	3	$	4
Research and development	3		4
Selling, general and administrative	10		21
Total share-based compensation expense	$	16	$	29

Share-based compensation arrangement by share-based payment award fair value assumptions and methodology schedule

The following assumptions were used to estimate the fair value of employee stock options and LTP Program grants.

	Three Months Ended
	January 31,
	2016		2015
Stock Option Plans:
Weighted average risk-free interest rate	—		1.6	%
Dividend yield	—		—	%
Weighted average volatility	—		31	%
Expected life	—		4.9 years
LTP Program:
Volatility of Keysight shares	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%

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NET INCOME PER SHARE (Tables)

3 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

Reconciliation of the numerators and denominators of the basic and diluted net income per share

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:

	Three Months Ended
	January 31,
	2016		2015
	(in millions)
Numerator:
Net income	$	64	$	70
Denominator:
Basic weighted-average shares	171		168
Potential common shares— stock options and other employee stock plans	1		2
Diluted weighted-average shares	172		170

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INVENTORY (Tables)

3 Months Ended

Jan. 31, 2016

Inventory, Net [Abstract]

INVENTORY

	January 31, 2016		October 31, 2015
	(in millions)
Finished goods	$	237	$	235
Purchased parts and fabricated assemblies	244		252
Total Inventory	$	481	$	487

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Jan. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill balances and movements for each reportable segments during the period

The following table presents goodwill balances and the movements for each of our reportable segments during the three months ended January 31, 2016:

	Measurement Solutions			Customer Support and Services			Total
	(in millions)
Goodwill as of October 31, 2015	$	637		$	63		$	700
Foreign currency translation impact	(3		)	(1		)	(4		)
Goodwill as of January 31, 2016	$	634		$	62		$	696

Components of other intangibles during the period

The components of other intangible assets as of January 31, 2016 and October 31, 2015 are shown in the table below:

	Other Intangible Assets
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
As of October 31, 2015:
Developed technology	$	305	$	125	$	180
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	64		28		36
Total amortizable intangible assets	393		159		234
In-Process R&D	12		—		12
Total	$	405	$	159	$	246
As of January 31, 2016:
Developed technology	$	305	$	136	$	169
Backlog	4		4		—
Trademark/Tradename	20		2		18
Customer relationships	63		29		34
Total amortizable intangible assets	392		171		221
In-Process R&D	12		—		12
Total	$	404	$	171	$	233

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Assets And Liabilities Measured On Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at January 31, 2016								Fair Value Measurements at October 31, 2015
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	329	$	329	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	374	$	371	$	3	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	16	$	—	$	16	$	—	$	22	$	—	$	22	$	—

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DERIVATIVES (Tables)

3 Months Ended

Jan. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Aggregated notional amounts by currency and designation

The aggregated notional amounts by currency and designation as of January 31, 2016 were as follows:

	Derivatives in Cash Flow Hedging Relationships					Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Option Contracts		Forward Contracts			Option Contracts
Currency	Buy/(Sell)			Buy/(Sell)		Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	—	$	35		42
British Pound	—			—		(36		)	—
Singapore Dollar	9			—		(1		)	—
Malaysian Ringgit	71			—		(7		)	—
Japanese Yen	(69		)	—		(59		)	—
Other	—			—		(9		)	—
Totals	$	11		$	—	$	(77	)	$	42

Gross fair values and balance sheet location of derivative instruments held in the consolidated balance sheet

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2016		October 31, 2015		Balance Sheet Location	January 31, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	—	Other accrued liabilities	$	3	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	1		$	5	$	10

Effect of derivative instruments for foreign exchange contracts in the consolidated statement of operations

The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and not designated as hedging instruments in our condensed consolidated statement of operations were as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2		$	(5	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of products	$	(4	)	$	1
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(2	)	$	(6	)

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RESTRUCTURING RESTRUCTURING (Tables)

3 Months Ended

Jan. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

A summary of balances and restructuring activity is shown in the table below:

	Workforce reduction			U.S. Pre-retirement Plan
	(in millions)
Balance as of October 31, 2015	$	4		$	2
Cash payments	(3		)	(2		)
Balance as of January 31, 2016	$	1		$	—

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables)

3 Months Ended

Jan. 31, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Schedule of net pension and post-retirement benefit costs

For the three months ended January 31, 2016 and 2015, our net pension and post-retirement benefit costs were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			8			11			2			2
Expected return on plan assets	(9		)	(9		)	(19		)	(19		)	(3		)	(4		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(2		)	—			—			(4		)	(5		)
Total periodic benefit cost (benefit)	$	2		$	—		$	—		$	3		$	—		$	(4	)

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WARRANTIES AND CONTINGENCIES (Tables)

3 Months Ended

Jan. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Standard warranty

Activity related to the standard warranty accrual, which is included in other accrued and other long-term liabilities in our condensed consolidated balance sheet, is as follows:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	8			9
Settlements made during the period	(8		)	(9		)
Ending balance	$	53		$	51
Accruals for warranties due within one year	$	34		$	36
Accruals for warranties due after one year	19			15
Ending balance	$	53		$	51

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DEBT (Tables)

3 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table summarizes the components of our long-term debt:

	January 31, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Total	$	1,099	$	1,099

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Jan. 31, 2016

Statement of Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2016 and 2015 were as follows:

							Net defined benefit pension cost and post retirement plan costs
	Unrealized gain on investments			Foreign currency translation			Actuarial losses			Prior service costs			Unrealized gains (losses) on derivatives			Total
	(in millions)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	—			(33		)	—			—			(5		)	(38		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	—			—			(3		)	3			2			2
Other comprehensive income (loss)	—			(33		)	8			(4		)	(4		)	(33		)
As of January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2016 and 2015 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Unrealized gain (loss) on derivatives	$	(4	)	$	1		Cost of products
	1			—			Provision for income taxes
	(3		)	1			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)
Prior service benefit	6			7
	(8		)	(4		)	Total before income tax
	3			—			Provision for income taxes
	(5		)	(4		)	Net of income tax
Total reclassifications for the period	$	(8	)	$	(3	)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jan. 31, 2016

Segment Reporting [Abstract]

Segment Profitability and Segment Assets

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Three Months Ended January 31, 2016:
Total segment revenue	$	631		$	95	$	726
Acquisition related fair value adjustments	(5		)	—		(5		)
Total net revenue	$	626		$	95	$	721
Segment income from operations	$	116		$	13	$	129
Three Months Ended January 31, 2015:
Total net revenue	$	606		$	95	$	701
Segment income from operations	$	110		$	14	$	124

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of January 31, 2016	$	2,492	$	257	$	2,749
As of October 31, 2015	$	2,531	$	265	$	2,796

Reconciliation of segment results to total enterprise results

The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes:

	Three Months Ended
	January 31,
	2016			2015
	(in millions)
Total reportable segments' income from operations	$	129		$	124
Share-based compensation expense	(16		)	(29		)
Amortization of intangibles	(11		)	(2		)
Acquisition and integration costs	(2		)	—
Separation and related costs	(5		)	(7		)
Acquisition related fair value adjustments	(5		)	—
Other	8			1
Interest income	1			—
Interest expense	(12		)	(12		)
Other income (expense), net	(3		)	3
Income before taxes, as reported	$	84		$	78

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Common Stock [Member] - shares	Oct. 22, 2014	Oct. 01, 2014
Property, Plant and Equipment [Line Items]
Sale of Stock, Number of Shares Issued in Transaction, Per Two Shares Held	1
Stock Issued During Period, Shares, New Issues		167,000,000

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Land Sale (Details) $ in Millions	3 Months Ended
	Jan. 31, 2016 USD ($)
Property, Plant and Equipment [Line Items]
Date of Land Sale Agreeement	Apr. 30, 2014
Retail Land Sales, Installment Method, Sales Value	$ 34
Document Period End Date	Jan. 31, 2016
Retail Land Sales, Installment Method, Gross Profit	$ 10

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Other Operating Expense (Income), Net (Details) $ in Millions	3 Months Ended
	Jan. 31, 2015 USD ($)
Accounting Policies [Abstract]
Re-class from Other expense (income),net to Other operating expense (income), net	$ 6

XML

ACQUISITION OF ANITE (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2015 USD ($) $ / shares
Business Acquisition [Line Items]
Business Acquisition, Period Results Included in Combined Entity | $	$ 752
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree, Actual | $	$ 68
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ / shares	$ 0.41
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ / shares	$ 0.40

XML

ACQUISITION OF ANITE (Narrative) (Details) - Anite [Member] - USD ($) $ in Millions		3 Months Ended
	Aug. 13, 2015	Jan. 31, 2016	Jan. 31, 2015
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition	Aug. 13, 2015
Payments to Acquire Business Three, Net of Cash Acquired	$ 558
Cash Acquired from Acquisition	$ 43
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed		$ 3	$ 0

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SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 16	$ 29
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract]
Windfall tax benefit realized	1	3
Share-based compensation capitalized within inventory	1	2
Share based compensation expense- Inaugral Stock Units	1	14
Cost of products and services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	3	4
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	3	4
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 10	$ 21

XML

SHARE-BASED COMPENSATION Fair Value Assumptions (Details)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP plan purchase price (in hundredths)	85.00%	85.00%
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average risk-free interest rate (in hundredths)		1.60%
Dividend yield		0.00%
Weighted average volatility (in hundredths)		31.00%
Expected life (in years)	0 years	4 years 11 months
LTPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility of Keysight shares (in hundredths)	25.00%	26.00%
Volatility of selected peer-company shares minimum (in hundredths)	14.00%	17.00%
Volatility of selected peer-company shares maximum (in hundredths)	54.00%	67.00%
Price-wise correlation with selected peers (in hundredths)	38.00%	38.00%

XML

INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Income Tax Examination [Line Items]
Income Tax Expense (Benefit)	$ 20	$ 8
Return to provision tax expense	$ 8
Income Tax Holiday, Income Tax Benefits Per Share	$ 0.05
Internal Revenue Service (IRS)
Income Tax Examination [Line Items]
Effective Income Tax Rate Reconciliation, Percent	23.70%	10.10%
Net Discrete Tax expense (Benefit)	$ 1	$ (10)
Income Tax Expense (Benefit)	$ 20	$ 8

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NET INCOME PER SHARE NET INCOME PER SHARE - COMPUTATIONS (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Numerator:
Net Income	$ 64	$ 70
Denominators:
Basic weighted-average shares (in shares)	171	168
Potentially dilutive common shares equivalents - stock options and other employee stock plans (in shares)	1	2
Diluted weighted average shares (in shares)	172	170

XML

NET INCOME PER SHARE (Details)	3 Months Ended
	Jan. 31, 2016 shares
Antidilutive Securities Excluded from EPS Computation
Document Period End Date	Jan. 31, 2016
Options with exercise price greater than average market price [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	1,700,000
Stock Options, ESPP, LTPP and restricted stock combined exercise price, unamortized fair value, excess tax benefits or shortfalls greater than average market price [Member] [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	16,100

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INVENTORY (Details) - USD ($) $ in Millions	Jan. 31, 2016	Oct. 31, 2015
Inventory, Net [Abstract]
Finished goods	$ 237	$ 235
Purchased parts and fabricated assemblies	244	252
Inventory	$ 481	$ 487

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GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions	3 Months Ended
	Jan. 31, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 700
Goodwill ending balance	696
Measurement Solutions
Goodwill [Roll Forward]
Goodwill beginning balance	637
Foreign currency translation impact	(3)
Goodwill ending balance	634
Customer Support and Services
Goodwill [Roll Forward]
Goodwill beginning balance	63
Foreign currency translation impact	(1)
Goodwill ending balance	62
Total
Goodwill [Roll Forward]
Goodwill beginning balance	700
Foreign currency translation impact	(4)
Goodwill ending balance	$ 696

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions	Jan. 31, 2016	Oct. 31, 2015
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 392	$ 393
Accumulated Amortization and Impairments	171	159
Finite-Lived Intangible Assets, Net	221	234
In-Process R&D	12	12
Gross book value	404	405
Net Book Value	233	246
Developed technology
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	305	305
Accumulated Amortization and Impairments	136	125
Net Book Value	169	180
Backlog
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	4	4
Accumulated Amortization and Impairments	4	4
Net Book Value	0	0
Trademark/Tradename
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	20	20
Accumulated Amortization and Impairments	2	2
Net Book Value	18	18
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	63	64
Accumulated Amortization and Impairments	29	28
Net Book Value	$ 34	$ 36

XML

GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Additions to goodwill	$ 0
Additions to other intangible assets	0
Impact to other intangibles due to Translation	1
Amortization of other intangible assets	$ 12	$ 2

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions	Jan. 31, 2016 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2016	$ 31
2017	39
2018	36
2019	36
2020	36
Thereafter	$ 43

XML

FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jan. 31, 2016	Oct. 31, 2015
Assets Short - term [Abstract]
Cash equivalents (money market funds)	$ 329	$ 295
Derivative instruments (foreign exchange contracts)	3	1
Assets, Long-term [Abstract]
Trading securities	11	12
Available-for-sale investments	31	41
Total assets measured at fair value	374	349
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	5	10
Liabilities Long-term [Abstract]
Deferred compensation liability	11	12
Total liabilities measured at fair value	16	22
Level 1
Assets Short - term [Abstract]
Cash equivalents (money market funds)	329	295
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Trading securities	11	12
Available-for-sale investments	31	41
Total assets measured at fair value	371	348
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Liabilities Long-term [Abstract]
Deferred compensation liability	0	0
Total liabilities measured at fair value	0	0
Level 2
Assets Short - term [Abstract]
Cash equivalents (money market funds)	0	0
Derivative instruments (foreign exchange contracts)	3	1
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	3	1
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	5	10
Liabilities Long-term [Abstract]
Deferred compensation liability	11	12
Total liabilities measured at fair value	16	22
Level 3
Assets Short - term [Abstract]
Cash equivalents (money market funds)	0	0
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	0	0
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Liabilities Long-term [Abstract]
Deferred compensation liability	0	0
Total liabilities measured at fair value	$ 0	$ 0

XML

DERIVATIVES (Details)	3 Months Ended
	Jan. 31, 2016 USD ($) contracts
Derivative [Line Items]
Document Period End Date	Jan. 31, 2016
Cash Flow Hedge Ineffectiveness is Immaterial	not significant
Derivative Instruments and Hedging Activities Disclosure
Derivative, Net Liability Position, Aggregate Fair Value | $	$ 3,000,000
Derivative Contracts [Abstract]
Foreign exchange forward contracts designated as cash flow hedge (in units) | contracts	103
Foreign exchange forward contracts not designated as hedges (in units) | contracts	68
Number of Foreign Exchange Option Contracts Not Designated As Hedges | $	1

XML

DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions	Jan. 31, 2016 USD ($)
Sell | Japanese Yen | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	$ 69
Buy | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	11
Buy | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Euro | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Euro | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | British Pound | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | British Pound | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Singapore Dollar | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	9
Buy | Singapore Dollar | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Malaysian Ringgit | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	71
Buy | Malaysian Ringgit | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Japanese Yen | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Other | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Buy | Other | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Derivatives Not Designated as Hedging Instruments | Sell | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	77
Derivatives Not Designated as Hedging Instruments | Sell | British Pound | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	36
Derivatives Not Designated as Hedging Instruments | Sell | Singapore Dollar | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	1
Derivatives Not Designated as Hedging Instruments | Sell | Malaysian Ringgit | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	7
Derivatives Not Designated as Hedging Instruments | Sell | Japanese Yen | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	59
Derivatives Not Designated as Hedging Instruments | Sell | Other | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	9
Derivatives Not Designated as Hedging Instruments | Buy | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	42
Derivatives Not Designated as Hedging Instruments | Buy | Euro | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	35
Derivatives Not Designated as Hedging Instruments | Buy | Euro | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	42
Derivatives Not Designated as Hedging Instruments | Buy | British Pound | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Derivatives Not Designated as Hedging Instruments | Buy | Singapore Dollar | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Derivatives Not Designated as Hedging Instruments | Buy | Malaysian Ringgit | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Derivatives Not Designated as Hedging Instruments | Buy | Japanese Yen | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Derivatives Not Designated as Hedging Instruments | Buy | Other | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	$ 0

XML

DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Oct. 31, 2015
Derivative [Line Items]
Document Period End Date	Jan. 31, 2016
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	$ 3	$ 1
Total derivatives Liabilities	5	10
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	2	0
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Accrued Liabilities
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	3	8
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Assets
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	1	1
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Accrued Liabilities
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	$ 2	$ 2

XML

DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Derivative [Line Items]
Gain (loss) recognized in accumulated other comprehensive income	$ 2	$ (5)
Cash Flow Hedging | Cost of products and services
Derivative [Line Items]
Cash Flow Hedge (Gain) Loss to be Reclassified within Twelve Months	2
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss)
Derivative [Line Items]
Gain (loss) recognized in accumulated other comprehensive income	2	(5)
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Cost of products and services
Derivative [Line Items]
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	(4)	1
Derivatives Not Designated as Hedging Instruments | Other (income) expense, net
Derivative [Line Items]
Gain (loss) recognized in other income (expense),net	$ (2)	$ (6)

XML

RESTRUCTURING RESTRUCTURING (Details) $ in Millions	3 Months Ended
	Jan. 31, 2016 USD ($)	Oct. 31, 2015 USD ($)
WORKFORCE REDUCTION [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 1	$ 4
Payments for Restructuring	$ (3)
US PRE RETIREMENT PLAN [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Number of Positions Eliminated	156
Restructuring Reserve	$ 0	$ 2
Payments for Restructuring	$ (2)

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	$ 5	$ 5
Interest cost on benefit obligation	6	5
Expected return on plan assets	(9)	(9)
Amortization:
Net actuarial losses	2	1
Prior service credit	(2)	(2)
Total periodic benefit cost (benefit)	2	0
Non-U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	4	4
Interest cost on benefit obligation	8	11
Expected return on plan assets	(19)	(19)
Amortization:
Net actuarial losses	7	7
Prior service credit	0	0
Total periodic benefit cost (benefit)	0	3
U.S. Post-Retirement Benefit Plan
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	0	0
Interest cost on benefit obligation	2	2
Expected return on plan assets	(3)	(4)
Amortization:
Net actuarial losses	5	3
Prior service credit	(4)	(5)
Total periodic benefit cost (benefit)	$ 0	$ (4)

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($)	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	$ 0
Estimated future employer contributions in remainder of current fiscal year	0
U.S. Post-Retirement Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	0	0
Non-U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	10,000,000	$ 14,000,000
Estimated future employer contributions in remainder of current fiscal year	$ 29,000,000

XML

WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance at beginning of period	$ 53	$ 51
Accruals for warranties including change in estimate	8	9
Settlements made during the period	(8)	(9)
Ending balance at end of period	53	51
Standard Product Warranty Disclosure [Abstract]
Accruals for warranties due within one year	34	36
Accruals for warranties due after one year	19	15
Ending balance at end of period	$ 53	$ 51

XML

DEBT Credit Facility (Details)	3 Months Ended
	Jan. 31, 2016 GBP (£)	Jan. 31, 2016 USD ($)	Jul. 21, 2015 USD ($)	Oct. 31, 2014 USD ($)
Line of Credit Facility [Line Items]
Document Period End Date	Jan. 31, 2016
Line of Credit Facility, Initiation Date	Sep. 15, 2014
Line of Credit Facility, Maximum Borrowing Capacity				$ 300,000,000
Line of Credit Facility, Expiration Date	Nov. 01, 2019
Line of Credit Facility, Accession Agreement Date	Jul. 21, 2015
Line of Credit Facility, Revised Maximum Borrowing Capacity			$ 450,000,000
Line of Credit Facility, Outstanding		$ 0
Line of Overdraft Facility, Maximum Borrowing capacity | £	£ 25,000,000
Line of Overdraft Facility, Expiration Date	Jul. 31, 2016
Line of Overdraft Facility, Outstanding		$ 0

XML

DEBT Long Term Debt (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jan. 31, 2016	Oct. 31, 2015
Debt Instrument [Line Items]
Letters of credit outstanding, amount	$ 17	$ 19
Long Term Debt Fair Value Over Carrying Value	29	8
3.30% Senior Notes due 2019
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	499	499
4.55% Senior Notes due 2024
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	600	600
Total
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	$ 1,099	$ 1,099

XML

STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Oct. 31, 2015	Oct. 31, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ (497)	$ (369)	$ (479)	$ (336)
Other comprehensive income (loss) before reclassifications	(26)	(38)
Amounts reclassified out of accumulated other comprehensive loss	12	3
Tax (expense) benefit	(4)	2
Other comprehensive income (loss)	(18)	(33)
Ending balance	497	369	$ 479	$ 336
Unrealized gain on investments [Abstract]
Beginning balance	21	16
Other comprehensive income (loss) before reclassifications	(7)	0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax	0	0
Tax (expense) benefit	1	0
Other comprehensive income (loss)	(6)	0
Ending balance	15	16
Foreign currency translation [Abstract]
Beginning balance	(48)	6
Other comprehensive income (loss) before reclassifications	(25)	(33)
Amounts reclassified out of accumulated other comprehensive loss	0	0
Tax (expense) benefit	0	0
Other comprehensive income (loss)	(25)	(33)
Ending balance	(73)	(27)
Prior service credits [Abstract]
Beginning balance	65	83
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified out of accumulated other comprehensive loss	(6)	(7)
Tax (expense) benefit	3	3
Other comprehensive income (loss)	(3)	(4)
Ending balance	62	79
Actuarial Losses [Abstract]
Beginning balance	(511)	(444)
Other comprehensive income (loss) before reclassifications	4	0
Amounts reclassified out of accumulated other comprehensive loss	(14)	(11)
Tax (expense) benefit	(6)	(3)
Other comprehensive income (loss)	12	8
Ending balance	(499)	(436)
Unrealized gains (losses) on derivatives [Abstract]
Beginning balance	(6)	3
Other comprehensive income (loss) before reclassifications	2	(5)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	4	(1)
Tax (expense) benefit	(2)	2
Other comprehensive income (loss)	4	(4)
Ending balance	$ (2)	$ (1)

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STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Statement of Comprehensive Income [Abstract]
Unrealized gains and (losses) on derivatives reclassified to cost of products	$ (4)	$ 1
Reclassification of (gains) and losses into earnings related to derivative instruments, tax	1	0
Unrealized gains and (losses) on derivatives reclassified to cost of products, net of tax	(3)	1
Actuarial net loss	(14)	(11)
Prior service benefit	6	7
Actuarial net loss and prior service benefit reclassified, before tax	(8)	(4)
Tax on actuarial net loss and prior service benefit reclassified	3	0
Actuarial net loss and prior service benefit reclassified, net of tax	(5)	(4)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	$ (8)	$ (3)

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SEGMENT INFORMATION Profitability (Details) $ in Millions	3 Months Ended
	Jan. 31, 2016 USD ($)	Jan. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of Operating Segments	2
Number of Reportable Segments	2
Business Combination Acquisition Related Fair Value Adjustments	$ 5	$ 0
Total net revenue	721	701
Segment income from operations	98	87
Measurement Solutions
Segment Reporting Information [Line Items]
Revenues	631
Business Combination Acquisition Related Fair Value Adjustments	5
Total net revenue	626	606
Segment income from operations	116	110
Customer Support and Services
Segment Reporting Information [Line Items]
Revenues	95
Business Combination Acquisition Related Fair Value Adjustments	0
Total net revenue	95	95
Segment income from operations	13	14
Total
Segment Reporting Information [Line Items]
Revenues	726
Business Combination Acquisition Related Fair Value Adjustments	5
Total net revenue	721	701
Segment income from operations	$ 129	$ 124

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SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2016	Jan. 31, 2015
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable segments' income from operations	$ 129	$ 124
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost	(16)	(29)
Business Combination Acquisition Related Fair Value Adjustments	(5)	0
Amortization of Intangibles and Other	(11)	(2)
Acquisition and integration costs	(2)	0
Separation and related costs	(5)	(7)
Segment Reporting Other reconciling items for operating profit loss segment to consolidated	8	1
Interest income	1	0
Interest expense	(12)	(12)
Other Nonoperating Income (Expense)	(3)	3
Income before taxes, as reported	$ 84	$ 78

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SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions	Jan. 31, 2016	Oct. 31, 2015
Segment Reporting Information [Line Items]
Assets	$ 3,481	$ 3,508
Measurement Solutions
Segment Reporting Information [Line Items]
Assets	2,492	2,531
Customer Support and Services
Segment Reporting Information [Line Items]
Assets	257	265
Total
Segment Reporting Information [Line Items]
Assets	$ 2,749	$ 2,796

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SUBSEQUENT EVENTS (Details) $ in Millions	Feb. 18, 2016 USD ($)
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Repurchase Program, Authorized Amount	$ 200