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 APRIL 30, 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 x  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 x  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 x	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 x

The number of shares of common stock outstanding at June 1, 2016 was 170,227,893. 

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	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
	Item 4.	Controls and Procedures	33
Part II.	Other Information		34
	Item 1.	Legal Proceedings	34
	Item 1A.	Risk Factors	34
	Item 2	Unregistered sales of equity securities and use of Proceeds	46
	Item 6.	Exhibits	46
Signature			47
Exhibit Index			48

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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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
Net revenue:
Products	$	613		$	630		$	1,219		$	1,226
Services and other	118			110			233			215
Total net revenue	731			740			1,452			1,441
Costs and expenses:
Cost of products	263			264			530			524
Cost of services and other	62			60			124			118
Total costs	325			324			654			642
Research and development	108			96			216			192
Selling, general and administrative	207			192			407			398
Other operating expense (income), net	(4		)	(5		)	(18		)	(11		)
Total costs and expenses	636			607			1,259			1,221
Income from operations	95			133			193			220
Interest income	—			1			1			1
Interest expense	(12		)	(11		)	(24		)	(23		)
Other income (expense), net	4			(1		)	1			2
Income before taxes	87			122			171			200
Provision (benefit) for income taxes	(1		)	26			19			34
Net income	$	88		$	96		$	152		$	166
Net income per share:
Basic	$	0.52		$	0.57		$	0.89		$	0.99
Diluted	$	0.51		$	0.56		$	0.88		$	0.97
Weighted average shares used in computing net income per share:
Basic	170			169			171			168
Diluted	172			171			172			171

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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
Net income	$	88		$	96		$	152		$	166
Other comprehensive income (loss):
Unrealized gain (loss) on investments, net of tax benefit (expense) of zero, $(1), $1 and $(1)	(1		)	8			(7		)	8
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $1, $(1), zero and $1	(2		)	2			(1		)	(1		)
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $(1), zero, $(2) and zero	2			(1		)	5			(2		)
Foreign currency translation, net of tax benefit (expense) of zero	56			(1		)	31			(34		)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $4, $3, $10 and $6	10			8			22			16
Change in net prior service benefit, net of tax benefit of $2, $3, $5 and $6	(5		)	(4		)	(8		)	(8		)
Other comprehensive income (loss)	60			12			42			(21		)
Total comprehensive income	$	148		$	108		$	194		$	145

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

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KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

	April 30, 2016			October 31, 2015
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	620		$	483
Accounts receivable, net	408			398
Inventory	475			487
Deferred tax assets	75			74
Other current assets	159			137
Total current assets	1,737			1,579
Property, plant and equipment, net	531			518
Goodwill	731			700
Other intangible assets, net	226			246
Long-term investments	58			70
Long-term deferred tax assets	264			295
Other assets	108			100
Total assets	$	3,655		$	3,508
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	168		$	209
Employee compensation and benefits	174			168
Deferred revenue	198			175
Income and other taxes payable	39			50
Other accrued liabilities	73			84
Total current liabilities	652			686
Long-term debt	1,100			1,099
Retirement and post-retirement benefits	250			280
Long-term deferred revenue	69			61
Other long-term liabilities	84			80
Total liabilities	2,155			2,206
Commitments and contingencies (Note 12)
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 April 30, 2016 and 170 million shares at October 31, 2015 issued	2			2
Treasury stock at cost; 1.6 million shares at April 30, 2016 and zero shares at October 31, 2015	(42		)	—
Additional paid-in-capital	1,211			1,165
Retained earnings	766			614
Accumulated other comprehensive loss	(437		)	(479		)
Total stockholders' equity	1,500			1,302
Total liabilities and equity	$	3,655		$	3,508

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

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KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)

	Six Months Ended
	April 30,
	2016			2015
Cash flows from operating activities:
Net income	$	152		$	166
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	67			46
Share-based compensation	29			42
Excess tax benefit from share-based plans	—			(3		)
Deferred taxes	3			13
Excess and obsolete inventory related charges	11			17
Gain on sale of land	(10		)	—
Other non-cash expenses, net	2			1
Changes in assets and liabilities:
Accounts receivable	(3		)	(5		)
Inventory	(11		)	(17		)
Accounts payable	(27		)	1
Payment to Agilent, net	—			(28		)
Employee compensation and benefits	11			7
Retirement and post-retirement benefits	(20		)	(21		)
Income tax payable	2			3
Other assets and liabilities	3			(62		)
Net cash provided by operating activities	209			160
Cash flows from investing activities:
Investments in property, plant and equipment	(62		)	(31		)
Proceeds from sale of investments	—			1
Acquisition of businesses and intangible assets, net of cash acquired	(10		)	—
Proceeds from sale of land	10			—
Net cash used in investing activities	(62		)	(30		)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	24			8
Excess tax benefit from share-based plans	—			3
Return of capital to Agilent	—			(49		)
Treasury stock repurchases	(40		)	—
Net cash used in financing activities	(16		)	(38		)
Effect of exchange rate movements	6			(8		)
Net increase in cash and cash equivalents	137			84
Cash and cash equivalents at beginning of period	483			810
Cash and cash equivalents at end of period	$	620		$	894
Cash paid during the period for:
Interest	$	22		$	24
Income taxes, net of refunds	$	8		$	22

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 and six months ended April 30, 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 April 30, 2016 and October 31, 2015, condensed consolidated statement of comprehensive income for the three and six months ended April 30, 2016 and 2015, condensed consolidated statement of operations for the three and six months ended April 30, 2016 and 2015, and condensed consolidated statement of cash flows for the six months ended April 30, 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 six months ended April 30, 2016 we recognized a $10 million gain on the sale of the second of three land tracts in other operating expense (income), net.

Restricted Cash. Restricted cash of $1.5 million primarily consists of deposit held as collateral against bank guarantee and is classified within other assets on the condensed consolidated balance sheet.

Reclassifications. Other operating expense (income), net for the three and six months ended April 30, 2015 includes $5 million and $11 million, respectively, 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.

Net revenue for the six months ended April 30, 2016 includes $5 million of product revenue that was previously classified as services and other revenue in the condensed consolidated statement of operations. Cost and expenses for the six months ended April 30, 2016 includes $7 million of costs of products that was previously classified as cost of services and other in the condensed consolidated statement of operations. The changes have no effect on reported net revenue, total costs and expenses and income for any periods presented.

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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.

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. In addition, during March, April, and May 2016, the FASB issued guidance that clarified the reporting of revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, narrow-scope improvements, and practical expedients. 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.

8

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 that requires deferred income tax liabilities and assets to be classified as non-current 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 non-current 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.

In March 2016, the FASB issued guidance that simplifies the accounting for taxes related to share-based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. The standard is effective for annual and interim periods beginning after December 31, 2016. 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

9

to the preliminary purchase price allocation during the three and six months ended April 30, 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 are not expected to be material.

In February 2016, we paid approximately $1 million related to the contingent consideration established during the preliminary purchase price allocation in connection with Anite's equity-settled share-based payment arrangements.

Acquisition and integration costs directly related to the Anite acquisition totaled $4 million and $7 million for the three and six months ended April 30, 2016, 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 April 30, 2015		Six Months Ended April 30, 2015
Net revenue	$	791	$	1,543
Net income	$	101	$	170
Net income per share - Basic	$	0.60	$	1.01
Net income per share - Diluted	$	0.59	$	0.99

The unaudited pro forma financial information for the three and six months ended April 30, 2015 combines the historical results of Keysight and Anite for the three and six months ended April 30, 2015, assuming 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.

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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Cost of products and services	$	4	$	4	$	7	$	8
Research and development	2		2		5		6
Selling, general and administrative	7		7		17		28
Total share-based compensation expense	$	13	$	13	$	29	$	42

At April 30, 2016 and 2015, there was no share-based compensation capitalized within inventory. The expense for the three and six months ended April 30, 2016 includes $2 million and $3 million, respectively, related to special inaugural RSU awards granted during the three months ended January 31, 2015. The expense for the three and six months ended April 30, 2015 includes $1 million and $15 million, respectively, related to these special inaugural RSU grants. These awards will vest over three years from the date of grant.

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

	Three Months Ended				Six Months Ended
	April 30,				April 30,
	2016		2015		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	%	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%		14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%	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 and six months ended April 30, 2016. For the six months ended April 30, 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 April 30, 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 a benefit of 1.1 percent and an expense of 11.0 percent for the three and six months ended April 30, 2016, respectively. Income tax recognized was a benefit of $1 million and expense of $19 million for the three and six months ended April 30, 2016, respectively. The effective tax rate for the three months ended April 30, 2016 was a benefit due to tax planning implemented during the quarter. The company's effective tax rate was 21.7 percent and 17.2 percent for the three and six months ended April 30, 2015, respectively. Income tax expense was $26 million and $34 million for the three and six months ended April 30, 2015, respectively.

The income tax provision for the three and six months ended April 30, 2016 included a net discrete benefit of $3 million and $2 million, respectively. The income tax provision for the three and six months ended April 30, 2015 included a net discrete expense of $3 million and a net discrete benefit of $7 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 and six months ended April 30, 2016 by $9 million and $17 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.05 and $0.10 for the three and six months ended April 30, 2016, respectively. 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

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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.

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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Numerator:
Net income	$	88	$	96	$	152	$	166
Denominator:
Basic weighted-average shares	170		169		171		168
Potential common shares— stock options and other employee stock plans	2		2		1		3
Diluted weighted-average shares	172		171		172		171

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 the effect would be anti-dilutive. For the three and six months ended April 30, 2016, 1.7 million options to purchase shares were excluded from the calculation of diluted earnings per share, respectively. In addition, we excluded stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three and six months ended April 30, 2016, we excluded 30,000 and 23,100 shares, respectively.

7. INVENTORY

	April 30, 2016		October 31, 2015
	(in millions)
Finished goods	$	226	$	235
Purchased parts and fabricated assemblies	249		252
Total Inventory	$	475	$	487

8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments during the six months ended April 30, 2016:

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Goodwill as of October 31, 2015	$	637	$	63	$	700
Foreign currency translation impact	19		2		21
Goodwill arising from acquisitions	10		—		10
Goodwill as of April 30, 2016	$	666	$	65	$	731

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The components of other intangible assets as of April 30, 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 April 30, 2016:
Developed technology	$	307	$	142	$	165
Backlog	4		4		—
Trademark/Tradename	20		3		17
Customer relationships	64		32		32
Total amortizable intangible assets	395		181		214
In-Process R&D	12		—		12
Total	$	407	$	181	$	226

During the six months ended April 30, 2016, we recognized additions to goodwill and other intangible assets of $10 million and $6 million, respectively, based on our preliminary estimates of acquisition date fair values related to one acquisition. During the six months ended April 30, 2016, we recorded $4 million of foreign exchange translation impact to other intangible assets.

Amortization of other intangible assets was $10 million and $22 million for the three and six months ended April 30, 2016, respectively. Amortization of other intangible assets was $2 million and $4 million for the three and six months ended April 30, 2015, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $22 million for the remainder of 2016, $40 million for 2017, $37 million for 2018, $37 million for 2019, $36 million for 2020 and $42 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 April 30, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at April 30, 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)	$	373	$	373	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	422	$	415	$	7	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	10	$	—	$	10	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	21	$	—	$	21	$	—	$	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 are recognized in other income (expense), net in the condensed consolidated statement of operations in the current period. We

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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 and six months ended April 30, 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 April 30, 2016 was $9 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of April 30, 2016.

There were 123 foreign exchange forward contracts open as of April 30, 2016 that were designated as cash flow hedges. There were 79 foreign exchange forward contracts and zero foreign exchange option contract open as of April 30, 2016 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of April 30, 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	$	—		$	—	$	51		—
British Pound	—			—		(34		)	—
Singapore Dollar	9			—		(4		)	—
Malaysian Ringgit	68			—		(8		)	—
Japanese Yen	(67		)	—		(60		)	—
Other currencies	(9		)	—		(14		)	—
Totals	$	1		$	—	$	(69	)	$	—

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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 April 30, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	April 30, 2016		October 31, 2015		Balance Sheet Location	April 30, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	—	Other accrued liabilities	$	6	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	4		2
Total derivatives	$	7	$	1		$	10	$	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					Six Months Ended
	April 30,					April 30,
	2016			2015		2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(3	)	$	3	$	(1	)	$	(2	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	(3	)	$	1	$	(7	)	$	2
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	—		$	2	$	(2	)	$	(4	)

The estimated amount of existing net loss at April 30, 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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11. RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three and six months ended April 30, 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 April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	4		$	5		$	—		$	1
Interest cost on benefit obligation	6			5			8			10			2			2
Expected return on plan assets	(9		)	(10		)	(18		)	(18		)	(4		)	(3		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(1		)	—			—			(4		)	(6		)
Total periodic benefit cost (benefit)	$	2		$	1		$	1		$	4		$	(1	)	$	(3	)

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Six Months Ended April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	10		$	11		$	8		$	9		$	—		$	1
Interest cost on benefit obligation	12			10			16			21			4			4
Expected return on plan assets	(18		)	(19		)	(37		)	(37		)	(7		)	(7		)
Amortization:
Net actuarial losses	4			2			14			14			10			6
Prior service credit	(4		)	(3		)	—			—			(8		)	(11		)
Total periodic benefit cost (benefit)	$	4		$	1		$	1		$	7		$	(1	)	$	(7	)

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three and six months ended April 30, 2016 and 2015. We contributed $9 million and $19 million to our Non-U.S. Defined Benefit Plans during the three and six months ended April 30, 2016, respectively, and contributed $11 million and $25 million to our Non-U.S. Defined Benefit Plans during the three and six months ended April 30, 2015, respectively.

During the remainder of 2016, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $19 million to our Non-U.S. Defined Benefit Plans.

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.

12. WARRANTY, COMMITMENTS 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:

	Six Months Ended
	April 30,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	14			17
Settlements made during the period	(16		)	(16		)
Ending balance	$	51		$	52
Accruals for warranties due within one year	$	33		$	39
Accruals for warranties due after one year	18			13
Ending balance	$	51		$	52

Commitments

There were no material changes during the six months ended April 30, 2016 to the operating lease commitments reported

in the company’s 2015 Annual Report on Form 10-K.

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.

13. 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 April 30, 2016, we had no borrowings outstanding under the credit facility. We were in compliance with the covenants of the credit facility during the six months ended April 30, 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 April 30, 2016, we had no borrowings outstanding under the facility. We were in compliance with the covenants of the credit facility during the six months ended April 30, 2016.

Long-Term Debt

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

	April 30, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Other	1		—
Total	$	1,100	$	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

18

table above, during the six months ended April 30, 2016 as compared to the senior notes described in our Annual Report on Form 10-K for fiscal year ended October 31, 2015.

In March 2016, we assumed approximately $1 million of long-term debt in connection with an acquisition. In May 2016, this debt was subsequently repaid in full.

As of April 30, 2016 and October 31, 2015, we had $16 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 above the carrying value by approximately $7 million and was below the carrying value by $8 million as of April 30, 2016 and October 31, 2015, respectively.

14. STOCKHOLDERS' EQUITY

Stock Repurchase Program

On February 18, 2016, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $200 million of the company’s common stock. Under the program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The stock repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion and does not have an expiration date.

For the six months ended April 30, 2016, we repurchased 1.6 million shares of common stock for $42 million. All such shares and related costs are held as treasury stock and accounted for at trade date using the cost method.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three and six months ended April 30, 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 January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
Other comprehensive income (loss) before reclassifications	(1		)	56			—			—			(3		)	52
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(7		)	3			10
Tax (expense) benefit	—			—			(4		)	2			—			(2		)
Other comprehensive income (loss)	(1		)	56			10			(5		)	—			60
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(8		)	31			4			—			(1		)	26
Amounts reclassified out of accumulated other comprehensive loss	—			—			28			(13		)	7			22
Tax (expense) benefit	1			—			(10		)	5			(2		)	(6		)
Other comprehensive income (loss)	(7		)	31			22			(8		)	4			42
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)

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							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 January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)
Other comprehensive income (loss) before reclassifications	9			(1		)	—			—			3			11
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	(1		)	—			(3		)	3			(1		)	(2		)
Other comprehensive income (loss)	8			(1		)	8			(4		)	1			12
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	9			(34		)	—			—			(2		)	(27		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			22			(14		)	(2		)	6
Tax (expense) benefit	(1		)	—			(6		)	6			1			—
Other comprehensive income (loss)	8			(34		)	16			(8		)	(3		)	(21		)
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)

Reclassifications out of accumulated other comprehensive loss for the three and six months ended April 30, 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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Unrealized gain on derivatives	$	(3	)	$	1		$	(7	)	$	2		Cost of sales
	1			—			2			—			Provision for income taxes
	(2		)	1			(5		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)	(28		)	(22		)
Prior service benefit	7			7			13			14
	(7		)	(4		)	(15		)	(8		)	Total before income tax
	2			—			5			—			Provision for income taxes
	(5		)	(4		)	(10		)	(8		)	Net of income tax
Total reclassifications for the period	$	(7	)	$	(3	)	$	(15	)	$	(6	)

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 11, "Retirement Plans and Post Retirement Pension Plans").

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15. 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 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 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 design and test 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 April 30, 2016:
Total segment revenue	$	639		$	96	$	735
Acquisition related fair value adjustments	(4		)	—		(4		)
Total net revenue	$	635		$	96	$	731
Segment income from operations	$	124		$	11	$	135
Three Months Ended April 30, 2015:
Total net revenue	$	638		$	102	$	740
Segment income from operations	$	136		$	18	$	154

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	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Six Months Ended April 30, 2016:
Total segment revenue	$	1,270		$	191	$	1,461
Acquisition related fair value adjustments	(9		)	—		(9		)
Total net revenue	$	1,261		$	191	$	1,452
Segment income from operations	$	240		$	24	$	264
Six Months Ended April 30, 2015:
Total net revenue	$	1,244		$	197	$	1,441
Segment income from operations	$	246		$	32	$	278

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

	Three Months Ended						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Total reportable segments' income from operations	$	135		$	154		$	264		$	278
Share-based compensation expense	(13		)	(13		)	(29		)	(42		)
Asset impairment	—			(2		)	—			(2		)
Amortization of intangibles	(11		)	(2		)	(22		)	(4		)
Acquisition and integration costs	(5		)	—			(5		)	—
Separation and related costs	(5		)	(5		)	(10		)	(12		)
Acquisition related fair value adjustments	(4		)	—			(9		)	—
Other	(2		)	1			4			—
Interest income	—			—			1			—
Interest expense	(12		)	(11		)	(24		)	(23		)
Other income (expense), net	4			—			1			5
Income before taxes, as reported	$	87		$	122		$	171		$	200

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

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of April 30, 2016	$	2,568	$	267	$	2,835
As of October 31, 2015	$	2,531	$	265	$	2,796

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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 and six months ended April 30, 2016, we recognized non-recurring separation and related costs of $5 million and $10 million, respectively, and for the three and six months ended April 30, 2015, we recognized non-recurring separation and related costs of $5 million and $12 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 primarily include costs related to infrastructure resizing and optimization.

Reclassifications. Other operating expense (income), net for the three and six months ended April 30, 2015 includes $5 million and $11 million, respectively, 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. 

Net revenue for the six months ended April 30, 2016 includes $5 million of product revenue that was previously classified as services and other revenue in the condensed consolidated statement of operations. Cost and expenses for the six months ended April 30, 2016 includes $7 million of costs of products that was previously classified as cost of services and other in the condensed consolidated statement of operations. The changes have no effect on reported net revenue, total costs and expenses and income for any 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.

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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 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 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, Electronic 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. To effect this transformation, we are in the process of forming the new solution groups and a corresponding management and reporting structure. We expect to finalize the changes to support management and decision-making under the new structure in the third quarter of fiscal 2016.

Three and six months ended April 30, 2016 and 2015

Total orders for the three and six months ended April 30, 2016 were $761 million and $1,440 million, respectively, an increase of 9 percent and 4 percent, respectively, when compared to the same periods last year. Foreign currency movements had an unfavorable impact of 1 percentage point on each of the year‑over‑year comparisons. Orders associated with acquisitions accounted for 8 percentage points and 7 percentage points of order growth for the three and six months ended April 30, 2016, respectively, when compared to the same periods last year.

Net revenue of $731 million and $1,452 million for the three and six months ended April 30, 2016 decreased 1 percent and increased 1 percent, respectively, when compared to the same periods last year and decreased 1 percent and increased 2 percent, respectively, excluding the impact of currency fluctuations. For the three and six months ended April 30, 2016, acquisitions added approximately 6 percentage points of revenue growth, which was offset by a decline in revenue primarily driven by a slowdown in communications revenue excluding acquisitions.

Net income for the three and six months ended April 30, 2016 was $88 million and $152 million, respectively, compared to $96 million and $166 million, respectively, for the corresponding periods last year.

Looking forward, we believe the long-term growth rate of our markets is 2 to 3 percent, although near-term 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.

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 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.

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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				Six Months Ended				Year over Year Change
	April 30,				April 30,				Three	Six
	2016		2015		2016		2015		Months	Months
	(in millions)
Orders	$	761	$	697	$	1,440	$	1,388	9%	4%
Net revenue:
Products	$	613	$	630	$	1,219	$	1,226	(3)%	(1)%
Services and other	118		110		233		215		8%	8%
Total net revenue	$	731	$	740	$	1,452	$	1,441	(1)%	1%

Orders

The following table provides the percent change in orders for the three and six months ended April 30, 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				Six Months Ended
	April 30, 2016				April 30, 2016
Geographic Region	actual		currency adjusted		actual		currency adjusted
Americas	(1	)%	(1	)%	(2	)%	(2	)%
Europe	27	%	28	%	15	%	18	%
Japan	6	%	3	%	5	%	5	%
Asia Pacific ex-Japan	14	%	16	%	5	%	7	%
Total orders	9	%	10	%	4	%	5	%

Total orders for the three and six months ended April 30, 2016 were $761 million and $1,440 million, respectively, an increase of 9 percent and 4 percent, respectively, when compared to the same periods last year. For the three months ended April 30, 2016, orders grew in all markets. For the six months ended April 30, 2016, order growth in the aerospace and defense and communication markets was partially offset by a slight decline in the industrial, computer, and semiconductor market. Foreign currency movements had an unfavorable impact of 1 percentage point on each of the year‑over‑year comparisons. Orders

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associated with acquisitions accounted for 8 percentage points and 7 percentage points of order growth for the three and six months ended April 30, 2016, respectively, when compared to the same periods last year.

Net Revenue

The following table provides the percent change in net revenue for the three and six months ended April 30, 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				Six Months Ended
	April 30, 2016				April 30, 2016
Geographic Region	actual		currency adjusted		actual		currency adjusted
Americas	(9	)%	(8	)%	(3	)%	(3	)%
Europe	11	%	11	%	8	%	11	%
Japan	(7	)%	(9	)%	2	%	2	%
Asia Pacific ex-Japan	4	%	5	%	1	%	3	%
Total net revenue	(1	)%	(1	)%	1	%	2	%

Net revenue of $731 million and $1,452 million for the three and six months ended April 30, 2016 decreased 1 percent and increased 1 percent, respectively, when compared to the same periods last year and decreased 1 percent and increased 2 percent, respectively, excluding the impact of currency fluctuations.

Revenue from the communications market, including revenue from Anite, represents approximately 34 percent of total revenue for the three and six months ended April 30, 2016, and was flat and increased 3 percent year-over-year, respectively. For the three months ended April 30, 2016, the communications market's contribution to total revenue decline was negligible, with growth in Europe offset by declines in the Americas, Japan and Asia Pacific excluding Japan. For the six months ended April 30, 2016, the communications market contributed 1 percentage point to total revenue growth, with growth in Europe and Asia Pacific excluding Japan and declines in the Americas and Japan. Revenue from the communications market was favorably impacted by Anite. Excluding Anite, communications revenue declined year-over-year as weakness in the smartphone supply chain and restructuring and consolidation activities offset strength in data center and 5G technologies.

Revenue from the aerospace and defense market, representing approximately 22 percent and 23 percent of total revenue for the three and six months ended April 30, 2016, increased 3 percent and 1 percent year-over-year, respectively. For the three months ended April 30, 2016, aerospace and defense contributed 1 percent to the total revenue growth and was driven by growth in Asia Pacific excluding Japan and Europe, partially offset by declines in the Americas and Japan. For the six months ended April 30, 2016, the aerospace and defense market's contribution to total revenue growth was negligible, with growth in Asia Pacific excluding Japan, Europe and the Americas and flat revenue in Japan.

Revenue from the industrial, computer and semiconductor market, representing approximately 44 percent and 43 percent of total revenue for the three and six months ended April 30, 2016, declined 4 percent and 1 percent year-over-year, respectively, driven by lower sales of our instrument products. The industrial, computer and semiconductor market contributed 2 percentage points to the total revenue decline for the three months ended April 30, 2016, with declines in the Americas, Europe and Japan, partially offset by an increase in Asia Pacific excluding Japan. For the six months ended April 30, 2016, the industrial, computer and semiconductor market declined 1 percent as compared to the same period last year. Declines in the Americas and Europe were partially offset by growth in Japan and Asia Pacific excluding Japan.

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Costs and Expenses

	Three Months Ended						Six Months Ended						Year over Year Change
	April 30,						April 30,						Three	Six
	2016			2015			2016			2015			Months	Months
Total gross margin	55.5		%	56.3		%	54.9		%	55.5		%	(1) ppt	(1) ppt
Operating margin	13.0		%	18.0		%	13.3		%	15.3		%	(5) ppts	(2) ppts
in millions
Research and development	$	108		$	96		$	216		$	192		12%	13%
Selling, general and administrative	$	207		$	192		$	407		$	398		8%	2%
Other operating expense (income), net	$	(4	)	$	(5	)	$	(18	)	$	(11	)	(28)%	62%

Gross margin for the three and six months ended April 30, 2016 decreased 1 percentage point compared to each of the same periods last year as unfavorable impacts from acquisition-related intangible amortization and foreign currency were partially offset by higher percentage of revenue from software and R&D solutions, lower inventory and warranty charges.

Research and development expense increased 12 percent and 13 percent for the three and six months ended April 30, 2016, respectively, compared to the same periods last year, primarily driven by the Anite acquisition. As a percentage of revenue, research and development expense increased to 15 percent for the three months and six months ended April 30, 2016 from 13 percent in the same periods 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 increased 8 percent for the three months ended April 30, 2016, compared to the same periods last year, primarily driven by the acquisition of Anite, people-related costs and acquisition and integration related costs, partially offset by the favorable impact of foreign currency movements. Selling, general and administrative expenses increased 2 percent for the six months ended April 30, 2016 compared to the same period last year, primarily driven by the acquisition of Anite, partially offset by lower shared-based compensation expense and the favorable impact of foreign currency movements.

Other operating expense (income), net for the three and six months ended April 30, 2016 was income of $4 million and $18 million, respectively, and for the three and six months ended April 30, 2015 was income of $5 million and $11 million, respectively. The increase in other operating expense (income) for the six months ended April 30, 2016 was largely driven by a gain on the sale of land.

Operating margin for the three months ended April 30, 2016 decreased 5 percentage points compared to the same period last year, primarily driven by acquisition-related intangible amortization and fair value adjustments, an increase in people-related costs and integration costs, as well as a decline in revenue. Operating margin for the six months ended April 30, 2016 decreased 2 percentage points compared to the same period last year, primarily driven by acquisition-related intangible amortization and fair value adjustments, an increase in people-related costs and integration costs, partially offset by lower shared-based compensation expense and favorable currency movements.

At April 30, 2016, our headcount was approximately 10,300 as compared to approximately 9,600 at April 30, 2015, primarily driven by acquisitions.

Interest Expense

Interest expense for the three and six months ended April 30, 2016 was $12 million and $24 million, respectively, as compared to $11 million and $23 million for both comparable periods last year, and relates to interest on our senior notes issued in October 2014.

Income Taxes

As of April 30, 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

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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 a benefit of 1.1 percent and an expense of 11.0 percent for the three and six months ended April 30, 2016, respectively. Income tax recognized was a benefit of $1 million and expense of $19 million for the three and six months ended April 30, 2016, respectively. The effective tax rate for the three months ended April 30, 2016 was a benefit due to tax planning implemented during the quarter. The company's effective tax rate was 21.7 percent and 17.2 percent for the three and six months ended April 30, 2015, respectively. Income tax expense was $26 million and $34 million for the three and six months ended April 30, 2015, respectively.

The income tax provision for the three and six months ended April 30, 2016 included a net discrete benefit of $3 million and $2 million, respectively. The income tax provision for the three and six months ended April 30, 2015 included a net discrete expense of $3 million and a net discrete benefit of $7 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 and six months ended April 30, 2016 by $9 million and $17 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.05 and $0.10 for the three and six months ended April 30, 2016, respectively. 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 April 30, 2016, our estimated annual effective tax rate is 12 percent excluding discrete items and 11 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 U.S. 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 a notice of appeal of the Tax Court decision to the Ninth Circuit, 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

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lifecycle. Our electronic design and test solutions serve the following markets: communications, aerospace and defense, and industrial, computer and semiconductor.

Net Revenue

	Three Months Ended				Six Months Ended				Year over Year Change
	April 30,				April 30,				Three	Six
	2016		2015		2016		2015		Months	Months
	(in millions)				(in millions)
Net revenue	$	639	$	638	$	1,270	$	1,244	—%	2	%

Measurement solutions revenue for the three and six months ended April 30, 2016 was flat and increased 2 percent, respectively, when compared to the same periods last year, and was flat and increased 3 percent, respectively, excluding the impact of currency fluctuations. For the three and six months ended April 30, 2016, acquisitions added approximately 8 percentage points and 7 percentage points, respectively, to revenue growth, which was offset by a decline in segment revenue primarily driven by a slowdown in communications revenue excluding acquisitions.

For the three months ended April 30, 2016, growth in the communications and aerospace and defense markets was offset by a decline in the industrial, computer and semiconductor market. For the six months ended April 30, 2016, growth in the communications market was partially offset by a decline in the aerospace and defense market, while the industrial, computer and semiconductor market was flat.

Looking forward, we believe the long-term growth rate of our markets is 2 to 3 percent, although near-term macroeconomic indicators remain mixed. In aerospace and defense we expect slow but steady growth. 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. Weakness in the smartphone supply chain and restructuring and consolidation activities are outweighing strength in data center and 5G technologies.

Gross Margin and Operating Margin

The following table shows the measurement solutions business' margins, expenses and income from operations for the three and six months ended April 30, 2016 versus the three and six months ended April 30, 2015.

	Three Months Ended						Six Months Ended						Year over Year Change
	April 30,						April 30,						Three	Six
	2016			2015			2016			2015			Months	Months
Total gross margin	60.6		%	59.3		%	59.9		%	58.5		%	1 ppt	1 ppt
Operating margin	19.5		%	21.3		%	18.9		%	19.8		%	(2) ppts	(1) ppt
in millions
Research and development	$	103		$	91		$	206		$	180		13%	15%
Selling, general and administrative	$	162		$	155		$	321		$	308		5%	4%
Other operating expense (income), net	$	(3	)	$	(4	)	$	(7	)	$	(7	)	(22)%	(4)%
Income from operations	$	124		$	136		$	240		$	246		(9)%	(3)%

Gross margin for the three and six months ended April 30, 2016 increased 1 percentage point compared to each of the same periods last year, primarily due to a higher percentage of revenue from software and R&D solutions, favorable people-related costs, inventory charges, warranty and trading expenses, partially offset by unfavorable foreign currency impact.

Research and development expense for the three and six months ended April 30, 2016 increased 13 percent and 15 percent, respectively, compared to the same periods 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 for the three and six months ended April 30, 2016, increased 5 percent and 4 percent, respectively, compared to the same periods last year, primarily driven by the acquisition of Anite, partially offset by the favorable impact of currency movements.

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Other operating expense (income), net for the three and six months ended April 30, 2016 was $3 million and $7 million, respectively, and for the three and six months ended April 30, 2015 was $4 million and $7 million, respectively.

Operating margin for the three and six months ended April 30, 2016 decreased 2 percentage points and 1 percentage point, respectively, when compared to the same periods last year, driven by higher operating expenses primarily due to the Anite acquisition and lower organic revenue.

Income from Operations

Income from operations for the three and six months ended April 30, 2016 decreased $12 million and $6 million, respectively, on a corresponding revenue increase of $1 million and $26 million, respectively, when compared to the same periods 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 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. 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.

Net Revenue

	Three Months Ended				Six Months Ended				Year over Year Change
	April 30,				April 30,				Three	Six
	2016		2015		2016		2015		Months	Months
	(in millions)				(in millions)
Net revenue	$	96	$	102	$	191	$	197	(5)%	(3	)%

Customer support and services revenue for the three and six months ended April 30, 2016 decreased 5 percent and 3 percent, respectively, when compared to the same periods last year and decreased 5 percent and 1 percent, respectively, excluding the impact of currency fluctuations. The revenue increase associated with acquisitions accounted for approximately 2 percentage points for the three and six months ended April 30, 2016 when compared to the same periods last year. For the three and six months ended April 30, 2016, declines in sales of used equipment was partially offset by increases in repair and calibration services. For the three months ended April 30, 2016, declines in Asia Pacific excluding Japan and Europe were partially offset by growth in Japan, while the Americas was flat. For the six months ended April 30, 2016, declines in Asia Pacific excluding Japan and Europe were partially offset by growth in Japan and the Americas.

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 variable as orders and revenue are primarily driven from the existing installed base of previously purchased measurement solutions products and less impacted by macroeconomic volatility.

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Gross Margin and Operating Margin

The following table shows the customer support and services business' margins, expenses and income from operations for the three and six months ended April 30, 2016 versus the three and six months ended April 30, 2015.

	Three Months Ended						Six Months Ended						Year over Year Change
	April 30,						April 30,						Three	Six
	2016			2015			2016			2015			Months	Months
Total gross margin	39.3		%	43.8		%	39.4		%	42.9		%	(5) ppts	(3	) ppts
Operating margin	11.2		%	18.2		%	12.6		%	16.4		%	(7) ppts	(4	) ppts
in millions
Research and development	$	3		$	3		$	5		$	6		(12)%	(18)%
Selling, general and administrative	$	25		$	24		$	48		$	48		5%	—%
Other operating expense (income), net	$	—		$	—		$	(1	)	$	(1	)	—%	(7)%
Income from operations	$	11		$	18		$	24		$	32		(41)%	(25)%

Gross margin for the three and six months ended April 30, 2016 decreased 5 percentage points and 3 percentage points, respectively, compared to the same periods last year, primarily driven by lower volume and higher expenses associated with 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 expense for the three and six months ended April 30, 2016 decreased 12 percent and 18 percent, respectively, compared to the same periods last year.

Selling, general and administrative expense for the three months ended April 30, 2016 increased 5 percent when compared to the same period last year due to higher field selling costs. For the six months ended April 30, 2016 selling, general and administrative expense was flat when compared to the same period last year due to lower field selling costs offset by higher infrastructure and enterprise allocation costs.

Operating margin for the three and six months ended April 30, 2016 decreased 7 percentage points and 4 percentage points, respectively, driven by lower volume and unfavorable gross margin.

Income from Operations

Income from operations for the three and six months ended April 30, 2016 decreased $7 million and $8 million, respectively, when compared to the same periods last year, on a corresponding revenue decrease of $6 million for each comparable period.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our financial position as of April 30, 2016 consisted of cash and cash equivalents of $620 million as compared to $483 million as of October 31, 2015.

As of April 30, 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 used for non-U.S. growth and expansion, however, some of this 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

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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 $209 million for the six months ended April 30, 2016 compared to net cash provided of $160 million for the same period in 2015.

• Net income for the first six months of fiscal 2016 decreased $14 million. Changes to non-cash income and expenses included an $18 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 six months of fiscal 2015 included expense associated with one-time inaugural grants, a $10 million gain from a land sale in the first six months of fiscal 2016, a $6 million decline in excess and obsolete inventory related charges, a $10 million decrease in deferred tax expense and $1 million of higher expense associated with investment losses.

• The aggregate of accounts receivable, inventory and accounts payable used net operating cash of $41 million during the first six months of fiscal 2016, compared to $21 million used 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 the six months ended April 30, 2016 as compared to the $28 million during the corresponding period last year.

• The aggregate of employee compensation and benefits, income tax payable and other assets and liabilities provided net operating cash of $16 million during the first six months of fiscal 2016, compared to $52 million used in the comparable period last year. The difference is primarily due to an increase in deferred revenue balances in the first six months of fiscal 2016 as compared to a decrease in the same period last year and other differences due to timing of accruals and collections versus payments between the periods.

• We contributed $19 million to our non-U.S. defined benefit plans during the first six months of fiscal 2016, compared to $25 million in the same period last year. We expect to contribute approximately $19 million to our non-U.S. defined benefit plans during the remainder of 2016. For the six months ended April 30, 2016 and 2015, we did not contribute 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 $62 million for the six months ended April 30, 2016 as compared to $30 million for the same period last year. Investments in property, plant and equipment were $62 million for the six months ended April 30, 2016 compared to $31 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 $100 million.

In the six months ended April 30, 2016, we used $10 million, net of cash acquired, for the acquisition of a small business and related intangibles assets and a contingent payment related to the Anite acquisition. We also received $10 million of proceeds from the sale of land in the six months ended April 30, 2016.

Net Cash Used in Financing Activities

Cash flows related to financing activities consist primarily of cash flows associated with the issuance of common stock, excess tax benefits from share-based plans and treasury stock repurchases. Net cash used in financing activities for the six months ended April 30, 2016 was $16 million compared to cash used of $38 million for the same period in 2015.

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We received proceeds of $24 million from issuance of common stock under employee stock option plans in the six months ended April 30, 2016 as compared to $8 million in the same period last year.

On February 18, 2016, our Board of Directors approved a stock repurchase program under which the company is authorized to repurchase up to $200 million of the company’s outstanding common stock through open market purchases, privately negotiated transactions or other means. The new repurchase program may be suspended or discontinued at any time at the company’s discretion. For the six months ended April 30, 2016, the company paid $40 million to repurchase shares.

Financing activities in the six months ended April 30, 2015 also reflects $49 million of cash returned to Agilent in accordance with the separation and distribution agreement.

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 April 30, 2016 the company had no borrowings outstanding under the facility. We were in compliance with the covenants for the credit facility during the six months ended April 30, 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 April 30, 2016, the company had no borrowings outstanding under the facility. We were in compliance with the covenants for the credit facility during the six months ended April 30, 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 six months ended April 30, 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

In March 2016, we assumed approximately $1 million of long-term debt in connection with an acquisition. In May 2016, this debt was subsequently repaid in full.

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 six 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 $21 million and $21 million of liabilities related to uncertain tax positions as of April 30, 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 six months ended April 30, 2016 to this information reported in the company’s 2015 Annual Report on Form 10-K.

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.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended April 30, 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.

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;

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• 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 electronic 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, 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 communications 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.

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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 under such less favorable terms, 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. However, there can be no assurances that our international sales will continue at existing levels or grow in accordance with our effort to increase foreign market penetration. 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 actively maintain policies and procedures designed to ensure ongoing 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 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.

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 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.

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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.

Any inability to complete acquisitions on acceptable terms could negatively impact our growth rate and financial performance.

Our ability to grow revenues, earnings and cash flow depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies and business performance. Appropriate targets for acquisition are difficult to identify and complete for a variety of reasons, including but not limited to, limited due diligence, high valuations, business and intellectual property evaluations, other interested parties, negotiations of the definitive documentation, satisfaction of closing conditions, the need to obtain antitrust or other regulatory approvals on acceptable terms, and availability of funding. The inability to close appropriate acquisitions on acceptable terms could adversely impact our growth rate, revenue, and financial performance.

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 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

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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 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

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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 and the fair value of our pension assets will be in future years or what interest rates and discount 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,

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accounting, auditing, human resources, corporate affairs and finance. Our historical financial results reflect allocations of 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,

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including those regarding the past and future conduct of the companies' respective businesses and other matters. If any of these 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.

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;

• 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.

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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).

        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.

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        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.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

The table below summarizes information about the company’s purchases, based on trade date; of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended April 30, 2016.

Period	Total Number of Shares of Common Stock Purchased (1)	Weighted Average Price Paid per Share of Common Stock (2)		Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Approximate Dollar Value of Shares of Common Stock that May Yet Be Purchased Under the Program (1)
Feb. 1, 2016 through Feb. 29, 2016	435,600	$	25.60	435,600	$	188,850,047
Mar. 1, 2016 through Mar. 31, 2016	1,005,855	$	26.53	1,005,855	$	162,165,219
Apr. 1, 2016 through Apr. 30, 2016	139,665	$	26.49	139,665	$	158,464,991
Total	1,581,120	$	26.27	1,581,120

(1)

On February 18, 2016, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $200 million of the company’s common stock. Under the program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The stock repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion and does not have an expiration date. All such shares and related costs are held as treasury stock and accounted for using the cost method.

(2)

The weighted average price paid per share of common stock does not include the cost of commissions.

ITEM 6. EXHIBITS

(a)Exhibits:

A list of exhibits is set forth in the Exhibit Index found on page 48 of this report.

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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:	June 3, 2016	By:	/s/ Neil Dougherty
			Neil Dougherty
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)
Dated:	June 3, 2016	By:	/s/ John C. Skinner
			John C. Skinner
			Vice President and Corporate Controller
			(Principal Accounting Officer)

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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

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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:	June 3, 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:	June 3, 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 Quarterly Report of Keysight Technologies, Inc. (the "Company") on Form 10-Q for the period ended April 30, 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:	June 3, 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 Quarterly Report of Keysight Technologies, Inc. (the "Company") on Form 10-Q for the period ended April 30, 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:	June 3, 2016	/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Apr. 30, 2016	Jun. 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		170,227,893
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 30, 2016
Trading Symbol	KEYS

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Net revenue [Abstract]
Products	$ 613	$ 630	$ 1,219	$ 1,226
Services and other	118	110	233	215
Total net revenue	731	740	1,452	1,441
Costs and expenses:
Cost of products	263	264	530	524
Cost of services and other	62	60	124	118
Total costs	325	324	654	642
Research and development	108	96	216	192
Selling, general and administrative	207	192	407	398
Other Operating Expense (Income), Net	(4)	(5)	(18)	(11)
Total costs and expenses	636	607	1,259	1,221
Income from operations	95	133	193	220
Interest income	0	1	1	1
Interest expense	(12)	(11)	(24)	(23)
Other income (expense), net	4	(1)	1	2
Income before taxes, as reported	87	122	171	200
Provision (Benefit) for income taxes	(1)	26	19	34
Net Income	$ 88	$ 96	$ 152	$ 166
Net income per share:
Basic (in dollars per share)	$ 0.52	$ 0.57	$ 0.89	$ 0.99
Diluted (in dollars per share)	$ 0.51	$ 0.56	$ 0.88	$ 0.97
Weighted average shares used in computing net income per share:
Basic (in shares)	170	169	171	168
Diluted (in shares)	172	171	172	171

XML

CONDENSED AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Other comprehensive income (loss):
Net Income	$ 88	$ 96	$ 152	$ 166
Unrealized gain (loss) on investments, net of tax benefit (expense) of zero, $(1), $1 and $(1)	(1)	8	(7)	8
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $1, $(1), zero and $1	(2)	2	(1)	(1)
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $(1), zero, $(2) and zero	2	(1)	5	(2)
Foreign currency translation, net of tax benefit (expense) of zero	56	(1)	31	(34)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $4, $3, $10 and $6	10	8	22	16
Change in net prior service benefit, net of tax benefit of $2, $3, $5 and $6	(5)	(4)	(8)	(8)
Other comprehensive income (loss)	60	12	42	(21)
Total comprehensive income	$ 148	$ 108	$ 194	$ 145

XML

CONDENSED AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract]
Unrealized gain (loss) on investments, tax	$ 0	$ (1)	$ 1	$ (1)
Unrealized gain (loss) on derivative instruments, tax	1	(1)	0	1
Amounts reclassified into earnings related to derivative instruments, tax	(1)	0	(2)	0
Foreign currency translation, tax	0	0	0	0
Net defined benefit pension cost and post retirement plan costs, tax [Abstract]
Change in actuarial net loss, tax	(4)	(3)	(10)	(6)
Change in net prior service benefit, tax	$ 2	$ 3	$ 5	$ 6

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Apr. 30, 2016	Oct. 31, 2015
Current assets:
Cash and cash equivalents	$ 620	$ 483
Accounts receivable, net	408	398
Inventory	475	487
Deferred Tax Assets	75	74
Other current assets	159	137
Total current assets	1,737	1,579
Property, plant and equipment, net	531	518
Goodwill	731	700
Other intangible assets, net	226	246
Long-term investments	58	70
Long-term deferred tax assets	264	295
Other assets	108	100
Total assets	3,655	3,508
Current liabilities:
Accounts payable	168	209
Employee compensation and benefits	174	168
Deferred revenue	198	175
Income and other taxes payable	39	50
Other accrued liabilities	73	84
Total current liabilities	652	686
Long-term debt	1,100	1,099
Retirement and post-retirement benefits	250	280
Long-term deferred revenue	69	61
Other long-term liabilities	84	80
Total liabilities	$ 2,155	$ 2,206
Commitments and contingencies (Note 12)
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 at April 30, 2016 and 170 million shares at October 31, 2015 issued	2	2
Treasury stock at cost; 1.6 million shares at April 30, 2016 and zero shares at October 31, 2015	(42)	0
Additional paid-in-capital	1,211	1,165
Retained earnings	766	614
Accumulated other comprehensive loss	(437)	(479)
Total stockholder's equity	1,500	1,302
Total liabilities and equity	$ 3,655	$ 3,508

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Apr. 30, 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, Shares, Issued	171,000,000	170,000,000
Treasury Stock, Shares	1,600,000	0

XML

CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015
Net Income	$ 152	$ 166
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	67	46
Share-based compensation	29	42
Excess tax benefit from share-based plans	0	(3)
Deferred taxes	3	13
Excess and obsolete inventory related charges	11	17
Gain on sale of land	(10)	0
Other non-cash expenses (income), net	2	1
Changes in assets and liabilities:
Accounts receivable	(3)	(5)
Inventory	(11)	(17)
Accounts payable	(27)	1
Increase (Decrease) in Due To/From Agilent, Current	0	(28)
Employee compensation and benefits	11	7
Increase (Decrease) in Pension and Postretirement Obligations	(20)	(21)
Increase (Decrease) in Income Taxes Payable	2	3
Other assets and liabilities	3	(62)
Net cash provided by operating activities	209	160
Cash flows from investing activities:
Investments in property, plant and equipment	(62)	(31)
Proceeds from sale of investments	0	1
Payments for (Proceeds from) Businesses and Interest in Affiliates	(10)	0
Proceeds from Sale of Land Held-for-use	10	0
Net cash used in investing activities	(62)	(30)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	24	8
Payments for Repurchase of Common Stock	(40)	0
Return of capital to Agilent	0	(49)
Excess tax benefit from share-based plans	0	3
Net Cash used in Financing Activities	(16)	(38)
Effect of exchange rate movements	6	(8)
Net increase in cash and cash equivalents	137	84
Cash and cash equivalents at beginning of period	483	810
Cash and cash equivalents at end of period	620	894
Interest Expense, Long-term Debt	22	24
Income Taxes Paid, Net	$ 8	$ 22

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Apr. 30, 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 and six months ended April 30, 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 April 30, 2016 and October 31, 2015, condensed consolidated statement of comprehensive income for the three and six months ended April 30, 2016 and 2015, condensed consolidated statement of operations for the three and six months ended April 30, 2016 and 2015, and condensed consolidated statement of cash flows for the six months ended April 30, 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 six months ended April 30, 2016 we recognized a $10 million gain on the sale of the second of three land tracts in other operating expense (income), net.

Restricted Cash. Restricted cash of $1.5 million primarily consists of deposit held as collateral against bank guarantee and is classified within other assets on the condensed consolidated balance sheet.

Reclassifications. Other operating expense (income), net for the three and six months ended April 30, 2015 includes $5 million and $11 million, respectively, 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.

Net revenue for the six months ended April 30, 2016 includes $5 million of product revenue that was previously classified as services and other revenue in the condensed consolidated statement of operations. Cost and expenses for the six months ended April 30, 2016 includes $7 million of costs of products that was previously classified as cost of services and other in the condensed consolidated statement of operations. The changes have no effect on reported net revenue, total costs and expenses and income for any periods 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

6 Months Ended

Apr. 30, 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. In addition, during March, April, and May 2016, the FASB issued guidance that clarified the reporting of revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, narrow-scope improvements, and practical expedients. 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 that requires deferred income tax liabilities and assets to be classified as non-current 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 non-current 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.

In March 2016, the FASB issued guidance that simplifies the accounting for taxes related to share-based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. The standard is effective for annual and interim periods beginning after December 31, 2016. 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)

6 Months Ended

Apr. 30, 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 and six months ended April 30, 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 are not expected to be material.

In February 2016, we paid approximately $1 million related to the contingent consideration established during the preliminary purchase price allocation in connection with Anite's equity-settled share-based payment arrangements.

Acquisition and integration costs directly related to the Anite acquisition totaled $4 million and $7 million for the three and six months ended April 30, 2016, 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 April 30, 2015		Six Months Ended April 30, 2015
Net revenue	$	791	$	1,543
Net income	$	101	$	170
Net income per share - Basic	$	0.60	$	1.01
Net income per share - Diluted	$	0.59	$	0.99

The unaudited pro forma financial information for the three and six months ended April 30, 2015 combines the historical results of Keysight and Anite for the three and six months ended April 30, 2015, assuming 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.

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SHARE-BASED COMPENSATION

6 Months Ended

Apr. 30, 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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Cost of products and services	$	4	$	4	$	7	$	8
Research and development	2		2		5		6
Selling, general and administrative	7		7		17		28
Total share-based compensation expense	$	13	$	13	$	29	$	42

At April 30, 2016 and 2015, there was no share-based compensation capitalized within inventory. The expense for the three and six months ended April 30, 2016 includes $2 million and $3 million, respectively, related to special inaugural RSU awards granted during the three months ended January 31, 2015. The expense for the three and six months ended April 30, 2015 includes $1 million and $15 million, respectively, related to these special inaugural RSU grants. 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				Six Months Ended
	April 30,				April 30,
	2016		2015		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	%	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%		14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%	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 and six months ended April 30, 2016. For the six months ended April 30, 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

6 Months Ended

Apr. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

As of April 30, 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 a benefit of 1.1 percent and an expense of 11.0 percent for the three and six months ended April 30, 2016, respectively. Income tax recognized was a benefit of $1 million and expense of $19 million for the three and six months ended April 30, 2016, respectively. The effective tax rate for the three months ended April 30, 2016 was a benefit due to tax planning implemented during the quarter. The company's effective tax rate was 21.7 percent and 17.2 percent for the three and six months ended April 30, 2015, respectively. Income tax expense was $26 million and $34 million for the three and six months ended April 30, 2015, respectively.

The income tax provision for the three and six months ended April 30, 2016 included a net discrete benefit of $3 million and $2 million, respectively. The income tax provision for the three and six months ended April 30, 2015 included a net discrete expense of $3 million and a net discrete benefit of $7 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 and six months ended April 30, 2016 by $9 million and $17 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.05 and $0.10 for the three and six months ended April 30, 2016, respectively. 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

6 Months Ended

Apr. 30, 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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Numerator:
Net income	$	88	$	96	$	152	$	166
Denominator:
Basic weighted-average shares	170		169		171		168
Potential common shares— stock options and other employee stock plans	2		2		1		3
Diluted weighted-average shares	172		171		172		171

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 the effect would be anti-dilutive. For the three and six months ended April 30, 2016, 1.7 million options to purchase shares were excluded from the calculation of diluted earnings per share, respectively. In addition, we excluded stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price, unamortized fair value and excess tax benefits or shortfalls collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three and six months ended April 30, 2016, we excluded 30,000 and 23,100 shares, respectively.

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INVENTORY

6 Months Ended

Apr. 30, 2016

Inventory, Net [Abstract]

INVENTORY

INVENTORY

	April 30, 2016		October 31, 2015
	(in millions)
Finished goods	$	226	$	235
Purchased parts and fabricated assemblies	249		252
Total Inventory	$	475	$	487

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Apr. 30, 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 six months ended April 30, 2016:

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Goodwill as of October 31, 2015	$	637	$	63	$	700
Foreign currency translation impact	19		2		21
Goodwill arising from acquisitions	10		—		10
Goodwill as of April 30, 2016	$	666	$	65	$	731

The components of other intangible assets as of April 30, 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 April 30, 2016:
Developed technology	$	307	$	142	$	165
Backlog	4		4		—
Trademark/Tradename	20		3		17
Customer relationships	64		32		32
Total amortizable intangible assets	395		181		214
In-Process R&D	12		—		12
Total	$	407	$	181	$	226

During the six months ended April 30, 2016, we recognized additions to goodwill and other intangible assets of $10 million and $6 million, respectively, based on our preliminary estimates of acquisition date fair values related to one acquisition. During the six months ended April 30, 2016, we recorded $4 million of foreign exchange translation impact to other intangible assets.

Amortization of other intangible assets was $10 million and $22 million for the three and six months ended April 30, 2016, respectively. Amortization of other intangible assets was $2 million and $4 million for the three and six months ended April 30, 2015, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $22 million for the remainder of 2016, $40 million for 2017, $37 million for 2018, $37 million for 2019, $36 million for 2020 and $42 million thereafter.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Apr. 30, 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 April 30, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at April 30, 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)	$	373	$	373	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	422	$	415	$	7	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	10	$	—	$	10	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	21	$	—	$	21	$	—	$	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

6 Months Ended

Apr. 30, 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 and six months ended April 30, 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 April 30, 2016 was $9 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of April 30, 2016.

There were 123 foreign exchange forward contracts open as of April 30, 2016 that were designated as cash flow hedges. There were 79 foreign exchange forward contracts and zero foreign exchange option contract open as of April 30, 2016 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of April 30, 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	$	—		$	—	$	51		—
British Pound	—			—		(34		)	—
Singapore Dollar	9			—		(4		)	—
Malaysian Ringgit	68			—		(8		)	—
Japanese Yen	(67		)	—		(60		)	—
Other currencies	(9		)	—		(14		)	—
Totals	$	1		$	—	$	(69	)	$	—

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 April 30, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	April 30, 2016		October 31, 2015		Balance Sheet Location	April 30, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	—	Other accrued liabilities	$	6	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	4		2
Total derivatives	$	7	$	1		$	10	$	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					Six Months Ended
	April 30,					April 30,
	2016			2015		2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(3	)	$	3	$	(1	)	$	(2	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	(3	)	$	1	$	(7	)	$	2
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	—		$	2	$	(2	)	$	(4	)

The estimated amount of existing net loss at April 30, 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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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

6 Months Ended

Apr. 30, 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 and six months ended April 30, 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 April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	4		$	5		$	—		$	1
Interest cost on benefit obligation	6			5			8			10			2			2
Expected return on plan assets	(9		)	(10		)	(18		)	(18		)	(4		)	(3		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(1		)	—			—			(4		)	(6		)
Total periodic benefit cost (benefit)	$	2		$	1		$	1		$	4		$	(1	)	$	(3	)

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Six Months Ended April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	10		$	11		$	8		$	9		$	—		$	1
Interest cost on benefit obligation	12			10			16			21			4			4
Expected return on plan assets	(18		)	(19		)	(37		)	(37		)	(7		)	(7		)
Amortization:
Net actuarial losses	4			2			14			14			10			6
Prior service credit	(4		)	(3		)	—			—			(8		)	(11		)
Total periodic benefit cost (benefit)	$	4		$	1		$	1		$	7		$	(1	)	$	(7	)

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three and six months ended April 30, 2016 and 2015. We contributed $9 million and $19 million to our Non-U.S. Defined Benefit Plans during the three and six months ended April 30, 2016, respectively, and contributed $11 million and $25 million to our Non-U.S. Defined Benefit Plans during the three and six months ended April 30, 2015, respectively.

During the remainder of 2016, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $19 million to our Non-U.S. Defined Benefit Plans.

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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WARRANTY, COMMITMENTS AND CONTINGENCIES

6 Months Ended

Apr. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

WARRANTY, COMMITMENTS AND CONTINGENCIES

WARRANTY, COMMITMENTS 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:

	Six Months Ended
	April 30,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	14			17
Settlements made during the period	(16		)	(16		)
Ending balance	$	51		$	52
Accruals for warranties due within one year	$	33		$	39
Accruals for warranties due after one year	18			13
Ending balance	$	51		$	52

Commitments

There were no material changes during the six months ended April 30, 2016 to the operating lease commitments reported

in the company’s 2015 Annual Report on Form 10-K.

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)

6 Months Ended

Apr. 30, 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 April 30, 2016, we had no borrowings outstanding under the credit facility. We were in compliance with the covenants of the credit facility during the six months ended April 30, 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 April 30, 2016, we had no borrowings outstanding under the facility. We were in compliance with the covenants of the credit facility during the six months ended April 30, 2016.

Long-Term Debt

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

	April 30, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Other	1		—
Total	$	1,100	$	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, during the six months ended April 30, 2016 as compared to the senior notes described in our Annual Report on Form 10-K for fiscal year ended October 31, 2015.

In March 2016, we assumed approximately $1 million of long-term debt in connection with an acquisition. In May 2016, this debt was subsequently repaid in full.

As of April 30, 2016 and October 31, 2015, we had $16 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 above the carrying value by approximately $7 million and was below the carrying value by $8 million as of April 30, 2016 and October 31, 2015, respectively.

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STOCKHOLDERS' EQUITY

6 Months Ended

Apr. 30, 2016

Statement of Comprehensive Income [Abstract]

STOCKHOLDERS EQUITY

STOCKHOLDERS' EQUITY

Stock Repurchase Program

On February 18, 2016, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $200 million of the company’s common stock. Under the program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The stock repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion and does not have an expiration date.

For the six months ended April 30, 2016, we repurchased 1.6 million shares of common stock for $42 million. All such shares and related costs are held as treasury stock and accounted for at trade date using the cost method.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three and six months ended April 30, 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 January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
Other comprehensive income (loss) before reclassifications	(1		)	56			—			—			(3		)	52
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(7		)	3			10
Tax (expense) benefit	—			—			(4		)	2			—			(2		)
Other comprehensive income (loss)	(1		)	56			10			(5		)	—			60
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(8		)	31			4			—			(1		)	26
Amounts reclassified out of accumulated other comprehensive loss	—			—			28			(13		)	7			22
Tax (expense) benefit	1			—			(10		)	5			(2		)	(6		)
Other comprehensive income (loss)	(7		)	31			22			(8		)	4			42
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)

							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 January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)
Other comprehensive income (loss) before reclassifications	9			(1		)	—			—			3			11
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	(1		)	—			(3		)	3			(1		)	(2		)
Other comprehensive income (loss)	8			(1		)	8			(4		)	1			12
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	9			(34		)	—			—			(2		)	(27		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			22			(14		)	(2		)	6
Tax (expense) benefit	(1		)	—			(6		)	6			1			—
Other comprehensive income (loss)	8			(34		)	16			(8		)	(3		)	(21		)
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)

Reclassifications out of accumulated other comprehensive loss for the three and six months ended April 30, 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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Unrealized gain on derivatives	$	(3	)	$	1		$	(7	)	$	2		Cost of sales
	1			—			2			—			Provision for income taxes
	(2		)	1			(5		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)	(28		)	(22		)
Prior service benefit	7			7			13			14
	(7		)	(4		)	(15		)	(8		)	Total before income tax
	2			—			5			—			Provision for income taxes
	(5		)	(4		)	(10		)	(8		)	Net of income tax
Total reclassifications for the period	$	(7	)	$	(3	)	$	(15	)	$	(6	)

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 11, "Retirement Plans and Post Retirement Pension Plans").

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SEGMENT INFORMATION

6 Months Ended

Apr. 30, 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 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 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 design and test 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 April 30, 2016:
Total segment revenue	$	639		$	96	$	735
Acquisition related fair value adjustments	(4		)	—		(4		)
Total net revenue	$	635		$	96	$	731
Segment income from operations	$	124		$	11	$	135
Three Months Ended April 30, 2015:
Total net revenue	$	638		$	102	$	740
Segment income from operations	$	136		$	18	$	154

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Six Months Ended April 30, 2016:
Total segment revenue	$	1,270		$	191	$	1,461
Acquisition related fair value adjustments	(9		)	—		(9		)
Total net revenue	$	1,261		$	191	$	1,452
Segment income from operations	$	240		$	24	$	264
Six Months Ended April 30, 2015:
Total net revenue	$	1,244		$	197	$	1,441
Segment income from operations	$	246		$	32	$	278

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

	Three Months Ended						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Total reportable segments' income from operations	$	135		$	154		$	264		$	278
Share-based compensation expense	(13		)	(13		)	(29		)	(42		)
Asset impairment	—			(2		)	—			(2		)
Amortization of intangibles	(11		)	(2		)	(22		)	(4		)
Acquisition and integration costs	(5		)	—			(5		)	—
Separation and related costs	(5		)	(5		)	(10		)	(12		)
Acquisition related fair value adjustments	(4		)	—			(9		)	—
Other	(2		)	1			4			—
Interest income	—			—			1			—
Interest expense	(12		)	(11		)	(24		)	(23		)
Other income (expense), net	4			—			1			5
Income before taxes, as reported	$	87		$	122		$	171		$	200

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

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of April 30, 2016	$	2,568	$	267	$	2,835
As of October 31, 2015	$	2,531	$	265	$	2,796

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ACQUISITION OF ANITE (Tables)

6 Months Ended

Apr. 30, 2016

Business Acquisition [Line Items]

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

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 April 30, 2015		Six Months Ended April 30, 2015
Net revenue	$	791	$	1,543
Net income	$	101	$	170
Net income per share - Basic	$	0.60	$	1.01
Net income per share - Diluted	$	0.59	$	0.99

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Apr. 30, 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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Cost of products and services	$	4	$	4	$	7	$	8
Research and development	2		2		5		6
Selling, general and administrative	7		7		17		28
Total share-based compensation expense	$	13	$	13	$	29	$	42

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				Six Months Ended
	April 30,				April 30,
	2016		2015		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	%	25	%	26	%
Volatility of selected peer-company shares	14%-54%		17%-67%		14%-54%		17%-67%
Price-wise correlation with selected peers	38	%	38	%	38	%	38	%

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NET INCOME PER SHARE (Tables)

6 Months Ended

Apr. 30, 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				Six Months Ended
	April 30,				April 30,
	2016		2015		2016		2015
	(in millions)
Numerator:
Net income	$	88	$	96	$	152	$	166
Denominator:
Basic weighted-average shares	170		169		171		168
Potential common shares— stock options and other employee stock plans	2		2		1		3
Diluted weighted-average shares	172		171		172		171

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INVENTORY (Tables)

6 Months Ended

Apr. 30, 2016

Inventory, Net [Abstract]

INVENTORY

	April 30, 2016		October 31, 2015
	(in millions)
Finished goods	$	226	$	235
Purchased parts and fabricated assemblies	249		252
Total Inventory	$	475	$	487

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Apr. 30, 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 six months ended April 30, 2016:

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Goodwill as of October 31, 2015	$	637	$	63	$	700
Foreign currency translation impact	19		2		21
Goodwill arising from acquisitions	10		—		10
Goodwill as of April 30, 2016	$	666	$	65	$	731

Components of other intangibles during the period

The components of other intangible assets as of April 30, 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 April 30, 2016:
Developed technology	$	307	$	142	$	165
Backlog	4		4		—
Trademark/Tradename	20		3		17
Customer relationships	64		32		32
Total amortizable intangible assets	395		181		214
In-Process R&D	12		—		12
Total	$	407	$	181	$	226

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Apr. 30, 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 April 30, 2016 and October 31, 2015 were as follows:

	Fair Value Measurements at April 30, 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)	$	373	$	373	$	—	$	—	$	295	$	295	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		1		—		1		—
Long-term
Trading securities	11		11		—		—		12		12		—		—
Available-for-sale investments	31		31		—		—		41		41		—		—
Total assets measured at fair value	$	422	$	415	$	7	$	—	$	349	$	348	$	1	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	10	$	—	$	10	$	—	$	10	$	—	$	10	$	—
Long-term
Deferred compensation liability	11		—		11		—		12		—		12		—
Total liabilities measured at fair value	$	21	$	—	$	21	$	—	$	22	$	—	$	22	$	—

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DERIVATIVES (Tables)

6 Months Ended

Apr. 30, 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 April 30, 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	$	—		$	—	$	51		—
British Pound	—			—		(34		)	—
Singapore Dollar	9			—		(4		)	—
Malaysian Ringgit	68			—		(8		)	—
Japanese Yen	(67		)	—		(60		)	—
Other currencies	(9		)	—		(14		)	—
Totals	$	1		$	—	$	(69	)	$	—

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 April 30, 2016 and October 31, 2015 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	April 30, 2016		October 31, 2015		Balance Sheet Location	April 30, 2016		October 31, 2015
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	—	Other accrued liabilities	$	6	$	8
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	4		2
Total derivatives	$	7	$	1		$	10	$	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					Six Months Ended
	April 30,					April 30,
	2016			2015		2016			2015
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(3	)	$	3	$	(1	)	$	(2	)
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	(3	)	$	1	$	(7	)	$	2
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	—		$	2	$	(2	)	$	(4	)

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables)

6 Months Ended

Apr. 30, 2016

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

Schedule of net pension and post-retirement benefit costs

For the three and six months ended April 30, 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 April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	4		$	5		$	—		$	1
Interest cost on benefit obligation	6			5			8			10			2			2
Expected return on plan assets	(9		)	(10		)	(18		)	(18		)	(4		)	(3		)
Amortization:
Net actuarial losses	2			1			7			7			5			3
Prior service credit	(2		)	(1		)	—			—			(4		)	(6		)
Total periodic benefit cost (benefit)	$	2		$	1		$	1		$	4		$	(1	)	$	(3	)

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Six Months Ended April 30,
	2016			2015			2016			2015			2016			2015
	(in millions)
Service cost—benefits earned during the period	$	10		$	11		$	8		$	9		$	—		$	1
Interest cost on benefit obligation	12			10			16			21			4			4
Expected return on plan assets	(18		)	(19		)	(37		)	(37		)	(7		)	(7		)
Amortization:
Net actuarial losses	4			2			14			14			10			6
Prior service credit	(4		)	(3		)	—			—			(8		)	(11		)
Total periodic benefit cost (benefit)	$	4		$	1		$	1		$	7		$	(1	)	$	(7	)

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WARRANTY, COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Apr. 30, 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:

	Six Months Ended
	April 30,
	2016			2015
	(in millions)
Beginning balance	$	53		$	51
Accruals for warranties including change in estimate	14			17
Settlements made during the period	(16		)	(16		)
Ending balance	$	51		$	52
Accruals for warranties due within one year	$	33		$	39
Accruals for warranties due after one year	18			13
Ending balance	$	51		$	52

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DEBT (Tables)

6 Months Ended

Apr. 30, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

	April 30, 2016		October 31, 2015
	(in millions)
3.30% Senior Notes due 2019	$	499	$	499
4.55% Senior Notes due 2024	600		600
Other	1		—
Total	$	1,100	$	1,099

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STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Apr. 30, 2016

Apr. 30, 2015

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 and six months ended April 30, 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 January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)
Other comprehensive income (loss) before reclassifications	(1		)	56			—			—			(3		)	52
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(7		)	3			10
Tax (expense) benefit	—			—			(4		)	2			—			(2		)
Other comprehensive income (loss)	(1		)	56			10			(5		)	—			60
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(8		)	31			4			—			(1		)	26
Amounts reclassified out of accumulated other comprehensive loss	—			—			28			(13		)	7			22
Tax (expense) benefit	1			—			(10		)	5			(2		)	(6		)
Other comprehensive income (loss)	(7		)	31			22			(8		)	4			42
As of April 30, 2016	$	14		$	(17	)	$	(489	)	$	57		$	(2	)	$	(437	)

							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 January 31, 2015	$	16		$	(27	)	$	(436	)	$	79		$	(1	)	$	(369	)
Other comprehensive income (loss) before reclassifications	9			(1		)	—			—			3			11
Amounts reclassified out of accumulated other comprehensive loss	—			—			11			(7		)	(1		)	3
Tax (expense) benefit	(1		)	—			(3		)	3			(1		)	(2		)
Other comprehensive income (loss)	8			(1		)	8			(4		)	1			12
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)
As of October 31, 2014	$	16		$	6		$	(444	)	$	83		$	3		$	(336	)
Other comprehensive income (loss) before reclassifications	9			(34		)	—			—			(2		)	(27		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			22			(14		)	(2		)	6
Tax (expense) benefit	(1		)	—			(6		)	6			1			—
Other comprehensive income (loss)	8			(34		)	16			(8		)	(3		)	(21		)
As of April 30, 2015	$	24		$	(28	)	$	(428	)	$	75		$	—		$	(357	)

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive loss for the three and six months ended April 30, 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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Unrealized gain on derivatives	$	(3	)	$	1		$	(7	)	$	2		Cost of sales
	1			—			2			—			Provision for income taxes
	(2		)	1			(5		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(14		)	(11		)	(28		)	(22		)
Prior service benefit	7			7			13			14
	(7		)	(4		)	(15		)	(8		)	Total before income tax
	2			—			5			—			Provision for income taxes
	(5		)	(4		)	(10		)	(8		)	Net of income tax
Total reclassifications for the period	$	(7	)	$	(3	)	$	(15	)	$	(6	)

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SEGMENT INFORMATION (Tables)

6 Months Ended

Apr. 30, 2016

Segment Reporting [Abstract]

Segment Profitability and Segment Assets

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Three Months Ended April 30, 2016:
Total segment revenue	$	639		$	96	$	735
Acquisition related fair value adjustments	(4		)	—		(4		)
Total net revenue	$	635		$	96	$	731
Segment income from operations	$	124		$	11	$	135
Three Months Ended April 30, 2015:
Total net revenue	$	638		$	102	$	740
Segment income from operations	$	136		$	18	$	154

	Measurement Solutions			Customer Support and Services		Total Segments
	(in millions)
Six Months Ended April 30, 2016:
Total segment revenue	$	1,270		$	191	$	1,461
Acquisition related fair value adjustments	(9		)	—		(9		)
Total net revenue	$	1,261		$	191	$	1,452
Segment income from operations	$	240		$	24	$	264
Six Months Ended April 30, 2015:
Total net revenue	$	1,244		$	197	$	1,441
Segment income from operations	$	246		$	32	$	278

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

	Measurement Solutions		Customer Support and Services		Total
	(in millions)
Assets:
As of April 30, 2016	$	2,568	$	267	$	2,835
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						Six Months Ended
	April 30,						April 30,
	2016			2015			2016			2015
	(in millions)
Total reportable segments' income from operations	$	135		$	154		$	264		$	278
Share-based compensation expense	(13		)	(13		)	(29		)	(42		)
Asset impairment	—			(2		)	—			(2		)
Amortization of intangibles	(11		)	(2		)	(22		)	(4		)
Acquisition and integration costs	(5		)	—			(5		)	—
Separation and related costs	(5		)	(5		)	(10		)	(12		)
Acquisition related fair value adjustments	(4		)	—			(9		)	—
Other	(2		)	1			4			—
Interest income	—			—			1			—
Interest expense	(12		)	(11		)	(24		)	(23		)
Other income (expense), net	4			—			1			5
Income before taxes, as reported	$	87		$	122		$	171		$	200

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Common Stock [Member]	Oct. 22, 2014 shares
Spin off from Agilent [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	6 Months Ended
	Apr. 30, 2016 USD ($)
Retail Land Sales, Installment Method, Gross Profit, Deferred [Abstract]
Date of Land Sale Agreeement	Apr. 30, 2014
Retail Land Sales, Installment Method, Sales Value	$ 34
Retail Land Sales, Installment Method, Gross Profit	$ 10

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Other Operating Expense (Income), Net (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Apr. 30, 2015	Apr. 30, 2015
Accounting Policies [Abstract]
Re-class from Other expense (income),net to Other operating expense (income), net	$ 5	$ 11

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted Cash (Details)	Apr. 30, 2016 USD ($)
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents, Noncurrent	$ 1,500,000.0

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Re-classification (Details) $ in Millions	6 Months Ended
	Apr. 30, 2016 USD ($)
Supplemental Income Statement Elements [Abstract]
Product Revenue that was previously classified as Services and Other Revenue	$ 5
Cost of Products that was previously classified as Cost of Services and Others	$ 7

XML

ACQUISITION OF ANITE Pro Forma operating results - if acquisition was connsumated (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Apr. 30, 2015	Apr. 30, 2015
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 791	$ 1,543
Business Acquisition, Pro Forma Net Income (Loss)	$ 101	$ 170
Business Acquisition, Pro Forma Earnings Per Share, Basic	$ 0.60	$ 1.01
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ 0.59	$ 0.99

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ACQUISITION OF ANITE (Narrative) (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended	6 Months Ended
	Aug. 13, 2015	Feb. 29, 2016	Apr. 30, 2016	Apr. 30, 2016	Aug. 31, 2015
Business Acquisition [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired					100.00%
Business Acquisition, Name of Acquired Entity	Anite
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability		$ 1
Anite [Member]
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition	Aug. 13, 2015
Business Acquisition, Description of Acquired Entity	Anite was a U.K.-based global company with strong software expertise and a leading supplier of wireless test solutions.
Payments to Acquire Business, Net of Cash Acquired	$ 558
Cash Acquired from Acquisition	$ 43
Anite [Member] | Selling, general and administrative
Business Acquisition [Line Items]
Business Combination, Integration Related Costs			$ 4	$ 7

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SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($)			3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount	$ 0	$ 0
Allocated Share-based Compensation Expense			$ 13,000,000	$ 13,000,000	$ 29,000,000	$ 42,000,000
Cost of products and services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense			4,000,000	4,000,000	7,000,000	8,000,000
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense			2,000,000	2,000,000	5,000,000	6,000,000
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense			7,000,000	7,000,000	17,000,000	28,000,000
RSU grant vesting in 3 years [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense			$ 2,000,000	$ 1,000,000	$ 3,000,000	$ 15,000,000

XML

SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - USD ($) shares in Millions			3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
ESPP plan purchase price (in hundredths)			85.00%	85.00%	85.00%	85.00%
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			0		0
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used					The fair value of employee stock option awards was estimated using the Black-Scholes option pricing model.
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate			0.00%	0.00%	0.00%	1.60%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate			0.00%	0.00%	0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate			0.00%	0.00%	0.00%	31.00%
Expected life (in years)			0 years	0 years	0 years	4 years 11 months
LTPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used					Shares granted under the LTP Program were valued using a Monte Carlo simulation model.
Volatility of Keysight shares (in hundredths)			25.00%	26.00%	25.00%	26.00%
Volatility of selected peer-company shares minimum (in hundredths)			14.00%	17.00%	14.00%	17.00%
Volatility of selected peer-company shares maximum (in hundredths)			54.00%	67.00%	54.00%	67.00%
Price-wise correlation with selected peers (in hundredths)			38.00%	38.00%	38.00%	38.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used					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.

XML

INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Income Tax Examination [Line Items]
Income Tax Holiday, Aggregate Dollar Amount	$ 9		$ 17
Income Tax Expense (Benefit)	$ (1)	$ 26	$ 19	$ 34
Income Tax Holiday, Income Tax Benefits Per Share	$ 0.05		$ 0.10
Foreign Tax Authority [Member]
Income Tax Examination [Line Items]
Income Tax Holiday, Description			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.
Income Tax Holiday, Termination Date			The Singapore tax incentive is due for renewal in fiscal 2024.
Internal Revenue Service (IRS)
Income Tax Examination [Line Items]
Effective Income Tax Rate Reconciliation, Percent	(1.10%)	21.70%	11.00%	17.20%
Net Discrete Tax expense (Benefit)	$ (3)	$ 3	$ (2)	$ (7)
Income Tax Expense (Benefit)	$ (1)	$ 26	$ 19	$ 34
Majority of company's entities [Member]
Income Tax Examination [Line Items]
Open Tax Year			2014
Entities retained as part of separation [Member]
Income Tax Examination [Line Items]
Open Tax Year			2006
Entities acquired [Member]
Income Tax Examination [Line Items]
Open Tax Year			2006

XML

NET INCOME PER SHARE NET INCOME PER SHARE - COMPUTATIONS (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Numerator:
Net Income	$ 88	$ 96	$ 152	$ 166
Denominators:
Basic weighted-average shares (in shares)	170	169	171	168
Potentially dilutive common shares equivalents - stock options and other employee stock plans (in shares)	2	2	1	3
Diluted weighted average shares (in shares)	172	171	172	171

XML

NET INCOME PER SHARE (Details) - shares	3 Months Ended	6 Months Ended
	Apr. 30, 2016	Apr. 30, 2016
Stock Options [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	1,700,000	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	30,000	23,100

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INVENTORY (Details) - USD ($) $ in Millions	Apr. 30, 2016	Oct. 31, 2015
Inventory, Net [Abstract]
Finished goods	$ 226	$ 235
Purchased parts and fabricated assemblies	249	252
Inventory	$ 475	$ 487

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions	6 Months Ended
	Apr. 30, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 700
Foreign currency translation impact	21
Additions to goodwill	10
Goodwill ending balance	731
Measurement Solutions
Goodwill [Roll Forward]
Goodwill beginning balance	637
Foreign currency translation impact	19
Additions to goodwill	10
Goodwill ending balance	666
Customer Support and Services
Goodwill [Roll Forward]
Goodwill beginning balance	63
Foreign currency translation impact	2
Additions to goodwill	0
Goodwill ending balance	$ 65

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015	Oct. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 10	$ 2	$ 22	$ 4
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	395		395		$ 393
Accumulated Amortization and Impairments	181		181		159
Finite-Lived Intangible Assets, Net	214		214		234
In-Process R&D	12		12		12
Gross book value	407		407		405
Net Book Value	226		226		246
Developed technology
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	307		307		305
Accumulated Amortization and Impairments	142		142		125
Net Book Value	165		165		180
Backlog
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	4		4		4
Accumulated Amortization and Impairments	4		4		4
Net Book Value	0		0		0
Trademark/Tradename
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	20		20		20
Accumulated Amortization and Impairments	3		3		2
Net Book Value	17		17		18
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	64		64		64
Accumulated Amortization and Impairments	32		32		28
Net Book Value	$ 32		$ 32		$ 36

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Additions to goodwill			$ 10
Additions to other intangible assets			6
Impact to other intangibles due to Translation			4
Amortization of intangible assets	$ 10	$ 2	$ 22	$ 4

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions	Apr. 30, 2016 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2016	$ 22
2017	40
2018	37
2019	37
2020	36
Thereafter	$ 42

XML

FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Apr. 30, 2016	Oct. 31, 2015
Assets Short - term [Abstract]
Cash equivalents (money market funds)	$ 373	$ 295
Derivative instruments (foreign exchange contracts)	7	1
Assets, Long-term [Abstract]
Trading securities	11	12
Available-for-sale investments	31	41
Total assets measured at fair value	422	349
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	10	10
Liabilities Long-term [Abstract]
Deferred compensation liability	11	12
Total liabilities measured at fair value	21	22
Level 1
Assets Short - term [Abstract]
Cash equivalents (money market funds)	373	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	415	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)	7	1
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	7	1
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	10	10
Liabilities Long-term [Abstract]
Deferred compensation liability	11	12
Total liabilities measured at fair value	21	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) $ in Millions	6 Months Ended
	Apr. 30, 2016 USD ($) contracts
Derivative [Line Items]
Cash Flow Hedge Ineffectiveness is Immaterial	not significant
Derivative Instruments and Hedging Activities Disclosure
Derivative, Net Liability Position, Aggregate Fair Value | $	$ 9
Designated as Hedging Instruments | Foreign Exchange Forward [Member]
Derivative [Line Items]
Derivative, Number of Instruments Held	123
Not Designated as Hedging Instruments | Foreign Exchange Forward [Member]
Derivative [Line Items]
Derivative, Number of Instruments Held	79
Not Designated as Hedging Instruments | Foreign Exchange Option [Member]
Derivative [Line Items]
Derivative, Number of Instruments Held	0

XML

DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions	Apr. 30, 2016 USD ($)
Not Designated as Hedging Instruments | Sell | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	$ 69
Not Designated as Hedging Instruments | Sell | British Pound | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	34
Not Designated as Hedging Instruments | Sell | Singapore Dollar | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	4
Not Designated as Hedging Instruments | Sell | Malaysian Ringgit | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	8
Not Designated as Hedging Instruments | Sell | Japanese Yen | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	60
Not Designated as Hedging Instruments | Sell | Other currencies | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	14
Not Designated as Hedging Instruments | Buy | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | Euro | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	51
Not Designated as Hedging Instruments | Buy | Euro | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | British Pound | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | Singapore Dollar | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | Malaysian Ringgit | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | Japanese Yen | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Not Designated as Hedging Instruments | Buy | Other currencies | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Sell | Japanese Yen | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	67
Designated as Hedging Instruments | Sell | Other currencies | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	9
Designated as Hedging Instruments | Buy | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	1
Designated as Hedging Instruments | Buy | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | British Pound | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | British Pound | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Singapore Dollar | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	9
Designated as Hedging Instruments | Buy | Singapore Dollar | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging | Forward Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	68
Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Japanese Yen | Cash Flow Hedging | Option Contracts Buy/(Sell)
Derivative [Line Items]
Total notional amount	0
Designated as Hedging Instruments | Buy | Other currencies | Cash Flow Hedging | 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	Apr. 30, 2016	Oct. 31, 2015
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	$ 7	$ 1
Total derivatives Liabilities	10	10
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	5	0
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Liabilities [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	6	8
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Assets
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	2	1
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Other Current Liabilities [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	$ 4	$ 2

XML

DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Cash Flow Hedging | Cost of products and services
Derivative [Line Items]
Cash Flow Hedge (Gain) Loss to be Reclassified within Twelve Months	$ 2
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	(3)	$ 3	$ (1)	$ (2)
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	(3)	1	(7)	2
Not Designated as Hedging Instruments | Other (income) expense, net
Derivative [Line Items]
Gain (loss) recognized in other income (expense),net	$ 0	$ 2	$ (2)	$ (4)

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	$ 5	$ 6	$ 10	$ 11
Interest cost on benefit obligation	6	5	12	10
Expected return on plan assets	(9)	(10)	(18)	(19)
Amortization:
Net actuarial losses	2	1	4	2
Prior service credit	(2)	(1)	(4)	(3)
Total periodic benefit cost (benefit)	2	1	4	1
Non-U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	4	5	8	9
Interest cost on benefit obligation	8	10	16	21
Expected return on plan assets	(18)	(18)	(37)	(37)
Amortization:
Net actuarial losses	7	7	14	14
Prior service credit	0	0	0	0
Total periodic benefit cost (benefit)	1	4	1	7
U.S. Post-Retirement Benefit Plan
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	0	1	0	1
Interest cost on benefit obligation	2	2	4	4
Expected return on plan assets	(4)	(3)	(7)	(7)
Amortization:
Net actuarial losses	5	3	10	6
Prior service credit	(4)	(6)	(8)	(11)
Total periodic benefit cost (benefit)	$ (1)	$ (3)	$ (1)	$ (7)

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in remainder of current fiscal year			$ 0
Non-U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 9	$ 11	19	$ 25
Estimated future employer contributions in remainder of current fiscal year			$ 19

XML

WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions	6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance at beginning of period	$ 53	$ 51
Accruals for warranties including change in estimate	14	17
Settlements made during the period	(16)	(16)
Ending balance at end of period	51	52
Standard Product Warranty Disclosure [Abstract]
Accruals for warranties due within one year	33	39
Accruals for warranties due after one year	18	13
Ending balance at end of period	$ 51	$ 52

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DEBT Credit Facility (Details)	6 Months Ended
	Apr. 30, 2016 USD ($)	Apr. 30, 2016 GBP (£)	Oct. 31, 2015 USD ($)	Jul. 21, 2015 USD ($)
Unsecured Credit facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Borrowing Capacity, Description	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.
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, Current Borrowing Capacity	$ 450,000,000
Line of Credit Facility, Revised Maximum Borrowing Capacity				$ 450,000,000
Line of Credit Facility, Outstanding	$ 0
Bank Overdrafts [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity | £		£ 25,000,000
Line of Credit Facility, Expiration Date	Jul. 31, 2016
Line of Credit Facility, Outstanding	$ 0
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Outstanding	$ 16,000,000		$ 19,000,000

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DEBT Long Term Debt (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	May. 31, 2016	Apr. 30, 2016	Oct. 31, 2015
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent		$ 1,100	$ 1,099
Long Term Debt Fair Value below Carrying Value		(7)	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
Other Debt Obligations [Member]
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent		$ 1	$ 0
Subsequent Event [Member] | Other Debt Obligations [Member]
Debt Instrument [Line Items]
Other Long-term Debt from acquisition	$ 1

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STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ (497)	$ (369)	$ (479)	$ (336)
OCI, before Reclassifications, before Tax, Attributable to Parent	52	11	26	(27)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	10	3	22	6
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(2)	(2)	(6)	0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	60	12	42	(21)
Ending balance	(437)	(357)	(437)	(357)
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	15	16	21	16
OCI, before Reclassifications, before Tax, Attributable to Parent	(1)	9	(8)	9
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	0	0	0	0
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0	(1)	1	(1)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(1)	8	(7)	8
Ending balance	14	24	14	24
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(73)	(27)	(48)	6
OCI, before Reclassifications, before Tax, Attributable to Parent	56	(1)	31	(34)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	0	0	0	0
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0	0	0	0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	56	(1)	31	(34)
Ending balance	(17)	(28)	(17)	(28)
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(499)	(436)	(511)	(444)
OCI, before Reclassifications, before Tax, Attributable to Parent	0	0	4	0
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	14	11	28	22
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(4)	(3)	(10)	(6)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	10	8	22	16
Ending balance	(489)	(428)	(489)	(428)
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	62	79	65	83
OCI, before Reclassifications, before Tax, Attributable to Parent	0	0	0	0
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	(7)	(7)	(13)	(14)
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	2	3	5	6
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(5)	(4)	(8)	(8)
Ending balance	57	(75)	57	(75)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(2)	(1)	(6)	3
OCI, before Reclassifications, before Tax, Attributable to Parent	(3)	3	(1)	(2)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	3	(1)	7	(2)
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0	(1)	(2)	1
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	0	1	4	(3)
Ending balance	$ (2)	$ 0	$ (2)	$ 0

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STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Goods Sold	$ 263	$ 264	$ 530	$ 524
Income Tax Expense (Benefit)	1	(26)	(19)	(34)
Net Income	88	96	152	166
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	87	122	171	200
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net Income	(7)	(3)	(15)	(6)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Goods Sold	(3)	1	(7)	2
Income Tax Expense (Benefit)	1	0	2	0
Net Income	(2)	1	(5)	2
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	(14)	(11)	(28)	(22)
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	7	7	13	14
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income Tax Expense (Benefit)	2	0	5	0
Net Income	(5)	(4)	(10)	(8)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	$ (7)	$ (4)	$ (15)	$ (8)

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STOCKHOLDERS' EQUITY Stock Repurchase (Details) - USD ($) shares in Thousands, $ in Millions	6 Months Ended
	Apr. 30, 2016	Feb. 18, 2016
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract]
Stock Repurchase Program, Authorized Amount		$ 200
Treasury Stock, Value, Acquired, Cost Method	$ 42
Treasury Stock, Shares, Acquired	1,600

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SEGMENT INFORMATION Profitability (Details) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016 USD ($)	Apr. 30, 2015 USD ($)	Apr. 30, 2016 USD ($)	Apr. 30, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of Operating Segments	2
Number of Reportable Segments	2
Business Combination Acquisition Related Fair Value Adjustments	$ (4)	$ 0	$ (9)	$ 0
Total net revenue	731	740	1,452	1,441
Segment income from operations	95	133	193	220
Measurement Solutions
Segment Reporting Information [Line Items]
Revenues	639		1,270
Business Combination Acquisition Related Fair Value Adjustments	(4)		(9)
Total net revenue	635	638	1,261	1,244
Segment income from operations	124	136	240	246
Customer Support and Services
Segment Reporting Information [Line Items]
Revenues	96		191
Business Combination Acquisition Related Fair Value Adjustments	0		0
Total net revenue	96	102	191	197
Segment income from operations	11	18	24	32
Total
Segment Reporting Information [Line Items]
Revenues	735		1,461
Business Combination Acquisition Related Fair Value Adjustments	(4)		(9)
Total net revenue	731	740	1,452	1,441
Segment income from operations	$ 135	$ 154	$ 264	$ 278

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SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2016	Apr. 30, 2015	Apr. 30, 2016	Apr. 30, 2015
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable segments' income from operations	$ 135	$ 154	$ 264	$ 278
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost	(13)	(13)	(29)	(42)
Asset Impairment Charges	0	(2)	0	(2)
Business Combination Acquisition Related Fair Value Adjustments	(4)	0	(9)	0
Amortization of Intangibles and Other	(11)	(2)	(22)	(4)
Acquisition and integration costs	(5)	0	(5)	0
Separation and related costs	(5)	(5)	(10)	(12)
Segment Reporting Other reconciling items for operating profit loss segment to consolidated	(2)	1	4	0
Investment Income, Nonoperating	0	0	1	0
Interest expense	(12)	(11)	(24)	(23)
Other Nonoperating Gains (Losses)	4	0	1	5
Income before taxes, as reported	$ 87	$ 122	$ 171	$ 200

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SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions	Apr. 30, 2016	Oct. 31, 2015
Segment Reporting Information [Line Items]
Assets	$ 3,655	$ 3,508
Measurement Solutions
Segment Reporting Information [Line Items]
Assets	2,568	2,531
Customer Support and Services
Segment Reporting Information [Line Items]
Assets	267	265
Total
Segment Reporting Information [Line Items]
Assets	$ 2,835	$ 2,796