10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2017

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 February 27, 2017 was 171,543,474. 

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	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	31
Part II.	Other Information		31
	Item 1.	Legal Proceedings	31
	Item 1A.	Risk Factors	31
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	45
	Item 6.	Exhibits	45
Signature			46
Exhibit Index			47

2

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

	Three Months Ended
	January 31,
	2017			2016
Net revenue:
Products	$	606		$	601
Services and other	120			120
Total net revenue	726			721
Costs and expenses:
Cost of products	255			260
Cost of services and other	67			69
Total costs	322			329
Research and development	108			108
Selling, general and administrative	213			200
Other operating expense (income), net	(79		)	(14		)
Total costs and expenses	564			623
Income from operations	162			98
Interest income	1			1
Interest expense	(12		)	(12		)
Other income (expense), net	1			(3		)
Income before taxes	152			84
Provision for income taxes	43			20
Net income	$	109		$	64
Net income per share:
Basic	$	0.64		$	0.37
Diluted	$	0.63		$	0.37
Weighted average shares used in computing net income per share:
Basic	171			171
Diluted	173			172

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

3

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2017			2016
Net income	$	109		$	64
Other comprehensive income (loss):
Unrealized gain (loss) on investments, net of tax benefit (expense) of ($1) and $1	4			(6		)
Unrealized gain on derivative instruments, net of tax expense of $1 and $1	2			1
Amounts reclassified into earnings related to derivative instruments, net of tax expense of zero and $1	1			3
Foreign currency translation, net of tax benefit (expense) of zero	(24		)	(25		)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $13 and $6	28			12
Change in net prior service credit, net of tax benefit of $2 and $3	(4		)	(3		)
Other comprehensive income (loss)	7			(18		)
Total comprehensive income	$	116		$	46

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

4

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

	January 31, 2017			October 31, 2016
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	896		$	783
Accounts receivable, net	395			437
Inventory	479			474
Other current assets	162			160
Total current assets	1,932			1,854
Property, plant and equipment, net	494			512
Goodwill	721			736
Other intangible assets, net	197			208
Long-term investments	60			55
Long-term deferred tax assets	342			392
Other assets	123			39
Total assets	$	3,869		$	3,796
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	172		$	189
Employee compensation and benefits	146			183
Deferred revenue	191			180
Income and other taxes payable	19			41
Other accrued liabilities	68			51
Total current liabilities	596			644
Long-term debt	1,093			1,093
Retirement and post-retirement benefits	384			405
Long-term deferred revenue	74			72
Other long-term liabilities	74			69
Total liabilities	2,221			2,283
Commitments and contingencies (Note 13)
Total equity:
Stockholders’ equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	—			—
Common stock; $0.01 par value; 1 billion shares authorized; 174 million shares at January 31, 2017 and 172 million shares at October 31, 2016 issued	2			2
Treasury stock at cost; 2.3 million shares at January 31, 2017 and at October 31, 2016	(62		)	(62		)
Additional paid-in-capital	1,271			1,242
Retained earnings	1,048			949
Accumulated other comprehensive loss	(611		)	(618		)
Total stockholders' equity	1,648			1,513
Total liabilities and equity	$	3,869		$	3,796

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)

	Three Months Ended
	January 31,
	2017			2016
Cash flows from operating activities:
Net income	$	109		$	64
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32			33
Share-based compensation	18			16
Excess tax benefit from share-based plans	(2		)	(1		)
Deferred taxes	40			4
Excess and obsolete inventory related charges	3			8
Gain on sale of land	(8		)	(10		)
Other non-cash expenses, net	—			2
Changes in assets and liabilities:
Accounts receivable	40			33
Inventory	(10		)	(4		)
Accounts payable	(12		)	(22		)
Employee compensation and benefits	(36		)	(29		)
Retirement and post-retirement benefits, net	(71		)	(13		)
Income tax payable	(15		)	2
Other assets and liabilities	14			9
Net cash provided by operating activities	102			92
Cash flows from investing activities:
Investments in property, plant and equipment	(16		)	(34		)
Proceeds from sale of land	8			10
Net cash used in investing activities	(8		)	(24		)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	19			24
Excess tax benefit from share-based plans	2			1
Net cash provided by financing activities	21			25
Effect of exchange rate movements	(2		)	(4		)
Net increase in cash and cash equivalents	113			89
Cash and cash equivalents at beginning of period	783			483
Cash and cash equivalents at end of period	$	896		$	572

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.

Basis of Presentation. We have prepared the accompanying financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements and information should be read in conjunction with our Annual Report on Form 10-K.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2017 and October 31, 2016, condensed consolidated statement of comprehensive income for the three months ended January 31, 2017 and 2016, condensed consolidated statement of operations for the three months ended January 31, 2017 and 2016, and condensed consolidated statement of cash flows for the three months ended January 31, 2017 and 2016.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP 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, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring, and accounting for income taxes.

Land Sale. On April 30, 2014 we entered into a binding contract to sell land in the United Kingdom ("U.K.") that resulted in the transfer of three separate land tracts in May 2014, November 2015 and November 2016 for £21 million. In the three months ended January 31, 2017 and 2016, we recognized gains of $8 million and $10 million, respectively, on the sale of the land tracts in other operating expense (income).

Restricted Cash. As of January 31, 2017 and October 31, 2016, restricted cash of $2 million consisted of approximately $1 million of deposits held as collateral against bank guarantees and approximately $1 million of deposits primarily held as collateral against foreign currency hedging contracts and is classified within other assets and other current assets, respectively, in the condensed consolidated balance sheet.

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, 2016.

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 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, May and December 2016 the FASB issued guidance that made technical corrections and improvements and 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.

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In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs, to simplify the presentation of deferred issuance costs by requiring that they be presented as a direct deduction from the carrying amount of the 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 adopted this guidance retrospectively during the first quarter of 2017. As a result, $7 million of unamortized debt issuance costs have been reclassified from other assets to long-term debt in the consolidated balance sheet as of January 31, 2017 and October 31, 2016 (see Note 14).

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.

In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, that removes the requirement under which the income tax consequences of intra-entity transfers are deferred until the assets are ultimately sold to an outside party, except for transfers of inventory. The tax consequences of such transfers would be recognized in tax expense when the transfers occur. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We elected to early adopt this guidance on a modified retrospective basis during the first quarter of 2017. As a result, a $10 million cumulative-effect adjustment was recorded directly to retained earnings as of November 1, 2016, the beginning of the annual period of adoption, with corresponding reductions of $2 million, $6 million and $2 million to other current assets, other assets, and long-term deferred tax assets, respectively.

In January 2017, the FASB issued guidance to narrow the definition of a business and provide a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. The standard is effective for fiscal years beginning after December 15, 2017, 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 January 2017, the FASB issued guidance that eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The standard is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

Other amendments to GAAP 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.     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. 

8

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		3
Selling, general and administrative	11		10
Total share-based compensation expense	$	18	$	16

 At January 31, 2017 and 2016, share-based compensation capitalized within inventory was $1 million. The income tax benefit realized from the exercised stock options and similar awards recognized was $2 million and $1 million for the three months ended January 31, 2017 and 2016, respectively.

The following assumptions were used to estimate the fair value of LTP Program grants.

	Three Months Ended
	January 31,
	2017		2016
LTP Program:
Volatility of Keysight shares	27	%	25	%
Volatility of selected index (2017)/peer-company shares (2016)	15	%	14%-54%
Price-wise correlation with selected peers	57	%	38	%

Shares granted under the LTP Program were valued using a Monte Carlo simulation model. In the first quarter of fiscal 2017, the company began awarding an additional type of performance award based on operating margin performance. These awards were valued based on the market price of Keysight’s common stock on the date of grant.The fair value of employee stock option awards granted before October 31, 2015 was estimated using the Black-Scholes option pricing model. We did not grant any option awards for the three months ended January 31, 2017 and 2016. 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.

4.     INCOME TAXES

The company’s effective tax rate was 28.3 percent and 23.7 percent for the three months ended January 31, 2017 and 2016, respectively. Income tax expense was $43 million and $20 million for the three months ended January 31, 2017 and 2016, respectively. The income tax provision for the three months ended January 31, 2017 and 2016 included a net discrete expense of $23 million and $1 million, respectively. The increase in the total income tax expense and discrete expense for the three months ended January 31, 2017, is primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund (see Note 11).

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months ended January 31, 2017 and 2016 by $11 million and $8 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.07 and $0.05 for the three months ended January 31, 2017 and 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 foreign entities, the tax years generally 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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5. NET INCOME PER SHARE

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Numerator:
Net income	$	109	$	64
Denominator:
Basic weighted-average shares	171		171
Potential common shares— stock options and other employee stock plans	2		1
Diluted weighted-average shares	173		172

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method. 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 months ended January 31, 2017 and 2016, we excluded zero and 1.7 million options, respectively, from the calculation of diluted earnings per share. 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 collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three months ended January 31, 2017 and 2016, we excluded 424,400 and 16,100 shares, respectively.

6. SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for income taxes was $17 million and $8 million for the three months ended January 31, 2017 and 2016, respectively. The following table summarizes our non-cash investing activities that are not reflected in the condensed consolidated statement of cash flows:

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Non-cash investing activities:
Capital expenditures in accounts payables	$	(5	)	$	(9	)
	$	(5	)	$	(9	)

7. INVENTORY

	January 31, 2017		October 31, 2016
	(in millions)
Finished goods	$	218	$	218
Purchased parts and fabricated assemblies	261		256
Total inventory	$	479	$	474

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8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents goodwill balances and the movements for each of our reportable segments as of and for the three months ended January 31, 2017:

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2016	$	456		$	216	$	64	$	736
Foreign currency translation impact	(15		)	—		—		(15		)
Goodwill as of January 31, 2017	$	441		$	216	$	64	$	721

The components of other intangible assets as of January 31, 2017 and October 31, 2016 are shown in the table below:

	Other Intangible Assets as of January 31, 2017						Other Intangible Assets as of October 31, 2016
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	314	$	167	$	147	$	309	$	159	$	150
Backlog	4		4		—		4		4		—
Trademark/Tradename	20		4		16		20		4		16
Customer relationships	65		38		27		65		35		30
Total amortizable intangible assets	403		213		190		398		202		196
In-Process R&D	7		—		7		12		—		12
Total	$	410	$	213	$	197	$	410	$	202	$	208

During the three months ended January 31, 2017, we recorded no additions to goodwill and other intangible assets. During the three months ended January 31, 2017, there was no foreign exchange translation impact to other intangible assets.

During the first quarter of 2017, we transferred $5 million from in-process R&D to developed technology as the project was successfully completed.

 Amortization of other intangible assets was $11 million and $12 million for the three months ended January 31, 2017 and 2016, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $31 million for the remainder of 2017, $39 million for 2018, $38 million for 2019, $38 million for 2020, $30 million for 2021 and $14 million thereafter.

9. FAIR VALUE MEASUREMENTS

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

Fair Value Hierarchy

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

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

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

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

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

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2017 and October 31, 2016 were as follows:

	Fair Value Measurements at January 31, 2017								Fair Value Measurements at October 31, 2016
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	572	$	572	$	—	$	—	$	471	$	471	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		4		—		4		—
Long-term
Trading securities	11		11		—		—		11		11		—		—
Available-for-sale investments	34		34		—		—		29		29		—		—
Total assets measured at fair value	$	624	$	617	$	7	$	—	$	515	$	511	$	4	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	6	$	—	$	6	$	—	$	8	$	—	$	8	$	—
Long-term
Deferred compensation liability	11		—		11		—		11		—		11		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	19	$	—	$	19	$	—

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 earnings. 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 earnings.

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.

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. Ineffectiveness in the three months ended January 31, 2017 and 2016 was not significant.

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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.

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

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

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2017 was $4 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2017.

There were 137 foreign exchange forward contracts open as of January 31, 2017 that were designated as cash flow hedges. There were 60 foreign exchange forward contracts as of January 31, 2017 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2017 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	62
British Pound	—			10
Singapore Dollar	10			1
Malaysian Ringgit	70			1
Japanese Yen	(82		)	(41		)
Other currencies	(15		)	6
Total	$	(17	)	$	39

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2017 and October 31, 2016 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2017		October 31, 2016		Balance Sheet Location	January 31, 2017		October 31, 2016
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	2	Other accrued liabilities	$	4	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		2		Other accrued liabilities	2		4
Total derivatives	$	7	$	4		$	6	$	8

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain recognized in accumulated other comprehensive income	$	3		$	2
Loss reclassified from accumulated other comprehensive income into cost of sales	$	(1	)	$	(4	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	2		$	(2	)

The estimated amount of existing net gain at January 31, 2017 expected to be reclassified from accumulated other comprehensive income to cost of sales within the next twelve months is immaterial.

11. RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2017 and 2016, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2017			2016			2017			2016			2017			2016
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	5			6			6			8			2			2
Expected return on plan assets	(8		)	(9		)	(19		)	(19		)	(3		)	(3		)
Amortization:
Net actuarial losses	4			2			9			7			5			5
Prior service credit	(2		)	(2		)	—			—			(4		)	(4		)
Settlement gain	—			—			(68		)	—			—			—
Total periodic benefit cost (benefit)	$	4		$	2		$	(68	)	$	—		$	—		$	—

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2017 and 2016. We contributed $7 million and $10 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2017 and 2016, respectively.

During the remainder of 2017, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $25 million to our Non-U.S. Defined Benefit Plans.

On December 15, 2016, we transferred a portion of the assets and obligations of our Japanese Employees’ Pension Fund ("EPF") to the Japanese government. The remaining portion of the EPF was transferred to a new Keysight Japan corporate defined benefit pension plan. The difference between the obligations settled with the government of $142 million and the assets transferred to the government of $51 million resulted in an increase in the funded status of the new defined benefit pension plan of $91 million. The settlement resulted in a gain of $68 million which is included in other operating expense (income) in the consolidated statement of operations. Previously accrued salary progression of $4 million was derecognized at the time of settlement.

12. RESTRUCTURING

We initiated a targeted workforce reduction program in November 2016 that is expected to reduce Keysight's total headcount by between 60 to 200 employees. The timing and scope of workforce reductions will vary based on local legal requirements. This targeted workforce management program was designed to support our site consolidation strategy, align with our new industry segment structure and improve efficiency. As of January 31, 2017, approximately 20 employees exited under the workforce reduction program.

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

	Workforce reduction
	(in millions)
Balance as of October 31, 2016	$	—
Income statement expense	2
Cash payments	—
Balance as of January 31, 2017	$	2

The restructuring accrual of $2 million at January 31, 2017 relating to workforce reduction is recorded in other accrued liabilities in the condensed consolidated balance sheet.

A summary of the charges in the consolidated statement of operations resulting from all restructuring plans is shown below:

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	1	$	—
Research and development	—		—
Selling, general and administrative	1		—
Total restructuring and other related costs	$	2	$	—

13. 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. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Beginning balance	$	44		$	53
Accruals for warranties including change in estimate	7			8
Settlements made during the period	(8		)	(8		)
Ending balance	$	43		$	53
Accruals for warranties due within one year	$	22		$	34
Accruals for warranties due after one year	21			19
Ending balance	$	43		$	53

Commitments

There were no material changes during the three months ended January 31, 2017 to the operating lease commitments reported in the company’s 2016 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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14. DEBT

Short-Term Debt

On January 30, 2017, we entered into a commitment letter, pursuant to which certain lenders have agreed to provide a senior unsecured 364-day bridge loan facility of up to $1.684 billion (“the Bridge Facility”) for the purpose of providing the financing to support Keysight's acquisition of Ixia. The company incurred issuance costs of $8 million in connection with the Bridge Facility. These costs are included in other current assets in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Bridge Facility. In connection with entering into the term credit agreement (described below), on February 15, 2017, the unsecured commitments under the Bridge Facility were automatically reduced in an aggregate principal amount of $400 million.

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that provides for a $450 million five-year unsecured revolving credit facility that will expire on February 15, 2022. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. The Revolving Credit Facility replaced our existing $450 million unsecured credit facility, dated as of September 15, 2014. The company may use amounts borrowed under the facility for general corporate purposes, including to finance, in part, the acquisition of Ixia, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. As of January 31, 2017, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2017.

Long-Term Debt

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

	January 31, 2017		October 31, 2016
	(in millions)
3.30% Senior Notes due 2019	$	497	$	497
4.55% Senior Notes due 2024	596		596
Total	$	1,093	$	1,093

The notes issued are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. There were no changes to the principal, maturity, interest rates and interest payment terms of the senior notes during the three months ended January 31, 2017.

On February 15, 2017, we entered into a term credit agreement, which provides for a three-year $400 million delayed draw senior unsecured term loan facility. The term loans will be available to us upon the closing of the Ixia acquisition. The term loan is intended to be used to finance, in part, the Ixia acquisition, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. The commitments under the term credit agreement automatically terminate on the first to occur of (a) the consummation of the Ixia acquisition without the borrowing of any loans under the term credit agreement, (b) the termination of the Merger Agreement to acquire Ixia in accordance with its terms or (c) on October 30, 2017.

See Note 17 for further details regarding the pending acquisition.

As of January 31, 2017 and October 31, 2016, we had $19 million and $18 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 $12 million and $30 million as of January 31, 2017 and October 31, 2016, respectively.

15. 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. All such shares and related costs are held as treasury stock and accounted for at trade date using the

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cost method. 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 three months ended January 31, 2017, we did not repurchase any shares of common stock under the stock repurchase program.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2017 and 2016 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)

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Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2017 and 2016 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Unrealized gain (loss) on derivatives	$	(1	)	$	(4	)	Cost of sales
	—			1			Provision for income taxes
	(1		)	(3		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(17		)	(14		)
Prior service credits	6			6
	(11		)	(8		)	Total before income tax
	3			3			Provision for income taxes
	(8		)	(5		)	Net of income tax
Total reclassifications for the period	$	(9	)	$	(8	)

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

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").

16. SEGMENT INFORMATION

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

In fiscal 2016, we completed an organizational change to align our organization with the industries we serve. As a result of this organizational realignment, we have three reportable operating segments, Communications Solutions Group (“CSG”), Electronic Industrial Solutions Group (“EISG”), and Services Solutions Group (“SSG”). CSG and EISG are from our previous Measurement Solutions segment, while SSG was formerly reported as the company's Customer Support and Services segment. The new organizational structure continues to include centralized enterprise functions that provide support across the groups. Prior period amounts were revised to conform to the current presentation.

Our three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess 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.

Descriptions of our three reportable segments are as follows:

The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

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The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment.

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 share-based compensation expense, restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, separation and related costs, acquisition-related fair value adjustments, non-cash amortization and other items as noted in the reconciliations below.

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2017:
Total segment revenue	$	434		$	192	$	100	$	726
Acquisition-related fair value adjustments	—			—		—		—
Total net revenue	$	434		$	192	$	100	$	726
Segment income from operations	$	72		$	42	$	14	$	128
Three Months Ended January 31, 2016:
Total segment revenue	$	440		$	191	$	95	$	726
Acquisition-related fair value adjustments	(5		)	—		—		(5		)
Total net revenue	$	435		$	191	$	95	$	721
Segment income from operations	$	78		$	38	$	13	$	129

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Total reportable segments' income from operations	$	128		$	129
Share-based compensation expense	(18		)	(16		)
Restructuring and related costs	(2		)	—
Amortization of intangibles	(10		)	(11		)
Acquisition and integration costs	(6		)	(2		)
Separation and related costs	(6		)	(5		)
Acquisition-related fair value adjustments	—			(5		)
Japan pension settlement gain	68			—
Other	8			8
Income from operations, as reported	162			98
Interest income	1			1
Interest expense	(12		)	(12		)
Other income (expense), net	1			(3		)
Income before taxes, as reported	$	152		$	84

There has been no material change in total assets by segment since October 31, 2016.

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17. PENDING ACQUISITION

On January 30, 2017, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ixia, a leading provider of network testing, visibility, and security solutions, and, by a joinder executed on February 2, 2017, Keysight Acquisition, Inc., a wholly-owned subsidiary of ours (“Merger Sub”), to acquire Ixia in an all-cash transaction totaling approximately $1.6 billion in consideration, net of cash acquired. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Ixia with Ixia surviving the merger and becoming our wholly-owned subsidiary. Our board of directors and Ixia’s board of directors have both unanimously approved the transaction, which is anticipated to close no later than the end of October 2017 and is subject to approval by Ixia shareholders, regulatory approvals, and customary closing conditions and approvals. Under the terms of the Merger Agreement, Ixia shareholders will receive $19.65 per share in cash. The combination of Keysight and Ixia brings together two highly complementary companies to create an innovative force in leading-edge technologies that spans electronic design, device and network validation, and application and security performance.

The description of the Merger Agreement herein does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to our Current Report on Form 8-K filed on February 1, 2017.

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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 completed acquisitions and other transactions, our transition to lower-cost regions, the existence of economic instability, and information regarding our and Ixia’s ability to complete the transactions contemplated by the Merger Agreement, including the satisfaction of the conditions to the transactions set forth in the Merger Agreement, and our and the combined group’s estimated or anticipated future results of operations, 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 but not limited to those risks and uncertainties 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.

In fiscal 2015, we initiated a phased program associated with our separation from Agilent to resize and optimize our infrastructure from the one that had been established to serve a diversified technology company. The focus of the first phase of the program was on the IT infrastructure to support finance, sales and human resources. The second phase of the program, which was initiated in the third quarter of fiscal 2016, primarily addresses the optimization of the IT infrastructure to support the services business. We recognized costs related to this program of $6 million and $5 million for the three months ended January 31, 2017 and 2016, respectively. We expect to recognize additional costs estimated to range from $19 million to $29 million through fiscal 2018.

Overview and Executive Summary

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

We 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 evolving technology standards and the need for faster data rates and new form factors.

In fiscal 2016, we completed an organizational change to align our organization with the industries we serve. As a result of this organizational realignment, we have three reportable operating segments: Communications Solutions Group, Electronic Industrial Solutions Group and Services Solutions Group. The Communications Solutions Group serves customers spanning the

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worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition, our global team of experts provides startup assistance, consulting, optimization and application support across all of our end markets.

Three months ended January 31, 2017 and 2016

Total orders for the three months ended January 31, 2017 were $695 million, an increase of 2 percent when compared to the same period last year. Foreign currency movements had a negligible impact on the year‑over‑year comparison.

Net revenue of $726 million for the three months ended January 31, 2017 increased 1 percent when compared to the same period last year. Foreign currency movements had a negligible impact on the year‑over‑year comparison. Strength in revenue from the Services Solutions Group and leading edge technology solutions was partially offset by decline in the aerospace, defense and government market.

Net income for the three months ended January 31, 2017 was $109 million compared to $64 million for the corresponding period last year.

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

Restructuring activities

We initiated a targeted workforce reduction program in November 2016 that is expected to reduce Keysight's total headcount by between 60 to 200 employees. The timing and scope of workforce reductions will vary based on local legal requirements. This targeted workforce management program was designed to support our site consolidation strategy, align with our new industry segment structure and improve efficiency. In the current period, we recognized $2 million of expense associated with the headcount reduction under this workforce reduction program. As of January 31, 2017, approximately 20 employees exited under the workforce reduction program. We expect to substantially complete this program by the end of the second quarter of fiscal 2018.

Japan Pension Settlement Gain

On December 15, 2016, we transferred a portion of the assets and obligations of our Japanese Employees’ Pension Fund ("EPF") to the Japanese government. The remaining portion of the EPF was transferred to a new Keysight Japan corporate defined benefit pension plan. The difference between the obligations settled with the government of $142 million and the assets transferred to the government of $51 million resulted in an increase in the funded status of the new defined benefit pension plan of $91 million. The settlement resulted in a gain of $68 million which is included in other operating expense (income) in the consolidated statement of operations.

Definitive Agreement to Acquire Ixia

On January 30, 2017, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ixia, a leading provider of network testing, visibility, and security solutions, and, by a joinder executed on February 2, 2017, Keysight Acquisition, Inc., a wholly-owned subsidiary of ours (“Merger Sub”), to acquire Ixia in an all-cash transaction totaling approximately $1.6 billion in consideration, net of cash acquired. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Ixia with Ixia surviving the merger and becoming our wholly-owned subsidiary. Our board of directors and Ixia’s board of directors have both unanimously approved the transaction, which is anticipated to close no later than the end of October 2017 and is subject to approval by Ixia shareholders, regulatory approvals, and customary closing conditions and approvals. Under the terms of the Merger Agreement, Ixia shareholders will receive $19.65 per share in cash. The combination of Keysight and Ixia brings together two highly complementary companies to create an innovative force in leading-edge technologies that spans electronic design, device and network validation, and application and security performance.

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 in the U.S. GAAP ("GAAP"). The preparation of financial statements in accordance with GAAP 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

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judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring 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, 2016. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management's best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates.

Adoption of New Pronouncements

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

Foreign Currency

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

Results from Operations

Orders and Net Revenue

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months. Revenue reflects the delivery and acceptance of the products and services as defined on the customer's terms and conditions. Cancellations are recorded in the period received from the customer and historically have not been material.

	Three Months Ended				Year over Year Change
	January 31,				Three
	2017		2016		Months
	(in millions)
Orders	$	695	$	679	2%
Net revenue:
Products	$	606	$	601	1%
Services and other	120		120		—%
Total net revenue	$	726	$	721	1%

Orders

Total orders for the three months ended January 31, 2017 were $695 million, an increase of 2 percent when compared to the same period last year. Foreign currency movements had a negligible impact on each of the year‑over‑year comparisons. For the three months ended January 31, 2017, order growth in the Electronic Industrial Solutions Group and the Service Solutions Group was partially offset by decline in the Communications Solutions Group. Growth in Asia Pacific excluding Japan, Europe and Japan was partially offset by decline in the Americas.

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Net Revenue

The following table provides the percent change in net revenue for the three months ended January 31, 2017 by geographic region including and excluding the impact of currency changes as compared to the same period last year.

	Year over Year % Change
	Three Months Ended
	January 31, 2017
Geographic Region	actual		currency adjusted
Americas	(4	)%	(4	)%
Europe	1	%	4	%
Japan	6	%	—	%
Asia Pacific ex-Japan	4	%	4	%
Total net revenue	1	%	1	%

Net revenue of $726 million for the three months ended January 31, 2017 increased 1 percent when compared to the same period last year. Foreign currency movements had a negligible impact on the year‑over‑year comparison.

Revenue from the Communications Solutions Group represented approximately 60 percent of total revenue for the three months ended January 31, 2017 and was flat year-over-year with negligible contribution to total revenue growth. Revenue growth in Europe and Japan was offset by declines in the Americas and Asia Pacific excluding Japan. Strength in 5G and next-generation data center technologies was offset by decline in the aerospace, defense and government market.

Revenue from the Electronic Industrial Solutions Group represented approximately 26 percent of total revenue for the three months ended January 31, 2017 and was flat year-over-year with negligible contribution to total revenue growth. Growth in semiconductor measurement solutions was offset by a decline in general electronics measurement solutions. Revenue growth in Asia Pacific excluding Japan was offset by declines in the Americas, Europe and Japan.

Revenue from the Services Solutions Group represented approximately 14 percent of total revenue for the three months ended January 31, 2017 and grew 5 percent year-over-year. The Services Solutions Group contribution to total revenue growth was 1 percentage point for the three months ended January 31, 2017, driven by an increase in sales for our calibration services and remarketed solutions. Revenue grew in the Americas, Europe and Japan, while Asia Pacific excluding Japan was flat when compared to the same period last year.

Costs and Expenses

	Three Months Ended						Year over Year Change
	January 31,						Three
	2017			2016			Months
Total gross margin	55.7		%	54.3		%	1 ppt
Operating margin	22.4		%	13.6		%	9 ppts
in millions
Research and development	$	108		$	108		(1)%
Selling, general and administrative	$	213		$	200		7%
Other operating expense (income), net	$	(79	)	$	(14	)	447%

Gross margin increased 1 percentage point for the three months ended January 31, 2017 compared to the same period last year. This increase in gross margin was driven by lower warranty and inventory charges, partially offset by an increase in people-related costs.

Research and development expense decreased 1 percent for the three months ended January 31, 2017 compared to the same period last year. As a percentage of revenue, research and development expense was 15 percent for both the three months ended January 31, 2017 and 2016. 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 7 percent for the three months ended January 31, 2017 compared to the same period last year, primarily driven by increases in people-related and acquisition and integration costs.

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Other operating expense (income), net for the three months ended January 31, 2017 was an income of $79 million, which includes gains of $68 million from the Japan pension settlement gain and $8 million from sale of land.

Operating margin for the three months ended January 31, 2017 increased 9 percentage points compared to the same period last year, primarily driven by the gain from the Japan pension settlement gain and favorable gross margin, partially offset by increases in selling, general and administrative expenses.

As of January 31, 2017, our headcount was approximately 10,400 compared to 10,300 as of January 31, 2016.

Interest Expense

Interest expense for the three months ended January 31, 2017 and 2016 was $12 million and relates to interest on our senior notes issued in October 2014.

Income Taxes

The company’s effective tax rate was 28.3 percent and 23.7 percent for the three months ended January 31, 2017 and 2016, respectively. Income tax expense was $43 million and $20 million for the three months ended January 31, 2017 and 2016, respectively. The income tax provision for the three months ended January 31, 2017 and 2016 included a net discrete expense of $23 million and $1 million, respectively. The increase in the total income tax expense and discrete expense for the three months ended January 31, 2017, is primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months ended January 31, 2017 and 2016 by $11 million and $8 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.07 and $0.05 for the three months ended January 31, 2017 and 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 foreign entities, the tax years generally remain open back to the year 2006. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

At January 31, 2017, our estimated annual effective tax rate is 20 percent excluding 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 U.S. federal research and development tax credit and the impact of permanent differences.

Segment Overview

In fiscal 2016, we completed an organizational change to align our organization with the industries we serve. As a result of this organizational realignment, we have three reportable operating segments: Communications Solutions Group, Electronic Industrial Solutions Group and Services Solutions Group. The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition, our global team of experts provides startup assistance, consulting, optimization and application support across all of our end markets.

The profitability of each segment 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.

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Communications Solutions Group

The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2017		2016		Months
	(in millions)
Net revenue	$	434	$	440	(1)%

The Communications Solutions Group revenue for the three months ended January 31, 2017 declined 1 percent when compared to the same period last year, driven by decline in the aerospace, defense and government market, partially offset by growth in the commercial communications market.

Revenue from the commercial communications market represents approximately 59 percent of the Communications Solutions Group for the three months ended January 31, 2017 and increased 2 percent year-over-year. For the three months ended January 31, 2017, revenue growth in Europe, the Americas and Japan was partially offset by decline in Asia Pacific excluding Japan. Commercial communications market growth was driven by growth from 5G and next-generation data center technologies, offset by continued cautious spending across the wireless device value chain.

Revenue from the aerospace, defense and government market represents approximately 41 percent of the total Communications Solutions Group revenue for the three months ended January 31, 2017 and decreased 6 percent year-over-year, primarily driven by delayed government funding. For the three months ended January 31, 2017, decline in the Americas, Asia Pacific excluding Japan and Europe was partially offset by growth in Japan.

Gross Margin and Operating Margin

The following table shows the Communications Solutions Group margins, expenses and income from operations for the three months ended January 31, 2017 versus the three months ended January 31, 2016.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2017			2016			Months
Total gross margin	60.5		%	60.1		%	— ppt
Operating margin	16.7		%	17.7		%	(1) ppt
in millions
Research and development	$	76		$	76		(1)%
Selling, general and administrative	$	117		$	113		3%
Other operating expense (income), net	$	(2	)	$	(3	)	(35)%
Income from operations	$	72		$	78		(7)%

Gross margin for the three months ended January 31, 2017 improved slightly compared to the same period last year, primarily due to lower inventory charges.

Research and development expense for the three months ended January 31, 2017 decreased 1 percent compared to the same period last year. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities in order to capture future growth.

Selling, general and administrative expenses for the three months ended January 31, 2017, increased 3 percent compared to the same period last year, primarily due to increased investment in sales resources.

Other operating expense (income) for the three months ended January 31, 2017 and 2016 was income of $2 million and $3 million, respectively.

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Income from Operations

Income from operations for the three months ended January 31, 2017 decreased $6 million on a corresponding revenue decrease of $6 million when compared to the same period last year, primarily driven by increased investment in sales resources.

Operating margin for the three months ended January 31, 2017 declined 1 percentage point when compared to the same period last year, driven by higher operating expenses primarily due to increased investment in sales resources.

Electronic Industrial Solutions Group

The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2017		2016		Months
	(in millions)
Net revenue	$	192	$	191	—%

The Electronic Industrial Solutions Group revenue for the three months ended January 31, 2017 was essentially flat when compared to the same period last year. Growth in semiconductor measurement solutions was offset by a decline in general electronics measurement solutions. For the three months ended January 31, 2017, growth in Asia Pacific excluding Japan was partially offset by declines in the Americas, Europe and Japan.

Gross Margin and Operating Margin

The following table shows the Electronic Industrial Solutions Group margins, expenses and income from operations for the three months ended January 31, 2017 versus the three months ended January 31, 2016.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2017			2016			Months
Total gross margin	59.9		%	57.2		%	3 ppts
Operating margin	21.7		%	19.7		%	2 ppts
in millions
Research and development	$	28		$	27		3%
Selling, general and administrative	$	46		$	46		1%
Other operating expense (income), net	$	(1	)	$	(1	)	(20)%
Income from operations	$	42		$	38		10%

Gross margin for the three months ended January 31, 2017 increased 3 percentage points compared to the same period last year, primarily driven by favorable product mix impact and lower warranty expense.

 Research and development expense for the three months ended January 31, 2017 increased 3 percent compared to the same period last year, primarily driven by continued investments in leading edge technologies. 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 months ended January 31, 2017, increased 1 percent compared to the same period last year, primarily due to increased investment in sales resources.

Other operating expense (income) for both the three months ended January 31, 2017 and 2016 was income of $1 million.

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Income from Operations

Income from operations for the three months ended January 31, 2017 increased $4 million on a corresponding revenue increase of $1 million when compared to the same period last year.

Operating margin for the three months ended January 31, 2017 improved by 2 percentage points when compared to the same period last year, driven by higher gross margins partially offset by higher investment in research and development and sales.

Services Solutions Group

The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment. This segment was formerly reported as the company’s Customer Support and Services segment.

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2017		2016		Months
	(in millions)
Net revenue	$	100	$	95	5%

The Services Solutions Group revenue for the three months ended January 31, 2017 increased 5 percent when compared to the same period last year. For the three months ended January 31, 2017, growth was driven by an increase in sales for our calibration services and remarketed solutions. Revenue grew in the Americas, Japan and Europe, while Asia Pacific excluding Japan was flat.

Gross Margin and Operating Margin

The following table shows the Services Solutions Group margins, expenses and income from operations for the three months ended January 31, 2017 versus the three months ended January 31, 2016.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2017			2016			Months
Total gross margin	39.4		%	39.6		%	— ppt
Operating margin	14.4		%	13.9		%	— ppt
in millions
Research and development	$	—		$	2		(80)%
Selling, general and administrative	$	25		$	23		9%
Other operating expense (income), net	$	—		$	(1	)	(17)%
Income from operations	$	14		$	13		8%

Gross margin for the three months ended January 31, 2017 was flat when compared to the same period last year as revenue growth was offset by the impact of less favorable mix.

Research and development expense for the three months ended January 31, 2017 decreased 80 percent when compared to the same period last year. The decline is primarily driven by a change in the Services Solutions Group's share of centralized investment in research and development.

Selling, general and administrative expense for the three months ended January 31, 2017 increased 9 percent when compared to the same period last year due to increased investment in sales resources and an increase in people-related costs.

Other operating expense (income) for the three months ended January 31, 2017 and 2016 was income of zero and $1 million, respectively.

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Income from Operations

Income from operations for the three months ended January 31, 2017 increased $1 million when compared to the same period last year, on a corresponding revenue increase of $5 million.

Operating margin for the three months ended January 31, 2017 was flat compared to the same period last year.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our financial position as of January 31, 2017 consisted of cash and cash equivalents of $896 million as compared to $783 million as of October 31, 2016.

As of January 31, 2017, approximately $667 million of our cash and cash equivalents was held outside of the U.S. in our foreign subsidiaries. Under current tax laws, most of the cash could be repatriated to the U.S., but it would be subject to U.S. federal and state income taxes, less applicable foreign tax credits. Cash held outside of the U.S. can be used for non-U.S. growth and expansion. Our cash and cash equivalents mainly consist of short-term deposits held at major global financial institutions, investments in institutional money market funds, and similar short duration instruments with original maturities of 90 days or less. We continuously monitor the creditworthiness of the financial institutions in which we invest our funds. 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. Most significant international locations have access to internal funding through an offshore cash pool for working capital needs, in addition to temporary local overdraft and short-term working capital lines of credit.

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

Net Cash Provided by Operating Activities

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

Net cash provided by operating activities was $102 million for the three months ended January 31, 2017 compared to net cash provided of $92 million for the same period in 2016.

• Net income for the first three months of fiscal 2017 increased $45 million. Changes to non-cash income and expenses included a $36 million increase in deferred tax expense, a $1 million decrease to amortization expense, a $2 million increase in share-based compensation expense, a $2 million decline in gain from sale of land, a $5 million decline in excess and obsolete inventory-related charges, and a $2 million decrease in other miscellaneous non-cash expenses as compared to the same period last year. The change in retirement and post-retirement benefits, net for the three months ended January 31, 2017 includes an adjustment for a non-cash gain of $68 million related to a Japan pension settlement gain.

• The aggregate of accounts receivable, inventory and accounts payable provided net operating cash of $18 million during the first three months of fiscal 2017, compared to cash provided of $7 million 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 shipments and purchases, as well as collections and payments in a period.

• The aggregate of employee compensation and benefits, income tax payable and other assets and liabilities used net operating cash of $37 million during the first three months of fiscal 2017, compared to cash used of $18 million in the comparable period last year. The difference is primarily due to increase in income tax and variable compensation payments as compared to the same period last year and other differences due to timing of accruals and collections versus payments between the periods.

• We contributed $7 million to our non-U.S. defined benefit plans during the first three months of fiscal 2017, compared to $10 million in the same period last year. We expect to contribute approximately $25 million to our non-U.S. defined benefit plans during the remainder of 2017. For the three months ended January 31, 2017 and 2016, we did not contribute

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to our U.S. defined benefit plans or U.S. post-retirement benefit plan and we do not expect to contribute to our U.S. defined benefit plans during the remainder of 2017.

Net Cash Used in Investing Activities

Net cash used in investing activities was $8 million for the three months ended January 31, 2017 as compared to $24 million for the same period last year. Investments in property, plant and equipment were $16 million for the three months ended January 31, 2017 compared to $34 million in the same period last year. The decrease in capital expenditures is primarily due to the timing of payments. We received $8 million and $10 million of proceeds from the sale of land in the three months ended January 31, 2017 and 2016, respectively. We expect that total capital expenditures for the current year will be approximately $100 million.

Net Cash Used in Financing Activities

Cash flows related to financing activities consist primarily of cash flows associated with the issuance of common stock, and excess tax benefits from share-based plans. Net cash provided by financing activities for the three months ended January 31, 2017 was $21 million compared to cash provided of $25 million for the same period in 2016, primarily due to proceeds from the issuance of common stock under employee stock plans.

Credit Facility

On January 30, 2017, we entered into a commitment letter, pursuant to which certain lenders have agreed to provide a senior unsecured 364-day bridge loan facility of up to $1.684 billion (“the Bridge Facility”) for the purpose of providing the financing to support Keysight's acquisition of Ixia. The company incurred issuance costs of $8 million in connection with the Bridge Facility. These costs are included in other current assets in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Bridge Facility. In connection with entering into the term credit agreement (described below), on February 15, 2017, the unsecured commitments under the Bridge Facility were automatically reduced in an aggregate principal amount of $400 million.

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that provides for a $450 million five-year unsecured revolving credit facility that will expire on February 15, 2022. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. The Revolving Credit Facility replaced our existing $450 million unsecured credit facility, dated as of September 15, 2014. The company may use amounts borrowed under the facility for general corporate purposes, including to finance, in part, the acquisition of Ixia, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. As of January 31, 2017, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2017.

Long-term debt

There have been no changes to the principal, maturity, interest rates and interest payment terms of the outstanding senior notes in the three months ended January 31, 2017 as compared to the senior notes as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2016.

On February 15, 2017, we entered into a term credit agreement, which provides for a three-year $400 million delayed draw senior unsecured term loan facility. The term loans will be available to us upon the closing of the Ixia acquisition. The term loan is intended to be used to finance, in part, the Ixia acquisition, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. The commitments under the term credit agreement automatically terminate on the first to occur of (a) the consummation of the Ixia acquisition without the borrowing of any loans under the term credit agreement, (b) the termination of the Merger Agreement to acquire Ixia in accordance with its terms or (c) on October 30, 2017.

See Note 17, "Pending Acquisitions", to the condensed consolidated financial statements for further details regarding the pending acquisition.

Other

There were no material changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2016, to our contractual commitments (including non-cancellable operating leases) in the first three months of 2017.

There were no material changes in our liabilities towards uncertain tax positions from our Annual Report on Form 10-K for the fiscal year ended October 31, 2016. We are unable to accurately predict when these will be realized or released. However,

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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, 2016. There were no material changes during the three months ended January 31, 2017 to this information reported in the company’s 2016 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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended January 31, 2017 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, the economic slowdown in Asia and the results of the recent U.S. and other national elections, economic uncertainties caused by the result of the United Kingdom's referendum advising for its exit from the European Union 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

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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;

• 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

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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.

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

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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.

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 consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.        

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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.

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.

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 HP Inc. ("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 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,

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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 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.

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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.

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.

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 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.

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 finance acquisitions by issuing additional convertible debt or equity securities, our existing stockholders may experience share dilution, which could affect the market price of our stock. 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.

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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 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.

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;

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• 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.

        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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Risks Related to the Separation

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

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

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

41

U.S. consolidated group during a taxable period or portion of a taxable period ending on or before the effective time of the distribution is severally liable for the U.S. federal income tax liability of the entire Agilent U.S. consolidated group for that taxable period. Consequently, if Agilent is unable to pay the consolidated U.S. federal income tax liability for a prior period, we could be required to pay the entire amount of such tax, which could be substantial and in excess of the amount allocated to it under the tax matters agreement between us and Agilent. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

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

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

Risks Related to the Pending Acquisition of Ixia

The closing and consummation of the merger with Ixia (the “Merger”) is subject to regulatory approvals and the satisfaction of certain conditions, and we cannot precisely predict when or whether the necessary conditions will be satisfied or waived and the requisite regulatory approvals received.

Our and Ixia’s obligation to consummate the Merger is subject to regulatory approvals and other customary conditions, including, without limitation:

• the approval of the Merger Agreement and the principal terms of the Merger by the affirmative vote of the holders of a majority of total number of shares of Ixia common stock outstanding;

• the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

• receipt of antitrust approvals in certain foreign jurisdictions;

• the accuracy of the other party’s representations and warranties contained in the Merger Agreement (subject to certain materiality standards set forth in the Merger Agreement);

• and the other party’s compliance with its pre-closing covenants and agreements contained in the Merger Agreement in all material respects;

• the absence of any law, judgment, order or injunction that prohibits the consummation of the Merger; and

• in the case of our obligation to consummate the Merger, the absence of a material adverse effect on Ixia.

We and Ixia may fail to secure the requisite regulatory approvals in a timely manner or on terms desired or anticipated, and the Merger may not close in the anticipated time frame, if at all. We have no control over certain conditions in the Merger Agreement, including that the Ixia shareholder approval of the Merger Agreement and the principal terms of the Merger will be obtained, and cannot predict whether such conditions will be satisfied or waived. Regulatory authorities have broad discretion in administering the governing regulation and may impose conditions on their approval of the Merger or require changes to the terms of the transaction. Such conditions or changes may prevent the closing of the Merger or cause the Merger to be delayed, and delays may

42

cause us to incur additional, potentially burdensome transaction costs, adversely affect our ability to integrate our operations with Ixia’s operations or reduce the anticipated benefits of the transaction.

Termination of the Merger Agreement or failure to consummate the Merger could adversely impact us and, under certain conditions, could require us to pay a termination fee of $500 million, which could adversely impact our stock price and our liquidity and financial condition.

The Merger Agreement contains certain termination rights, including the right of either party to terminate the Merger Agreement if the Merger has not occurred by October 30, 2017. If the Merger Agreement is terminated by Ixia due to our failure to close when required to do so pursuant to the Merger Agreement, we will be required to pay Ixia a reverse termination fee of $500 million. This could occur, for example, if we are unable to draw on the Bridge Facility. The payment of such fee would have an adverse impact on our liquidity and financial condition. In addition, if the Merger Agreement is terminated, we may suffer other negative consequences. Our business may be negatively impacted by our management having focused its attention on acquiring Ixia instead of pursuing other advantageous business opportunities or plans. Furthermore, we have incurred and will continue to incur substantial expenses and costs related to the Merger, whether or not it is consummated, including legal, accounting and advisory fees. We also could be subject to litigation related to a failure to consummate the transaction or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement. Finally, failure to consummate the Merger may result in negative publicity and market reactions, and may have an adverse impact on Keysight’s stock price and future financial results.

We may not realize all of the anticipated benefits of the Merger or those benefits may take longer to realize than expected. We may also encounter significant unexpected difficulties in integrating the two businesses.

Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to integrate our and Ixia’s businesses. The combination of two independent businesses is a complex, costly and time-consuming process. As a result, we will be required to devote significant management attention and resources to integrating Ixia’s business practices and operations with our existing business practices and operations. The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits of the Merger. Our failure to meet the challenges involved in integrating the two businesses to realize the anticipated benefits of the Merger could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations.

In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of management's attention. The difficulties of combining the operations of the companies include, among others:

• the diversion of management's attention to integration matters;

• difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining Ixia’s business with our business;

• difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience;

• difficulties in the integration of operations and systems;

• difficulties in the assimilation of employees;

• difficulties in managing the expanded operations of a significantly larger and more complex company;

• successfully managing relationships with our strategic partners and supplier and customer base; and

• challenges in maintaining existing, and establishing new, business relationships.

Many of these factors will be outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could materially impact the business, financial condition and our results of operations. In addition, even if the operations of our business and Ixia’s business are integrated successfully, we may not realize the full benefits of the Merger, including the synergies, cost savings or sales or growth opportunities that we expect. These benefits may not be achieved within the anticipated time frame, or at all. Furthermore, additional unanticipated costs may be incurred in the integration of the businesses. All of these factors could decrease or delay the expected accretive effect of the Merger and negatively impact us. As a result, we cannot be certain that the combination of our and Ixia’s businesses will result in the realization of the full benefits anticipated from the Merger.

Our obligation to consummate the Merger is not conditional on obtaining financing.

We do not have the right to terminate the Merger Agreement if we are unable to obtain financing on acceptable terms or at all. We have entered into the term credit agreement to finance, in part, the Ixia acquisition and plan to raise the remainder of the

43

necessary funds through additional transactions. If we are unable to raise the additional funds necessary to finance the Ixia acquisition through other transactions, we will need to draw on the Bridge Facility. The Bridge Facility will expire 364-days from the time it is drawn. If we are unable to enter into financing transactions on terms more attractive than those of the Bridge Facility prior to closing of the Ixia acquisition or if we draw on the Bridge Facility and are unable to refinance it prior to its maturity our business, financial condition and results of operations may be materially and adversely affected.

Uncertainties associated with the Merger may cause a loss of employees and may otherwise materially adversely affect the future business and operations of the combined company.

The combined company’s success after the Merger will depend in part upon the ability of the combined company to retain executive officers and key employees. In some of the fields in which we and Ixia operate, there are only a limited number of people in the job market who possess the requisite skills and it may be increasingly difficult for the combined company to hire personnel over time.

Current and prospective employees of each company may experience uncertainty about their roles with the combined company following the Merger. In addition, key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the Merger. The loss of services of any key personnel or the inability to hire new personnel with the requisite skills could restrict the ability of the combined company to develop new products or enhance existing products in a timely manner, to sell products to customers or to manage the business of the combined company effectively. Also, the business, financial condition and results of operations of the combined company could be materially adversely affected by the loss of any of its key employees, by the failure of any key employee to perform in his or her current position, or by the combined company’s inability to attract and retain skilled employees.

We and Ixia will incur direct and indirect costs as a result of the Merger.

We and Ixia will incur substantial expenses in connection with and as a result of completing the Merger and, over a period of time following the completion of the Merger, we further expect to incur substantial expenses in connection with coordinating our businesses, operations, policies and procedures and Ixia’s. While we have assumed that a certain level of transaction expenses will be incurred, factors beyond our control could affect the total amount or the timing of these expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately.

We will be subject to business uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on customers and suppliers may have an adverse effect on us and/or Ixia and consequently on the combined company. These uncertainties could cause customers, suppliers and others that deal with us and/or Ixia to defer entering into contracts with us or Ixia or making other decisions concerning us or Ixia or seek to change existing business relationships with us or Ixia. In addition, the Merger Agreement restricts us from making certain acquisitions that would reasonably be expected to materially delay or materially and adversely affect our ability to satisfy the antitrust approval conditions. Such restriction may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Merger.

A lawsuit has been filed against Ixia and us challenging the Merger, and an adverse ruling in the lawsuit may prevent or delay the Merger.

On or about February 23, 2017, a putative class action lawsuit was filed in the United States District Court for the Central District of California on behalf of Ixia’s shareholders seeking, among other things, to temporarily and permanently enjoin the Merger and, if the Merger is consummated, to rescind the Merger. The lawsuit is captioned Witmer v. Ixia, et al., 17-cv-1483 (C.D. Cal.) and names Ixia, certain Ixia officers and directors, us, and the Merger Sub as defendants. If this action, or similar actions that may be brought, are successful, the Merger could be prevented, delayed, or rescinded, and Keysight could be liable for monetary damages, fees, and costs. Additionally, we may incur significant expense defending or settling any such actions.

One condition to closing the Merger is the absence of any law, order, judgment or other similar legal restraint by a court or other governmental entity that prevents, declares unlawful, or enjoins or prohibits the consummation of the Merger. If plaintiffs are successful in obtaining an injunction prohibiting the consummation of the Merger, then such injunction may prevent the Merger from being completed, or from being completed within the expected timeframe.

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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 January 31, 2017.

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)
November 1, 2016 through November 30, 2016	—	N/A	—	$	138,515,618
December 1, 2016 through December 31, 2016	—	N/A	—	$	138,515,618
January 1, 2017 through January 31, 2017	—	N/A	—	$	138,515,618
Total	—	N/A	—

(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 47 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:	February 28, 2017	By:	/s/ Neil Dougherty
			Neil Dougherty
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)
Dated:	February 28, 2017	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

47

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:	February 28, 2017
		/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:	February 28, 2017
		/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 January 31, 2017, 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:	February 28, 2017	/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 January 31, 2017, 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:	February 28, 2017	/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

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Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2017	Feb. 27, 2017
Entity Information [Line Items]
Entity Registrant Name	Keysight Technologies, Inc.
Entity Central Index Key	0001601046
Current Fiscal Year End Date	--10-31
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		171,543,474
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2017
Trading Symbol	KEYS

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Net revenue [Abstract]
Products	$ 606	$ 601
Services and other	120	120
Total net revenue	726	721
Costs and expenses:
Cost of products	255	260
Cost of services and other	67	69
Total costs	322	329
Research and development	108	108
Selling, general and administrative	213	200
Other Operating Expense (Income), Net	(79)	(14)
Total costs and expenses	564	623
Income from operations	162	98
Interest income	1	1
Interest expense	(12)	(12)
Other income (expense), net	1	(3)
Income before taxes, as reported	152	84
Provision for income taxes	43	20
Net Income	$ 109	$ 64
Net income per share:
Basic (in dollars per share)	$ 0.64	$ 0.37
Diluted (in dollars per share)	$ 0.63	$ 0.37
Weighted average shares used in computing net income per share:
Basic (in shares)	171	171
Diluted (in shares)	173	172

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Other comprehensive income (loss):
Net Income	$ 109	$ 64
Unrealized gain (loss) on investments, net of tax benefit (expense) of ($1) and $1	4	(6)
Unrealized gain on derivative instruments, net of tax expense of $1 and $1	2	1
Amounts reclassified into earnings related to derivative instruments, net of tax expense of zero and $1	1	3
Foreign currency translation, net of tax benefit (expense) of zero	(24)	(25)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $13 and $6	28	12
Change in net prior service credit, net of tax benefit of $2 and $3	(4)	(3)
Other comprehensive income (loss)	7	(18)
Total comprehensive income	$ 116	$ 46

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract]
Unrealized gain (loss) on investments, tax	$ (1)	$ 1
Unrealized gain on derivative instruments, tax	(1)	(1)
Amounts reclassified into earnings related to derivative instruments, tax	0	(1)
Foreign currency translation, tax	0	0
Net defined benefit pension cost and post retirement plan costs, tax [Abstract]
Change in actuarial net loss, tax	(13)	(6)
Change in net prior service credit, tax	$ 2	$ 3

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CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jan. 31, 2017	Oct. 31, 2016
Current assets:
Cash and cash equivalents	$ 896	$ 783
Accounts receivable, net	395	437
Inventory	479	474
Other current assets	162	160
Total current assets	1,932	1,854
Property, plant and equipment, net	494	512
Goodwill	721	736
Other intangible assets, net	197	208
Long-term investments	60	55
Long-term deferred tax assets	342	392
Other assets	123	39
Total assets	3,869	3,796
Current liabilities:
Accounts payable	172	189
Employee compensation and benefits	146	183
Deferred revenue	191	180
Income and other taxes payable	19	41
Other accrued liabilities	68	51
Total current liabilities	596	644
Long-term debt	1,093	1,093
Retirement and post-retirement benefits	384	405
Long-term deferred revenue	74	72
Other long-term liabilities	74	69
Total liabilities	2,221	2,283
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	0	0
Common stock; $0.01 par value; 1 billion shares authorized; 174 million shares at January 31, 2017 and 172 million shares at October 31, 2016 issued	2	2
Treasury stock at cost; 2.3 million shares at January 31, 2017 and at October 31, 2016	(62)	(62)
Additional paid-in-capital	1,271	1,242
Retained earnings	1,048	949
Accumulated other comprehensive loss	(611)	(618)
Total stockholder's equity	1,648	1,513
Total liabilities and equity	$ 3,869	$ 3,796

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CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares	Jan. 31, 2017	Oct. 31, 2016
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	174,000,000	172,000,000
Treasury Stock, Shares	2,000,000	2,000,000

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Cash flows from operating activities:
Net Income	$ 109	$ 64
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32	33
Share-based compensation	18	16
Excess tax benefit from share-based plans	(2)	(1)
Deferred taxes	40	4
Excess and obsolete inventory related charges	3	8
Gain on sale of land	(8)	(10)
Other non-cash expenses, net	0	2
Changes in assets and liabilities:
Accounts receivable	40	33
Inventory	(10)	(4)
Accounts payable	(12)	(22)
Employee compensation and benefits	(36)	(29)
Retirement and post-retirement benefits, net	(71)	(13)
Income tax payable	(15)	2
Other assets and liabilities	14	9
Net cash provided by operating activities	102	92
Cash flows from investing activities:
Investments in property, plant and equipment	(16)	(34)
Proceeds from sale of land	8	10
Net cash used in investing activities	(8)	(24)
Cash flows from financing activities:
Issuance of common stock under employee stock plans	19	24
Excess tax benefit from share-based plans	2	1
Net Cash provided by financing activities	21	25
Effect of exchange rate movements	(2)	(4)
Net increase in cash and cash equivalents	113	89
Cash and cash equivalents at beginning of period	783	483
Cash and cash equivalents at end of period	$ 896	$ 572

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jan. 31, 2017

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.

Basis of Presentation. We have prepared the accompanying financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements and information should be read in conjunction with our Annual Report on Form 10-K.

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2017 and October 31, 2016, condensed consolidated statement of comprehensive income for the three months ended January 31, 2017 and 2016, condensed consolidated statement of operations for the three months ended January 31, 2017 and 2016, and condensed consolidated statement of cash flows for the three months ended January 31, 2017 and 2016.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP 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, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring, and accounting for income taxes.

Land Sale. On April 30, 2014 we entered into a binding contract to sell land in the United Kingdom ("U.K.") that resulted in the transfer of three separate land tracts in May 2014, November 2015 and November 2016 for £21 million. In the three months ended January 31, 2017 and 2016, we recognized gains of $8 million and $10 million, respectively, on the sale of the land tracts in other operating expense (income).

Restricted Cash. As of January 31, 2017 and October 31, 2016, restricted cash of $2 million consisted of approximately $1 million of deposits held as collateral against bank guarantees and approximately $1 million of deposits primarily held as collateral against foreign currency hedging contracts and is classified within other assets and other current assets, respectively, in the condensed consolidated balance sheet.

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, 2016.

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NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jan. 31, 2017

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 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, May and December 2016 the FASB issued guidance that made technical corrections and improvements and 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 April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs, to simplify the presentation of deferred issuance costs by requiring that they be presented as a direct deduction from the carrying amount of the 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 adopted this guidance retrospectively during the first quarter of 2017. As a result, $7 million of unamortized debt issuance costs have been reclassified from other assets to long-term debt in the consolidated balance sheet as of January 31, 2017 and October 31, 2016 (see Note 14).

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.

In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, that removes the requirement under which the income tax consequences of intra-entity transfers are deferred until the assets are ultimately sold to an outside party, except for transfers of inventory. The tax consequences of such transfers would be recognized in tax expense when the transfers occur. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We elected to early adopt this guidance on a modified retrospective basis during the first quarter of 2017. As a result, a $10 million cumulative-effect adjustment was recorded directly to retained earnings as of November 1, 2016, the beginning of the annual period of adoption, with corresponding reductions of $2 million, $6 million and $2 million to other current assets, other assets, and long-term deferred tax assets, respectively.

In January 2017, the FASB issued guidance to narrow the definition of a business and provide a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. The standard is effective for fiscal years beginning after December 15, 2017, 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 January 2017, the FASB issued guidance that eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The standard is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We do not expect a material impact to our consolidated financial statements due to the adoption of this guidance.

Other amendments to GAAP 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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SHARE-BASED COMPENSATION

3 Months Ended

Jan. 31, 2017

Share-based Compensation [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Keysight accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock option awards, restricted stock units ("RSUs"), employee stock purchases made under our Employee Stock Purchase Plan (“ESPP”) and performance share awards granted to selected members of our senior management under the Long-Term Performance (“LTP”) Program based on estimated fair values. 

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		3
Selling, general and administrative	11		10
Total share-based compensation expense	$	18	$	16

 At January 31, 2017 and 2016, share-based compensation capitalized within inventory was $1 million. The income tax benefit realized from the exercised stock options and similar awards recognized was $2 million and $1 million for the three months ended January 31, 2017 and 2016, respectively.

The following assumptions were used to estimate the fair value of LTP Program grants.

	Three Months Ended
	January 31,
	2017		2016
LTP Program:
Volatility of Keysight shares	27	%	25	%
Volatility of selected index (2017)/peer-company shares (2016)	15	%	14%-54%
Price-wise correlation with selected peers	57	%	38	%

Shares granted under the LTP Program were valued using a Monte Carlo simulation model. In the first quarter of fiscal 2017, the company began awarding an additional type of performance award based on operating margin performance. These awards were valued based on the market price of Keysight’s common stock on the date of grant.The fair value of employee stock option awards granted before October 31, 2015 was estimated using the Black-Scholes option pricing model. We did not grant any option awards for the three months ended January 31, 2017 and 2016. 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.

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INCOME TAXES

3 Months Ended

Jan. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The company’s effective tax rate was 28.3 percent and 23.7 percent for the three months ended January 31, 2017 and 2016, respectively. Income tax expense was $43 million and $20 million for the three months ended January 31, 2017 and 2016, respectively. The income tax provision for the three months ended January 31, 2017 and 2016 included a net discrete expense of $23 million and $1 million, respectively. The increase in the total income tax expense and discrete expense for the three months ended January 31, 2017, is primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund (see Note 11).

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of tax incentives decreased the income tax provision for the three months ended January 31, 2017 and 2016 by $11 million and $8 million, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.07 and $0.05 for the three months ended January 31, 2017 and 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 foreign entities, the tax years generally remain open back to the year 2006. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

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NET INCOME PER SHARE

3 Months Ended

Jan. 31, 2017

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Numerator:
Net income	$	109	$	64
Denominator:
Basic weighted-average shares	171		171
Potential common shares— stock options and other employee stock plans	2		1
Diluted weighted-average shares	173		172

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method. 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 months ended January 31, 2017 and 2016, we excluded zero and 1.7 million options, respectively, from the calculation of diluted earnings per share. 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 collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three months ended January 31, 2017 and 2016, we excluded 424,400 and 16,100 shares, respectively.

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SUPPLEMENT CASH FLOW INFORMATION (Notes)

3 Months Ended

Jan. 31, 2017

Other Significant Noncash Transactions [Line Items]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

6. SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for income taxes was $17 million and $8 million for the three months ended January 31, 2017 and 2016, respectively. The following table summarizes our non-cash investing activities that are not reflected in the condensed consolidated statement of cash flows:

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Non-cash investing activities:
Capital expenditures in accounts payables	$	(5	)	$	(9	)
	$	(5	)	$	(9	)

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INVENTORY

3 Months Ended

Jan. 31, 2017

Inventory, Net [Abstract]

INVENTORY

INVENTORY

	January 31, 2017		October 31, 2016
	(in millions)
Finished goods	$	218	$	218
Purchased parts and fabricated assemblies	261		256
Total inventory	$	479	$	474

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Jan. 31, 2017

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 as of and for the three months ended January 31, 2017:

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2016	$	456		$	216	$	64	$	736
Foreign currency translation impact	(15		)	—		—		(15		)
Goodwill as of January 31, 2017	$	441		$	216	$	64	$	721

The components of other intangible assets as of January 31, 2017 and October 31, 2016 are shown in the table below:

	Other Intangible Assets as of January 31, 2017						Other Intangible Assets as of October 31, 2016
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	314	$	167	$	147	$	309	$	159	$	150
Backlog	4		4		—		4		4		—
Trademark/Tradename	20		4		16		20		4		16
Customer relationships	65		38		27		65		35		30
Total amortizable intangible assets	403		213		190		398		202		196
In-Process R&D	7		—		7		12		—		12
Total	$	410	$	213	$	197	$	410	$	202	$	208

During the three months ended January 31, 2017, we recorded no additions to goodwill and other intangible assets. During the three months ended January 31, 2017, there was no foreign exchange translation impact to other intangible assets.

During the first quarter of 2017, we transferred $5 million from in-process R&D to developed technology as the project was successfully completed.

 Amortization of other intangible assets was $11 million and $12 million for the three months ended January 31, 2017 and 2016, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $31 million for the remainder of 2017, $39 million for 2018, $38 million for 2019, $38 million for 2020, $30 million for 2021 and $14 million thereafter.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 31, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

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

Fair Value Hierarchy

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

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

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

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

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

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2017 and October 31, 2016 were as follows:

	Fair Value Measurements at January 31, 2017								Fair Value Measurements at October 31, 2016
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	572	$	572	$	—	$	—	$	471	$	471	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		4		—		4		—
Long-term
Trading securities	11		11		—		—		11		11		—		—
Available-for-sale investments	34		34		—		—		29		29		—		—
Total assets measured at fair value	$	624	$	617	$	7	$	—	$	515	$	511	$	4	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	6	$	—	$	6	$	—	$	8	$	—	$	8	$	—
Long-term
Deferred compensation liability	11		—		11		—		11		—		11		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	19	$	—	$	19	$	—

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 earnings. 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 earnings.

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DERIVATIVES

3 Months Ended

Jan. 31, 2017

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.

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. Ineffectiveness in the three months ended January 31, 2017 and 2016 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.

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

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

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2017 was $4 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2017.

There were 137 foreign exchange forward contracts open as of January 31, 2017 that were designated as cash flow hedges. There were 60 foreign exchange forward contracts as of January 31, 2017 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2017 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	62
British Pound	—			10
Singapore Dollar	10			1
Malaysian Ringgit	70			1
Japanese Yen	(82		)	(41		)
Other currencies	(15		)	6
Total	$	(17	)	$	39

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2017 and October 31, 2016 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2017		October 31, 2016		Balance Sheet Location	January 31, 2017		October 31, 2016
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	2	Other accrued liabilities	$	4	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		2		Other accrued liabilities	2		4
Total derivatives	$	7	$	4		$	6	$	8

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain recognized in accumulated other comprehensive income	$	3		$	2
Loss reclassified from accumulated other comprehensive income into cost of sales	$	(1	)	$	(4	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	2		$	(2	)

The estimated amount of existing net gain at January 31, 2017 expected to be reclassified from accumulated other comprehensive income to cost of sales within the next twelve months is immaterial.

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

3 Months Ended

Jan. 31, 2017

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

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2017 and 2016, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2017			2016			2017			2016			2017			2016
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	5			6			6			8			2			2
Expected return on plan assets	(8		)	(9		)	(19		)	(19		)	(3		)	(3		)
Amortization:
Net actuarial losses	4			2			9			7			5			5
Prior service credit	(2		)	(2		)	—			—			(4		)	(4		)
Settlement gain	—			—			(68		)	—			—			—
Total periodic benefit cost (benefit)	$	4		$	2		$	(68	)	$	—		$	—		$	—

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2017 and 2016. We contributed $7 million and $10 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2017 and 2016, respectively.

During the remainder of 2017, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $25 million to our Non-U.S. Defined Benefit Plans.

On December 15, 2016, we transferred a portion of the assets and obligations of our Japanese Employees’ Pension Fund ("EPF") to the Japanese government. The remaining portion of the EPF was transferred to a new Keysight Japan corporate defined benefit pension plan. The difference between the obligations settled with the government of $142 million and the assets transferred to the government of $51 million resulted in an increase in the funded status of the new defined benefit pension plan of $91 million. The settlement resulted in a gain of $68 million which is included in other operating expense (income) in the consolidated statement of operations. Previously accrued salary progression of $4 million was derecognized at the time of settlement.

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RESTRUCTURING (Notes)

3 Months Ended

Jan. 31, 2017

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Activities Disclosure [Text Block]

12. RESTRUCTURING

We initiated a targeted workforce reduction program in November 2016 that is expected to reduce Keysight's total headcount by between 60 to 200 employees. The timing and scope of workforce reductions will vary based on local legal requirements. This targeted workforce management program was designed to support our site consolidation strategy, align with our new industry segment structure and improve efficiency. As of January 31, 2017, approximately 20 employees exited under the workforce reduction program.

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

	Workforce reduction
	(in millions)
Balance as of October 31, 2016	$	—
Income statement expense	2
Cash payments	—
Balance as of January 31, 2017	$	2

The restructuring accrual of $2 million at January 31, 2017 relating to workforce reduction is recorded in other accrued liabilities in the condensed consolidated balance sheet.

A summary of the charges in the consolidated statement of operations resulting from all restructuring plans is shown below:

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	1	$	—
Research and development	—		—
Selling, general and administrative	1		—
Total restructuring and other related costs	$	2	$	—

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WARRANTY, COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jan. 31, 2017

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. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Beginning balance	$	44		$	53
Accruals for warranties including change in estimate	7			8
Settlements made during the period	(8		)	(8		)
Ending balance	$	43		$	53
Accruals for warranties due within one year	$	22		$	34
Accruals for warranties due after one year	21			19
Ending balance	$	43		$	53

Commitments

There were no material changes during the three months ended January 31, 2017 to the operating lease commitments reported in the company’s 2016 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)

3 Months Ended

Jan. 31, 2017

Debt Disclosure [Abstract]

DEBT

DEBT

Short-Term Debt

On January 30, 2017, we entered into a commitment letter, pursuant to which certain lenders have agreed to provide a senior unsecured 364-day bridge loan facility of up to $1.684 billion (“the Bridge Facility”) for the purpose of providing the financing to support Keysight's acquisition of Ixia. The company incurred issuance costs of $8 million in connection with the Bridge Facility. These costs are included in other current assets in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Bridge Facility. In connection with entering into the term credit agreement (described below), on February 15, 2017, the unsecured commitments under the Bridge Facility were automatically reduced in an aggregate principal amount of $400 million.

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that provides for a $450 million five-year unsecured revolving credit facility that will expire on February 15, 2022. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. The Revolving Credit Facility replaced our existing $450 million unsecured credit facility, dated as of September 15, 2014. The company may use amounts borrowed under the facility for general corporate purposes, including to finance, in part, the acquisition of Ixia, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. As of January 31, 2017, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2017.

Long-Term Debt

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

	January 31, 2017		October 31, 2016
	(in millions)
3.30% Senior Notes due 2019	$	497	$	497
4.55% Senior Notes due 2024	596		596
Total	$	1,093	$	1,093

The notes issued are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness. There were no changes to the principal, maturity, interest rates and interest payment terms of the senior notes during the three months ended January 31, 2017.

On February 15, 2017, we entered into a term credit agreement, which provides for a three-year $400 million delayed draw senior unsecured term loan facility. The term loans will be available to us upon the closing of the Ixia acquisition. The term loan is intended to be used to finance, in part, the Ixia acquisition, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. The commitments under the term credit agreement automatically terminate on the first to occur of (a) the consummation of the Ixia acquisition without the borrowing of any loans under the term credit agreement, (b) the termination of the Merger Agreement to acquire Ixia in accordance with its terms or (c) on October 30, 2017.

See Note 17 for further details regarding the pending acquisition.

As of January 31, 2017 and October 31, 2016, we had $19 million and $18 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 $12 million and $30 million as of January 31, 2017 and October 31, 2016, respectively.

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STOCKHOLDERS' EQUITY

3 Months Ended

Jan. 31, 2017

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. All such shares and related costs are held as treasury stock and accounted for at trade date using the cost method. 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 three months ended January 31, 2017, we did not repurchase any shares of common stock under the stock repurchase program.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2017 and 2016 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2017 and 2016 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Unrealized gain (loss) on derivatives	$	(1	)	$	(4	)	Cost of sales
	—			1			Provision for income taxes
	(1		)	(3		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(17		)	(14		)
Prior service credits	6			6
	(11		)	(8		)	Total before income tax
	3			3			Provision for income taxes
	(8		)	(5		)	Net of income tax
Total reclassifications for the period	$	(9	)	$	(8	)

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

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

3 Months Ended

Jan. 31, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

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

In fiscal 2016, we completed an organizational change to align our organization with the industries we serve. As a result of this organizational realignment, we have three reportable operating segments, Communications Solutions Group (“CSG”), Electronic Industrial Solutions Group (“EISG”), and Services Solutions Group (“SSG”). CSG and EISG are from our previous Measurement Solutions segment, while SSG was formerly reported as the company's Customer Support and Services segment. The new organizational structure continues to include centralized enterprise functions that provide support across the groups. Prior period amounts were revised to conform to the current presentation.

Our three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess 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.

Descriptions of our three reportable segments are as follows:

The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment.

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 share-based compensation expense, restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, separation and related costs, acquisition-related fair value adjustments, non-cash amortization and other items as noted in the reconciliations below.

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2017:
Total segment revenue	$	434		$	192	$	100	$	726
Acquisition-related fair value adjustments	—			—		—		—
Total net revenue	$	434		$	192	$	100	$	726
Segment income from operations	$	72		$	42	$	14	$	128
Three Months Ended January 31, 2016:
Total segment revenue	$	440		$	191	$	95	$	726
Acquisition-related fair value adjustments	(5		)	—		—		(5		)
Total net revenue	$	435		$	191	$	95	$	721
Segment income from operations	$	78		$	38	$	13	$	129

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Total reportable segments' income from operations	$	128		$	129
Share-based compensation expense	(18		)	(16		)
Restructuring and related costs	(2		)	—
Amortization of intangibles	(10		)	(11		)
Acquisition and integration costs	(6		)	(2		)
Separation and related costs	(6		)	(5		)
Acquisition-related fair value adjustments	—			(5		)
Japan pension settlement gain	68			—
Other	8			8
Income from operations, as reported	162			98
Interest income	1			1
Interest expense	(12		)	(12		)
Other income (expense), net	1			(3		)
Income before taxes, as reported	$	152		$	84

There has been no material change in total assets by segment since October 31, 2016.

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PENDING ACQUISITION (Notes)

3 Months Ended

Jan. 31, 2017

Business Combinations [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

17. PENDING ACQUISITION

On January 30, 2017, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ixia, a leading provider of network testing, visibility, and security solutions, and, by a joinder executed on February 2, 2017, Keysight Acquisition, Inc., a wholly-owned subsidiary of ours (“Merger Sub”), to acquire Ixia in an all-cash transaction totaling approximately $1.6 billion in consideration, net of cash acquired. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Ixia with Ixia surviving the merger and becoming our wholly-owned subsidiary. Our board of directors and Ixia’s board of directors have both unanimously approved the transaction, which is anticipated to close no later than the end of October 2017 and is subject to approval by Ixia shareholders, regulatory approvals, and customary closing conditions and approvals. Under the terms of the Merger Agreement, Ixia shareholders will receive $19.65 per share in cash. The combination of Keysight and Ixia brings together two highly complementary companies to create an innovative force in leading-edge technologies that spans electronic design, device and network validation, and application and security performance.

The description of the Merger Agreement herein does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to our Current Report on Form 8-K filed on February 1, 2017.

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Jan. 31, 2017

Share-based Compensation [Abstract]

Allocated Share-based compensation expense disclosure

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		3
Selling, general and administrative	11		10
Total share-based compensation expense	$	18	$	16

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 LTP Program grants.

	Three Months Ended
	January 31,
	2017		2016
LTP Program:
Volatility of Keysight shares	27	%	25	%
Volatility of selected index (2017)/peer-company shares (2016)	15	%	14%-54%
Price-wise correlation with selected peers	57	%	38	%

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NET INCOME PER SHARE (Tables)

3 Months Ended

Jan. 31, 2017

Earnings Per Share [Abstract]

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

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

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Numerator:
Net income	$	109	$	64
Denominator:
Basic weighted-average shares	171		171
Potential common shares— stock options and other employee stock plans	2		1
Diluted weighted-average shares	173		172

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SUPPLEMENT CASH FLOW INFORMATION (Tables)

3 Months Ended

Jan. 31, 2017

Other Significant Noncash Transactions [Line Items]

Cash Flow, Supplemental Disclosures [Text Block]

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Non-cash investing activities:
Capital expenditures in accounts payables	$	(5	)	$	(9	)
	$	(5	)	$	(9	)

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INVENTORY (Tables)

3 Months Ended

Jan. 31, 2017

Inventory, Net [Abstract]

INVENTORY

	January 31, 2017		October 31, 2016
	(in millions)
Finished goods	$	218	$	218
Purchased parts and fabricated assemblies	261		256
Total inventory	$	479	$	474

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Jan. 31, 2017

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 as of and for the three months ended January 31, 2017:

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2016	$	456		$	216	$	64	$	736
Foreign currency translation impact	(15		)	—		—		(15		)
Goodwill as of January 31, 2017	$	441		$	216	$	64	$	721

Components of other intangibles during the period

The components of other intangible assets as of January 31, 2017 and October 31, 2016 are shown in the table below:

	Other Intangible Assets as of January 31, 2017						Other Intangible Assets as of October 31, 2016
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	314	$	167	$	147	$	309	$	159	$	150
Backlog	4		4		—		4		4		—
Trademark/Tradename	20		4		16		20		4		16
Customer relationships	65		38		27		65		35		30
Total amortizable intangible assets	403		213		190		398		202		196
In-Process R&D	7		—		7		12		—		12
Total	$	410	$	213	$	197	$	410	$	202	$	208

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Assets And Liabilities Measured On Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2017 and October 31, 2016 were as follows:

	Fair Value Measurements at January 31, 2017								Fair Value Measurements at October 31, 2016
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents (money market funds)	$	572	$	572	$	—	$	—	$	471	$	471	$	—	$	—
Derivative instruments (foreign exchange contracts)	7		—		7		—		4		—		4		—
Long-term
Trading securities	11		11		—		—		11		11		—		—
Available-for-sale investments	34		34		—		—		29		29		—		—
Total assets measured at fair value	$	624	$	617	$	7	$	—	$	515	$	511	$	4	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	6	$	—	$	6	$	—	$	8	$	—	$	8	$	—
Long-term
Deferred compensation liability	11		—		11		—		11		—		11		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	19	$	—	$	19	$	—

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DERIVATIVES (Tables)

3 Months Ended

Jan. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Aggregated notional amounts by currency and designation

The aggregated notional amounts by currency and designation as of January 31, 2017 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	62
British Pound	—			10
Singapore Dollar	10			1
Malaysian Ringgit	70			1
Japanese Yen	(82		)	(41		)
Other currencies	(15		)	6
Total	$	(17	)	$	39

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

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2017 and October 31, 2016 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2017		October 31, 2016		Balance Sheet Location	January 31, 2017		October 31, 2016
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	5	$	2	Other accrued liabilities	$	4	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		2		Other accrued liabilities	2		4
Total derivatives	$	7	$	4		$	6	$	8

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

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain recognized in accumulated other comprehensive income	$	3		$	2
Loss reclassified from accumulated other comprehensive income into cost of sales	$	(1	)	$	(4	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	2		$	(2	)

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables)

3 Months Ended

Jan. 31, 2017

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

Schedule of net pension and post-retirement benefit costs

For the three months ended January 31, 2017 and 2016, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2017			2016			2017			2016			2017			2016
	(in millions)
Service cost—benefits earned during the period	$	5		$	5		$	4		$	4		$	—		$	—
Interest cost on benefit obligation	5			6			6			8			2			2
Expected return on plan assets	(8		)	(9		)	(19		)	(19		)	(3		)	(3		)
Amortization:
Net actuarial losses	4			2			9			7			5			5
Prior service credit	(2		)	(2		)	—			—			(4		)	(4		)
Settlement gain	—			—			(68		)	—			—			—
Total periodic benefit cost (benefit)	$	4		$	2		$	(68	)	$	—		$	—		$	—

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RESTRUCTURING (Tables)

3 Months Ended

Jan. 31, 2017

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Costs [Table Text Block]

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

	Workforce reduction
	(in millions)
Balance as of October 31, 2016	$	—
Income statement expense	2
Cash payments	—
Balance as of January 31, 2017	$	2

Restructuring And Related Charges By Statement Of Operations Caption [Table Text Block]

A summary of the charges in the consolidated statement of operations resulting from all restructuring plans is shown below:

	Three Months Ended
	January 31,
	2017		2016
	(in millions)
Cost of products and services	$	1	$	—
Research and development	—		—
Selling, general and administrative	1		—
Total restructuring and other related costs	$	2	$	—

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WARRANTY, COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Jan. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Standard warranty

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Beginning balance	$	44		$	53
Accruals for warranties including change in estimate	7			8
Settlements made during the period	(8		)	(8		)
Ending balance	$	43		$	53
Accruals for warranties due within one year	$	22		$	34
Accruals for warranties due after one year	21			19
Ending balance	$	43		$	53

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DEBT (Tables)

3 Months Ended

Jan. 31, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

	January 31, 2017		October 31, 2016
	(in millions)
3.30% Senior Notes due 2019	$	497	$	497
4.55% Senior Notes due 2024	596		596
Total	$	1,093	$	1,093

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Jan. 31, 2017

Statement of Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2017 and 2016 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)
As of October 31, 2015	$	21		$	(48	)	$	(511	)	$	65		$	(6	)	$	(479	)
Other comprehensive income (loss) before reclassifications	(7		)	(25		)	4			—			2			(26		)
Amounts reclassified out of accumulated other comprehensive loss	—			—			14			(6		)	4			12
Tax (expense) benefit	1			—			(6		)	3			(2		)	(4		)
Other comprehensive income (loss)	(6		)	(25		)	12			(3		)	4			(18		)
As of January 31, 2016	$	15		$	(73	)	$	(499	)	$	62		$	(2	)	$	(497	)

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2017 and 2016 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Unrealized gain (loss) on derivatives	$	(1	)	$	(4	)	Cost of sales
	—			1			Provision for income taxes
	(1		)	(3		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(17		)	(14		)
Prior service credits	6			6
	(11		)	(8		)	Total before income tax
	3			3			Provision for income taxes
	(8		)	(5		)	Net of income tax
Total reclassifications for the period	$	(9	)	$	(8	)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jan. 31, 2017

Segment Reporting Information [Line Items]

Reconciliation of segment results to total enterprise results

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

	Three Months Ended
	January 31,
	2017			2016
	(in millions)
Total reportable segments' income from operations	$	128		$	129
Share-based compensation expense	(18		)	(16		)
Restructuring and related costs	(2		)	—
Amortization of intangibles	(10		)	(11		)
Acquisition and integration costs	(6		)	(2		)
Separation and related costs	(6		)	(5		)
Acquisition-related fair value adjustments	—			(5		)
Japan pension settlement gain	68			—
Other	8			8
Income from operations, as reported	162			98
Interest income	1			1
Interest expense	(12		)	(12		)
Other income (expense), net	1			(3		)
Income before taxes, as reported	$	152		$	84

Segment Assets

	Communications Solutions Group			Electronic Industrial Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2017:
Total segment revenue	$	434		$	192	$	100	$	726
Acquisition-related fair value adjustments	—			—		—		—
Total net revenue	$	434		$	192	$	100	$	726
Segment income from operations	$	72		$	42	$	14	$	128
Three Months Ended January 31, 2016:
Total segment revenue	$	440		$	191	$	95	$	726
Acquisition-related fair value adjustments	(5		)	—		—		(5		)
Total net revenue	$	435		$	191	$	95	$	721
Segment income from operations	$	78		$	38	$	13	$	129

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Land Sale (Details) £ in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2017 USD ($)	Jan. 31, 2016 USD ($)	Apr. 30, 2014 GBP (£)
Property, Plant and Equipment [Line Items]
Document Period End Date	Jan. 31, 2017
Date of Land Sale Agreeement	Apr. 30, 2014
Binding contract to sell land | £			£ 21
Gain (Loss) on Disposition of Property Plant Equipment | $	$ 8	$ 10

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted Cash (Details) $ in Millions	Jan. 31, 2017 USD ($)
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents	$ 2
Restricted Cash and Cash Equivalents, Current	1
Restricted Cash and Cash Equivalents, Noncurrent	$ 1

XML

NEW ACCOUNTING PRONOUNCEMENTS ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Details)	Oct. 31, 2016 USD ($)
Long-term Debt [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Debt Instrument, Unamortized Debt Issuance Costs, Net	$ 7,000,000
Other Assets [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Debt Instrument, Unamortized Debt Issuance Costs, Net	$ (7,000,000)

XML

NEW ACCOUNTING PRONOUNCEMENTS ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (Details)	Nov. 01, 2016 USD ($)
New Accounting Pronouncement, Early Adoption [Line Items]
Increase (Decrease) in Other Current Assets	$ (2,000,000)
Increase (Decrease) in Other Noncurrent Assets	(6,000,000)
Increase (Decrease) in Deferred Tax Asset, Non-Current	(2,000,000)
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 10,000,000

XML

SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation Capitalized within inventory	$ 1	$ 1
Income tax benefit realized from exercised stock options and similar awards	2	1
Allocated Share-based Compensation Expense	18	16
Cost of products and services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	3	3
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	4	3
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 11	$ 10

XML

SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - shares shares in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
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 granted before October 31, 2015 was estimated using the Black-Scholes option pricing model.
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. In the first quarter of fiscal 2017, the company began awarding an additional type of performance award based on operating margin performance. These awards were valued based on the market price of Keysight’s common stock on the date of grant.
Volatility of Keysight shares (in hundredths)	27.00%	25.00%
Volatility of selected index (2017)/peer-company shares(2016) minimum (in hundredths)	15.00%	14.00%
Volatility of selected index (2017)/peer-company shares (2016) maximum (in hundredths)	15.00%	54.00%
Price-wise correlation with selected peers (in hundredths)	57.00%	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.

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INCOME TAXES (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Income Tax Examination [Line Items]
Income Tax Expense (Benefit)	$ 43	$ 20
Increase in tax resulting from transfer of a portion of Japanese employees pension fund	22
Income Tax Holiday, Aggregate Dollar Amount	$ 11	$ 8
Income Tax Holiday, Income Tax Benefits Per Share	$ 0.07	$ 0.05
Majority of company's entities [Member]
Income Tax Examination [Line Items]
Open Tax Year	2014
Certain foreign entities [Member]
Income Tax Examination [Line Items]
Open Tax Year	2006
Internal Revenue Service (IRS) [Member]
Income Tax Examination [Line Items]
Effective Income Tax Rate, Percent	28.30%	23.70%
Income Tax Expense (Benefit)	$ 43	$ 20
Net Discrete Tax expense (Benefit)	$ 23	$ 1
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.

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NET INCOME PER SHARE NET INCOME PER SHARE - COMPUTATIONS (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Numerator:
Net Income	$ 109	$ 64
Denominators:
Basic weighted-average shares (in shares)	171	171
Potentially dilutive common shares equivalents - stock options and other employee stock plans (in shares)	2	1
Diluted weighted average shares (in shares)	173	172

XML

NET INCOME PER SHARE (Details) - shares	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Stock Options [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	0	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	424,400	16,100

XML

SUPPLEMENT CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Other Significant Noncash Transactions [Line Items]
Capital Expenditures Incurred but Not yet Paid	$ (5)	$ (9)

XML

SUPPLEMENT CASH FLOW INFORMATION Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Income Taxes Paid, Net [Abstract]
Income Taxes Paid, Net	$ 17	$ 8

XML

INVENTORY (Details) - USD ($) $ in Millions	Jan. 31, 2017	Oct. 31, 2016
Inventory, Net [Abstract]
Finished goods	$ 218	$ 218
Purchased parts and fabricated assemblies	261	256
Inventory	$ 479	$ 474

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions	3 Months Ended
	Jan. 31, 2017 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 736
Foreign currency translation impact	(15)
Goodwill ending balance	721
Communications Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill beginning balance	456
Foreign currency translation impact	(15)
Goodwill ending balance	441
Electronic Industrial Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill beginning balance	216
Foreign currency translation impact	0
Goodwill ending balance	216
Services Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill beginning balance	64
Foreign currency translation impact	0
Goodwill ending balance	$ 64

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Oct. 31, 2016
Finite-Lived Intangible Assets, Net [Abstract]
Finite-Lived Intangible Assets, Gross	$ 403	$ 398
Finite-Lived Intangible Assets, Accumulated Amortization	213	202
Finite-Lived Intangible Assets, Net	190	196
Indefinite-Lived Intangible Assets (Excluding Goodwill)	7	12
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)	0	0
Intangible Assets, Gross (Excluding Goodwill)	410	410
Intangible Assets, Net (Excluding Goodwill)	197	208
Developed technology
Finite-Lived Intangible Assets, Net [Abstract]
Finite-Lived Intangible Assets, Gross	314	309
Finite-Lived Intangible Assets, Accumulated Amortization	167	159
Intangible Assets, Net (Excluding Goodwill)	147	150
Backlog
Finite-Lived Intangible Assets, Net [Abstract]
Finite-Lived Intangible Assets, Gross	4	4
Finite-Lived Intangible Assets, Accumulated Amortization	4	4
Intangible Assets, Net (Excluding Goodwill)	0	0
Trademark/Tradename
Finite-Lived Intangible Assets, Net [Abstract]
Finite-Lived Intangible Assets, Gross	20	20
Finite-Lived Intangible Assets, Accumulated Amortization	4	4
Intangible Assets, Net (Excluding Goodwill)	16	16
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Finite-Lived Intangible Assets, Gross	65	65
Finite-Lived Intangible Assets, Accumulated Amortization	38	35
Intangible Assets, Net (Excluding Goodwill)	$ 27	$ 30

XML

GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill arising from acquisitions and other adjustments	$ 0
Additions to other intangible assets	0
Impact to other intangibles due to Translation	0
Finite-Lived Intangible Assets, Period Increase (Decrease)	5
Amortization of intangible assets	$ 11	$ 12

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions	Jan. 31, 2017 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Remainder of 2017	$ 31
Finite-Lived Intangible Assets, Amortization Expense, 2018	39
Finite-Lived Intangible Assets, Amortization Expense, 2019	38
Finite-Lived Intangible Assets, Amortization Expense, 2020	38
Finite-Lived Intangible Assets, Amortization Expense, 2021	30
Finite-Lived Intangible Assets, Amortization Expense, 2022 and thereafter	$ 14

XML

FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jan. 31, 2017	Oct. 31, 2016
Assets Short - term [Abstract]
Cash equivalents (money market funds)	$ 572	$ 471
Derivative instruments (foreign exchange contracts)	7	4
Assets, Long-term [Abstract]
Trading securities	11	11
Available-for-sale investments	34	29
Total assets measured at fair value	624	515
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	6	8
Liabilities Long-term [Abstract]
Deferred compensation liability	11	11
Total liabilities measured at fair value	17	19
Level 1
Assets Short - term [Abstract]
Cash equivalents (money market funds)	572	471
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Trading securities	11	11
Available-for-sale investments	34	29
Total assets measured at fair value	617	511
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	4
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	7	4
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	6	8
Liabilities Long-term [Abstract]
Deferred compensation liability	11	11
Total liabilities measured at fair value	17	19
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, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions	3 Months Ended
	Jan. 31, 2017 USD ($) contracts
Derivative [Line Items]
Cash Flow Hedge Ineffectiveness is Immaterial	not significant
Derivative, Net Liability Position, Aggregate Fair Value	$ 4
Cash Flow Hedging
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	137
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	60
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Japanese Yen
Derivative [Line Items]
Total notional amount	$ 41
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy
Derivative [Line Items]
Total notional amount	39
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Euro
Derivative [Line Items]
Total notional amount	62
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | British Pound
Derivative [Line Items]
Total notional amount	10
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Singapore Dollar
Derivative [Line Items]
Total notional amount	1
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Malaysian Ringgit
Derivative [Line Items]
Total notional amount	1
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Other Currency [Member]
Derivative [Line Items]
Total notional amount	6
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	17
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Japanese Yen | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	82
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Other Currency [Member] | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	15
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	0
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | British Pound | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	0
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Singapore Dollar | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	10
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	$ 70

XML

DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions	Jan. 31, 2017	Oct. 31, 2016
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	$ 7	$ 4
Total derivatives Liabilities	6	8
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	2
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	4	4
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts | Other Current Assets
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	2	2
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts | Other Current Liabilities [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	$ 2	$ 4

XML

DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Derivative [Line Items]
Cash Flow Hedge (Gain) Loss to be Reclassified within Twelve Months	$ 0
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	$ 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	(1)	(4)
Not Designated as Hedging Instrument [Member] | Other (income) expense, net
Derivative [Line Items]
Gain (loss) recognized in other income (expense),net	$ 2	$ (2)

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	$ 5	$ 5
Interest cost on benefit obligation	5	6
Expected return on plan assets	(8)	(9)
Amortization:
Net actuarial losses	4	2
Prior service credit	(2)	(2)
Settlement gain	0	0
Total periodic benefit cost (benefit)	4	2
Non-U.S. Defined Benefit Plans
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	4	4
Interest cost on benefit obligation	6	8
Expected return on plan assets	(19)	(19)
Amortization:
Net actuarial losses	9	7
Prior service credit	0	0
Settlement gain	(68)	0
Total periodic benefit cost (benefit)	(68)	0
U.S. Post-Retirement Benefit Plan
Defined Benefit Plan, Net Periodic Benefit Cost
Service cost—benefits earned during the period	0	0
Interest cost on benefit obligation	2	2
Expected return on plan assets	(3)	(3)
Amortization:
Net actuarial losses	5	5
Prior service credit	(4)	(4)
Settlement gain	0	0
Total periodic benefit cost (benefit)	$ 0	$ 0

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Document Period End Date	Jan. 31, 2017
U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	$ 0
Estimated future employer contributions in remainder of current fiscal year	0
Non-U.S. Defined Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	7	$ 10
Estimated future employer contributions in remainder of current fiscal year	$ 25

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS JAPAN PENSION FUND SETTLEMENT (Details) $ in Millions	Dec. 15, 2016 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Decrease in Pension Plan Obligations due to transfer of substitutional portion to Japanese government	$ (142)
Assets (substitutional portion) Transferred to Japanese government	(51)
Increase in funded status	91
Japanese Welfare Pension Insurance Law, Previously Accrued Salary Progression Derecognition	4
Other Operating Income (Expense) [Member]
Defined Benefit Plan Disclosure [Line Items]
Settlement gain	$ 68

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RESTRUCTURING (Details) $ in Millions	3 Months Ended
	Jan. 31, 2017 USD ($)	Jan. 31, 2016 USD ($)	Oct. 31, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Description	We initiated a targeted workforce reduction program in November 2016 that is expected to reduce Keysight's total headcount by between 60 to 200 employees. The timing and scope of workforce reductions will vary based on local legal requirements. This targeted workforce management program was designed to support our site consolidation strategy, align with our new industry segment structure and improve efficiency.
Restructuring and Related Cost Expected Number of Positions Eliminated Minimum	60
Restructuring And Related Cost Expected Number Of Positions Eliminated Maximum	200
Restructuring and Related Cost, Number of Positions Eliminated	20
Restructuring Reserve	$ 2		$ 0
Payments for Restructuring	0
Restructuring Charges	2	$ 0
Cost of products and services
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	1	0
Research and development
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	0	0
Selling, general and administrative
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 1	$ 0
WORKFORCE REDUCTION [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Initiation Date	Nov. 30, 2016
Other accrued liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 2

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WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance at beginning of period	$ 44	$ 53
Accruals for warranties including change in estimate	7	8
Settlements made during the period	(8)	(8)
Ending balance at end of period	43	53
Standard Product Warranty Disclosure [Abstract]
Accruals for warranties due within one year	22	34
Accruals for warranties due after one year	21	19
Ending balance at end of period	$ 43	$ 53

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DEBT Facility (Details) - USD ($)		3 Months Ended
	Feb. 15, 2017	Jan. 31, 2017
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Facility, Maximum Borrowing Capacity		$ 450,000,000
Additional drawings on credit facility		150,000,000
Facility, Outstanding		$ 0
Facility, Covenant Compliance		We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2017.
Bridge Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Term		364 days
Facility, Initiation Date		Jan. 30, 2017
Facility, Maximum Borrowing Capacity		$ 1,684,000,000
Debt Issuance Costs, Gross, Current		$ 8,000,000
Subsequent Event [Member] | Bridge Loan [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Increase (Decrease), Other, Net	$ (400,000,000)
Subsequent Event [Member] | Revolving Credit Facility - 2 [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Term	5 years
Facility, Description	The Revolving Credit Facility replaced our existing $450 million unsecured credit facility, dated as of September 15, 2014. The company may use amounts borrowed under the facility for general corporate purposes, including to finance, in part, the acquisition of Ixia, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition.
Facility, Initiation Date	Feb. 15, 2017
Facility, Maximum Borrowing Capacity	$ 450,000,000
Facility, Expiration Date	Feb. 15, 2022

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DEBT Long Term Debt (Details) - USD ($) $ in Millions	Feb. 15, 2017	Jan. 31, 2017	Oct. 31, 2016
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities		$ 1,093	$ 1,093
Letters of Credit Outstanding, Amount		19	18
Long Term Debt Fair Value above carrying Value		12	30
3.30% Senior Notes due 2019
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities		497	497
4.55% Senior Notes due 2024
Debt Instrument [Line Items]
Long-term Debt, Excluding Current Maturities		$ 596	$ 596
Subsequent Event [Member] | Long-term Debt [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Initiation Date	Feb. 15, 2017
Debt Instrument, Term	3 years
Long-term Line of Credit	$ 400
Line of Credit Facility, Description	The term loans will be available to us upon the closing of the Ixia acquisition. The term loan is intended to be used to finance, in part, the Ixia acquisition, the payment of fees and expenses related thereto and the repayment in full of all third-party indebtedness of Ixia and its subsidiaries that becomes due or otherwise defaults upon the consummation of the Ixia acquisition. The commitments under the term credit agreement automatically terminate on the first to occur of (a) the consummation of the Ixia acquisition without the borrowing of any loans under the term credit agreement, (b) the termination of the Merger Agreement to acquire Ixia in accordance with its terms or (c) on October 30, 2017.

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STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ (618)	$ (479)
OCI, before Reclassifications, before Tax, Attributable to Parent	8	(26)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	12	12
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(13)	(4)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	7	(18)
Ending balance	(611)	(497)
Unrealized gain on equity securities [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	10	21
OCI, before Reclassifications, before Tax, Attributable to Parent	5	(7)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	0	0
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(1)	1
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	4	(6)
Ending balance	14	15
Foreign currency translation [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(29)	(48)
OCI, before Reclassifications, before Tax, Attributable to Parent	(24)	(25)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	0	0
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0	0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(24)	(25)
Ending balance	(53)	(73)
Net defined benefit pension cost and post retirement plan costs, actuarial losses [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(646)	(511)
OCI, before Reclassifications, before Tax, Attributable to Parent	24	4
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	17	14
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(13)	(6)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	28	12
Ending balance	(618)	(499)
Net defined benefit pension cost and post retirement plan costs, prior service credits [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	50	65
OCI, before Reclassifications, before Tax, Attributable to Parent	0	0
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	(6)	(6)
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	2	3
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(4)	(3)
Ending balance	46	62
Unrealized gain (losses) on derivatives [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(3)	(6)
OCI, before Reclassifications, before Tax, Attributable to Parent	3	2
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent	1	4
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(1)	(2)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	3	4
Ending balance	$ 0	$ (2)

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STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Goods Sold	$ 255	$ 260
Income Tax Expense (Benefit)	(43)	(20)
Net Income	109	64
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	152	84
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net Income	(9)	(8)
Unrealized gain (losses) on derivatives [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	(1)	(4)
Income Tax Expense (Benefit)	0	1
Net Income	(1)	(3)
Net defined benefit pension cost and post retirement plan costs, actuarial losses [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	(17)	(14)
Net defined benefit pension cost and post retirement plan costs, prior service credits [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	6	6
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)	3	3
Net Income	(8)	(5)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	$ (11)	$ (8)

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STOCKHOLDERS' EQUITY Stock Repurchase (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Feb. 18, 2016
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract]
Stock Repurchased During Period, Shares	0
Stock Repurchase Program, Authorized Amount		$ 200

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SEGMENT INFORMATION Profitability (Details) $ in Millions	3 Months Ended
	Jan. 31, 2017 USD ($)	Jan. 31, 2016 USD ($)
Segment Reporting Information [Line Items]
Segment Reporting, Factors Used to Identify Entity's Reportable Segments	Our three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess 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.
Segment Reporting, Additional Information about Entity's Reportable Segments	Descriptions of our three reportable segments are as follows: The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of industries within the electronic industrial end market, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment.
Number of Operating Segments	3
Number of Reportable Segments	3
Revenues	$ 726	$ 726
Business Combination Acquisition Related Fair Value Adjustments	0	(5)
Total net revenue	726	721
Segment income from operations	162	98
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	128	129
Communications Solutions Group [Member]
Segment Reporting Information [Line Items]
Revenues	434	440
Business Combination Acquisition Related Fair Value Adjustments	0	(5)
Total net revenue	434	435
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	72	78
Electronic Industrial Solutions Group [Member]
Segment Reporting Information [Line Items]
Revenues	192	191
Business Combination Acquisition Related Fair Value Adjustments	0	0
Total net revenue	192	191
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	42	38
Services Solutions Group [Member]
Segment Reporting Information [Line Items]
Revenues	100	95
Business Combination Acquisition Related Fair Value Adjustments	0	0
Total net revenue	100	95
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	$ 14	$ 13

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SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable segments' income from operations	$ 128	$ 129
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost	(18)	(16)
Restructuring Charges	(2)	0
Business Combination Acquisition Related Fair Value Adjustments	0	(5)
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements	68	0
Amortization of Intangibles	(10)	(11)
Acquisition and integration costs	(6)	(2)
Separation and related costs	(6)	(5)
Segment Reporting Other reconciling items for operating profit loss segment to consolidated	8	8
Income from operations	162	98
Investment Income, Nonoperating	1	1
Interest expense	(12)	(12)
Other Nonoperating Gains (Losses)	1	(3)
Income before taxes, as reported	$ 152	$ 84

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SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2017	Oct. 31, 2016
Segment Reporting Information [Line Items]
Disclosure on Geographic Areas, Long-Lived Assets	There has been no material change in total assets by segment since October 31, 2016.
Assets	$ 3,869	$ 3,796

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PENDING ACQUISITION (Details) - USD ($) $ / shares in Units, $ in Billions	3 Months Ended
	Jan. 31, 2017	Jan. 30, 2017
Pending business acquisition [Abstract]
Payment to acquire business, agreement	$ 1.6
Business Acquisition, Share Price		$ 19.65