RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

12 Months Ended

Oct. 31, 2024

Retirement Benefits [Abstract]

RETIREMENT PLANS AND POST-RETIREMENT PENSION PLANS

12.    RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

General. The majority of our employees are covered under various defined benefit and/or defined contribution retirement plans. Additionally, we sponsor post-retirement health care benefits for our eligible U.S. employees. We provide U.S. employees who meet eligibility criteria under the Keysight Technologies, Inc. Retirement Plan (“RP”), defined benefits that are based on an employee’s base or target pay during the years of employment and length of service. For eligible employees’ service through October 31, 1993, the defined benefit payable under the RP is reduced by any amounts due to the eligible employees’ service under our defined contribution Deferred Profit-Sharing Plan (“DPSP”), which was closed to new participants as of November 1993. The obligations under the DPSP equal the fair value of the DPSP assets, which was $161 million as of October 31, 2024. Employees hired on or after August 1, 2015 are not eligible to participate in the RP or the Keysight Technologies, Inc. Health Plan for Retirees (“U.S. Post-Retirement Benefit Plan”).

In addition, in the U.S. we maintain the Supplemental Benefits Retirement Plan (“SBRP”), a supplemental unfunded non-qualified defined benefit plan to provide benefits that would be provided under the RP but for limitations imposed by the Internal Revenue Code. The RP and the SBRP comprise the “U.S. Plans.”

Eligible employees outside the U.S. generally receive retirement benefits under various retirement plans (“Non-U.S. Plans”) based on factors such as years of service and/or employee compensation levels. Eligibility is generally determined in accordance with local statutory requirements. Certain of our immaterial Non-U.S. defined benefit plans are not included in these disclosures.

401(k) defined contribution plan. Eligible U.S. employees may participate in the Keysight Technologies, Inc. 401(k) Plan (the “401(k) Plan”). Enrollment in the 401(k) Plan is automatic for employees who meet eligibility requirements unless they decline participation. We provide matching contributions of up to 4 percent of annual eligible compensation for employees hired prior to August 1, 2015 and up to 6 percent for employees hired thereafter. The 401(k) Plan employer expense included in income from operations was $33 million in 2024, $34 million in 2023 and $31 million in 2022.

Post-retirement medical benefit plans. In addition to receiving retirement benefits, U.S. employees who meet eligibility requirements as of their termination date may participate in the U.S. Post-Retirement Benefit Plan.

Components of net periodic benefit cost. We record the service cost component of net periodic benefit cost (benefit) in the same line item as other employee compensation costs. We record the non-service cost components of net periodic benefit cost (benefit), such as interest cost, expected return on assets, amortization of prior service cost, and actuarial gains or losses, within “other income (expense), net” in the consolidated statement of operations. The company uses alternate methods of amortization, as allowed by the authoritative guidance, which amortizes the actuarial gains and losses on a consistent basis for the years presented. For the U.S. Plans, gains and losses are amortized over the average future working lifetime of active plan participants. For most Non-U.S. Plans and the U.S. Post-Retirement Benefit Plan, gains and losses are amortized using a separate layer for each year’s gains and losses.

During the year ended October 31, 2023 and October 31, 2022, we recognized a settlement gain of $1 million in our Japan defined benefit plan and a settlement loss of $9 million in our U.K. defined benefit plan, respectively, as the lump-sum payments in the respective plans were more than the sum of the service cost and interest cost components of net periodic benefit cost (“the threshold amount”).

For the years ended October 31, 2024, 2023 and 2022, components of net periodic benefit cost (benefit) and other amounts recognized in other comprehensive income consisted of:

	Defined Benefit Plans												U.S. Post-Retirement Benefit Plan
	U.S. Plans						Non-U.S. Plans
	Year Ended October 31,
	2024		2023		2022		2024		2023		2022		2024		2023		2022
	(in millions)
Net periodic benefit cost (benefit)
Service cost — benefits earned during the period	$	14	$	16	$	25	$	8	$	10	$	13	$	1	$	1	$	1
Interest cost on benefit obligations	40		36		23		36		31		15		8		8		5
Expected return on plan assets	(47)		(49)		(61)		(53)		(53)		(58)		(12)		(12)		(14)
Amortization:
Net actuarial loss	9		9		11		9		9		24		(1)		2		1
Prior service credit	—		—		—		—		—		—		—		(1)		(1)
Net periodic benefit cost (benefit)	16		12		(2)		—		(3)		(6)		(4)		(2)		(8)
Settlements	—		—		—		—		(1)		9		—		—		—
Total periodic benefit cost (benefit)	$	16	$	12	$	(2)	$	—	$	(4)	$	3	$	(4)	$	(2)	$	(8)
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Net actuarial loss (gain)	$	(23)	$	14	$	(9)	$	(43)	$	32	$	(38)	$	(3)	$	(5)	$	17
Net prior service cost/(credit)	2		—		—		—		—		—		—		—		—
Amortization:
Net actuarial loss	(9)		(9)		(11)		(9)		(9)		(24)		1		(2)		(1)
Prior service credit	—		—		—		—		—		—		—		1		1
Settlements	—		—		—		—		1		(9)		—		—		—
Foreign currency	—		—		—		1		(2)		(6)		—		—		—
Total recognized in other comprehensive (income) loss	$	(30)	$	5	$	(20)	$	(51)	$	22	$	(77)	$	(2)	$	(6)	$	17
Total recognized in the periodic benefit cost (benefit) and other comprehensive (income) loss	$	(14)	$	17	$	(22)	$	(51)	$	18	$	(74)	$	(6)	$	(8)	$	9

Funded status. As of October 31, 2024 and 2023, the funded status of the defined benefit and post-retirement benefit plans was as follows:

	U.S. Defined Benefit Plans				Non-U.S. Defined Benefit Plans				U.S. Post-Retirement Benefit Plan
	October 31,
	2024		2023		2024		2023		2024		2023
	(in millions)
Change in fair value of plan assets:
Fair value — beginning of year	$	622	$	640	$	985	$	1,003	$	153	$	155
Actual return on plan assets	155		25		149		(23)		33		12
Employer contributions	1		1		13		12		—		—
Settlements	—		(1)		—		(3)		—		—
Benefits paid	(56)		(43)		(46)		(41)		(15)		(14)
Currency impact	—		—		35		37		—		—
Fair value — end of year	$	722	$	622	$	1,136	$	985	$	171	$	153
Change in benefit obligation:
Benefit obligation — beginning of year	$	634	$	636	$	810	$	819	$	136	$	146
Service cost	14		16		8		10		1		1
Interest cost	40		36		36		31		8		8
Settlements	—		(1)		—		(3)		—		—
Actuarial loss (gain)	84		(10)		52		(44)		18		(5)
Benefits paid	(56)		(43)		(46)		(41)		(15)		(14)
Plan amendment	2		—		—		—		—		—
Currency impact	—		—		36		38		—		—
Benefit obligation — end of year	$	718	$	634	$	896	$	810	$	148	$	136
Overfunded (Underfunded) status of PBO	$	4	$	(12)	$	240	$	175	$	23	$	17
Amounts recognized in the consolidated balance sheet consist of:
Other assets	$	10	$	—	$	283	$	205	$	23	$	17
Employee compensation and benefits	(1)		(1)		—		—		—		—
Retirement and post-retirement benefits	(5)		(11)		(43)		(30)		—		—
Net asset (liability)	$	4	$	(12)	$	240	$	175	$	23	$	17
Amounts recognized in accumulated other comprehensive (income) loss:
Actuarial losses (gains)	$	54	$	86	$	352	$	403	$	(13)	$	(11)
Prior service cost (credits)	2		—		—		—		—		—
Total	$	56	$	86	$	352	$	403	$	(13)	$	(11)

The change in benefit obligations for the U.S. and non-U.S. defined benefit plans for 2024 was primarily driven by changes in discount rates, and for 2023 was primarily driven by changes in discount rates, partially offset by changes in demographic assumptions. The change in benefit obligations for the U.S. post-retirement benefit plan for 2024 was primarily driven by changes in discount and retiree mortality rates and for 2023 was primarily driven by changes in discount rates.

Investment policies and strategies as of October 31, 2024. In the U.S., our RP Plan target asset allocations are approximately 60 percent growth funds, primarily equities, and approximately 40 percent fixed income investments and in the U.S. Post-Retirement Benefit Plan, target asset allocations are approximately 70 percent growth funds, primarily equities, and approximately 30 percent fixed income investments. Our DPSP target asset allocation is approximately 60 percent growth funds, primarily equities, and approximately 40 percent fixed income investments. The general investment objective for all our plan assets is to obtain the optimum rate of investment return on the total investment portfolio consistent with the assumed level of risk. Specific investment objectives for the plans’ portfolios are to maintain and enhance the purchasing power of the plans’ assets; achieve investment returns consistent with the level of risk being taken; and earn performance rates of return in accordance with the benchmarks adopted for each asset class. Outside of the U.S., our target asset allocation is from 11 to 70 percent equities, from 30 to 54 percent fixed income investments, and from zero to 47 percent insurance contracts and cash. All plans’ assets are broadly diversified. Due to fluctuations in capital markets, our actual allocation of plan assets as of October 31, 2024 may differ from the target allocation. Our policy is to periodically bring the actual allocation in line with the target allocation.

Equity securities include exchange-traded common stock and preferred stock of companies from broadly diversified industries. Fixed income securities include a portfolio of corporate bonds of companies from diversified industries, government securities, mortgage-backed securities, asset-backed securities, derivative instruments and other. Portions of the cash and cash equivalent, equity, and fixed income investments are held in commingled funds. Investments in commingled funds are valued using the net asset value (“NAV”) method as a practical expedient. Investments valued using the NAV method are allocated across a broad array of funds and diversify the portfolio. The value of the plan assets directly affects the funded status of our pension and post-retirement benefit plans recorded in the financial statements. In March 2021, we entered into an insurance buy-in contract for a portion of benefit obligations under the U.K. defined benefit plan and classified it as “other investments.” In December 2021, we completed the second phase of the same contract. The insurance buy-in contract is similar to an annuity contract, which matches cash flows with future benefit payments for a specific group of pensioners with the obligation remaining with the plan. This contract is issued by a third-party insurance company with no affiliation to us. The insurance contract is valued on an insurer pricing basis, which reflects the purchase price adjusted for changes in discount rates and other actuarial assumptions, which approximates fair value.

Fair Value. The measurement of the fair value of pension and post-retirement plan assets uses the valuation methodologies and the inputs as described in Note 8, “Fair Value Measurements.”

Cash and Cash Equivalents - Cash and cash equivalents consist of short-term investment funds that are invested in short-term domestic fixed income securities and other securities with debt-like characteristics, emphasizing short-term maturities and quality. Cash and cash equivalents are generally classified as Level 2 investments except when the cash and cash equivalents are held in commingled funds, which have a daily NAV derived from quoted prices for the underlying securities in active markets; these are classified as assets measured at NAV.

Equity - Some equity securities consisting of common and preferred stock are held in commingled funds, which have daily NAVs derived from quoted prices for the underlying securities in active markets; these are classified as assets measured at NAV. Commingled funds that have quoted prices in active markets are classified as Level 1 investments. Equity also includes some growth-seeking real estate commingled funds that are measured at NAV.

Fixed Income - Some fixed income securities are held in commingled funds that have daily NAVs derived from the underlying securities; these are classified as assets measured at NAV. Commingled funds that have quoted prices in active markets are classified as Level 1 investments. Some fixed income securities that are not actively traded and are valued basis inputs, such as quoted price of similar securities, or other inputs that can be derived principally from or corroborated by observable market data are classified as Level 2 investments.

Other Investments - Other investments represents the U.K. insurance buy-in contract and is classified as a Level 3 investment. Insurance contracts are generally classified as Level 3 investments.

The following tables present the fair value of U.S. Defined Benefit Plans assets classified under the appropriate level of the fair value hierarchy as of October 31, 2024 and 2023:

			Fair Value Measurement as of October 31, 2024 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Cash and cash equivalents	$	10	$	—	$	10	$	—	$	—
Equity	438		—		—		—		438
Fixed income	274		58		—		—		216
Total assets measured at fair value	$	722	$	58	$	10	$	—	$	654

			Fair Value Measurement as of October 31, 2023 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	—
Equity	446		—		—		—		446
Fixed income	176		—		—		—		176
Total assets measured at fair value	$	622	$	—	$	—	$	—	$	622

(a) Certain instruments that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.

For U.S. Defined Benefit Plans, there was no activity relating to assets measured at fair value using significant unobservable inputs (Level 3) during 2024 and 2023.

The following tables present the fair value of U.S. Post-Retirement Benefit Plan assets classified under the appropriate level of the fair value hierarchy as of October 31, 2024 and 2023:

			Fair Value Measurement as of October 31, 2024 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Cash and cash equivalents	$	2	$	—	$	2	$	—	$	—
Equity	121		—		—		—		121
Fixed income	48		5		29		—		14
Total assets measured at fair value	$	171	$	5	$	31	$	—	$	135

			Fair Value Measurement as of October 31, 2023 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Cash and cash equivalents	$	1	$	—	$	1	$	—	$	—
Equity	107		—		—		—		107
Fixed income	45		3		26		—		16
Total assets measured at fair value	$	153	$	3	$	27	$	—	$	123

(a) Certain instruments that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.

For the U.S. Post-Retirement Benefit Plan, there was no activity relating to assets measured at fair value using significant unobservable inputs (Level 3) during 2024 and 2023.

The following tables present the fair value of Non-U.S. Defined Benefit Plans assets classified under the appropriate level of the fair value hierarchy as of October 31, 2024 and 2023:

			Fair Value Measurement as of October 31, 2024 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Equity	$	422	$	—	$	—	$	—	$	422
Fixed income	467		—		—		—		467
Other investments	247		—		—		247		—
Total assets measured at fair value	$	1,136	$	—	$	—	$	247	$	889

			Fair Value Measurement as of October 31, 2023 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets Measured at NAV(a)
	(in millions)
Equity	$	410	$	—	$	—	$	—	$	410
Fixed income	342		—		—		—		342
Other investments	233		—		—		233		—
Total assets measured at fair value	$	985	$	—	$	—	$	233	$	752

(a) Certain instruments that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.

For Non-U.S. Defined Benefit Plans assets measured at fair value using significant unobservable inputs (Level 3), the following table summarizes the change in balances during 2024 and 2023:

	Year Ended October 31,
	2024		2023
	(in millions)
Balance, beginning of year	$	233	$	254
Unrealized gains (losses)	15		(19)
Purchases, sales, issuances and settlements	(17)		(15)
Transfers in (out)	—		—
Currency impact	16		13
Balance, end of year	$	247	$	233

The table below presents the combined projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”) and fair value of plan assets, grouping plans using comparisons of the PBO and ABO relative to the plan assets as of October 31, 2024 and 2023:

	2024				2023
	Benefit Obligation		Fair Value of Plan Assets		Benefit Obligation		Fair Value of Plan Assets
	PBO				PBO
	(in millions)				(in millions)
U.S. defined benefit plans where PBO exceeds the fair value of plan assets	$	6	$	—	$	634	$	622
U.S. defined benefit plans where fair value of plan assets exceeds PBO	712		722		—		—
Total	$	718	$	722	$	634	$	622
Non-U.S. defined benefit plans where PBO exceeds the fair value of plan assets	$	86	$	43	$	64	$	34
Non-U.S. defined benefit plans where fair value of plan assets exceeds PBO	810		1,093		746		951
Total	$	896	$	1,136	$	810	$	985
	ABO				ABO
U.S. defined benefit plans where ABO exceeds the fair value of plan assets	$	4	$	—	$	5	$	—
U.S. defined benefit plans where the fair value of plan assets exceeds ABO	636		722		576		622
Total	$	640	$	722	$	581	$	622
Non-U.S. defined benefit plans where ABO exceeds the fair value of plan assets	$	85	$	43	$	63	$	34
Non-U.S. defined benefit plans where fair value of plan assets exceeds ABO	808		1,093		742		951
Total	$	893	$	1,136	$	805	$	985

    

Contributions and estimated future benefit payments. For 2025, we do not expect to contribute to our U.S. Defined Benefit Plans or U.S. Post-Retirement Benefit Plan, and we expect to contribute $13 million to our Non-U.S. Defined Benefit Plans. The following table presents expected future benefit payments for the next 10 years.

	U.S. Defined Benefit Plans		Non-U.S. Defined Benefit Plans		U.S. Post-Retirement Benefit Plan
	(in millions)
2025	$	56	$	45	$	16
2026	$	57	$	47	$	16
2027	$	59	$	49	$	17
2028	$	56	$	51	$	17
2029	$	59	$	52	$	17
2030 - 2034	$	286	$	269	$	66

Assumptions. The assumptions used to determine the benefit obligations and net periodic benefit cost (benefit) for our defined benefit and post-retirement benefit plans are presented in the tables below. The expected long-term return on assets below represents an estimate of long-term returns on investment portfolios, consisting of a mixture of equities, fixed income and other investments, in proportion to the asset allocations of each of our plans. We consider long-term rates of return, which are weighted based on the asset classes (both historical and forecasted) in which we expect our pension and post-retirement

funds to be invested. Discount rates reflect the current rate at which pension and post-retirement obligations could be settled based on the measurement dates of the plans, which is October 31. The U.S. discount rates as of October 31, 2024 and 2023 were determined based on the results of matching expected plan benefit payments with cash flows from a hypothetically constructed bond portfolio. The Non-U.S. discount rates as of October 31, 2024 and 2023 were determined based on a granular approach, which discounts the expected plan benefit payments with rates from a high-quality corporate bond yield curve. In addition, we used this method to calculate two components of the periodic benefit cost: service cost and interest cost. The range of assumptions that were used for the Non-U.S. Defined Benefit Plans reflects the different economic environments within various countries.

Assumptions used to calculate the net periodic benefit cost (benefit) were as follows:

	Year Ended October 31,
	2024	2023
U.S. Defined Benefit Plans:
Discount rate	6.50%	6.00%
Average increase in compensation levels	3.50%	3.50%
Expected long-term return on assets	8.00%	8.00%
Non-U.S. Defined Benefit Plans:
Discount rate	2.50-5.35%	1.87-4.22%
Average increase in compensation levels	2.50-3.00%	2.50-3.00%
Expected long-term return on assets	4.73-7.00%	4.16-7.00%
U.S. Post-Retirement Benefits Plan:
Discount rate	6.50%	6.00%
Expected long-term return on assets	8.00%	8.00%
Current medical cost trend rate	6.50%	7.00%
Ultimate medical cost trend rate	4.75%	4.75%
Medical cost trend rate decreases to ultimate rate in year	2029	2029

Assumptions used to calculate the benefit obligation as of October 31, 2024 and 2023 were as follows:

	Year Ended October 31,
	2024	2023
U.S. Defined Benefit Plans:
Discount rate	5.50%	6.50%
Average increase in compensation levels	3.50%	3.50%
Non-U.S. Defined Benefit Plans:
Discount rate	2.30-5.07%	2.50-5.35%
Average increase in compensation levels	2.50-3.00%	2.50-3.00%
U.S. Post-Retirement Benefits Plan:
Discount rate	5.50%	6.50%
Current medical cost trend rate	6.00%	6.50%
Ultimate medical cost trend rate	4.75%	4.75%
Medical cost trend rate decreases to ultimate rate in year	2029	2029

Health care trend rates did not have a significant effect on the total service and interest cost components or on the post-retirement benefit obligation amounts reported for the U.S. Post-Retirement Benefit Plan for the years ended October 31, 2024 and 2023.