XML 33 R16.htm IDEA: XBRL DOCUMENT v3.25.3
INCOME TAXES
 12 Months Ended
Oct. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The domestic and foreign components of income before taxes are:

 Years Ended October 31,
 202520242023
 (in millions)
U.S. operations$292 $391 $614 
Non-U.S. operations1,143 1,130 725 
Total income before taxes$1,435 $1,521 $1,339 
The provision for income taxes is comprised of:

 Years Ended October 31,
 202520242023
 (in millions)
U.S. federal taxes:   
Current$103 $182 $117 
Deferred(105)(104)(84)
Non-U.S. taxes:   
Current148 87 26 
Deferred(16)60 38 
State taxes, net of federal benefit:   
Current11 27 12 
Deferred(9)(20)(10)
Total provision for income taxes$132 $232 $99 


The differences between the U.S. federal statutory income tax rate and our effective tax rate are:

 Years Ended October 31,
 202520242023
 (in millions)
Profit before tax times statutory rate$301 $319 $281 
State income taxes, net of federal benefit3 7 2 
Non-U.S. income taxed at different rates(40)(14)20 
Change in unrecognized tax benefits(37)(8)(35)
Foreign-derived intangible income deduction(29)(47)(41)
Realized loss on divestiture of business— — (104)
Intra-entity transfer of assets(57)— — 
Other, net(9)(25)(24)
Provision (benefit) for income taxes$132 $232 $99 
Effective tax rate9.2 %15.3 %7.4 %

For 2025, our income tax expense was $132 million with an effective tax rate of 9.2 percent. For the year ended October 31, 2025, our effective tax rate and the resulting provision for income taxes were impacted by the federal tax benefit of $57 million related to the intra-entity transfer of assets. The income taxes for the year ended October 31, 2025, also include the tax benefit of $29 million related to foreign-derived intangible income along with the tax benefit of $28 million related to the release of tax reserves due to a remeasurement of the liability.

For 2024, our income tax expense was $232 million with an effective tax rate of 15.3 percent. For the year ended October 31, 2024, our effective tax rate and the resulting provision for income taxes were impacted by the tax benefit of $47 million related to foreign-derived intangible income.

For 2023, our income tax expense was $99 million with an effective tax rate of 7.4 percent. For the year ended October 31, 2023, our effective tax rate and the resulting provision for income taxes were impacted by the federal tax benefit of $104 million related to the realized loss on the divestiture of a business. The income taxes for the year ended October 31, 2023, also include the tax benefit of $41 million related to foreign-derived intangible income along with the tax benefit of $30 million related to the release of tax reserves in the U.S. due to the settlement of the audit with the Internal Revenue Service ("IRS") for tax years 2018 and 2019.

We have negotiated a tax holiday in Singapore. The tax holiday provides a lower rate of taxation on certain classes of income and requires various thresholds of investments and employment or specific types of income. The tax holiday in Singapore was renegotiated and extended through 2030. As a result of the incentive, the impact of the tax holiday decreased income taxes by $102 million, $84 million, and $54 million in 2025, 2024, and 2023, respectively. The benefit of the tax holiday on net income per share (diluted) was approximately $0.36, $0.29, and $0.18 in 2025, 2024 and 2023, respectively.
The United States enacted the One Big Beautiful Bill Act ("OBBBA") on July 4, 2025, including adjustments to effective tax rates on certain types of income and an elective deduction for domestic Research and Development (R&D), which are generally applicable to Agilent in fiscal years 2026 and 2027. The OBBBA did not have any material impact on our effective tax rate or cash flow in the current fiscal year.

The significant components of deferred tax assets and deferred tax liabilities included on the consolidated balance sheet are:

 Years Ended October 31,
 20252024
 (in millions)
Deferred Tax Assets
Intangibles$151 $20 
Employee benefits, other than retirement36 31 
Net operating loss, capital loss, and credit carryforwards217 184 
Deferred revenue39 98 
Share-based compensation26 25 
Capitalized R&D118 93 
Lease obligations42 39 
Other49 35 
Deferred tax assets$678 $525 
Tax valuation allowance(119)(113)
Deferred tax assets, net of valuation allowance$559 $412 
Deferred Tax Liabilities
Property, plant and equipment$(76)$(62)
Pension benefits and retiree medical benefits(53)(41)
Right-of-use asset(40)(39)
Other(10)(4)
Deferred tax liabilities$(179)$(146)
Net deferred tax assets (liabilities)$380 $266 

The increase in 2025 as compared to 2024 for the deferred tax assets and liabilities was primarily due to the benefit of $155 million related to the intra-entity transfer of assets.

Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction by jurisdiction basis. As of October 31, 2025, we continued to maintain a valuation allowance of $119 million until sufficient positive evidence exists to support reversal. The valuation allowance is primarily related to deferred tax assets for the state of California, along with the net operating losses in the Netherlands and capital losses in Australia.

At October 31, 2025, we had federal, state and foreign net operating loss carryforwards of approximately $8 million, $101 million and $223 million, respectively. The federal and state net operating loss carryforwards are subject to various limitations under Section 382 of the Internal Revenue Code and applicable state tax laws. If not utilized, the federal and state net operating loss carryforwards will begin to expire in 2026. If not utilized, $82 million of the foreign net operating loss carryforwards will begin to expire in 2035. The remaining $141 million of the foreign net operating losses carry forward indefinitely. At October 31, 2025, we had foreign capital loss carryforwards of $110 million. The foreign capital losses carry forward indefinitely. At October 31, 2025, we had state tax credit carryforwards of approximately $99 million. The state tax credits carry forward indefinitely.
The breakdown between long-term deferred tax assets and deferred tax liabilities was as follows:

 October 31,
 20252024
 (in millions)
Long-term deferred tax assets (included within other assets)$427 $351 
Long-term deferred tax liabilities (included within other long-term liabilities)(47)(85)
Total$380 $266 


The breakdown between current and long-term income tax assets and liabilities, excluding deferred tax assets and liabilities, was as follows:
October 31,
20252024
(in millions)
Current income tax assets (included within other current assets)$108 $147 
Long-term income tax assets (included within other assets)3 3 
Current income tax liabilities (included within other accrued liabilities)(143)(152)
Long-term income tax liabilities (included within other long-term liabilities)(28)(115)
Total$(60)$(117)

Uncertain Tax Positions

The aggregate changes in the balances of our gross unrecognized tax benefits including all federal, state and foreign tax jurisdictions are as follows:

202520242023
 (in millions)
Balance, beginning of year$97 $98 $123 
Additions for tax positions related to the current year— 6 5 
Additions for tax positions from prior years— 3 3 
Reductions for tax positions from prior years(23)(1)(27)
Statute of limitations expirations(5)(9)(6)
Balance, end of year$69 $97 $98 

As of October 31, 2025, we had $77 million of unrecognized tax benefits, including interest and penalties of which $54 million, if recognized, would affect our effective tax rate.

Interest and penalties accrued as of October 31, 2025 and 2024 were $8 million and $17 million, respectively. We recognized tax benefit of $9 million in 2025, tax expense of $1 million in 2024, and tax benefit of $5 million in 2023 for interest and penalties related to unrecognized tax benefits.

In the U.S., tax years remain open back to the year 2022 for federal income tax purposes and 2021 for significant states. In other major jurisdictions where we conduct business, the tax years generally remain open back to the year 2014.

With these jurisdictions and the U.S., it is reasonably possible that some tax audits may be completed over the next twelve months. However, management is not able to provide a reasonably reliable estimate of the timing of any other future tax payments or change in unrecognized tax benefits, if any.