Exhibit 99.1

October 8, 2014

Dear Agilent Technologies, Inc. Shareholder:

In September 2013, we announced plans to separate our electronic measurement business from our life sciences, chemical analysis and diagnostics and genomics businesses. The separation will occur by means of a spinoff of a company named Keysight Technologies, Inc. (“Keysight”), which was formed to hold our electronic measurement business. The life sciences, chemical analysis and diagnostics and genomics businesses will remain a part of the existing publicly traded company, which will continue to be named Agilent Technologies, Inc. (“Agilent”). As two distinct businesses, Agilent and Keysight will be better positioned to capitalize on significant growth opportunities and provide greater focus on their respective businesses and strategic priorities.

Both of these companies have businesses with valuable assets and industry-leading products and services. Keysight will be a leading global provider of electronic measurement solutions. As an independent, publicly traded company, Keysight will be able to pursue its own growth strategies and prioritize investment spending and capital allocation accordingly. Agilent will continue to be a leading measurement company providing core bio-analytical measurement solutions to the life sciences, chemical analysis and diagnostics and genomics industries. After the separation, Agilent will be able to better focus its capital deployment strategy and implement an appropriate capital structure to meet the needs of its shareholder base.

The separation will provide current Agilent shareholders with ownership interests in both Agilent and Keysight. We expect that, for U.S. federal income tax purposes, the separation will be tax-free to Agilent shareholders.

The separation will be in the form of a pro rata distribution of 100% of the outstanding shares of Keysight common stock to holders of Agilent common shares. Each Agilent shareholder will receive one share of Keysight common stock for every two shares of Agilent common stock held on October 22, 2014, the record date for the distribution. You do not need to take any action to receive shares of Keysight common stock to which you are entitled as an Agilent shareholder. You do not need to pay any consideration or surrender or exchange your Agilent common shares to participate in the spin-off.

I encourage you to read the attached information statement, which is being provided to all Agilent shareholders who held shares on the record date for the distribution. The information statement describes the separation in detail and contains important business and financial information about Keysight.

I believe the separation is a positive progression for our businesses and our shareholders. We remain committed to working on your behalf to continue to build long-term shareholder value.

	Sincerely,

	William P. (Bill) Sullivan President and Chief Executive Officer Agilent Technologies, Inc.

INFORMATION STATEMENT

Keysight Technologies, Inc.

This information statement is being furnished in connection with the distribution by Agilent Technologies, Inc. (“Agilent”) to its shareholders of all of the outstanding shares of common stock of Keysight Technologies, Inc., a wholly owned subsidiary of Agilent that will hold, directly or indirectly, the assets and liabilities associated with Agilent’s electronic measurement business (“Keysight”). To implement the distribution, Agilent will distribute all of the shares of Keysight common stock on a pro rata basis to the Agilent shareholders in a manner that is intended to be tax-free for U.S. federal income tax purposes.

For every two shares of Agilent common stock held of record by you as of the close of business on October 22, 2014, the record date for the distribution, you will receive one share of Keysight common stock. You will receive cash in lieu of any fractional shares of Keysight common stock that you would have received after application of the above ratio. As discussed under “The Separation and Distribution—Trading Between the Record Date and Distribution Date,” if you sell your Agilent common shares “regular-way” after the record date and before the distribution, you also will be selling your right to receive shares of Keysight common stock in connection with the separation. Keysight expects the shares of Keysight common stock to be distributed by Agilent to you on November 1, 2014. Keysight refers to the date of the distribution of the Keysight common stock as the “distribution date.”

No vote of Agilent shareholders is required for the distribution. Therefore, you are not being asked for a proxy, and you are requested not to send Agilent a proxy, in connection with the distribution. You do not need to pay any consideration, exchange or surrender your existing Agilent common shares or take any other action to receive your shares of Keysight common stock.

There is no current trading market for Keysight common stock, although Keysight expects that a limited market, commonly known as a “when-issued” trading market, will develop on or shortly before the record date for the distribution, and Keysight expects “regular-way” trading of Keysight common stock to begin on the first trading day following the distribution. Keysight has been authorized to have its common stock listed on the New York Stock Exchange (the “NYSE”) under the symbol “KEYS.” Following the distribution, Agilent will continue to trade on the NYSE under the symbol “A.”

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 9.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is October 8, 2014.

This information statement was first mailed to Agilent shareholders on or about October 8, 2014.

TABLE OF CONTENTS

		Page
QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION		i
INFORMATION STATEMENT SUMMARY		1
SUMMARY HISTORICAL COMBINED FINANCIAL INFORMATION		8
RISK FACTORS		9
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		28
DIVIDEND POLICY		29
CAPITALIZATION		30
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS		31
SELECTED HISTORICAL COMBINED FINANCIAL DATA		39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.		40
BUSINESS		63
MANAGEMENT		75
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS		83
DIRECTOR COMPENSATION		113
KEYSIGHT TECHNOLOGIES, INC. 2014 EQUITY AND INCENTIVE COMPENSATION PLAN		114
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS		119
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		128
THE SEPARATION AND DISTRIBUTION		130
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		136
DESCRIPTION OF MATERIAL INDEBTEDNESS		139
DESCRIPTION OF KEYSIGHT’S CAPITAL STOCK		141
WHERE YOU CAN FIND MORE INFORMATION		146
INDEX TO FINANCIAL STATEMENTS		F-1

Presentation of Information

Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement about Keysight assumes the completion of all of the transactions referred to in this information statement in connection with the separation and distribution. Unless the context otherwise requires, references in this information statement to “Keysight” and the “company” refer to Keysight Technologies, Inc., a Delaware corporation, and its consolidated subsidiaries. References to Keysight’s historical business and operations refer to the business and operations of Agilent’s electronic measurement business that will be transferred to Keysight in connection with the separation and distribution. References in this information statement to “Agilent” refer to Agilent Technologies, Inc., a Delaware corporation, and its consolidated subsidiaries, unless the context otherwise requires.

Trademarks, Trade Names and Service Marks

Keysight owns or has rights to use the trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the more important trademarks that Keysight owns or has rights to use that appear in this information statement include: “Keysight” and “Keysight Technologies,” which may be registered or trademarked in the United States or other jurisdictions. Each trademark, trade name or service mark of any other company appearing in this information statement is, to our knowledge, owned by such other company.

QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

*What is Keysight Technologies, Inc. and why is Agilent separating Keysight’s business and distributing Keysight stock?*		Keysight, which is currently a wholly owned subsidiary of Agilent, was formed to hold Agilent’s electronic measurement business. The separation of Keysight from Agilent and the distribution of Keysight common stock are intended to provide you with equity investments in two separate, publicly traded companies that will be able to focus on each of their respective businesses. Agilent and Keysight expect that the separation will result in enhanced long-term performance of each business for the reasons discussed in the sections entitled “The Separation and Distribution—Background” and “The Separation and Distribution—Reasons for the Separation.”

*Why am I receiving this document?*		Agilent is delivering this document to you because you are a holder of Agilent common shares. If you are a holder of Agilent common shares as of the close of business on October 22, 2014, the record date of the distribution, you will be entitled to receive one share of Keysight common stock for every two shares of Agilent common stock that you held at the close of business on such date. This document will help you understand how the separation and distribution will affect your investment in Agilent and your investment in Keysight after the separation.

*How will the separation of Keysight from Agilent work?*		To accomplish the separation, Agilent will distribute all of the outstanding shares of Keysight common stock to Agilent shareholders on a pro rata basis in a distribution intended to be tax-free for U.S. federal income tax purposes.

*Why is the separation of Keysight structured as a distribution?*		Agilent believes that a tax-free distribution for U.S. federal income tax purposes of shares of Keysight stock to the Agilent shareholders is an efficient way to separate its electronic measurement business in a manner that will create long-term value for Agilent, Keysight and their respective shareholders.

*What is the record date for the distribution?*		The record date for the distribution will be October 22, 2014.

*When will the distribution occur?*		It is expected that all of the shares of Keysight common stock will be distributed by Agilent on November 1, 2014 to holders of record of Agilent common shares at the close of business on October 22, 2014, the record date for the distribution.

*Will Keysight issue fractional shares of its common stock in the distribution?*		No. Keysight will not issue fractional shares of its common stock in the distribution. Fractional shares that Agilent shareholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those shareholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares. The receipt of cash in lieu of fractional shares generally will be taxable to the recipient shareholders for U.S. federal income tax purposes as described in the section entitled “Material U.S. Federal Income Tax Consequences.”

*What are the conditions to the distribution?*		The distribution is subject to final approval by the board of directors of Agilent, as well as to a number of conditions, including, among others:

		· the transfer of assets and liabilities to Keysight in accordance with the separation and distribution agreement will have been completed, other than assets and liabilities intended to transfer after the distribution;

		· Agilent will have 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 U.S. Internal Revenue Code of 1986, as amended (the “Code”);

		· the U.S. Securities and Exchange Commission (or the “SEC”) will have declared effective the registration statement of which this information statement forms a part, no stop order suspending the effectiveness of the registration statement will be in effect, no proceedings for such purpose will be pending before or threatened by the SEC and this information statement will have been mailed to Agilent shareholders;

		· no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, the distribution or any of the related transactions will be in effect;

		· the shares of Keysight common stock to be distributed will have been accepted for listing on the NYSE, subject to official notice of distribution;

		· the financing described under the section entitled “Description of Material Indebtedness” will have been completed; and

iii

		· no other event or development will have occurred or exist that, in the judgment of Agilent’s board of directors, in its sole discretion, makes it inadvisable to effect the separation, the distribution or the other related transactions.

		Agilent and Keysight cannot assure you that any or all of these conditions will be met. In addition, Agilent can decline at any time to go forward with the separation. For a complete discussion of all of the conditions to the distribution, see “The Separation and Distribution—Conditions to the Distribution.”

*What is the expected date of completion of the separation?*		The completion and timing of the separation are dependent upon a number of conditions. It is expected that the shares of Keysight common stock will be distributed by Agilent on November 1, 2014 to the holders of record of Agilent common shares at the close of business on October 22, 2014, the record date for the distribution. However, no assurance can be provided as to the timing of the separation or that all conditions to the separation will be met.

*Can Agilent decide to cancel the distribution of Keysight common stock even if all the conditions have been met?*		Yes. The distribution is subject to the satisfaction or waiver of certain conditions. See “The Separation and Distribution—Conditions to the Distribution.” Until the distribution has occurred, Agilent has the right to terminate the distribution, even if all of the conditions are satisfied.

*What if I want to sell my Agilent common stock or my Keysight common stock?*		You should consult with your financial advisors, such as your stockbroker, bank or tax advisor.

*What is “regular-way” and “ex-distribution” trading of Agilent stock?*		Beginning on or shortly before the record date for the distribution and continuing up to the distribution date, it is expected that there will be two markets in Agilent common shares: a “regular-way” market and an “ex-distribution” market. Agilent common shares that trade in the “regular-way” market will trade with an entitlement to shares of Keysight common stock distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without an entitlement to shares of Keysight common stock distributed pursuant to the distribution.

		If you decide to sell any Agilent common shares before the distribution date, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your Agilent common shares with or without your entitlement to Keysight common stock pursuant to the distribution.

*Where will I be able to trade shares of Keysight common stock?*		Keysight has been authorized to have its common stock listed on the NYSE under the symbol “KEYS.” Keysight anticipates that trading in shares of its common stock will begin on a “when-issued” basis on or shortly before the record date for the distribution and will continue up to the distribution date and that “regular-way” trading in Keysight common stock will begin on the first trading day following the completion of the distribution. If trading begins on a “when-issued” basis, you may purchase or sell Keysight common stock up to the distribution date, but your transaction will not settle until after the distribution date. Keysight cannot predict the trading prices for its common stock before, on or after the distribution date.

*What will happen to the listing of Agilent common shares?*		Agilent common stock will continue to trade on the NYSE after the distribution under the symbol “A.”

*Will the number of Agilent common shares that I own change as a result of the distribution?*		No. The number of Agilent common shares that you own will not change as a result of the distribution.

*Will the distribution affect the market price of my Agilent shares?*		Yes. As a result of the distribution, Agilent expects the trading price of Agilent common shares immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the value of the electronic measurement business held by Keysight. There can be no assurance that the aggregate market value of the Agilent common shares and the Keysight common stock following the separation will be higher or lower than the market value of Agilent common shares if the separation did not occur. This means, for example, that the combined trading prices of one Agilent common share and 0.5 shares of Keysight common stock after the distribution (representing the number of shares of Keysight common stock to be received per every one share of Agilent common stock in the distribution) may be equal to, greater than or less than the trading price of one Agilent common share before the distribution.

*What are the material U.S. federal income tax consequences of the distribution?*		Provided the distribution qualifies as a reorganization within the meaning of Sections 368(a)(1)(D) and 355 of the Code, for U.S. federal income tax purposes, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of Keysight’s common stock pursuant to the distribution. You will, however, recognize gain or loss for U.S. federal income tax purposes with respect to cash received in lieu of a fractional share of Keysight’s common stock.

		For more information regarding the potential U.S. federal income tax consequences to Keysight, Agilent and you of the separation and distribution, see “Material U.S. Federal Income Tax Consequences.”

*Who will manage Keysight after the separation?*		Keysight benefits from having in place a management team with an extensive background in the electronic measurement business. Led by Ron Nersesian, who will be Keysight’s chief executive officer after the separation, Keysight’s management team possesses deep knowledge of, and extensive experience in, its industry. Keysight’s management team also includes Neil Dougherty, Ingrid Estrada, Mike Gasparian, Soon Chai Gooi, Guy Séné, John Skinner and Stephen Williams, who have all held senior positions of responsibility at Agilent. For more information regarding Keysight’s management, see “Management.”

*Are there risks associated with owning Keysight common stock?*		Yes. Ownership of Keysight common stock is subject to both general and specific risks, including those relating to Keysight’s business, the industry in which it operates, its ongoing contractual relationships with Agilent and its status as a separate, publicly traded company. Ownership of Keysight common stock is also subject to risks relating to the separation. These risks are described in the “Risk Factors” section of this information statement beginning on page 9. You are encouraged to read that section carefully.

*Does Keysight plan to pay dividends?*		Keysight does not currently expect to pay dividends on its common stock. The declaration and payment of any dividends in the future by Keysight will be subject to the sole discretion of its board of directors and will depend upon many factors. See “Dividend Policy.”

*Will Keysight incur any indebtedness prior to or at the time of the distribution?*		Yes. Keysight anticipates having certain indebtedness upon completion of the separation. See “Description of Material Indebtedness” and “Risk Factors—Risks Related to Keysight’s Business.”

*Who will be the distribution agent, transfer agent, registrar and information agent for the Keysight common stock?*		The distribution agent, transfer agent and registrar for the Keysight common stock will be Computershare Trust Company, N.A. For questions relating to the transfer or mechanics of the stock distribution, you should contact:

		Computershare 211 Quality Circle, Suite 210 College Station, TX 77845 (877) 373-6374

*Where can I find more information about Agilent and Keysight ?*		Before the distribution, if you have any questions relating to Agilent’s business performance, you should contact:

		Agilent Technologies, Inc. 5301 Stevens Creek Blvd. Santa Clara, CA 95051

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INFORMATION STATEMENT SUMMARY

The following is a summary of material information discussed in this information statement. This summary may not contain all of the details concerning the separation or other information that may be important to you. To better understand the separation and Keysight’s business and financial position, you should carefully review this entire information statement.

This information statement describes the Electronic Measurement Business of Agilent to be transferred to Keysight by Agilent in the separation as if the transferred business were Keysight’s business for all historical periods described. References in this information statement to Keysight’s historical assets, liabilities, products, businesses or activities of Keysight’s business are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the Electronic Measurement Business as part of Agilent and its subsidiaries prior to the separation.

The Company

Keysight provides electronic measurement solutions to the communications and electronics industries. We provide electronic measurement 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 the first quarter of 2014, in conjunction with the separation, we reorganized our business into two reportable operating segments, the measurement solutions segment and customer support and services segment. The measurement solutions segment consists of businesses that sell hardware and software products including radio frequency (“RF”), microwave, digital and other test technology solutions. The customer support and services segment consists of businesses that provide repair and calibration services for our customers’ installed base of instruments and facilitates the resale of refurbished used equipment.

We have a comprehensive sales strategy that uses our direct sales force, distributors, resellers and manufacturer’s representatives. The strategy varies based on the size of the customer, the complexity of products and geographical coverage. Of our total net revenue of $2.9 billion for the fiscal year ended October 31, 2013, we generated 33% in the United States and 67% outside the United States.

Our primary research and development and manufacturing sites are in California and Colorado in the United States and, outside the United States, in China, Germany, India, Japan, Malaysia, Singapore and Spain.

As of October 31, 2013, our headcount was approximately 8,500. Prior to the separation, approximately 1,200 additional employees of Agilent’s corporate and shared services will be transferred to our business. We generated $2.9 billion in total net revenue in the fiscal year ended October 31, 2013 and $3.3 billion in total net revenue in each of the fiscal years ended October 31, 2012 and 2011.

The net revenue, income from operations and assets by business segment, for each of the three years ended October 31, 2013 are shown in Note 16, “Segment Information,” to our combined financial statements, which are included elsewhere in this information statement.

Strategies

Keysight plans to invest in product development as well as expand its presence in the emerging markets to facilitate growth.

Invest in our product portfolio to address the changing needs of the market: Keysight is investing in research and development to design measurement solutions that will satisfy the changing needs of our

customers. These changes are being driven by the need for faster data rates and new form factors, and by evolving technology standards.

· Invest in new wireless communication measurement platforms. Keysight is investing in the development of new wireless communications test solutions to satisfy the market that is being driven by the explosive growth in mobile data and evolving wireless standards.

· Invest in modular solutions. The market for modular solutions is expected to grow faster than the overall electronic measurement market. Keysight is investing to leverage our strength in feature rich instrumentation into a portfolio of modular measurement solutions.

· Accelerate the value migration to software solutions. An increasing percentage of measurement science and functionality is delivered through software solutions. Keysight’s portfolio of embedded software solutions, stand-alone software packages and software productivity tools is extensive and represents a significant corporate asset. Keysight will continue to invest in software development to capitalize on the growth opportunity in software.

Invest to expand our presence in emerging markets: Keysight is investing to capitalize on higher emerging market growth rates. The emerging markets of China, Russia, Brazil and India, as well as other high-growth economies in Asia and Latin America, represent an excellent opportunity to leverage our broad portfolio of electronic measurement solutions. The drivers of growth vary by country but include the following as examples: rapid adoption of wireless communications in large centers of populations, government-sponsored education and research funding, investment in satellite communications and modernization of critical defense systems.

Strengths

Keysight’s Electronic Measurement Business originated in 1939. Our legacy encompasses 75 years of innovation, measurement science expertise and deep customer relationships. Keysight does business with most Fortune 1000 companies that are developing electronic products. The following strengths are significant:

Technology Leadership as a Competitive Differentiator: Twelve research and development (“R&D”) centers around the world provide expertise in specific measurement technologies, as well as proprietary integrated circuit design capability. We believe our products typically offer the highest specifications and fastest measurement speeds, which are required to test leading-edge technologies, and can give our customers a first-to-market advantage. These contributions are often recognized by industry-specific trade press, such as the EDN/EE Times ACE Award in 2013 for the Infiniium 90000 Q-Series Oscilloscope.

Broad Portfolio of Solutions to Address Customer Needs: We believe Keysight has the broadest portfolio of electronic measurement products in the industry. Our hardware product portfolio spans many technologies, price points and form factors. We address time and frequency domain applications with RF, microwave, high-speed digital and general instrumentation. In addition, Keysight has a broad portfolio of software products including Electronic Design Automation software for RF and high-speed digital design, hundreds of measurement application packages to help customers make specific measurements quickly and consistently, and software tools for programming.

Industry Leading Commitment to Product Quality and Reliability: We believe Keysight has a reputation in the industry for high-quality and high-reliability electronic measurement instrumentation and software. This reputation for quality is supported by a three-year instrument warranty. Quality and reliability are an integral part of our new product development processes.

Large Customer Installed Base: Keysight has a large customer installed base based on the breadth of our product portfolio and our long history of producing high performance and high quality products. This enables a strong and growing Customer Support and Service organization that provides a wide range of

calibration and repair services, on both a per incident and contract basis, and provides a significant source of loyal customers for future sales.

Sales Channel with Global Reach: Keysight has a worldwide and comprehensive sales channel. We have experienced management teams and highly technical sales and application engineers in all parts of the world, including a strong local presence in emerging markets. Our sales channel strategy is segmented by customer size and product characteristics. We deploy a direct sales organization for medium and large targeted accounts, and focus our direct sales efforts on higher performance products that require configuration and application specific information. Approximately 75% of our business comes from customer interactions with our direct sales organization. To ensure broad geographic coverage and wide availability of our general purpose products, we maintain a network of over 600 channel partners to complement our direct sales force.

Centralized Order Fulfillment: Our order fulfillment organization allows us to leverage the scale and scope of our business to provide high-quality, market-leading instrument solutions to our customers while generating competitive gross margins. Our Penang, Malaysia site is our largest manufacturing facility, with a proven track record of operational excellence, technology capability and quality. We have an established network of suppliers and subcontractors, especially in Asia, that complement our in-house capabilities.

Business Model: Keysight’s operating model incorporates a substantial amount of cost structure flexibility with the intent to be materially profitable across the business cycle. Our variable compensation programs, sales channel strategy and the outsourced components of our supply chain have been implemented to improve the flexibility of our cost structure.

Risks Associated with the Business and the Separation and Distribution

An investment in Keysight’s common stock is subject to a number of risks, including risks relating to the separation and distribution. The following list of risk factors is not exhaustive. Please read the information in the section captioned “Risk Factors” for a more thorough description of these and other risks.

Risks Related to Keysight’s Business

· Depressed and uncertain general economic conditions may adversely affect Keysight’s operating results and financial condition.

· Keysight’s operating results and financial condition could be harmed if the markets into which Keysight sells its products decline or do not grow as anticipated.

· If Keysight does not introduce successful new products and services in a timely manner to address increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards, its products and services will become obsolete, and its operating results will suffer.

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

· Keysight’s operating results may suffer if its manufacturing capacity does not match the demand for its products.

· Economic, political and other risks associated with international sales and operations could adversely affect Keysight’s results of operations.

· Keysight’s business will suffer if it is not able to retain and hire key personnel.

· Keysight’s acquisitions, strategic alliances, joint ventures and divestitures may result in financial results that are different than expected.

· Environmental contamination from past operations could subject Keysight 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 Keysight to substantial liabilities in the future.

· Keysight and its customers are subject to various governmental regulations, compliance with which may cause Keysight to incur significant expenses, and if Keysight fails to maintain satisfactory compliance with certain regulations, it may be forced to recall products and cease their manufacture and distribution, and Keysight could be subject to civil or criminal penalties.

· Keysight’s effective tax rate may fluctuate and it could be subject to additional tax liabilities, including in the event of repatriation of Keysight’s overseas earnings to fund Keysight’s liquidity needs in the United States.

· Keysight is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations.

Risks Related to the Separation

· Keysight has no history operating as an independent company, and its historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

· Keysight may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect Keysight’s business.

· Challenges in the commercial and credit environment may materially adversely affect Keysight’s ability to complete the separation.

· After Keysight’s separation from Agilent, Keysight will have debt obligations that could adversely affect its business and its ability to meet its obligations and pay dividends.

Risks Related to Keysight’s Common Stock

· Keysight cannot be certain that an active trading market for its common stock will develop or be sustained after the separation and, following the separation, Keysight’s stock price may fluctuate significantly.

· A number of shares of Keysight common stock are or will be eligible for future sale, which may cause Keysight’s stock price to decline.

· Keysight does not currently expect to pay dividends on its common stock. There is no assurance as to whether or when Keysight will pay any dividends on its common stock or as to the amount of any such dividends.

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

· Keysight’s amended and restated certificate of incorporation will contain an exclusive forum provision that may discourage lawsuits against Keysight and Keysight’s directors and officers.

The Separation and Distribution

On September 19, 2013, Agilent announced that it intended to separate its electronic measurement business from the remainder of its businesses, including its life sciences, chemical analytics and diagnostics and genomics businesses.

On September 16, 2014, the Agilent board of directors approved the distribution of all of Keysight’s issued and outstanding shares of common stock on the basis of one share of Keysight common stock for every two shares of Agilent common stock held as of the close of business on October 22, 2014, the record date for the distribution.

Keysight’s Post-Separation Relationship with Agilent

Keysight has entered into a separation and distribution agreement with Agilent, which is referred to in this information statement as the “separation agreement” or the “separation and distribution agreement.” In connection with the separation, Keysight has also entered into various other agreements to effect the separation and provide a framework for its relationship with Agilent after the separation, including a services agreement, a tax matters agreement, an employee matters agreement, an intellectual property matters agreement, a trademark license agreement and a real estate matters agreement. These agreements provide for the allocation between Keysight and Agilent of Agilent’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Keysight’s separation from Agilent and will govern certain relationships between Keysight and Agilent after the separation. For additional information regarding the separation agreement and other transaction agreements, see the sections entitled “Risk Factors—Risks Related to the Separation” and “Certain Relationships and Related Person Transactions.”

Reasons for the Separation

The Agilent board of directors believes that separating the electronic measurement business from the remainder of Agilent is in the best interests of Agilent and its shareholders for a number of reasons, including that:

· the separation will allow investors to separately value Agilent and Keysight based on their unique investment identities, including the merits, performance and future prospects of their respective businesses. The separation will also provide investors with two distinct and targeted investment opportunities;

· the separation will allow each business to more effectively pursue its own distinct operating priorities and strategies, and will enable the management of both companies to pursue appropriate opportunities for long-term growth and profitability;

· the separation will permit each company to concentrate its financial resources solely on its own operations, providing greater flexibility to invest capital in its business in a time and manner appropriate for its distinct strategy and business needs. We anticipate this will facilitate a more efficient allocation of capital;

· the separation will create an independent equity structure that will afford Keysight direct access to capital markets and facilitate the ability to capitalize on its unique growth opportunities and effect future acquisitions utilizing its common stock; and

· the separation will facilitate incentive compensation arrangements for employees more directly tied to the performance of the relevant company’s business, and may enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

The Agilent board of directors also considered a number of potentially negative factors in evaluating the separation, including that:

· as a current part of Agilent, the electronic measurement business benefits from Agilent’s size and purchasing power in procuring certain goods and services. After the separation, as a separate, independent entity, Keysight may be unable to obtain these goods, services and technologies at prices or on terms as favorable as those Agilent obtained prior to the separation. Keysight may also incur costs for certain functions previously performed by Agilent, such as accounting, tax, legal, human resources and other general administrative functions that are higher than the amounts reflected in Keysight’s historical financial statements, which could cause Keysight’s profitability to decrease;

· the actions required to separate Keysight’s and Agilent’s respective businesses could disrupt Keysight’s operations;

· certain costs and liabilities that were otherwise less significant to Agilent as a whole will be more significant for Keysight as a stand-alone company;

· Keysight will incur costs in connection with the transition to being a stand-alone public company that may include accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring or reassigning Keysight personnel, costs related to establishing a new brand identity in the marketplace and costs to separate information systems;

· Keysight may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Keysight’s business; (ii) following the separation, Keysight may be more susceptible to market fluctuations and other adverse events than if it were still a part of Agilent; and (iii) following the separation, Keysight’s business will be less diversified than Agilent’s business prior to the separation; and

· to preserve the tax-free treatment for U.S. federal income tax purposes to Agilent of the separation and the distribution, under the tax matters agreement that Keysight has entered into with Agilent, Keysight will be restricted from taking any action that prevents the separation and distribution from being tax-free for U.S. federal income tax purposes. These restrictions may limit Keysight’s ability to pursue certain strategic transactions or engage in other transactions that might increase the value of its business.

The Agilent board of directors concluded that the potential benefits of the separation outweighed these factors. For more information, see the sections entitled “The Separation and Distribution—Reasons for the Separation” and “Risk Factors.”

Corporate Information

Keysight was incorporated in Delaware for the purpose of holding Agilent’s electronic measurement business in connection with the separation and distribution. Prior to the contribution of this business to Keysight, which occurred on August 1, 2014, Keysight had no operations. The address of Keysight’s principal executive offices is 1400 Fountaingrove Parkway, Santa Rosa, California 95403. Keysight’s telephone number is (877) 424-4536.

Since January 7, 2014, Keysight has maintained an Internet site at www.keysight.com. Keysight’s website, and the information contained therein, or connected thereto, is not incorporated by reference into this information statement or the registration statement of which this information statement forms a part.

SUMMARY HISTORICAL COMBINED FINANCIAL INFORMATION

The following table sets forth summary historical financial information for the Electronic Measurement Business of Agilent, which will be transferred to Keysight prior to the distribution, for the periods indicated below. The summary balance sheet data as of October 31, 2013 and 2012 and the summary statement of operations data for the fiscal years ended October 31, 2013, 2012 and 2011 have been derived from the audited combined financial statements of the Electronic Measurement Business of Agilent, which are included elsewhere in this information statement. The summary balance sheet data as of October 31, 2011 has been derived from the unaudited combined financial statements of the Electronic Measurement Business of Agilent that are not included in this information statement. The summary balance sheet data as of July 31, 2014 and the summary statement of operations data for the nine months ended July 31, 2014 and 2013 have been derived from the unaudited combined financial statements of the Electronic Measurement Business of Agilent, which are included elsewhere in this information statement. In our management’s opinion, the unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of ordinary recurring adjustments, necessary for a fair statement of the information for the periods presented.

Our historical combined financial statements include certain expenses of Agilent that were allocated to us for certain functions, including general corporate expenses related to information technology, research and development, finance, legal, insurance, compliance and human resources activities. These costs may not be representative of the future costs we will incur as an independent public company. In addition, our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation and distribution from Agilent, including changes in our cost structure, personnel needs, tax structure, financing and business operations. Our historical combined financial statements also do not reflect certain other adjustments between Agilent and us as reflected under “Unaudited Pro Forma Combined Financial Statements” included elsewhere in this information statement. Consequently, the financial information included here may not necessarily reflect our financial position and results of operations or what our financial position and results of operations would have been had we been an independent, publicly traded company during the periods presented or be indicative of Keysight’s future performance as an independent company. The summary financial information should be read in conjunction with the discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the unaudited pro forma combined financial statements and corresponding notes, the audited combined financial statements and corresponding notes and the unaudited combined financial statements and corresponding notes included elsewhere in this information statement.

	Nine Months Ended July 31,				Year Ended October 31,
	2014		2013		2013		2012		2011
	(in millions)
Combined Statement of Operations Data:
Net revenue	$	2,171	$	2,183	$	2,888	$	3,315	$	3,316
Income before taxes	$	342	$	374	$	501	$	746	$	749
Net income	$	291	$	342	$	457	$	841	$	787

	July 31,		October 31,
	2014		2013		2012		2011
	(in millions)
Combined Balance Sheet Data:
Working capital	$	438	$	412	$	398	$	272
Total assets	$	1,999	$	2,028	$	2,133	$	1,908
Invested equity	$	1,261	$	1,245	$	1,305	$	996

RISK FACTORS

You should carefully consider the following risks and other information in this information statement in evaluating Keysight and Keysight’s common stock. Any of the following risks could materially and adversely affect Keysight’s results of operations or financial condition. The risk factors generally have been separated into three groups: risks related to Keysight’s business, risks related to the separation and risks related to Keysight’s common stock.

Risks Related to Keysight’s Business

Depressed and uncertain general economic conditions may adversely affect Keysight’s operating results and financial condition.

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

· reduced demand for Keysight’s products, delays in the shipment of orders or increases in order cancellations;

· increased risk of excess and obsolete inventories;

· increased price pressure for Keysight’s products and services; and

· greater risk of impairment to the value, and a detriment to the liquidity, of Keysight’s future investment portfolio.

Keysight’s operating results and financial condition could be harmed if the markets into which Keysight sells its products decline or do not grow as anticipated.

Visibility into Keysight’s markets is limited. Keysight’s 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 Keysight’s customers. In addition, Keysight’s revenues and earnings forecasts for future fiscal quarters are often based on the expected seasonality or cyclicality of Keysight’s markets. However, the markets Keysight serves do not always experience the seasonality or cyclicality that Keysight expects. Any decline in our customers’ markets would likely result in a reduction in demand for Keysight products and services. The broader semiconductor market is one of the drivers for Keysight’s business, and therefore, a decrease in the semiconductor market could harm Keysight’s business. Also, if Keysight’s customers’ markets decline, Keysight may not be able to collect on outstanding amounts due to it. Such declines could harm Keysight’s combined financial position, results of operations, cash flows and stock price, and could limit Keysight’s profitability. Also, in such an environment, pricing pressures could intensify. Since a significant portion of Keysight’s operating expenses is relatively fixed in nature due to sales, R&D and manufacturing costs, if Keysight were unable to respond quickly enough, these pricing pressures could further reduce Keysight’s operating margins.

If Keysight does not introduce successful new products and services in a timely manner to address increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards, its products and services will become obsolete, and its operating results will suffer.

Keysight generally sells its 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 Keysight operates are seasonal and cyclical. Without the timely introduction of new products, services and enhancements, Keysight’s products and services will become technologically obsolete over time, in which case its revenue and operating results

would suffer. The success of new products and services will depend on several factors, including Keysight’s 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 its products in sufficient volumes and on time;

· differentiate its offerings from its competitors’ offerings;

· price its products competitively;

· anticipate its competitors’ development of new products, services or technological innovations; and

· control product quality in its manufacturing process.

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

As part of Keysight’s efforts to streamline operations and to cut costs, Keysight outsources aspects of its manufacturing processes and other functions and continues to evaluate additional outsourcing. If Keysight’s contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, Keysight’s ability to bring products to market and its reputation could suffer. For example, during a market upturn, Keysight’s contract manufacturers may be unable to meet its demand requirements, which may preclude it from fulfilling its customers’ orders on a timely basis. The ability of these manufacturers to perform is largely outside of Keysight’s control. Additionally, changing or replacing Keysight’s contract manufacturers or other outsourcees could cause disruptions or delays. In addition, Keysight outsources significant portions of its information technology (“IT”) and other administrative functions. Since IT is critical to Keysight’s operations, any failure to perform on the part of its IT providers could impair its 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 Keysight’s results of operations and stock price. Much of Keysight’s outsourcing takes place in developing countries and, as a result, may be subject to geopolitical uncertainty.

Failure to adjust Keysight’s purchases due to changing market conditions or failure to estimate its customers’ demand could adversely affect Keysight’s income.

Keysight’s income could be harmed if Keysight is unable to adjust its purchases to market fluctuations, including those caused by the seasonal or cyclical nature of the markets in which Keysight operates. The sale of Keysight’s 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, Keysight may not be able to purchase sufficient supplies or components to meet increasing product demand, which could materially affect its results. In the past, Keysight has seen a shortage of parts for some of its 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, Keysight would be forced to reengineer its 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, Keysight may continue to enter into non-cancelable purchase commitments with vendors, or at times make advance payments to suppliers, which could impact Keysight’s ability to adjust its inventory to declining market demands. Prior commitments of this type have resulted in an excess of parts when demand for

communications and electronics products has decreased. If demand for Keysight’s products is less than it expects, Keysight may experience additional excess and obsolete inventories and be forced to incur additional charges.

Keysight’s operating results may suffer if its manufacturing capacity does not match the demand for its products.

Because Keysight cannot immediately adapt its production capacity and related cost structures to rapidly changing market conditions, when demand does not meet its expectations, Keysight’s manufacturing capacity will likely exceed its production requirements. If, during a general market upturn or an upturn in Keysight’s business, Keysight cannot increase its manufacturing capacity to meet product demand, Keysight 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 Keysight’s ability to improve its income, margin and operating results. By contrast, if, during an economic downturn, Keysight had excess manufacturing capacity, then its fixed costs associated with excess manufacturing capacity would adversely affect its income, margins and operating results.

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

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

· interruption to transportation flows for delivery of parts to it and finished goods to its 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.

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

Additionally, Keysight 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 Keysight’s business conduct and on its ability to offer its products in one or more countries, and could also materially affect Keysight’s brand, ability to attract and retain employees, international operations, business and operating

results. Although Keysight plans to implement policies and procedures designed to ensure compliance with these laws and regulations, there can be no assurance that Keysight’s employees, contractors or agents will not violate these policies and procedures.

In addition, although a substantial amount of Keysight’s products are priced and paid for in U.S. dollars, many of Keysight’s 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. In the future, Keysight’s hedging programs will be designed to reduce, but not always entirely eliminate, within any given 12-month period, the impact of currency exchange rate movements, including those caused by currency controls, which could impact Keysight’s business, operating results and financial condition by resulting in lower revenue or increased expenses. However, for expenses beyond a 12-month period, Keysight’s hedging strategy will not mitigate its exchange rate risk. In addition, Keysight’s future currency hedging programs will involve third-party financial institutions as counterparties. The weakening or failure of these counterparties may adversely affect Keysight’s future hedging programs and its financial condition through, among other things, a reduction in the number of available counterparties, increasingly unfavorable terms or the failure of counterparties to perform under hedging contracts.

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

Certain significant key customers have substantial purchasing power and leverage in negotiating contractual arrangements with us. These customers may demand contract terms that differ considerably from our standard terms and conditions. Large orders may also include severe contractual liabilities for us if we fail to provide the quantity and quality of product at the required delivery times. While we attempt to contractually limit our potential liability under such contracts, we expect to be forced 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.

Keysight’s business will suffer if it is not able to retain and hire key personnel.

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

Environmental contamination from past operations could subject Keysight 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 Keysight to substantial liabilities in the future.

Some of Keysight’s properties are undergoing remediation by Hewlett-Packard Company (“HP”) for subsurface contaminations that were known at the time of Agilent’s separation from HP in 1999. In connection with Agilent’s separation from HP, HP and Agilent entered into an agreement pursuant to which HP agreed to retain the liability for this subsurface contamination, perform the required remediation and indemnify Agilent with respect to claims arising out of that contamination. We expect that Agilent will seek to assign its rights and obligations under this agreement to Keysight in respect of facilities transferred to Keysight in the separation. As a result, HP will have access to a limited number of Keysight properties to perform remediation. Although HP agreed to minimize interference with on-site operations at such properties, remediation activities and subsurface contamination may require Keysight 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 Keysight directly for any liabilities related thereto. Keysight 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, Agilent also agreed to indemnify Keysight for any liability associated with contamination from past operations at all properties transferred from Agilent to Keysight. Keysight cannot be sure that Agilent will fulfill its indemnification obligations.

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

Keysight and its customers are subject to various governmental regulations, compliance with which may cause Keysight to incur significant expenses, and if Keysight fails to maintain satisfactory compliance with certain regulations, it may be forced to recall products and cease their manufacture and distribution, and Keysight could be subject to civil or criminal penalties.

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

Keysight’s 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. Keysight also must comply with work safety rules. If Keysight fails to adequately address any of these regulations, its businesses could be harmed.

Keysight’s business may suffer if it fails to comply with government contracting laws and regulations.

Keysight derives a portion (less than five percent) of its revenues from direct and indirect sales to U.S., state, local and foreign governments and their respective agencies. Such contracts are subject to various procurement laws and regulations, and contract provisions relating to their formation, administration and performance. Failure to comply with these laws, regulations or provisions in Keysight’s government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments or suspension from future government contracting. On March 4, 2013, Agilent made a report to the Inspector General of the Department of Defense regarding pricing irregularities relating to certain sales of electronic measurement products to U.S. government agencies. See “Business—Legal Proceedings.” If Keysight’s government contracts are terminated, if Keysight is suspended from government work or if Keysight’s ability to compete for new contracts is adversely affected, Keysight’s business could suffer.

Third parties may claim that Keysight is infringing their intellectual property rights, and Keysight 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 Keysight’s products or services infringe their intellectual property rights. Keysight analyzes and takes 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 Keysight’s technology and the uncertainty of intellectual property litigation and could divert Keysight’s management and key personnel from business operations. A claim of intellectual property infringement could cause Keysight to enter into a costly or restrictive license agreement (which may not be available under acceptable terms, or at all), require Keysight to redesign certain of its products (which would be costly and time-consuming) and/or subject Keysight to significant damages or an injunction against the development and sale of certain products or services. In certain of its businesses, Keysight relies on third-party intellectual property licenses, and Keysight cannot ensure that these licenses will be available to us in the future on terms favorable to Keysight or at all.

Third parties may infringe Keysight’s intellectual property rights, and Keysight may suffer competitive injury or expend significant resources enforcing its intellectual property rights.

Keysight’s success depends in part on its proprietary technology, including technology Keysight obtained through acquisitions. Keysight relies on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish its proprietary rights. If Keysight does not enforce its intellectual property rights successfully, its competitive position may suffer, which could harm Keysight’s operating results.

Keysight’s pending patent, copyright and trademark registration applications may not be allowed or competitors may challenge the validity or scope of Keysight’s patents, copyrights or trademarks. In addition, Keysight’s patents, copyrights, trademarks and other intellectual property rights may not provide Keysight 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.

Keysight may be required to spend significant resources monitoring its intellectual property rights, and Keysight may or may not be able to detect infringement of such rights by third parties. Keysight’s competitive position may be harmed if Keysight cannot detect infringement and enforce its intellectual property rights in a timely manner, or at all. In some circumstances, Keysight may choose to not pursue enforcement due to a variety of reasons. In addition, competitors may avoid infringement by designing around Keysight intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and Keysight’s 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 Keysight. Furthermore, some of Keysight’s intellectual property is licensed to others, which allows them to compete with Keysight using that intellectual property.

Keysight is or will be subject to ongoing tax examinations of its 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 Keysight’s results of operations, financial condition and liquidity.

Keysight is or will be subject to ongoing tax examinations of its tax returns by the IRS and other tax authorities in various jurisdictions. Keysight regularly assesses the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of its 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 Keysight’s tax liabilities. The calculation of Keysight’s 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 Keysight’s 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.

Keysight’s effective tax rate may be adversely impacted by, among other things, changes in the mix of its earnings among countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets and changes in tax laws. Keysight cannot give any assurance as to what its effective tax rate will be in the future because of, among other things, uncertainty regarding the tax policies of the jurisdictions where Keysight operates. In addition, Keysight may be impacted by changes in tax laws, including tax rate changes, changes to the laws related to the treatment and remittance of foreign earnings, new tax laws and subsequent interpretations of tax law in the United States and other jurisdictions.

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

Keysight benefits from tax incentives extended to its foreign subsidiaries to encourage investment or employment. Several jurisdictions have granted or are anticipated to grant Keysight tax incentives that require renewal at various times in the future, the most significant being in Singapore. We do not expect incentives granted by other tax authorities to have a material impact on the financial statements. The specific conditions of the tax incentives with Singapore are being negotiated and have not been finally agreed. However, we expect that these conditions will be different from those currently agreed between Agilent and Singapore, and will include achieving different thresholds of employment, ownership of certain assets as well as specific types of investment activities within Singapore. Keysight believes that it will satisfy such conditions in the future.

Keysight’s taxes could increase if the incentives are not granted or renewed upon expiration. If Keysight cannot or does not wish to satisfy all or portions of the tax incentive conditions, it may lose the related tax incentive and could be required to refund tax incentives previously realized. As a result, Keysight’s effective tax rate could be higher than it would have been had Keysight maintained the benefits of the tax incentives.

If Keysight suffers a loss to its factories, facilities or distribution system due to catastrophic loss, its operations could be significantly harmed.

Keysight’s 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 Keysight’s facilities could be subject to a catastrophic loss caused by earthquake or other natural disasters due to their locations. For example, Keysight’s production facilities, headquarters and laboratories in California, and Keysight’s 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 Keysight’s operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. If such a disruption were to occur, Keysight could breach its agreements, Keysight’s reputation could be harmed and Keysight’s business and operating results could be adversely affected. In addition, since Keysight has consolidated its manufacturing facilities, Keysight is more likely to experience an interruption to its operations in the event of a catastrophe in any one location. Although Keysight carries insurance for property damage and business interruption, Keysight does not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism. Also, Keysight’s third-party insurance coverage will vary from time to time in both type and amount depending on availability, cost and Keysight’s decisions with respect to risk retention. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which Keysight is able to obtain third-party insurance. If Keysight’s third-party insurance coverage is adversely affected, or to the extent Keysight has elected to self-insure, it may be at a greater risk that its operations will be harmed by a catastrophic loss.

If Keysight experiences a significant disruption in, or breach in security of, its information technology systems, or if Keysight fails to implement new systems and software successfully, its business could be adversely affected.

Keysight relies 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. Keysight’s 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. If Keysight were to experience a prolonged system disruption in the information technology systems that involve Keysight’s interactions with customers or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect Keysight’s business. In addition, security breaches of Keysight’s information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to Keysight or its employees, partners, customers or suppliers, which could result in significant financial or reputational damage to Keysight.

Keysight’s business and financial results may be adversely affected by various legal and regulatory proceedings.

Keysight is 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 Keysight’s expectations because the outcomes of litigation are often difficult to reliably predict. Various factors or developments can lead Keysight to change current estimates of liabilities and related insurance receivables where applicable, or permit Keysight 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 Keysight’s business, operating results or financial condition.

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

In the normal course of business, Keysight may engage in discussions with third parties relating to possible acquisitions, strategic alliances, joint ventures and divestitures. As a result of such transactions, Keysight’s financial results may differ from its own or the investment community’s expectations in a given fiscal quarter, or over the long term. 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 Keysight to integrate a different company culture, management team and business infrastructure. Keysight may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances the performance of Keysight’s 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 Keysight’s infrastructure, policies and organizations with those of the acquired company.

In addition, effective internal controls are necessary for Keysight to provide reliable and accurate financial reports and to effectively prevent fraud. Keysight anticipates devoting significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes- Oxley Act of 2002. However, Keysight cannot be certain that these measures will ensure that it designs, implements and maintains adequate control over its 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 Keysight’s control system could harm Keysight’s operating results or cause Keysight to fail to meet its financial reporting obligations. Inferior internal controls could also cause investors to lose confidence in Keysight’s reported financial information, which could have a negative effect on the trading price of Keysight’s stock and Keysight’s access to capital.

A successful divestiture depends on various factors, including Keysight’s ability to:

· effectively transfer liabilities, contracts, facilities and employees to the purchaser;

· identify and separate the intellectual property to be divested from the intellectual property that Keysight wishes to keep; and

· reduce fixed costs previously associated with the divested assets or business.

In addition, if customers of the divested business do not receive the same level of service from the new owners of the business, this may adversely affect Keysight’s other businesses to the extent that these customers continue to purchase other products from Keysight. All of these efforts require varying levels of management resources, which may divert Keysight’s attention from other business operations. Further, if market conditions or other factors lead Keysight to change its strategic direction, it may not realize the expected value from such transactions. If Keysight does not realize the expected benefits or synergies of such transactions, its consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

Keysight’s operations require substantial capital.

Keysight has substantial capital requirements for expansion and repair or replacement of existing facilities or equipment. Although Keysight maintains its production equipment with regular scheduled maintenance, key pieces of equipment may need to be repaired or replaced periodically. The costs of repairing or replacing such equipment and the associated downtime of the affected production line could adversely affect Keysight’s operating results and financial condition.

Keysight believes its capital resources will be adequate to meet its current projected operating needs, capital expenditures and other cash requirements. If for any reason Keysight is unable to provide for its operating needs, capital expenditures and other cash requirements on economic terms, Keysight could experience an adverse effect on its business, operating results and financial condition.

Keysight has substantial cash requirements in the United States, although most of its cash is generated outside of the United States. The failure to maintain a level of cash sufficient to address Keysight’s cash requirements in the United States could adversely affect its financial condition and results of operations.

Although the cash generated in the United States from Keysight’s operations is expected to cover its normal operating requirements and debt service requirements, a substantial amount of additional cash may be required for special purposes such as the maturity of Keysight’s future debt obligations, any dividends that may be declared, any future stock repurchase programs and any acquisitions. If Keysight encounters a significant need for liquidity domestically or at a particular location that it cannot fulfill through borrowings, equity offerings or other internal or external sources, Keysight may incur unfavorable tax and earnings consequences if Keysight chooses to repatriate cash. These adverse consequences would occur, for example, if the transfer of cash into the United States is taxed and no foreign tax credit is available to offset the U.S. tax liability, resulting in higher taxes. Foreign exchange ceilings imposed by local governments and the sometimes lengthy approval processes that foreign governments require for international cash transfers may delay Keysight’s internal cash transfers from time to time. These factors may cause Keysight to have an overall tax rate higher than other companies or higher than Keysight’s tax rates have been in the past. Keysight’s business, operating results, financial condition and strategic initiatives could be adversely impacted if Keysight were unable to address its U.S. cash requirements through the efficient and timely repatriations of overseas cash or other sources of cash obtained at a cost and on other terms acceptable to Keysight.

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

Keysight may need to seek additional financing for its general corporate purposes. For example, it may need to increase its investment in R&D activities or need funds to make acquisitions. Keysight may be unable to obtain any desired additional financing on terms favorable to it, if at all. If adequate funds are not available on acceptable terms, Keysight may be unable to fund its expansion, successfully develop or enhance products or respond to competitive pressures, any of which could negatively affect Keysight’s business. If Keysight raises additional funds through the issuance of equity securities, its shareholders will experience dilution of their ownership interest. If Keysight raises additional funds by issuing debt, it may be subject to further limitations on its 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 Keysight’s cash investments or impair its liquidity.

As of the distribution, Keysight anticipates having cash and cash equivalents of approximately $700 million 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 Keysight’s counterparty financial institutions or funds in which Keysight has invested may adversely impact Keysight’s cash and cash equivalent positions and, in turn, its results and financial condition.

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

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

Risks Related to the Separation

Keysight has no history of operating as an independent company, and Keysight’s historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

The historical information about Keysight in this information statement refers to Keysight’s business as operated by and integrated with Agilent. Keysight’s historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of Agilent. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that Keysight would have achieved as a separate, publicly traded company during the periods presented or those that Keysight will achieve in the future primarily as a result of the factors described below:

· prior to the separation, Keysight’s business has been 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 Keysight such as legal, treasury, accounting, auditing, human resources, corporate affairs and finance. Keysight’s historical and pro forma financial results reflect allocations of corporate expenses from Agilent for such functions and are likely to be less

than the expenses Keysight would have incurred had it operated as a separate publicly traded company. Following the separation, Keysight’s cost related to such functions previously performed by Agilent may therefor increase;

· currently, Keysight’s business is integrated with the other businesses of Agilent. Historically, Keysight has shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Although Keysight’s transition agreements with Agilent will take effect upon the separation, these arrangements may not fully capture the benefits that Keysight has enjoyed as a result of being integrated with Agilent and may result in Keysight paying higher charges than in the past for these services. This could have an adverse effect on Keysight’s results of operations and financial condition following the completion of the separation;

· generally, Keysight’s working capital requirements and capital for its 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 completion of the separation, Keysight may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements;

· after the completion of the separation, the cost of capital for Keysight’s business may be higher than Agilent’s cost of capital prior to the separation; and

· Keysight’s historical financial information does not reflect the debt or the associated interest expense that it will incur as part of the separation and distribution.

Other significant changes may occur in Keysight’s 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 Keysight’s business and the basis of presentation of the historical combined financial statements and the unaudited pro forma combined financial statements of Keysight’s business, see “Unaudited Pro Forma Combined Financial Statements,” “Selected Historical Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and accompanying notes included elsewhere in this information statement.

Certain contracts that will need to be assigned from Agilent or its affiliates to Keysight in connection with the separation require the consent of the counterparty to such an assignment, and failure to obtain these consents could increase Keysight’s expenses or otherwise reduce Keysight’s profitability.

The separation agreement provides that, in connection with Keysight’s separation, a number of contracts are to be assigned from Agilent or its affiliates to Keysight or Keysight’s affiliates. Approximately five percent of these contracts require the contractual counterparty’s consent to such an assignment. It is possible that some parties may use the consent requirement to seek more favorable contractual terms from Keysight. If Keysight is unable to obtain these consents, Keysight may be unable to obtain some of the benefits, assets and contractual commitments that are intended to be allocated to Keysight as part of the separation. If Keysight is unable to obtain these consents, the loss of these contracts could increase Keysight’s expenses or otherwise reduce Keysight’s profitability.

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

The separation and distribution agreement provides for, among other things, indemnification obligations designed to make Keysight financially responsible for any Keysight Liabilities (defined below); the failure of Keysight to pay, perform or otherwise promptly discharge any Keysight 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 the benefit of Keysight, unless related to an Agilent Liability (defined below); any breach by Keysight of the separation agreement or any of the ancillary agreements or any action by Keysight in contravention of its 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 of which this information statement forms a part, this information statement (as amended or supplemented) or any other disclosure document that describes the separation or the distribution or Keysight and its subsidiaries or primarily relates to the transactions contemplated by the separation and distribution agreement, subject to certain exceptions. If Keysight is required to indemnify Agilent under the circumstances set forth in the separation and distribution agreement, Keysight may be subject to substantial liabilities. See “Certain Relationships and Related Person Transactions—The Separation and Distribution Agreement—Indemnification.”

In connection with Keysight’s separation from Agilent, Agilent will indemnify Keysight for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure Keysight 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 Keysight for certain liabilities as discussed further in “Certain Relationships and Related Person Transactions—The Separation and Distribution Agreement—Indemnification.” However, third parties could also seek to hold Keysight 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 Keysight 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 coverage to Keysight for liabilities associated with certain occurrences of indemnified liabilities prior to the separation. Moreover, even if Keysight ultimately succeeds in recovering from Agilent or such insurance providers any amounts for which Keysight is held liable, Keysight may be temporarily required to bear these losses. Each of these risks could negatively affect Keysight’s business, financial position, results of operations and cash flows.

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

After the separation, there will be several significant areas where the liabilities of Agilent may become Keysight’s obligations. For example, under the Code and the related rules and regulations, each corporation that was a member of the Agilent U.S. consolidated group during a taxable period or portion of a taxable period ending on or before the effective time of the distribution is severally liable for the U.S. federal income tax liability of the entire Agilent U.S. consolidated group for that taxable period. Consequently, if Agilent is unable to pay the consolidated U.S. federal income tax liability for a prior period, Keysight 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 it and Agilent. For a discussion of the tax matters agreement, see “Certain Relationships and Related Person Transactions—Tax Matters Agreement.” 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 will have 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. For more information regarding the tax opinion, see “Material U.S. Federal Income Tax Consequences.”

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, Keysight is generally required to indemnify Agilent against taxes incurred by Agilent that arise as a result of Keysight 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, Keysight may also be required to indemnify Agilent for other contingent tax liabilities, which could materially adversely affect Keysight’s financial position. For a discussion of the tax matters agreement, see “Certain Relationships and Related Person Transactions—Tax Matters Agreement.”

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

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

These restrictions may limit Keysight’s ability to pursue certain strategic transactions or other transactions that it may believe to be in the best interests of its shareholders or that might increase the value of its business. In addition, under the tax matters agreement, Keysight may be required to indemnify Agilent against any such tax liabilities as a result of the acquisition of Keysight’s stock or assets, even if it did not participate in or otherwise facilitate the acquisition. For more information, see “Certain Relationships and Related Person Transactions—Tax Matters Agreement.”

After the separation, certain of Keysight’s executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Agilent and because certain converted Keysight performance share awards held by them will be earned based on the performance of Agilent.

The ownership by Keysight’s expected executive officers and some of Keysight’s expected directors of common shares of Agilent may create, or may create the appearance of, conflicts of interest. Because of their current or former positions with Agilent, certain of the expected executive officers and directors of Keysight own Agilent common shares. The individual holdings of common shares may be significant for some of these persons compared to these persons’ total assets. Further, the fact that Keysight’s expected executive officers will hold certain converted Keysight performance share awards which will be earned

based on Agilent’s performance may create, or may create the appearance of, conflicts of interest. Specifically, the outstanding Agilent performance share awards with a fiscal year 2013-2015 performance period held by Keysight’s expected executive officers will be converted into performance share awards with respect to Keysight common stock upon the separation, but will continue to be subject, for the remainder of the performance period, to the same performance criteria (Agilent total shareholder return) as applied immediately prior to the separation. Even though Keysight’s board of directors will consist of a majority of directors who are independent, and Keysight’s expected executive officers who are currently employees of Agilent will cease to be employees of Agilent upon the separation, continuing ownership of Agilent common shares by Keysight’s expected executive officers and some of Keysight’s expected directors, and continued application of performance criteria based on Agilent total shareholder return to certain converted Keysight performance share awards held by Keysight’s expected executive officers, could create, or appear to create, potential conflicts of interest if Keysight and Agilent pursue the same corporate opportunities or face decisions that could have different implications for Keysight and Agilent.

Until the separation occurs, Agilent has sole discretion to change the terms of the separation in ways that may be unfavorable to Keysight.

Until the separation occurs, Keysight will be a wholly owned subsidiary of Agilent. Accordingly, Agilent will effectively have the sole and absolute discretion to determine and change the terms of the separation, including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to Keysight. In addition, Agilent may decide at any time not to proceed with the separation and distribution.

Keysight may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect Keysight’s business.

Keysight may not be able to achieve the full strategic and financial benefits expected to result from the separation, or such benefits may be delayed or not occur at all. The separation and distribution is expected to provide the following benefits, among others:

· a distinct investment identity allowing investors to evaluate the merits, performance and future prospects of Keysight separately from Agilent;

· more effective pursuit of each company’s distinct operating priorities and strategies;

· more efficient allocation of capital for both Agilent and Keysight;

· direct access by Keysight to the capital markets; and

· facilitation of incentive compensation arrangements for employees more directly tied to the performance of the relevant company’s business, and potential enhancement of employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives, while at the same time creating an independent equity structure that will facilitate Keysight’s ability to effect future acquisitions utilizing Keysight common stock.

Keysight may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (i) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Keysight’s business; (ii) following the separation, Keysight may be more susceptible to market fluctuations and other adverse events than if it were still a part of Agilent; (iii) following the separation, Keysight’s business will be less diversified and have less scale than Agilent’s business prior to the separation; and (iv) the other actions required to separate Agilent’s and Keysight’s respective businesses could disrupt Keysight’s operations. If Keysight fails to achieve some or all of the benefits expected to result from the separation, or if such benefits are delayed, the business, operating results and financial condition of Keysight could be adversely affected.

Keysight or Agilent may fail to perform under various transaction agreements that have been executed as part of the separation or Keysight may fail to have necessary systems and services in place when certain of the transaction agreements expire.

In connection with the separation, Keysight and Agilent have entered into a separation agreement and various other agreements, including a services agreement, a tax matters agreement, an employee matters agreement, an intellectual property matters agreement, a trademark license agreement and a real estate matters agreement. The separation agreement, tax matters agreement, employee matters agreement, intellectual property matters agreement, trademark license agreement and real estate matters agreement determine the allocation of assets and liabilities between the companies following the separation for those respective areas and include any necessary indemnifications related to liabilities and obligations. The services agreement provides for the performance of certain services by each company for the benefit of the other for a period of time after the separation. Keysight will rely on Agilent to satisfy its performance and payment obligations under these agreements. If Agilent is unable to satisfy its obligations under these agreements, including its indemnification obligations, Keysight could incur operational difficulties or losses. If Keysight does not have in place its own systems and services, or if Keysight does not have agreements with other providers of these services once certain transaction agreements expire, Keysight may not be able to operate its business effectively and its profitability may decline. Keysight is in the process of creating its own, or engaging third parties to provide, systems and services to replace many of the systems and services that Agilent currently provides to Keysight. However, Keysight may not be successful in implementing these systems and services or in transitioning data from Agilent’s systems to Keysight’s.

Challenges in the commercial and credit environment may materially adversely affect Keysight’s and Agilent’s ability to complete the separation.

Keysight’s ability to issue debt or enter into other financing arrangements on acceptable terms could be materially adversely affected if there is a material decline in the demand for Keysight’s products or in the solvency of its customers or suppliers or if other significantly unfavorable changes in economic conditions occur. Volatility in the world financial markets could increase borrowing costs or affect Keysight’s ability to gain access to the capital markets, all of which could have a material adverse effect on Keysight’s or Agilent’s ability to complete the separation.

After Keysight’s separation from Agilent, Keysight will have debt obligations that could adversely affect its business and its ability to meet its obligations and pay dividends.

Immediately following the separation, Keysight expects to carry net debt. See “Description of Material Indebtedness.” Keysight may also incur additional indebtedness in the future. This significant amount of debt could have important, adverse consequences to Keysight and its investors, including:

· requiring a substantial portion of Keysight’s cash flow from operations to make interest payments;

· making it more difficult to satisfy other obligations;

· increasing the risk of a future credit ratings downgrade of Keysight’s debt, which could increase future debt costs and limit the future availability of debt financing;

· increasing Keysight’s vulnerability to general adverse economic and industry conditions;

· reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow Keysight’s business;

· limiting Keysight’s flexibility in planning for, or reacting to, changes in its business and the industry; and

· limiting Keysight’s ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase common stock.

To the extent that Keysight incurs additional indebtedness, the risks described above could increase. In addition, Keysight’s actual cash requirements in the future may be greater than expected. Keysight’s cash flow from operations may not be sufficient to service its outstanding debt or to repay the outstanding debt as it becomes due, and Keysight may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance its debt.

Potential liabilities may arise due to fraudulent transfer considerations, which would adversely affect Keysight’s financial condition and its results of operations.

In connection with the separation and distribution, Agilent has undertaken and will undertake several corporate restructuring transactions which, along with the separation and distribution, may be subject to federal and state fraudulent conveyance and transfer laws. If, under these laws, a court were to determine that, at the time of the separation and distribution, any entity involved in these restructuring transactions or the separation and distribution:

· was insolvent;

· was rendered insolvent by reason of the separation and distribution;

· had remaining assets constituting unreasonably small capital; or

· intended to incur, or believed it would incur, debts beyond its ability to pay these debts as they matured,

then the court could void the separation and distribution, in whole or in part, as a fraudulent conveyance or transfer. The court could then require Keysight’s shareholders to return to Agilent some or all of the shares of Keysight common stock issued in the distribution, or require Agilent or Keysight, as the case may be, to fund liabilities of the other company for the benefit of creditors. The measure of insolvency will vary depending upon the jurisdiction whose law is being applied. Generally, however, an entity would be considered insolvent if the fair value of its assets was less than the amount of its liabilities or if it incurred debt beyond its ability to repay the debt as it matures.

Risks Related to Keysight’s Common Stock

Keysight cannot be certain that an active trading market for its common stock will develop or be sustained after the separation, and following the separation, Keysight’s stock price may fluctuate significantly.

A public market for Keysight common stock does not currently exist. Keysight anticipates that on or prior to the record date for the distribution, trading of shares of its common stock will begin on a “when-issued” basis and will continue through the distribution date. However, Keysight cannot guarantee that an active trading market will develop or be sustained for its common stock after the separation. Nor can Keysight predict the prices at which shares of its common stock may trade after the separation. Similarly, Keysight cannot predict the effect of the separation on the trading prices of its common stock or whether the combined market value of the shares of Keysight common stock and the Agilent common shares will be less than, equal to or greater than the market value of Agilent common shares prior to the separation.

The market price of Keysight common stock may fluctuate significantly due to a number of factors, some of which may be beyond Keysight’s control, including:

· actual or anticipated fluctuations in Keysight’s operating results;

· changes in earnings estimated by securities analysts or Keysight’s ability to meet those estimates;

· the operating and stock price performance of comparable companies;

· changes to the regulatory and legal environment in which Keysight operates; and

· domestic and worldwide economic conditions.

A number of shares of Keysight common stock are or will be eligible for future sale, which may cause Keysight’s stock price to decline.

Any sales of substantial amounts of Keysight common stock in the public market or the perception that such sales might occur, in connection with the distribution or otherwise, may cause the market price of Keysight common stock to decline. Upon completion of the distribution, Keysight expects that it will have an aggregate of approximately 166,816,116 shares of its common stock issued and outstanding. These shares will be freely tradable without restriction or further registration under the U.S. Securities Act of 1933, as amended (“Securities Act”), unless the shares are owned by one or more of Keysight’s “affiliates,” as that term is defined in Rule 405 under the Securities Act. Keysight is unable to predict whether large amounts of its common stock will be sold in the open market following the distribution. Keysight is also unable to predict whether a sufficient number of buyers would be in the market at that time.

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

Keysight does not currently expect to pay dividends on its common stock. The payment of any dividends in the future, and the timing and amount thereof, to Keysight shareholders will fall within the discretion of Keysight’s board of directors. The board’s decisions regarding the payment of dividends will depend on many factors, such as Keysight’s financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in Keysight’s debt, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant. For more information, see “Dividend Policy.” Keysight’s ability to pay dividends will depend on its ongoing ability to generate cash from operations and on its access to the capital markets. Keysight cannot guarantee that it will pay a dividend in the future or continue to pay any dividends if Keysight commences paying dividends.

Your percentage ownership in Keysight may be diluted in the future.

In the future, your percentage ownership in Keysight may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that Keysight will be granting to Keysight’s directors, officers and employees and purchases of shares from Keysight through Keysight’s employee stock purchase plan. Keysight’s employees will have options to purchase shares of its common stock after the distribution as a result of conversion of their Agilent stock options to Keysight stock options. Keysight employees will also have stock-based awards for Keysight common stock after the distribution as a result of conversion of their Agilent stock-based awards to Keysight stock-based awards. The conversion of Agilent stock options and stock-based awards held by Keysight employees into Keysight stock options and stock-based awards, respectively, is described in further detail in the section entitled “Treatment of Equity-Based Compensation Awards at the Time of the Separation.” As of the date of this information statement, the exact number of shares of Keysight common stock that will be subject to the converted Keysight options and stock-based awards is not determinable, and, therefore, it is not possible to determine the extent to which your percentage ownership in Keysight could by diluted as a result of the converted Keysight options and stock-based awards. Keysight anticipates its compensation committee will grant additional stock options or other stock-based awards to its employees and directors after the distribution, from time to time, under Keysight’s employee benefits plans. Such awards will have a dilutive effect on Keysight’s earnings per share, which could adversely affect the market price of Keysight’s common stock.

In addition, Keysight’s amended and restated certificate of incorporation will authorize Keysight to issue, without the approval of Keysight’s shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over Keysight’s common stock respecting dividends and distributions, as Keysight’s board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of Keysight’s common stock. For example, Keysight could grant the holders of preferred stock the right to elect some number of Keysight’s directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that Keysight could assign to holders of preferred stock could affect the residual value of the common stock. See “Description of Keysight’s Capital Stock.”

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

Keysight’s amended and restated certificate of incorporation and amended and restated bylaws will 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 Keysight’s board of directors rather than to attempt a hostile takeover. These provisions include, among others:

· the inability of Keysight’s shareholders to call a special meeting;

· the inability of Keysight’s 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 Keysight’s board to issue preferred stock without shareholder approval;

· the division of Keysight’s 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 Keysight’s directors, and not shareholders, to fill vacancies on Keysight’s board of directors; and

· the requirement that the affirmative vote of shareholders holding at least 80% of Keysight’s voting stock is required to amend certain provisions in Keysight’s amended and restated certificate of incorporation (relating to the number, term and removal of its directors, the filling of its 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 Keysight’s shareholders and amendments of the certificate of incorporation) and certain provisions in Keysight’s 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 Keysight’s directors, the filling of its board vacancies, director and officer indemnification and amendments of the bylaws).

In addition, because Keysight has 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 you 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.

Keysight believes these provisions will protect its shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with Keysight’s board of directors and by providing Keysight’s board of directors with more time to assess any acquisition proposal. These provisions are not intended to make Keysight 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 Keysight’s board of directors determines is not in the best interests of Keysight and Keysight’s shareholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

In addition, an acquisition or further issuance of Keysight’s stock could trigger the application of Section 355(e) of the Code. For a discussion of Section 355(e) of the Code, see “Material U.S. Federal Income Tax Consequences.” Under the tax matters agreement, Keysight would be required to indemnify Agilent for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that you may consider favorable.

Keysight’s amended and restated certificate of incorporation will designate 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 Keysight’s shareholders, which could discourage lawsuits against Keysight and Keysight’s directors and officers.

Keysight’s amended and restated certificate of incorporation will 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 behalf of Keysight, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of Keysight to Keysight or Keysight’s shareholders, any action asserting a claim against Keysight or any director or officer of Keysight 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 Keysight or any director or officer of Keysight governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of Keysight’s shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with Keysight or Keysight’s directors or officers, which may discourage such lawsuits against Keysight and Keysight’s directors and officers.

CAPITALIZATION

The following table sets forth the capitalization of the Electronic Measurement Business of Agilent on an historical basis and on a pro forma basis to give effect to the separation and distribution and the transactions related to the separation and distribution as if they occurred on July 31, 2014. You can find an explanation of the pro forma adjustments made to our historical combined financial statements under “Unaudited Pro Forma Combined Financial Statements.” You should review the following table in conjunction with the “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical unaudited combined financial statements and accompanying notes included elsewhere in this information statement. The historical financial information may not necessarily reflect what our capitalization would have been had we been an independent, publicly traded company during the period presented and is not necessarily indicative of our future capitalization.

	As of July 31, 2014
	Historical		Pro Forma
	(in millions)
	(unaudited)
Indebtedness:
Senior unsecured notes(1)	$	—	$	1,100
Total indebtedness	$	—	$	1,100
Equity
Common stock; par value	$	—	$	2
Additional paid-in capital(2)	—		1,104
Net parent company investment(1)(2)	1,238		—
Accumulated other comprehensive income (loss)	23		(246		)
Total equity	$	1,261	$	860
Total capitalization	$	1,261	$	1,960

(1) Prior to the distribution date, Keysight expects to issue approximately $1,100 million principal senior unsecured notes to fund a cash distribution of $900 million to Agilent and to fund working capital and other liquidity needs of the Keysight business.

(2) Reflects Agilent’s net investment impact as a result of the anticipated post-distribution capital structure. As of the distribution date, Agilent’s net investment in Keysight will be exchanged to reflect the distribution of Keysight’s common stock to Agilent shareholders and to reflect the aggregate par value of our shares of common stock being distributed.

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements consist of unaudited pro forma combined statements of operations for the nine months ended July 31, 2014 and for the year ended October 31, 2013 and an unaudited pro forma combined balance sheet as of July 31, 2014. The unaudited pro forma combined financial statements reported below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the historical combined annual and interim financial statements and the corresponding notes included elsewhere in this information statement.

The unaudited pro forma combined financial statements are derived from the historical combined annual and condensed interim financial statements of the Electronic Measurement Business of Agilent and reflect adjustments in connection with our separation from Agilent and related financing and other transactions. The statements are for informational purposes only and do not purport to represent what our financial position and results of operations actually would have been had the separation and distribution occurred on the dates indicated, or to project our financial performance for any future period.

The unaudited pro forma combined balance sheet assumes that our separation from Agilent occurred as of July 31, 2014. The unaudited pro forma combined statements of operations for the nine months ended July 31, 2014 and for the year ended October 31, 2013 assume that the separation occurred as of November 1, 2012.

Agilent did not account for us as, and the business was not operated as, a separate, independent company for the periods presented. We expect to experience changes in our ongoing cost structure when we become an independent, publicly traded company. For example, Agilent currently allocates expenses to us arising from shared services and infrastructure costs. Our historical combined financial statements include allocations of these expenses from Agilent. However, these costs may not be representative of the future costs we will incur as an independent public company.

The unaudited pro forma combined statements of operations for the nine months ended July 31, 2014 and for the year ended October 31, 2013 and the unaudited pro forma combined balance sheet as of July 31, 2014 have been adjusted to give effect to the following transactions:

· incurrence of certain indebtedness;

· receipt of $700 million cash partially derived from separation-related financing;

· the removal of non-recurring pre-separation and transaction costs that were incurred that are directly related to the separation of Keysight from Agilent;

· transfer of net liabilities between Agilent and us, including certain employee benefit plan and other obligations net of any related assets. Our estimates may change as we approach the distribution date and continue to refine our estimates of the net liability transfers as of that date. The discount rate assumptions reflect the rate at which pension and post-retirement obligations were calculated based on the measurement date of the plans, which is August 1, 2014. The actual assumed net benefit plan obligations could change based on final asset transfers;

· the net transfer of various corporate and other assets and liabilities not included in our historical condensed combined balance sheet;

· the issuance of approximately 167 million shares of Keysight common stock. This number of shares is based on the number of Agilent common shares outstanding on July 31, 2014 and a distribution ratio of one share of our common stock for every two shares of Agilent common stock; and

· the impact of the separation agreement, the tax matters agreement, the services agreement, the employee matters agreement, including pension and postretirement benefit plans, and other commercial agreements between us and Agilent.

THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED JULY 31, 2014

(in millions, except per share amounts)

	Historical		Pro Forma Adjustments				Pro Forma
Net revenue:
Products	$	1,833	$				$	1,833
Services and other	338						338
Total net revenue	2,171						2,171
Costs and expenses:
Cost of products	801						801
Cost of services and other	169						169
Total costs	970						970
Research and development	270						270
Selling, general and administrative	592		(51		)	(A)	541
Total costs and expenses	1,832		(51		)		1,781
Income from operations	339		51				390
Other income (expense), net	3		(35		)	(B)	(32		)
Income before taxes	342		16				358
Provision for income taxes	51		(10		)	(C)	41
Net income	$	291	$	26			$	317
Unaudited pro forma net income per share:
Basic						(D)	$	1.90
Diluted						(E)	$	1.88
Weighted average number of shares used in computing unaudited pro forma net income per share:
Basic						(D)	167
Diluted						(E)	169

See accompanying notes to unaudited pro forma combined financial statements.

THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED OCTOBER 31, 2013

(in millions, except per share amounts)

	Historical		Pro Forma Adjustments				Pro Forma
Net revenue:
Products	$	2,434	$				$	2,434
Services and other	454						454
Total net revenue	2,888						2,888
Costs and expenses:
Cost of products	1,044						1,044
Cost of services and other	221						221
Total costs	1,265						1,265
Research and development	375						375
Selling, general and administrative	752		(2		)	(A)	750
Total costs and expenses	2,392		(2		)		2,390
Income from operations	496		2				498
Other income (expense), net	5		(47		)	(B)	(42		)
Income before taxes	501		(45		)		456
Provision for income taxes	44		(17		)	(C)	27
Net income	$	457	$	(28	)		$	429
Unaudited pro forma net income per share:
Basic						(D)	$	2.52
Diluted						(E)	$	2.48
Weighted average number of shares used in computing unaudited pro forma net income per share:
Basic						(D)	170
Diluted						(E)	173

See accompanying notes to unaudited pro forma combined financial statements.

THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JULY 31, 2014

(in millions)

	Historical		Pro Forma Adjustments				Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	700		(H)	$	700
Accounts receivable, net	319						319
Inventory	516						516
Deferred tax assets	61		11			(L)(N)	72
Other current assets	93		13			(K)	106
Total current assets	989		724				1,713
Property, plant and equipment, net	462		19			(K)	481
Goodwill	405						405
Other intangible assets, net	14						14
Long-term investments	60		3			(K)	63
Long-term deferred tax assets	51		10			(F)(L)(N)	61
Other assets	18		65			(F)(K)	83
Total assets	$	1,999	$	821			$	2,820
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	112	$	9		(K)	$	121
Employee compensation and benefits	129		15			(K)	144
Deferred revenue	185						185
Income and other taxes payable	80		(32		)	(M)(N)	48
Other accrued liabilities	45						45
Total current liabilities	551		(8		)		543
Long-term deferred revenue	76						76
Long-term debt	—		1,100			(G)	1,100
Retirement and post-retirement benefits	—		182			(F)	182
Other long-term liabilities	111		(52		)	(F)(K)(M)(N)	59
Total liabilities	738		1,222				1,960
Commitments and contingencies
Invested equity:
Common stock	—		2			(I)	2
Additional paid-in-capital	—		1,104			(J)(O)	1,104
Agilent net investment	1,238		(1,238		)	(J)(O)	—
Accumulated other comprehensive income	23		(269		)	(F)	(246		)
Total equity	1,261		(401		)		860
Total liabilities and invested equity	$	1,999	$	821			$	2,820

See accompanying notes to unaudited pro forma combined financial statements.

THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The unaudited pro forma combined financial statements as of July 31, 2014 and for the nine months ended July 31, 2014 and for the year ended October 31, 2013 include the following adjustments:

(A) Reflects the removal of non-recurring transaction and pre-separation costs incurred in the historical periods that are directly related to the separation of Keysight from Agilent.

(B) Reflects interest expense related to approximately $1,100 million of long-term debt expected to be issued by Keysight. Based on current market conditions and Keysight’s currently expected debt rating, the interest rate on the debt is expected to be approximately 4.25 percent. Interest expense was calculated assuming constant debt levels throughout the periods. Interest expense may be higher or lower if Keysight’s actual interest rate or market conditions change. A 0.125 percent change to the annual interest rate would change interest expense by approximately $1 million on an annual basis.

(C) Reflects the tax effects of the tax deductible pro forma adjustments at the applicable jurisdictional statutory income tax rates.

(D) The pro forma weighted-average number of Keysight shares used to compute pro forma basic net income per share for the year ended October 31, 2013 and for the nine months ended July 31, 2014 is based on the weighted-average number of Agilent shares outstanding for the year ended October 31, 2013 and for the nine months ended July 31, 2014, respectively, applying a distribution ratio of one share of Keysight common stock for every two shares of Agilent common stock outstanding.

(E) The pro forma weighted-average number of Keysight shares used to compute pro forma diluted net income per share is based on the weighted-average number of basic shares of Keysight common stock as described in note (D) above, plus incremental shares assuming exercise of dilutive outstanding options and restricted stock awards granted to our employees under Agilent’s stock based compensation programs. The actual effect of the dilution on a go-forward basis will depend on various factors, including the employment of our personnel in one company or the other and the value of the equity awards at the time of distribution. We cannot fully estimate the dilutive effects at this time, although we believe an estimate based on applying the distribution ratio as described in note (D) above to the Agilent weighted-average shares outstanding for diluted EPS provides a reasonable approximation of the potential dilutive effect of the equity awards.

(F) Certain of our eligible employees participate in retirement plans and post-retirement pension plans offered by Agilent. When we become a stand-alone independent company, we will assume these obligations and provide benefits directly. Agilent will transfer to us the plan liabilities and assets associated with our active and retired and other former employees. The net benefit obligations we will assume will result in our recording an estimated net unfunded benefit plan liability of $182 million and net funded benefit plan assets of $57 million, which are based on the actual discount rates and plan assumptions determined as of the transfer date, accumulated other comprehensive income losses, net of tax, of $269 million, $47 million of related deferred tax assets and $21 million of related deferred tax liabilities. These estimates will change based on the final asset values on the transfer date.

(G) Reflects the expected issuance of approximately $1,100 million aggregate principal in (senior) notes. Following the senior note issuance and in accordance with the separation agreement, Keysight is expected to distribute $900 million in cash to Agilent.

(H) Reflects the following adjustments to cash and cash equivalents (in millions):

Cash received from incurrence of new debt (see note (G))	$	1,100
Cash distribution paid to Agilent (see note (G))	(900		)
Cash funding from Agilent	500
Cash pro forma adjustment	$	700

(I) Represents the issuance of approximately 167 million common shares at a par value of $0.01 per share. The number of common shares is based on the number of Agilent common shares outstanding on July 31, 2014 and a distribution ratio of one share of Keysight common stock for every two shares of Agilent common stock.

(J) On the separation and distribution date, Agilent’s net investment in Keysight will be redesignated as Keysight shareholders equity and will be allocated between common stock and additional paid-in capital based on the number of shares of Keysight common stock outstanding at the distribution date. The cash distribution and contribution described in notes (G) and (H) will impact Agilent’s net investment in Keysight prior to the redesignation of the investment as Keysight shareholder’s equity.

(K) Reflects various corporate assets and liabilities to be transferred to (from) Keysight as follows:

(in millions)	Increase (decrease)
Other current assets	$	13
Property, plant and equipment, net	19
Long-term investments	3
Other assets	8
Total assets	$	43

Accounts Payable	$	9
Employee compensation and benefits	15
Other long-term liabilities	18
Total liabilities	$	42

These adjustments include a portion of shared information technology assets, shared service and infrastructure employee obligations, reclassification adjustment of Agilent Long-Term Performance (“LTP”) Program FY13-15 tranche from equity-classified to liability-classified as their payout to our employees will be based on Agilent’s performance, and adjustments to prepaid and accrued expenses in accordance with the separation agreement. The amount of shared technology assets will be determined by a number of factors, primarily including specific location of technology assets, actual software license transfers, actual numbers of users of applications and allocations based on respective headcount. The amount of infrastructure employee obligations was determined based on actual data for those infrastructure employees identified as transferring from Agilent to Keysight. We do not expect incremental depreciation on those shared information technology assets, which typically have lives of between three and five years, to be materially different from depreciation previously charged to Keysight through allocations from Agilent corporate functions.

(L) Our historical financial statements reflect the calculation of certain deferred tax assets and deferred tax liabilities that have been estimated based on a separate return methodology. As of the distribution date, we anticipate assuming certain additional current deferred tax assets of $4 million and transferring certain noncurrent deferred tax assets of $13 million. The actual amounts being assumed and transferred will be determined as of the distribution date and may be significantly different from our estimates.

(M) Under the terms of the tax matters agreement, current taxes payable for 2014 will be paid by the legal entity that files the tax return for such tax year. Current taxes payable are reduced by $28 million to

reflect the amount expected to be paid by Keysight with its 2014 returns. The historical financial information includes the allocation of liabilities for uncertain tax positions. Other long-term liabilities have been reduced by $75 million, which reflects the difference between the reserves being transferred to Keysight per the tax matters agreement and the reserves that were allocated to Keysight in their historical carve out financial statements using the separate return methodology.

(N) Certain transfers of assets and liabilities will be characterized as taxable transactions for local income tax purposes. The historical balances reflect deferred tax assets and liabilities in these jurisdictions. To calculate the deferred tax adjustment related to the tax basis step up, we computed the taxable gain on the sale transactions using the fair market value of the assets acquired by the Keysight entities over the historical tax basis, taking any permanent adjustments to basis under local jurisdictional law into consideration, and applied the applicable statutory rate. The pro forma adjustments required to bring the historical balances to the taxable transaction position are $7 million increase to current deferred tax asset, $4 million decrease to current deferred tax liability, $24 million decrease to non-current deferred tax asset and $16 million decrease to non-current deferred tax liability. The law in Singapore regarding the amortization of intangibles is still being finalized and the treatment of Keysight’s acquisition of intangibles from Agilent is still being discussed with the Singaporean Economic Development Board. Depending on how the law is finalized and the outcome of such negotiations, there could be a material increase in the deferred tax assets balance for Keysight.

(O) Represents the elimination of the net investment by Agilent and adjustments to additional paid-in capital resulting from the following:

Reclassification of Agilent net investment	$	1,238
Cash distribution to Agilent (see Note (G) and (H))	(900		)
Cash funding from Agilent (see Note (H))	500
Net corporate assets and liabilities to be recorded on Keysight books (see Note (K))	1
Net retirement obligations and associated deferred taxes (see Note (F))	175
Net deferred tax assets and liabilities (see Note (L))	(9		)
Net tax liabilities assumed by Keysight (see Note (M))	103
Net taxable sales from transfer of assets (see Note (N))	3
Common stock ($0.01 par value) (see Note (I))	(2		)
Total additional paid-in capital	$	1,109

SELECTED HISTORICAL COMBINED FINANCIAL DATA

The following table presents the selected historical combined financial data for the Electronic Measurement Business of Agilent as of July 31, 2014 and for the nine months ended July 31, 2014 and 2013 and as of and for each of the fiscal years in the five-year period ended October 31, 2013. We derived the selected historical combined financial data as of July 31, 2014 and for the nine months ended July 31, 2014 and 2013 from our unaudited condensed combined financial statements included elsewhere in this information statement. We derived the selected historical financial data as of October 31, 2013 and 2012, and for each of the fiscal years in the three-year period ended October 31, 2013, from our audited combined financial statements included elsewhere in this information statement. We derived the selected historical combined financial data as of October 31, 2011 and as of and for the fiscal years ended October 31, 2010 and 2009, from our unaudited combined financial statements that are not included in this information statement. In our management’s opinion, the unaudited combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of ordinary recurring adjustments, necessary for a fair statement of the information for the periods presented.

	Nine Months Ended July 31,				Years Ended October 31,
	2014		2013		2013		2012		2011		2010		2009
	(in millions)
Combined Statement of Operations Data:
Net revenue	$	2,171	$	2,183	$	2,888	$	3,315	$	3,316	$	2,706	$	2,205
Income (loss) before taxes	$	342	$	374	$	501	$	746	$	749	$	360	$	(243	)
Net income (loss)	$	291	$	342	$	457	$	841	$	787	$	355	$	(203	)

	July 31,		October 31,
	2014		2013		2012		2011		2010		2009
	(in millions)
Combined Balance Sheet Data:
Working capital	$	438	$	412	$	398	$	272	$	199	$	192
Total assets	$	1,999	$	2,028	$	2,133	$	1,908	$	1,766	$	1,632
Invested equity	$	1,261	$	1,245	$	1,305	$	996	$	817	$	771

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OF THE ELECTRONIC MEASUREMENT BUSINESS OF AGILENT TECHNOLOGIES, INC.

You should read the following discussion in conjunction with the audited combined financial statements and the corresponding notes, the unaudited combined financial statements and the corresponding notes, and the unaudited pro forma combined financial statements and the corresponding notes of the Electronic Measurement Business of Agilent included elsewhere in this information statement. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Separation from Agilent

On September 19, 2013, Agilent announced plans to separate into two publicly traded companies, one comprising of the life sciences, diagnostics and chemical analysis businesses that will retain the Agilent name, and the other that will be comprised of the electronic measurement business that will be renamed Keysight Technologies, Inc. (“Keysight”). As part of the separation, Agilent has transferred substantially all of the assets, liabilities and operations of the electronic measurement business to Keysight. The distribution is expected to occur through a pro rata distribution of Keysight shares to Agilent shareholders that is tax free for U.S. federal income tax purposes. Keysight was incorporated in Delaware as a wholly owned subsidiary of Agilent on December 6, 2013. The distribution is subject to a number of conditions, including among others that the transfer of assets and liabilities to Keysight has occurred in accordance with the separation agreement, the receipt of an external counsel opinion 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, all actions and filings necessary or appropriate under U.S. laws have become effective or accepted, and the completion of the financing needed for Keysight.

Our historical combined financial statements have been prepared on a stand-alone basis and are derived from Agilent’s consolidated financial statements and accounting records. The combined financial statements reflect our financial position, results of operations, comprehensive income and cash flows as its business was operated as part of Agilent prior to the distribution, in conformity with U.S. generally accepted accounting principles.

The combined financial statements include the allocation of certain assets and liabilities that have historically been held at the Agilent level but which are specifically identified or allocated to us. Cash and cash equivalents held by Agilent were not allocated to us. Agilent’s debt and related interest expense have not been allocated to us for any of the periods presented since we are not the legal obligor of the debt and Agilent’s borrowings were not directly attributable to us. All intercompany transactions between us and Agilent are considered to be effectively settled in the combined financial statements at the time the transactions are recorded. All cash generated by our business is assumed to be remitted to the Agilent subsidiary located in the same legal entity or country. The total net effect of the settlement of these intercompany transactions is reflected in the combined statement of cash flows as a financing activity and in the combined balance sheet as Agilent Net investment in us.

The combined statement of operations includes our direct expenses for cost of products and services sold, research and development, sales and marketing, distribution, and administration as well as allocations of expenses arising from shared services and infrastructure provided by Agilent to us. These allocated expenses include costs of information technology, accounting and legal services, real estate and facilities, corporate advertising, insurance services, treasury and other corporate and infrastructure services. In addition, other costs allocated to us include restructuring costs, share-based compensation expense and

retirement plan expenses related to Agilent’s corporate and shared services employees. These expenses are allocated to us using estimates that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by us. The allocation methods include headcount, square footage, actual consumption and usage of services, adjusted invested capital and others.

We expect Agilent to continue to provide some of these services related to these functions on a transitional basis for a fee, which will be partially offset by other income from Keysight services provided to Agilent. These services will be received or provided under the transition services agreement described in “Certain Relationships and Related Person Transactions.” We do not expect the net costs associated with the transition services agreement to be materially different than the historical costs that have been allocated to us related to these same services.

We also expect to incur other incremental costs as an independent, publicly traded company as compared to the costs historically allocated to us by Agilent. These incremental costs are estimated to be $10 million to $15 million on an annual pre-tax basis.

Of the total cost allocated from Agilent to date, $53 million was allocated for non-recurring transaction and pre-separation costs, of which $51 million was recognized in the nine months ended July 31, 2014. We expect to recognize additional non-recurring transaction and separation costs, which are currently estimated to range from $51 million to $65 million, of which $26 million to $30 million is expected to be recognized in the fourth quarter of fiscal year 2014. These costs are expected to include, among other things, branding, legal, accounting and other advisory fees and other costs to separate and transition from Agilent.

Overview and Executive Summary

As the Electronic Measurement Business (“we,” “us,” the “company,” “our Business” or “the Business”) of Agilent, we provide electronic measurement solutions to communications and electronics industries. We provide electronic measurement 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.

Historically, we conducted our business in one reportable operating segment. In the first quarter of 2014, in conjunction with the planned separation, we implemented changes in our organizational structure which resulted in the formation of two reportable operating segments, measurement solutions and customer support and services. The measurement solutions segment is primarily the hardware and associated software businesses serving the electronic measurement market. The customer support and services segment provides repair and calibration of the hardware measurement solutions and the resale of used instrument equipment.

Years ended October 31, 2013, 2012 and 2011

Our total orders in 2013 were $2,866 million, a decrease of 13 percent when compared to 2012. Orders were lower for all market segments, including aerospace and defense; industrial, computer and semiconductor test; and communications test, which decreased year-over-year primarily due to lower wireless manufacturing demand relating to the loss of business from a large customer with whom we could not agree on contractual terms. Foreign currency movements had an unfavorable impact of 2 percentage points on the year-over-year comparison. Orders of $3,280 million in 2012 declined 1 percent year-over-year, on slight declines in industrial, computer and semiconductor and aerospace and defense business partially offset by slight improvement in communications test.

Our net revenue of $2,888 million in 2013 declined 13 percent when compared to 2012. Compared to last year, lower communications test revenue contributed to 8 percentage points of the revenue decline, and lower industrial, computer and semiconductor test revenue further decreased revenue by

approximately 5 percentage points; while aerospace and defense was flat year-over-year. The decline in communications test reflected significantly lower wireless manufacturing revenue mostly driven by the loss of business from a large customer with whom we could not agree on contractual terms. The unfavorable impact of foreign currency movements contributed 2 percentage points of the year-over-year decrease. Our revenue was flat in 2012 compared to 2011 on slightly higher industrial, computer and semiconductor business, flat communications test, and slightly lower aerospace and defense demand.

Net income was $457 million in 2013 compared to net income of $841 million and $787 million in 2012 and 2011, respectively. In 2013, 2012 and 2011 we generated operating cash flows of $566 million, $724 million and $751 million, respectively.

Nine Months ended July 31, 2014 and 2013

Total orders of $2,203 million for the nine months ended July 31, 2014 increased 4 percent compared to the same period last year. The overall increase reflected stronger growth in our aerospace and defense business, and a moderate increase in our communications test business. Foreign currency movements for the nine months ended July 31, 2014 had an unfavorable impact of approximately 1 percentage point compared to the same period last year.

Net revenue of $2,171 million for the nine months ended July 31, 2014, decreased 1 percent when compared to the same period last year. Lower aerospace and defense revenue contributed to a 2 percentage point decline, partially offset by increased revenue from industrial, computer and semiconductor and communications test businesses. Foreign currency movements for the nine months ended July 31, 2014 had an unfavorable impact of approximately 1 percentage point compared to the same period last year.

Net income for the nine months ended July 31, 2014 was $291 million compared to $342 million for the corresponding period last year. In the nine months ended July 31, 2014, we generated $362 million of cash from operations compared with $431 million generated in the same period last year.

Looking forward, the macroeconomic indicators support modest growth. The geopolitical situation does represent risk, particularly related to the situation in Russia. We expect modest seasonal improvement in aerospace and defense business next quarter driven by U.S. government related spending. The communication test market projections continue to be mixed with base station spending expected to remain steady and handset/device manufacturing projected to remain soft in the short-term.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in our combined 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 best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimate that are reasonably likely to occur could materially change the financial statements. 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, allocation methods and allocated expenses from Agilent, including share-based compensation and retirement and post-retirement plan assumptions, restructuring, valuation of goodwill and accounting for income taxes.

Revenue recognition. We enter into agreements to sell products (hardware or software), services, and other arrangements (multiple element arrangements) that include combinations of products and services. Revenue from product sales, net of trade discounts and allowances, is recognized provided that persuasive

evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Revenue is reduced for estimated product returns, when appropriate. For sales that include customer-specified acceptance criteria, revenue is recognized after the acceptance criteria have been met. For products that include installation, if the installation meets the criteria to be considered a separate element, product revenue is recognized upon delivery, and recognition of installation revenue occurs when the installation is complete. Otherwise, neither the product nor the installation revenue is recognized until the installation is complete. Revenue from services is deferred and recognized over the contractual period or as services are rendered and accepted by the customer. We allocate revenue to each element in our multiple-element arrangements based upon their relative selling prices. We determine the selling price for each deliverable based on a selling price hierarchy. The selling price for a deliverable is based on our vendor specific objective evidence (VSOE) if available, third-party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. Revenue from the sale of software products that are not required to deliver the tangible product’s essential functionality are accounted for under software revenue recognition rules. Revenue allocated to each element is then recognized when the basic revenue recognition criteria for that element have been met. The amount of product revenue recognized is affected by our judgments as to whether an arrangement includes multiple elements.

We use VSOE of selling price in the selling price allocation in all instances where it exists. VSOE of selling price for products and services is determined when a substantial majority of the selling prices fall within a reasonable range when sold separately. TPE of selling price can be established by evaluating largely interchangeable competitor products or services in stand-alone sales to similarly situated customers. As our products contain a significant element of proprietary technology and the solution offered differs substantially from that of competitors, it is difficult to obtain the reliable stand-alone competitive pricing necessary to establish TPE. ESP represents the best estimate of the price at which we would transact a sale if the product or service were sold on a stand-alone basis. We determine ESP for a product or service by using historical selling prices which reflect multiple factors including, but not limited to, customer type, geography, market conditions, competitive landscape, gross margin objectives and pricing practices. The determination of ESP is made through consultation with and approval by management. We may modify or develop new pricing practices and strategies in the future. As these pricing strategies evolve, changes may occur in ESP. The aforementioned factors may result in a different allocation of revenue to the deliverables in multiple element arrangements, which may change the pattern and timing of revenue recognition for these elements but will not change the total revenue recognized for the arrangement.

Inventory valuation. We assess the valuation of our inventory on a periodic basis and make adjustments to the value for estimated excess and obsolete inventory based upon estimates about future demand and actual usage. Such estimates are difficult to make under most economic conditions. The excess balance determined by this analysis becomes the basis for our excess inventory charge. Our excess inventory review process includes analysis of sales forecasts, managing product rollovers and working with manufacturing to maximize recovery of excess inventory. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. If actual market conditions are more favorable than anticipated, inventory previously written down may be sold to customers, resulting in lower cost of sales and higher income from operations than expected in that period.

Allocations. Agilent has allocated certain costs such as share-based compensation expense and retirement and post-retirement benefit plan expense relating to our employees and Agilent’s corporate and shared services employees. These expenses are subject to certain underlying assumptions mentioned below.

Share-based compensation. Our employees have historically participated in Agilent’s stock plans and will continue participating until consummation of the distribution. Share-based compensation expense has been allocated to us based on our employees participating in Agilent’s stock plan and our share of Agilent’s corporate and shared services employee costs based on our share of revenue. Agilent accounts

for share-based awards in accordance with the authoritative guidance where share-based compensation expense is primarily based on estimated grant date fair value and is recognized on a straight line basis. The fair value of share-based awards for employee stock option awards was estimated using the Black-Scholes option pricing model. Shares granted under the Long-Term Performance (“LTP”) Program were valued using the Monte Carlo simulation model. The estimated fair value of restricted stock unit awards is determined based on the market price of Agilent’s common stock on the date of grant adjusted for expected dividend yield. The Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of Agilent’s common stock at 85 percent of the purchase price and uses the purchase date to establish the fair market value.

Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions used by Agilent, including the option’s expected life and the price volatility of Agilent stock.

The assumptions used in calculating the fair value of share-based awards represent Agilent’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. Although we believe the assumptions and estimates made are reasonable and appropriate, changes in assumptions could materially impact our reported financial results.

Retirement and post-retirement plan assumptions. Substantially all of our employees are covered under various defined benefit and/or defined contribution retirement plans sponsored by Agilent. Agilent provides U.S. employees, who meet eligibility criteria, defined benefits which are based on an employee’s base or target pay during the years of employment and on length of service. U.S. employees who meet eligibility requirements as of their termination date may participate in a post-retirement health care plan. Eligible employees outside the U.S. generally receive retirement benefits under various retirement plans based upon factors such as years of service and/or employee compensation levels. Eligibility is generally determined in accordance with local statutory requirements. We have accounted for our employee participation in Agilent’s defined benefit retirement plans and the post-retirement health care plan as multiemployer plans. As a result, no asset or liability was recorded by us to recognize the funded status of such plans in our combined balance sheet.

Our combined statements of operations include expense allocations for these benefits for our employees which were determined based on a review of personnel by business unit and for allocations of Agilent’s corporate and shared services personnel. We consider the expense allocation methodology and results to be reasonable for all periods presented. At or prior to the separation date, we will establish defined benefit retirement and post retirement plans for our current and former employees. The defined benefit retirement and post retirement obligations relating to those participants in these plans will be transferred from Agilent’s plans to our defined benefit plans. A proportionate share of the defined benefit plan assets will be allocated from the Agilent pension trust in each applicable country to a newly established Keysight pension trust. Subject to local law, it is anticipated that the share of assets allocated to us will be in the same proportion as the projected benefit obligation of our participants to the total projected benefit obligation of Agilent.

Retirement and post-retirement benefit plan costs are a significant cost of doing business. They represent obligations that will ultimately be settled sometime in the future and therefore are subject to estimation. Pension accounting is intended to reflect the recognition of future benefit costs over the employees’ average expected future service to us based on the terms of the plans and investment and funding decisions. The net periodic pension costs allocated to operations for our U.S. and Non-U.S. retirement plans were $32 million in 2013, $34 million in 2012 and $31 million in 2011. The net periodic benefits allocated to operations for our U.S. post-retirement plan were $10 million in 2013, $10 million in 2012 and $4 million in 2011.

The net periodic pension costs allocated to operations for our U.S. and Non-U.S. retirement plans were $12 million and $24 million for the nine months ended July 31, 2014 and 2013, respectively. The net

periodic benefits allocated to operations for our U.S. post-retirement plan were $9 million for both the nine months ended July 31, 2014 and 2013.

Restructuring. The main component of our restructuring plan is related to workforce reductions. Workforce reduction charges are accrued when payment of benefits becomes probable that the employees are entitled to the severance and the amounts can be estimated. If the amounts and timing of cash flows from restructuring activities are significantly different from what we have estimated, the actual amount of restructuring and other related charges could be materially different, either higher or lower, than those we have recorded.

Goodwill and purchased intangible assets. We review goodwill for impairment annually during our fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value may not be recoverable. As defined in the authoritative guidance, a reporting unit is an operating segment, or one level below an operating segment. At the time of an acquisition, we assign goodwill to the reporting unit that is expected to benefit from the synergies of the combination.

In September 2011, the Financial Accounting Standards Board (“FASB”) approved changes to the goodwill impairment guidance which are intended to reduce the cost and complexity of the annual impairment test. The changes provide entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. The revised standard gives an entity the option to first assess qualitative factors to determine whether performing the current two-step test is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not (i.e., > 50 percent chance) that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required.

The revised guidance includes examples of events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount. The factors that we consider include macroeconomic conditions such as a deterioration in the business’ operating environment, industries and market considerations; business-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the perceived value on either an absolute basis or relative to peers.

The qualitative indicators replace those previously used to determine whether an interim goodwill impairment test is required. We adopted this guidance for the year ended October 31, 2011.

If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the provisions of authoritative guidance require that we perform a two-step impairment test on goodwill. In the first step, we compare the fair value of each reporting unit to its carrying value. The second step (if necessary) measures the amount of impairment by applying fair value-based tests to the individual assets and liabilities within each reporting unit.

We performed a qualitative test for goodwill impairment as of September 30, 2013. Based on the results of our testing, we believe that it is more-likely-than-not that the fair value of the reporting unit is greater than its respective carrying value. In the first quarter of 2014, in conjunction with the planned separation, we implemented changes in our organizational structure which resulted in the formation of two reportable operating segments. There was no impairment of goodwill during the years ended October 31, 2013, 2012 and 2011 and for the nine months ended July 31, 2014 and 2013. Each quarter we review the events and circumstances to determine if goodwill impairment is indicated.

Accounting for income taxes. We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, benefits and deductions, and in the calculation of certain tax assets and liabilities which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as interest and penalties related to uncertain tax positions. Significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period.

Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part. When it is more likely than not that all or some portion of specific deferred tax assets such as net operating losses or foreign tax credit carryforwards will not be realized, a valuation allowance must be established for the amount of the deferred tax assets that cannot be realized. We consider all available positive and negative evidence on a jurisdiction-by-jurisdiction basis when assessing whether it is more likely than not that deferred tax assets are recoverable. We consider evidence such as our past operating results, the existence of losses in recent years and our forecast of future taxable income. In the fourth quarter of fiscal year 2012 we released the valuation allowance for the majority of our U.S. deferred tax assets. At October 31, 2013 and July 31, 2014, we continue to recognize a valuation allowance for certain U.S. state and foreign deferred tax assets. We intend to maintain a valuation allowance in these jurisdictions until sufficient positive evidence exists to support its reversal.

We have not provided for all U.S. federal income and foreign withholding taxes on the undistributed earnings of some of our foreign subsidiaries because we intend to indefinitely reinvest such earnings abroad. Should we decide to remit this income to the United States in a future period, our provision for income taxes will increase materially in that period.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax law and regulations in a multitude of jurisdictions. Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met those thresholds will continue to require significant judgment by management. In accordance with the guidance on the accounting for uncertainty in income taxes, for all U.S. and other tax jurisdictions, we recognize potential liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes and interest will be due. The ultimate resolution of tax uncertainties may differ from what is currently estimated, which could result in a material impact on income tax expense. If our estimate of income tax liabilities proves to be less than the ultimate assessment, a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. We include interest and penalties related to unrecognized tax benefits within the provision for income taxes on the combined statements of operations.

We have calculated our taxes on a separate return basis. However, the amounts recorded are not necessarily representative of the amounts that would have been reflected in the financial statements had we been an entity that operated independently of Agilent. It is possible that we will make different tax accounting elections and assertions, such as the amount of earnings that will be permanently reinvested outside the U.S. following our distribution from Agilent. Consequently, our future results after our separation from Agilent may be materially different from our historical results.

Adoption of New Pronouncements

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

Restructuring

In the second quarter of 2013, in response to slow revenue growth due to macroeconomic conditions, we accrued for a targeted restructuring program to reduce our total headcount by approximately 200 regular employees, representing approximately 2 percent of our global workforce. The timing and scope of workforce reductions will vary based on local legal requirements. When completed, the restructuring program is expected to result in an approximately $22 million reduction in annual cost of sales and operating expenses.

For the year ended October 31, 2013, we accrued $15 million associated with the headcount reductions. Within the United States, we have substantially completed these restructuring activities. As of October 31, 2013, approximately 110 employees were terminated and $9 million was paid under the targeted restructuring program.

After the separation announcement in the fourth quarter of 2013, approximately 40 employees from the targeted restructuring plan have been redeployed within the company, reducing the total headcount under this plan to 160 and a corresponding reduction in annual cost of sales and operating expenses of $18 million.

For the nine months ended July 31, 2014, we reversed $3 million of accrual related to approximately 40 employees that have been redeployed within the company. As of July 31, 2014, approximately 145 employees were terminated and $11 million was paid under the targeted restructuring program.

We have substantially completed these actions as of July 31, 2014.

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. Currently, Agilent hedges revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short term and anticipated basis on our behalf. The result of the hedging has been allocated to us and is included in our combined statement of operations. We do experience some fluctuations within individual lines of the combined statement of operations and balance sheet because Agilent’s hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. None of the financial instruments used in Agilent’s hedging program have been included on our combined balance sheet. Agilent’s hedging program is designed to hedge currency movements on a relatively short-term basis (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, Agilent may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction. After our separation from Agilent, we anticipate that we will be exposed to the same changes in foreign currency exchange rates. We intend to implement our own program to hedge revenues, expenses and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries. We intend for our program to be similar to the activities that Agilent currently employs.

Results from Operations—Years ended October 31, 2013, 2012 and 2011

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.

	Years Ended October 31,						2013 Over 2012		2012 Over 2011
	2013		2012		2011		% Change		% Change
	(in millions)
Orders	$	2,866	$	3,280	$	3,305	(13	)%	(1	)%
Net revenue:
Products	$	2,434	$	2,862	$	2,875	(15	)%	—
Services and other	$	454	$	453	$	441	—		3	%
Total net revenue	$	2,888	$	3,315	$	3,316	(13	)%	—

	Years Ended October 31,						2013 Over 2012		2012 Over 2011
	2013		2012		2011		Ppts Change		Ppts Change
% of total net revenue:
Products	84	%	86	%	87	%	(2	)ppts	(1	)ppt
Services and other	16	%	14	%	13	%	2	ppts	1	ppt
Total	100	%	100	%	100	%

Our orders declined 13 percent in 2013 compared to 2012. Orders were lower for all market segments, including aerospace and defense; industrial, computer and semiconductor test; and communications test, which decreased year-over-year primarily due to lower wireless manufacturing demand relating to the loss of business from a large customer with whom we could not agree on contractual terms. Foreign currency movements had an unfavorable impact of 2 percentage points on the year-over-year compare. On a geographic basis, orders declined 20 percent in the Americas, 12 percent in Japan, 7 percent in Asia Pacific excluding Japan, and 4 percent in Europe. The decline in orders in the Americas was driven by weak communications test and soft aerospace and defense demand. Japan orders were lower due to the unfavorable impact of currency movements, improving by 1 percent year-over-year in local currency. Electronic measurement orders declined 1 percent in 2012 compared to 2011 on slight declines in industrial, computer and semiconductor test and aerospace and defense business partially offset by slight improvement in communications test business.

Our revenue declined 13 percent in 2013 compared to 2012. Lower communications test and industrial, computer and semiconductor related revenue drove the decline compared to last year; aerospace and defense was flat year-over-year. Communications test decreased year-over-year primarily due to lower wireless manufacturing demand relating to the loss of business from a large customer with whom we could not agree on contractual terms. Revenue from the Americas decreased 19 percent on weakness across all market segments, particularly for wireless manufacturing. Japan revenue was 14 percent lower year-over-year but declined only 3 percent in local currency. Asia Pacific excluding Japan decreased 7 percent, and Europe declined 6 percent when compared to last year. The unfavorable impact of foreign currency movements contributed to 2 percentage points of the year-over-year decrease. Our revenue was flat in 2012 compared to 2011 on slightly higher industrial, computer and semiconductor business, flat communications test, and slightly lower aerospace and defense demand.

Communications test revenue, representing approximately 34 percent of total electronic measurement revenue, declined compared to 2012 primarily due to significantly lower wireless manufacturing demand driven by the loss of business from a large customer with whom we could not agree on contractual terms. Wireless R&D spending remained soft reflecting a cautious spending environment though long-term industry fundamentals remain intact, with continued interest in high data rate applications such as long-term evolution (LTE). In 2012, communications test represented approximately 37 percent of total electronic measurement revenue; strong wireless manufacturing test demand was offset by lower wireless R&D and broadband communications business.

Aerospace and defense test, representing approximately 23 percent of total electronic measurement revenue, was flat compared to 2012, with lower demand in the Americas offset by stronger spending in Europe. In 2012, aerospace and defense test, representing approximately 20 percent of total revenue, was down slightly from 2011, on softer demand across regions, particularly Asia.

Industrial, computer and semiconductor test revenue, representing approximately 43 percent of total business, declined compared to 2012. Uncertain global economic conditions contributed to lower industrial test business across all regions. Semiconductor test revenue declined on moderating investments in new process technology and weak manufacturing demand. The shift from personal computers to lower priced, more highly integrated tablets has resulted in a reduction in test equipment demand. In 2012, industrial,

computer and semiconductor test represented approximately 43 percent of the total business with slight growth in computer and semiconductor business and flat industrial demand compared to 2011.

Backlog

Backlog represents the amount of revenue expected from orders that have already been booked, including orders for goods and services that have not been delivered to customers, orders invoiced but not yet recognized as revenue, and orders for goods that were shipped but not invoiced, awaiting acceptance by customers.

On October 31, 2013, our backlog was approximately $761 million, as compared to approximately $804 million at October 31, 2012. We expect the majority of the backlog to be delivered to customers within six months. On average, our backlog represents approximately three months’ worth of revenues. We believe backlog on any particular date, while indicative of short-term revenue performance, is not necessarily a reliable indicator of medium or long-term revenue performance.

Costs and Expenses

	Years Ended October 31,									2013 Over 2012		2012 Over 2011
	2013			2012			2011			Change		Change
Gross margin on products	57.1		%	57.8		%	59.7		%	(1	)ppt	(2	)ppts
Gross margin on services and other	51.3		%	50.1		%	47.2		%	1	ppt	3	ppts
Total gross margin	56.2		%	56.7		%	58.0		%	(1	)ppt	(1	)ppt
Operating margin	17.2		%	22.1		%	22.2		%	(5	)ppts	—

(in millions)
Research and development	$	375		$	377		$	381		(1	)%	(1	)%
Selling, general and administrative	$	752		$	771		$	806		(2	)%	(4	)%

Gross margin declined 1 percentage point in 2013 compared to 2012 primarily due to the lower sales volume. A decline in variable and incentive pay and reduced infrastructure spending were offset by higher inventory charges, wage increases, acquisition and integration costs, and restructuring expenses. In 2012, gross margin declined 1 percentage point compared to 2011 on flat revenue primarily driven by the unfavorable impact of a higher proportion of lower gross margin wireless manufacturing business.

Gross inventory charges were $21 million in 2013, $14 million in 2012 and $17 million in 2011. Sales of previously written down inventory was $1 million in each of 2013, 2012 and 2011.

Research and development expenses for 2013 decreased by 1 percent when compared to 2012. Reductions in development spending, variable and incentive pay, and infrastructure related expenses, and the favorable impact of currency movements were offset by investments in acquisitions, wage increases, and restructuring expenses. Research and development expenses declined 1 percent in 2012 compared to 2011 on lower variable and incentive pay and infrastructure costs partially offset by incremental spending on acquisitions and wage increases.

Selling, general and administrative expenses decreased 2 percent in 2013 compared to 2012. Reductions in discretionary spending, lower variable and incentive pay, and the favorable impact of currency movements were partially offset by wage increases and restructuring expenses. Selling, general and administrative expenses decreased 4 percent in 2012 compared to 2011 on lower variable and incentive pay, infrastructure costs and commissions partially offset by wage increases.

Operating margin declined by 5 percentage points in 2013 compared to 2012 on lower revenue partially offset by reduced operating expenses. Operating margin was approximately the same in 2012 compared to 2011 on flat revenue with the net impact of lower gross margins mostly offset by reductions in operating expenses.

Income Taxes

	Years Ended October 31,
	2013		2012			2011
	(in millions)
Provision (benefit) for income taxes	$	44	$	(95	)	$	(38	)

For 2013, the effective tax rate was 9 percent. The 9 percent effective tax is lower than the U.S. statutory rate primarily due to the mix of earnings in non-U.S. jurisdictions taxed at lower statutory tax rates; in particular Singapore where we enjoy tax holidays.

For 2012, the effective tax rate reflects a favorable benefit of 13 percent. The 13 percent effective tax rate benefit reflects tax on earnings in jurisdictions that have low effective tax rates and includes a $227 million tax benefit due to the reversal of a valuation allowance for our U.S. federal deferred tax 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. In the fourth quarter of 2012, management concluded that the valuation allowance for our U.S. federal deferred tax assets is no longer needed primarily due to the emergence from cumulative losses in recent years, the return to sustainable U.S. operating profits and the expectation of sustainable profitability in future periods. As of October 31, 2012, the cumulative positive evidence outweighed the negative evidence regarding the likelihood that most of the deferred tax asset for our U.S. combined income tax group will be realized. Accordingly, we recognized a non-recurring tax benefit of $227 million in 2012 relating to the valuation allowance reversal. The effective tax rate also included a non-recurring tax expense of $80 million relating to an increase in the overall residual tax expected to be imposed upon the repatriation of unremitted foreign earnings previously considered permanently reinvested. During the fourth quarter of 2012, we assessed the forecasted cash needs and the overall financial position of our foreign subsidiaries and determined that a portion of previously permanently reinvested earnings would no longer be reinvested overseas.

For 2011, the effective tax rate reflects a benefit of 5 percent. The 5 percent effective tax rate reflected tax on earnings in jurisdictions that had low effective tax rates and included a $55 million net tax benefit due to the changes in the valuation allowance for U.S. federal and state deferred tax assets related to fiscal year 2011 earnings in the United States and included a $57 million tax benefit associated with the recognition of previously unrecognized tax benefits and the reversal of the related interest accruals due to the reassessment of certain uncertain tax positions, primarily as a result of a settlement with the IRS.

We enjoy tax holidays in several different jurisdictions, most significantly in Singapore. The tax holidays provide lower rates of taxation on certain classes of income and require various thresholds of investments and employment or specific types of income in those jurisdictions. The tax holidays are due for renewal between 2015 and 2023. As a result of the incentives, the impact of the tax holidays decreased income taxes by $68 million, $96 million, and $84 million in 2013, 2012, and 2011, respectively.

In accordance with the guidance on the accounting for uncertainty in income taxes, for all U.S. and other tax jurisdictions, we recognize potential liabilities for anticipated tax audit issues based on our

estimate of whether, and the extent to which, additional taxes and interest will be due. If our estimate of income tax liabilities proves to be less than the ultimate assessment, a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. We include interest and penalties related to unrecognized tax benefits within the provision for income taxes on the combined statements of operations.

In the United States, tax years remain open back to the year 2008 for federal income tax purposes and the year 2000 for significant states. On January 29, 2014 Agilent reached an agreement with the IRS for the tax years 2006 through 2007. Tax adjustments resulting from this agreement are reflected in the first quarter of 2014. Agilent’s U.S. federal income tax returns for 2008 through 2011 are currently under audit by the IRS. In other major jurisdictions where we conduct business, the tax years generally remain open back to the year 2003. With these jurisdictions and the United States, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

Segment Overview

Measurement Solutions Business

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

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

Net Revenue

	Years Ended October 31,						2013 Over		2012 Over
	2013		2012		2011		2012 Change		2011 Change
	(in millions)
Net revenue	$	2,493	$	2,942	$	2,943	(15	)%	—

Measurement solutions net revenue in 2013 declined 15 percent compared to 2012 primarily on lower communications test and industrial, computer and semiconductor test demand. Communications test net revenue declined year-over-year on significantly lower wireless manufacturing demand primarily relating to the loss of business from a large customer with whom we could not agree on contractual terms.

Measurement solutions net revenue was flat in 2012 compared to 2011 on flat communications test with slight improvement in industrial, computer and semiconductor test offset by lower aerospace and defense business.

Gross Margin and Operating Margin

The following table shows the measurement solutions business’s margins, expenses and income from operations for 2013 versus 2012 and 2012 versus 2011.

	Years Ended October 31,									2013 Over		2012 Over
	2013			2012			2011			2012 Change		2011 Change
Total gross margin	58.3		%	58.0		%	60.0		%	—		(2	)ppts
Operating margin	18.1		%	22.8		%	23.4		%	(5	)ppts	(1	)ppt

(in millions)
Research and development	$	356		$	367		$	371		(3	)%	(1	)%
Selling, general and administrative	$	646		$	672		$	705		(4	)%	(5	)%
Income from operations	$	451		$	669		$	690		(33	)%	(3	)%

Gross margin in 2013 remained flat when compared to 2012 primarily due to the lower sales volume, offset by the favorable impact of a lower proportion of the wireless manufacturing business. Gross margin decreased 2 percentage points in 2012 compared to 2011 driven by the unfavorable impact of a higher proportion of lower gross margin wireless manufacturing.

Research and development expenses decreased 3 percent in 2013 compared to 2012 primarily driven by reductions in variable and incentive pay, discretionary spending and infrastructure related expenses. Research and development expenses decreased 1 percent in 2012 compared to 2011 driven by lower variable pay and infrastructure costs. We remain committed to invest in research and development and have focused our development efforts on key strategic opportunities in order to align our business with available markets and position ourselves to capture market share.

Selling, general and administrative expenses decreased 4 percent in 2013 compared to 2012. Reductions in discretionary spending, lower variable and incentive pay, and favorable impact of currency movements were partially offset by wage increases. Selling, general and administrative expenses decreased 5 percent in 2012 compared to 2011 on lower variable and incentive pay, commissions, and infrastructure costs offset by wage increases.

Operating margin decreased by 5 percentage points in 2013 compared to 2012 on lower revenue partially offset by reduced operating expenses. Operating margin decreased 1 percentage point in 2012 compared to 2011 driven by lower gross margin partially offset by expense reductions.

Income from Operations

Income from operations in 2013 decreased by $218 million or 33 percent, on a revenue decrease of $449 million. Income from operations in 2012 decreased $21 million or 3 percent on a revenue decrease of $1 million.

Customer Support and Services Business

The customer support and services business provides repair and calibration services for our installed base measurement solutions customers and facilitates the resale of used equipment. Our customer support and services business enables our customers to maximize the value from their electronic measurement

equipment and strengthen customer loyalty. Providing these services assures a high level of instrument performance and availability while minimizing the cost of ownership and downtime.

Net Revenue

	Years Ended October 31,						2013 Over		2012 Over
	2013		2012		2011		2012 Change		2011 Change
	(in millions)
Net revenue	$	395	$	373	$	373	6	%	—

Customer support and services net revenue in 2013 increased 6 percent compared to 2012 on slightly higher repair and calibration services and stronger demand for remarketed equipment. Customer support and services net revenue was flat in 2012 compared to 2011 on improvement in repair and calibration services offset by lower remarketed equipment revenue.

Gross Margin and Operating Margin

The following table shows the customer support and services business’s margins, expenses and income from operations for 2013 versus 2012, and 2012 versus 2011.

	Years Ended October 31,									2013 Over		2012 Over
	2013			2012			2011			2012 Change		2011 Change
Total gross margin	48.1		%	48.2		%	46.1		%	—		2	ppts
Operating margin	23.5		%	22.0		%	18.8		%	2	ppts	3	ppts

(in millions)
Research and development	$	10		$	8		$	9		20	%	(7	)%
Selling, general and administrative	$	87		$	90		$	93		(3	)%	(4	)%
Income from operations	$	93		$	82		$	70		14	%	17	%

Gross margin in 2013 was flat compared to 2012 while gross margin increased by 2 percentage points in 2012 compared to 2011, driven by lower overall costs.

Research and development expenses for customer support and services represent the segment’s share of centralized investment. Research and development expenses increased 20 percent in 2013 compared to 2012 due to an increase in centralized research and development allocation. Research and development expenses declined in 2012 compared to 2011 on lower centralized spending.

Selling, general, and administrative expenses were 3 percent lower in 2013 compared to 2012. Reductions in discretionary spending, lower variable and incentive pay, and the favorable impact of currency movements were offset by wage increases. Selling, general, and administrative expenses decreased 4 percent in 2012 compared to 2011 on lower variable and incentive pay, infrastructure costs and commissions partially offset by wage increases.

Operating margin increased by 2 percentage points in 2013 compared to 2012; the increase was mainly due to favorable gross margin from higher revenue with slightly lower operating expenses. Operating margin increased 3 percentage points from 2012 compared to 2011 on increased gross margin and lower operating expenses.

Income from Operations

Income from operations in 2013 increased by $11 million or 14 percent on a revenue increase of $22 million, a 50 percent year-over-year operating margin incremental. Income from operations in 2012 increased by $12 million or 17 percent compared to 2011 on flat revenue. Operating margin incremental is measured by the increase in income from operations compared to the prior period divided by the increase in revenue compared to the prior period.

Results from Operations—Nine Months ended July 31, 2014 and 2013

Orders and Net Revenue

	Nine Months Ended July 31,				Year Over Year Change
	2014		2013		Nine Months
	(in millions)
Orders	$	2,203	$	2,124	4	%
Net revenue:
Products	$	1,833	$	1,845	(1	)%
Services and other	338		338		0	%
Total net revenue	$	2,171	$	2,183	(1	)%

Total orders for the nine months ended July 31, 2014 increased 4 percent compared to the same period last year, reflecting growth in industrial, computer and semiconductor and in aerospace and defense businesses. The communications test business had growth in wireless manufacturing offset by a modest decrease in wireless R&D. On a geographical basis, orders grew 1 percent in the Americas primarily impacted by recent increases in aerospace and defense orders. Asia Pacific excluding Japan increased 11 percent, with growth in all market segments and particular strength in computers and semiconductors and aerospace and defense. Europe orders grew 10 percent with growth in communications and aerospace and defense offset by declines in industrial, computers and semiconductors. Japan orders declined 16 percent year-over-year in the nine months ended July 31, 2014 with 8 percentage points from unfavorable currency impact; the market weakness was primarily in aerospace and defense. Foreign currency movements for the nine months ended July 31, 2014 had an unfavorable impact of 1 percentage point compared to the same period last year.

Net revenue of $2,171 million for the nine months ended July 31, 2014 decreased 1 percent when compared to the same period last year. Lower aerospace and defense revenue contributed to a 2 percentage point decline, partially offset by increased revenue from industrial, computer and semiconductor and communications test businesses. Asia Pacific excluding Japan increased 12 percent year-over-year for the nine months ended July 31, 2014, with growth in all market segments. Europe revenue increased 5 percent year-over-year, with strength in communications partially offset by declines in aerospace and defense. The Americas revenue declined 9 percent with declines in the aerospace and defense and the communications test businesses. Japan revenue declined 13 percent for the nine months ended July 31, 2014, with 9 percentage points from unfavorable currency movements with declines in the aerospace and defense and communications markets. In total, foreign currency movements for the nine

*What do shareholders need to do to participate in the distribution?*		Shareholders of Agilent as of the record date for the distribution will not be required to take any action to receive Keysight common stock in the distribution, but you are urged to read this entire information statement carefully. No shareholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration, exchange or surrender your existing Agilent common shares or take any other action to receive your shares of Keysight common stock. Please do not send in your Agilent stock certificates. The distribution will not affect the number of outstanding Agilent shares or any rights of Agilent shareholders, although it will affect the market value of each outstanding Agilent common share.

*How will shares of Keysight common stock be issued?*		You will receive shares of Keysight common stock through the same channels that you currently use to hold or trade Agilent common shares, whether through a brokerage account, 401(k) plan or other channel. Receipt of Keysight shares will be documented for you in the same manner that you typically receive shareholder updates, such as monthly broker statements and 401(k) statements.

		If you own Agilent common shares as of the close of business on the record date for the distribution, including shares owned in certificate form or through the Agilent dividend reinvestment plan, Agilent, with the assistance of Computershare Trust Company, N.A., the settlement and distribution agent, will electronically distribute shares of Keysight common stock to you or to your brokerage firm on your behalf in book-entry form. Computershare will mail you a book-entry account statement that reflects your shares of Keysight common stock, or your bank or brokerage firm will credit your account for the shares.

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		You should consult your tax advisor about the particular consequences of the distribution to you, including the application of the tax basis allocation rules and the application of state, local and foreign tax laws.

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	Sincerely,

	Ronald S. Nersesian President and Chief Executive Officer Keysight Technologies, Inc.

		After the distribution, Keysight shareholders who have any questions relating to Keysight’s business performance should contact Keysight at:

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