10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2018

OR

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

FOR THE TRANSITION PERIOD FROM              TO        

COMMISSION FILE NUMBER: 001-36334

KEYSIGHT TECHNOLOGIES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE	46-4254555
(State or other jurisdiction of	(IRS employer
incorporation or organization)	Identification no.)
1400 FOUNTAINGROVE PARKWAY
SANTA ROSA, CALIFORNIA	95403
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 829-4444

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the exchange act.

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(do not check if a smaller reporting company)	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a)of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

The number of shares of common stock outstanding at March 6, 2018 was 187,542,645. 

KEYSIGHT TECHNOLOGIES, INC.

TABLE OF CONTENTS

			Page Number
Part I.	Financial Information		3
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
		Condensed Consolidated Statement of Operations	3
		Condensed Consolidated Statement of Comprehensive Income	4
		Condensed Consolidated Balance Sheet	5
		Condensed Consolidated Statement of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
	Item 4.	Controls and Procedures	36
Part II.	Other Information		36
	Item 1.	Legal Proceedings	36
	Item 1A.	Risk Factors	36
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
	Item 6.	Exhibits	49
Signature			50

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PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

	Three Months Ended
	January 31,
	2018			2017
Net revenue:
Products	$	684		$	606
Services and other	153			120
Total net revenue	837			726
Costs and expenses:
Cost of products	337			255
Cost of services and other	73			67
Total costs	410			322
Research and development	146			108
Selling, general and administrative	289			213
Other operating expense (income), net	(3		)	(79		)
Total costs and expenses	842			564
Income (loss) from operations	(5		)	162
Interest income	3			1
Interest expense	(22		)	(12		)
Other income (expense), net	1			1
Income (loss) before taxes	(23		)	152
Provision (benefit) for income taxes	(117		)	43
Net income	$	94		$	109
Net income per share:
Basic	$	0.50		$	0.64
Diluted	$	0.50		$	0.63
Weighted average shares used in computing net income per share:
Basic	187			171
Diluted	189			173

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

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KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2018			2017
Net income	$	94		$	109
Other comprehensive income (loss):
Unrealized gain (loss) on investments, net of tax benefit (expense) of zero and ($1)	(2		)	4
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of zero and $1	2			2
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of zero	(2		)	1
Foreign currency translation, net of tax benefit (expense) of zero	41			(24		)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $3 and $13	10			28
Change in net prior service credit, net of tax benefit of $1 and $2	(4		)	(4		)
Other comprehensive income	45			7
Total comprehensive income	$	139		$	116

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

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KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

	January 31, 2018			October 31, 2017
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	980		$	818
Accounts receivable, net	454			547
Inventory	609			588
Other current assets	232			224
Total current assets	2,275			2,177
Property, plant and equipment, net	539			530
Goodwill	1,894			1,882
Other intangible assets, net	807			855
Long-term investments	61			63
Long-term deferred tax assets	204			186
Other assets	270			240
Total assets	$	6,050		$	5,933
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	20		$	10
Accounts payable	229			211
Employee compensation and benefits	170			217
Deferred revenue	354			291
Income and other taxes payable	35			28
Other accrued liabilities	78			62
Total current liabilities	886			819
Long-term debt	2,028			2,038
Retirement and post-retirement benefits	315			309
Long-term deferred revenue	105			101
Other long-term liabilities	232			356
Total liabilities	3,566			3,623
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	—			—
Common stock; $0.01 par value; 1 billion shares authorized; 190 million shares at January 31, 2018 and 188 million shares at October 31, 2017 issued	2			2
Treasury stock at cost; 2.3 million shares at January 31, 2018 and at October 31, 2017	(62		)	(62		)
Additional paid-in-capital	1,815			1,786
Retained earnings	1,141			1,041
Accumulated other comprehensive loss	(412		)	(457		)
Total stockholders' equity	2,484			2,310
Total liabilities and equity	$	6,050		$	5,933

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

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KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2018			2017
Cash flows from operating activities:
Net income	$	94		$	109
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	78			32
Share-based compensation	19			18
Deferred tax expense (benefit)	(235		)	40
Excess and obsolete inventory-related charges	6			3
Gain on sale of land	—			(8		)
Pension curtailment and settlement gains	—			(68		)
Other non-cash expenses, net	2			—
Changes in assets and liabilities:
Accounts receivable	99			40
Inventory	(20		)	(10		)
Accounts payable	14			(12		)
Employee compensation and benefits	(50		)	(36		)
Retirement and post-retirement benefits	(12		)	(3		)
Deferred revenue	61			15
Income taxes payable	115			(15		)
Other assets and liabilities	—			10
Net cash provided by operating activities	171			115
Cash flows from investing activities:
Investments in property, plant and equipment	(24		)	(16		)
Proceeds from sale of land	—			8
Acquisition of businesses and intangible assets, net of cash acquired	(3		)	—
Net cash used in investing activities	(27		)	(8		)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	24			19
Payment of taxes related to net share settlement of equity awards	(15		)	(11		)
Proceeds from revolving credit facility	40			—
Repayment of revolving credit facility	(40		)	—
Net cash provided by financing activities	9			8
Effect of exchange rate movements	9			(2		)
Net increase in cash and cash equivalents	162			113
Cash and cash equivalents at beginning of period	818			783
Cash and cash equivalents at end of period	$	980		$	896

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

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KEYSIGHT TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Keysight Technologies, Inc. ("we", "us", "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries. Following the acquisition of Ixia on April 18, 2017, the company also provides testing, visibility, and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers, and network equipment manufacturers.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2018 and October 31, 2017, condensed consolidated statement of comprehensive income for the three months ended January 31, 2018 and 2017, condensed consolidated statement of operations for the three months ended January 31, 2018 and 2017, and condensed consolidated statement of cash flows for the three months ended January 31, 2018 and 2017.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring, and accounting for income taxes.

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

Restricted Cash. As of January 31, 2018, restricted cash of approximately $2 million consisted of deposits held as collateral against bank guarantees and is classified within other assets in the condensed consolidated balance sheet. As of October 31, 2017, restricted cash of approximately $2 million consisted of deposits held as collateral against bank guarantees and is classified within other assets in the condensed consolidated balance sheet.

Update to Significant Accounting Policies. There have been no material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017.

2. NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance which will replace numerous requirements in GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to show the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016. During 2016, the FASB issued several amendments to the standard, including clarification to the guidance on reporting revenues as a principal versus an agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability, presentation of sales taxes, impairment testing for contract costs and disclosure of performance obligations.

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The two permitted transition methods under the new standard are (1) the full retrospective method, in which case the standard would be applied to each prior reporting period presented, and the cumulative effect of applying the standard would be recognized at the earliest period shown, or (2) the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. We currently anticipate adopting the standard on November 1, 2018 under the modified retrospective transition method. Based on the progress to date, we have not identified any material impacts of the new standard on the amount and timing of revenue recognition to our consolidated statement of operations; however, we have not completed our assessment, including the impact of our recent acquisitions of Ixia and ScienLab. We expect recognition of revenue for a majority of customer contracts to remain substantially unchanged. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for software license revenue, as under the new standard we expect to recognize software license revenue at the time of billing rather than over the contractual term since control of the software license is transferred, and our performance obligation is satisfied at that point in time. The new standard will also require the deferral of commissions that were previously expensed as incurred and may qualify for capitalization under the new standard.

In February 2016, the FASB issued guidance that will require organizations that lease assets to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting, that amends the accounting for stock-based compensation and requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits and deficiencies to be presented as operating activity in the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this guidance during the first quarter of 2018 and elected to recognize forfeitures as they occur. As a result, a $6 million cumulative-effect adjustment was recorded directly to retained earnings as of November 1, 2017, the beginning of the annual period of adoption, with a corresponding reduction to deferred tax liabilities. Additionally, we reported an income tax benefit of $1 million for the first quarter of 2018 due to recognition of excess tax benefits from share-based compensation.

We elected to apply the presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares retrospectively to all periods presented, which resulted in the following change to our previously reported condensed consolidated statement of cash flows for the three months ended January 31, 2017:

	Three Months Ended January 31, 2017
	As Originally Reported		As Adjusted		Change
	(in millions)
Net cash provided by operating activities	$	102	$	115	$	13
Net cash provided by financing activities	$	21	$	8	$	(13	)

In March 2017, the FASB issued guidance that requires the service cost component of net periodic pension cost and net periodic post-retirement benefit cost to be included in operating expenses (together with other employee compensation costs) and the other components of the cost to be included in non-operating expenses. The standard is effective for annual and interim periods beginning after December 31, 2017. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The standard is effective for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

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In August 2017, the FASB issued guidance to enable entities to better portray the economics of their risk management activities in the financial statements and enhance transparency and understandability of hedge results. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In February 2018, the FASB issued guidance that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted in December 2017. The standard is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

Other amendments to GAAP that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

3. ACQUISITIONS

Acquisitions in 2017

Acquisition of Ixia

On April 18, 2017, pursuant to the terms of an Agreement and Plan of Merger dated January 30, 2017, between Keysight and Ixia (the "Merger Agreement"), we acquired all of the outstanding common stock of Ixia for $1,622 million, net of $72 million of cash acquired, pursuant to an exchange offer for $19.65 per share (the "Merger Consideration"). Pursuant to the Merger Agreement, any outstanding and unexercised Ixia stock options with an exercise price below the Merger Consideration and any outstanding Ixia restricted stock awards were cancelled and converted into the right to receive a cash payment equal to the merger consideration of $19.65 per share (minus the exercise price for the Ixia stock options). The vested portion of the awards associated with prior service of Ixia employees represented approximately $47 million of the total consideration. We funded the acquisition with a combination of cash and proceeds from debt and equity financings. As a result of the acquisition, Ixia has become a wholly-owned subsidiary of Keysight. Accordingly, the results of Ixia are included in Keysight's consolidated financial statements from the date of the acquisition and are reported in the Ixia Solutions Group operating segment.

The Ixia acquisition was accounted for in accordance with the authoritative accounting guidance. The acquired assets and assumed liabilities were recorded by Keysight at their estimated fair values. Keysight determined the estimated fair values with the assistance of appraisals or valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management. We expect to leverage and expand the existing sales channels and product development resources, and utilize the assembled workforce. The company also anticipates opportunities for growth through expanded geographic and customer segment diversity and the ability to leverage additional products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Ixia's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

All goodwill was assigned to the Ixia Solutions Group. We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

A portion of the overall purchase price was allocated to acquired intangible assets. Amortization expense associated with acquired intangible assets is not deductible for tax purposes. Therefore, a deferred tax liability of approximately $186 million was established primarily for the future amortization of these intangibles and is included in "other long-term liabilities" in the table below.

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The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of April 18, 2017 (in millions):

Cash and cash equivalents	$	72
Short-term investments	44
Accounts receivable	91
Inventory	107
Other current assets	34
Property, plant and equipment	50
Goodwill	1,117
Other intangible assets	744
Other assets	4
Total assets acquired	2,263
Accounts payable	(10		)
Employee compensation and benefits	(32		)
Deferred revenue	(35		)
Income and other taxes payable	(1		)
Other accrued liabilities	(32		)
Other long-term liabilities	(459		)
Net assets acquired	$	1,694

The fair values of cash and cash equivalents, short-term investments, accounts receivable, short-term investments, other current assets, accounts payable, employee compensation and benefits, and other accrued liabilities were generally determined using historical carrying values given the short-term nature of these assets and liabilities. The fair values for acquired inventory, property, plant and equipment, intangible assets, and deferred revenue were determined with the input from third-party valuation specialists. The fair values of certain other assets and certain other liabilities were determined internally using historical carrying values and estimates made by management. If additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of other intangible assets acquired in connection with the Ixia acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	423	4 years
Customer relationships	234		7 years
Tradenames and trademarks	12		3 years
Backlog	8		90 days
Total intangible assets subject to amortization	677
In-process research and development	67
Total intangible assets	$	744

As noted above, the intangible assets were valued with input from valuation specialists using the income approach, which includes the discounted cash flow, cost-savings, and relief from royalty methods. The in-process research and development was valued using the multi-period excess earnings method under the income approach by discounting forecasted cash flows directly related to the products expecting to result from the projects, net of returns on contributory assets. A discount rate of 14% was used to value the research and development projects, adjusted to reflect additional risks inherent in the acquired projects. The primary in-process projects acquired relate to next generation products which will be released in the near future. Total costs to complete for all Ixia in-process research and development were estimated at approximately $12 million as of the close date.

10

Acquisition and integration costs directly related to the Ixia acquisition were recorded in the condensed consolidated statement of operations as follows:

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	2	$	—
Research and development	1		—
Selling, general and administrative	15		2
Total acquisition and integration costs	$	18	$	2

Such costs are expensed in accordance with the authoritative accounting guidance.

Acquisition of ScienLab

On August 31, 2017, we acquired all of the outstanding common stock of ScienLab for $60 million, net of $2 million of cash acquired. ScienLab is a Germany-based company that provides test solutions to automotive original equipment manufacturers and Tier 1 suppliers in the automotive and energy markets. This acquisition complements our portfolio, allowing end-to-end solutions for hybrid electric vehicles, electric vehicles, and battery test solutions that address e-mobility market dynamics. We funded the acquisition using existing cash. As a result of the acquisition, ScienLab has become a wholly-owned subsidiary of Keysight. Accordingly, the results of ScienLab are included in Keysight's consolidated financial statements from the date of the acquisition and are reported in the Electronic Industrial Solutions Group operating segment.

The ScienLab acquisition was accounted for in accordance with the authoritative accounting guidance. The acquired assets and assumed liabilities were recorded by Keysight at their estimated fair values. Keysight determined the estimated fair values with the assistance of appraisals or valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management. We expect to leverage and expand the existing sales channels and product development resources, and utilize the assembled workforce. The company also anticipates opportunities for growth through expanded geographic and customer segment diversity and the ability to leverage additional products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of ScienLab's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

All goodwill was assigned to the Electronic Industrial Solutions Group. We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

A portion of the overall purchase price was allocated to acquired intangible assets. Amortization expense associated with acquired intangible assets is not deductible for tax purposes. Therefore, a deferred tax liability of approximately $13 million was established primarily for the future amortization of these intangibles and is included in "other long-term liabilities" in the table below.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of August 31, 2017 (in millions):

Cash and cash equivalents	$	2
Accounts receivable	3
Inventory	16
Other current assets	1
Goodwill	23
Other intangible assets	40
Total assets acquired	85
Accounts payable	(1		)
Deferred revenue	(3		)
Income and other taxes payable	(2		)
Current portion of long-term debt	(1		)
Other long-term liabilities	(16		)
Net assets acquired	$	62

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The fair values of cash and cash equivalents, accounts receivable, other current assets, accounts payable, deferred revenue, and current portion of long-term debt were generally determined using historical carrying values given the short-term nature of these assets and liabilities. The fair values for acquired inventory and intangible assets were determined with the input from third-party valuation specialists. The fair values of certain other liabilities were determined internally using historical carrying values and estimates made by management. As additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of intangible assets acquired in connection with the ScienLab acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	33	6 years
Customer relationships	4		5 years
Non-compete agreements	1		3 years
Tradenames and trademarks	1		3 years
Backlog	1		6 months
Total intangible assets	$	40

As noted above, the intangible assets were valued with input from valuation specialists using the income approach, which includes the discounted cash flow, cost-savings, and relief from royalty methods.

Acquisition and integration costs directly related to the ScienLab acquisition totaled $1 million for the three months ended January 31, 2018 which were recorded in selling, general and administrative expenses.

Supplemental Pro Forma Information (Unaudited)

The following represents pro forma operating results as if Ixia had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2017. Pro forma results of operations for ScienLab have not been presented because the effects of the acquisition were not material to the company’s financial results.

	Three Months Ended
in millions, except per share amounts	January 31, 2017
Net revenue	$	846
Net income	$	39
Net income per share - Basic	$	0.21
Net income per share - Diluted	$	0.21

The unaudited pro forma financial information for the three months ended January 31, 2017 combines the historical results of Keysight and Ixia for the three months ended January 31, 2017, assuming that the companies were combined as of November 1, 2016 and include business combination accounting effects from the acquisition including amortization and depreciation charges from acquired intangible assets, property plant and equipment, interest expense on the financing transactions used to fund the acquisition and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2017.

4.     SHARE-BASED COMPENSATION

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

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		4
Selling, general and administrative	12		11
Total share-based compensation expense	$	19	$	18

 At both January 31, 2018 and 2017, share-based compensation capitalized within inventory was $1 million.

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

	Three Months Ended
	January 31,
	2018		2017
LTP Program:
Volatility of Keysight shares	25	%	27	%
Volatility of selected index	14	%	15	%
Price-wise correlation with selected peers	57	%	57	%

Awards granted under the LTP Program are based on a variety of targets, such as total shareholder return (TSR) or financial metrics such as operating margin, cost synergies and others. The awards based on TSR were valued using a Monte Carlo simulation model and those based on financial metrics were valued based on the market price of Keysight’s common stock on the date of grant. We did not grant any option awards for the three months ended January 31, 2018 and 2017, respectively. Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.

5.     INCOME TAXES

The company’s effective tax rate was a benefit of 515.8 percent for the three months ended January 31, 2018 and expense of 28.3 percent for the three months ended January 31, 2017. The income tax benefit was $117 million for the three months ended January 31, 2018, and income tax expense was $43 million for the three months ended January 31, 2017. The increase in the total income tax benefit and discrete benefit for the three months ended January 31, 2018 is primarily due to changes in U.S. tax law. The income tax benefit for the three months ended January 31, 2018 included a net discrete benefit of $115 million, primarily due to $117 million of benefit resulting from changes in U.S. tax law. The income tax provision for the three months ended January 31, 2017 included a net discrete expense of $23 million, primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund (see Note 12).

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014 through the current tax year. For certain acquired U.S. entities, the tax years generally remain open back to year 2009. For foreign entities, the tax years remain open, at most, back to the year 2007. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

The company is being audited in Malaysia for the 2008 tax year. Although this tax year pre-dates our spin-off from Agilent, pursuant to the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, for certain entities including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal 2017, Keysight paid income taxes and penalties of $68 million on gains related to intellectual property rights, although we are currently in the process of appealing to the Special Commissioners of Income Tax (“SCIT”) in Malaysia. The company believes there are numerous defenses to the current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed and the income in question

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is exempt from tax in Malaysia. The company is disputing this assessment and pursuing all avenues to resolve this issue favorably for the company.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”).  The Tax Act includes significant changes to the U.S. corporate income tax system, including but not limited to: a federal corporate income tax rate reduction from 35 percent to 21 percent; limitations on the deductibility of interest expense and executive compensation; creation of new minimum taxes such as the base erosion anti-abuse tax (“BEAT”) and Global Intangible Low Taxed Income (“GILTI”) tax; and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which will result in a one time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the “Transition Tax”).

The corporate tax rate reduction is effective as of January 1, 2018. Since the company has a fiscal year rather than a calendar year, it is subject to rules relating to transitional tax rates. As a result, the company’s fiscal year 2018 federal statutory rate will be a blended rate of 23.3 percent.

Due to the complexities involved in accounting for the enactment of the Tax Act, the SEC staff has issued Staff Accounting Bulletin 118 (“SAB 118”) directing companies to consider the impact of the Tax Act as “provisional” when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for the change in tax law. For the amounts which the company was able to reasonably estimate, the company has recognized a provisional discrete income tax benefit of approximately $117 million. This is made up of a one-time reduction in net deferred tax liabilities and corresponding income tax benefit of approximately $304 million due to the re-measurement of U.S. income taxes recorded on the undistributed earnings of foreign subsidiaries that were not considered permanently reinvested. This was offset by approximately $176 million of income tax expense and corresponding long-term income tax payable due to the one-time toll charge. The company also estimated a one-time reduction in net deferred tax assets and corresponding income tax expense of approximately $11 million due to the re-measurement of the U.S. deferred tax assets at the lower 21 percent U.S. federal corporate income tax rate. We have not completed our accounting for the income tax effects of certain elements of the Tax Act, including the new GILTI tax. Due to the complexity of these new tax rules, we are continuing to evaluate these provisions of the Tax Act and whether such taxes are recorded as a current-period expense when incurred or whether such amounts should be factored into a company’s measurement of its deferred taxes. As a result, we have not included an estimate of the tax expense/benefit related to these items for the period ended January 31, 2018.

We are continuing to evaluate the Tax Act and its requirements, as well as its application to our business and its impact on our effective tax rate. In accordance with SAB 118, the estimated discrete income tax benefit of $117 million represents our best estimate based on interpretation of the Tax Act. We are able to make reasonable estimates of the impact of the deemed repatriation transition tax, remeasurement of the deferred tax liability recorded on the undistributed earnings of foreign subsidiaries that were not considered reinvested and reduction in the U.S. corporate income tax rate. The final impact of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the U.S. Treasury, additional analysis of foreign earnings inherited from acquisitions, and changes to U.S. state conformance to the U.S. federal tax law change. In accordance with SAB 118, the estimated discrete income tax benefit of $117 million is considered provisional and any subsequent adjustment to these amounts will be recorded to tax expense in the quarter in which the analysis is complete, but no later than December 22, 2018.

6. NET INCOME PER SHARE

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Numerator:
Net income	$	94	$	109
Denominator:
Basic weighted-average shares	187		171
Potential common shares— stock options and other employee stock plans	2		2
Diluted weighted-average shares	189		173

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The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method. We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because the effect would be anti-dilutive. For the three months ended January 31, 2018 and 2017, we excluded no options from the calculation of diluted earnings per share. In addition, we exclude stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price and unamortized fair value collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three months ended January 31, 2018 and 2017, we excluded approximately 668,100 shares and 424,400 shares, respectively.

7. SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for income taxes was $1 million and $17 million for the three months ended January 31, 2018 and 2017, respectively. Cash paid for interest was $2 million and zero for the three months ended January 31, 2018 and 2017, respectively. The following table summarizes our non-cash investing activities that are not reflected in the condensed consolidated statement of cash flows:

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Capital expenditures in accounts payable	$	(3	)	$	(5	)
	$	(3	)	$	(5	)

8. INVENTORY

	January 31, 2018		October 31, 2017
	(in millions)
Finished goods	$	296	$	286
Purchased parts and fabricated assemblies	313		302
Total inventory	$	609	$	588

9. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill balances and the movements for each of our reportable operating segments as of and for the three months ended January 31, 2018 were as follows:

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2017	$	441	$	240	$	1,117	$	84	$	1,882
Foreign currency translation impact	8		3		—		1		12
Goodwill as of January 31, 2018	$	449	$	243	$	1,117	$	85	$	1,894

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Other intangible assets as of January 31, 2018 and October 31, 2017 consisted of the following:

	Other Intangible Assets as of January 31, 2018						Other Intangible Assets as of October 31, 2017
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	821	$	291	$	530	$	808	$	252	$	556
Backlog	13		13		—		13		12		1
Trademark/Tradename	33		10		23		33		8		25
Customer relationships	304		70		234		304		61		243
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,172		384		788		1,159		333		826
In-Process R&D	19		—		19		29		—		29
Total	$	1,191	$	384	$	807	$	1,188	$	333	$	855

 During the three months ended January 31, 2018, we recognized no additions to goodwill and other intangible assets.During the three months ended January 31, 2018, there was a $3 million foreign exchange translation impact to other intangible assets. During the three months ended January 31, 2018, we transferred $10 million from in-process R&D to developed technology as projects were successfully completed.

Amortization of other intangible assets was $51 million and $11 million for the three months ended January 31, 2018 and 2017, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $152 million for the remainder of 2018, $202 million for 2019, $194 million for 2020, $127 million for 2021, $50 million for 2022 and $63 million thereafter.

10. FAIR VALUE MEASUREMENTS

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

Fair Value Hierarchy

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

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

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

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

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

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2018 and October 31, 2017 were as follows:

	Fair Value Measurements at January 31, 2018								Fair Value Measurements at October 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	451	$	451	$	—	$	—	$	403	$	403	$	—	$	—
Derivative instruments (foreign exchange contracts)	9		—		9		—		6		—		6		—
Long-term
Trading securities	13		13		—		—		13		13		—		—
Available-for-sale investments	31		31		—		—		34		34		—		—
Total assets measured at fair value	$	504	$	495	$	9	$	—	$	456	$	450	$	6	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	4	$	—	$	4	$	—	$	1	$	—	$	1	$	—
Long-term
Deferred compensation liability	13		—		13		—		13		—		13		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	14	$	—	$	14	$	—

Our money market funds, trading securities, and available-for-sale investments are generally valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. Our deferred compensation liability is classified as Level 2 because the inputs used in the calculations are observable, although the values are not directly based on quoted market prices. Our derivative financial instruments are classified within Level 2 as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets.

Trading securities (which are earmarked to pay the deferred compensation liability) and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in earnings. Investments designated as available-for-sale and certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss). Realized gains and losses from the sale of these instruments are recorded in earnings.

11. DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options, to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. Ineffectiveness in the three months ended January 31, 2018 and 2017 was not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments.

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

17

risk that include establishing counterparty credit limits, monitoring credit exposures, and continually assessing the creditworthiness of counterparties.

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

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2018 was $2 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2018.

There were 121 foreign exchange forward contracts open as of January 31, 2018 that were designated as cash flow hedges. There were 63 foreign exchange forward contracts as of January 31, 2018 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2018 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	45
British Pound	—			(6		)
Singapore Dollar	11			1
Malaysian Ringgit	77			(5		)
Japanese Yen	(96		)	(34		)
Other currencies	(15		)	(10		)
Total	$	(23	)	$	(9	)

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2018 and October 31, 2017 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2018		October 31, 2017		Balance Sheet Location	January 31, 2018		October 31, 2017
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	7	$	5	Other accrued liabilities	$	2	$	—
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	2		1
Total derivatives	$	9	$	6		$	4	$	1

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2	$	3
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	2	$	(1	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	1	$	2

The estimated amount of existing net gain at January 31, 2018 expected to be reclassified from accumulated other comprehensive income to cost of sales within the next twelve months is $4 million.

12. RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2018 and 2017, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2018			2017			2018			2017			2018			2017
	(in millions)
Service cost—benefits earned during the period	$	6		$	5		$	3		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			6			6			2			2
Expected return on plan assets	(9		)	(8		)	(21		)	(19		)	(4		)	(3		)
Amortization:
Net actuarial loss	3			4			6			9			4			5
Prior service credit	(2		)	(2		)	—			—			(3		)	(4		)
Settlement gain	—			—			—			(68		)	—			—
Net periodic benefit cost (benefit)	$	4		$	4		$	(6	)	$	(68	)	$	(1	)	$	—

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2018 and 2017. We contributed $9 million and $7 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2018 and 2017, respectively.

During the remainder of 2018, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $29 million to our Non-U.S. Defined Benefit Plans.

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

13. WARRANTY, COMMITMENTS AND CONTINGENCIES

Standard Warranty

Effective December 1, 2017, the Keysight warranty on products sold through direct sales channel is primarily one year. Warranties for products sold through distribution channels continue to be primarily three years. We accrue for standard warranty costs based on historical trends in warranty charges. The accrual is reviewed regularly and periodically adjusted to reflect changes

19

in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Beginning balance	$	45		$	44
Accruals for warranties including change in estimate	10			7
Settlements made during the period	(8		)	(8		)
Ending balance	$	47		$	43
Accruals for warranties due within one year	$	26		$	22
Accruals for warranties due after one year	21			21
Ending balance	$	47		$	43

Commitments

There were no material changes during the three months ended January 31, 2018 to the operating and capital lease commitments reported in the company’s 2017 Annual Report on Form 10-K.

Contingencies

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

14. DEBT

Short-Term Debt

Revolving Credit Facility

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that replaced our existing $450 million unsecured credit facility dated September 15, 2014. The Revolving Credit Facility provides for a $450 million, five-year unsecured revolving credit facility that will expire on February 15, 2022 and bears interest at an annual rate of LIBOR + 1.30%. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. We may use amounts borrowed under the facility for general corporate purposes. During the three months ended January 31, 2018, we borrowed and repaid $40 million of borrowings outstanding under the Revolving Credit Facility. As of January 31, 2018, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2018.

Long-Term Debt

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

	January 31, 2018		October 31, 2017
	(in millions)
2019 Senior Notes at 3.30% ($500 face amount less unamortized costs of $2 and $2)	$	498	$	498
2024 Senior Notes at 4.55% ($600 face amount less unamortized costs of $4 and $4)	596		596
2027 Senior Notes at 4.60% ($700 face amount less unamortized costs of $6 and $6)	694		694
Term loan ($260 face amount less unamortized costs of zero)	260		260
	2,048		2,048
Less: Current portion of long-term debt	20		10
Total	$	2,028	$	2,038

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There have been no changes to the principal, maturity, interest rates and interest payment terms of the senior notes during the three months ended January 31, 2018 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017.

Senior Unsecured Term Loan

On February 15, 2017, we entered into a term credit agreement that provides for a three-year $400 million senior unsecured term loan that bears interest at an annual rate of LIBOR + 1.50%. The term loan was drawn upon the closing of the Ixia acquisition. As of January 31, 2018, we had borrowings outstanding under the term loan of $260 million, which was repaid in February 2018.

As of January 31, 2018 and October 31, 2017, we had $27 million and $26 million, respectively, of outstanding letters of credit unrelated to the credit facility that were issued by various lenders.

The fair value of our long-term debt, calculated from quoted prices that are primarily Level 1 inputs under the accounting guidance fair value hierarchy, was above the carrying value by approximately $58 million and $91 million as of January 31, 2018 and October 31, 2017, respectively.

15. STOCKHOLDERS' EQUITY

Stock Repurchase Program

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

For the three months ended January 31, 2018, we did not repurchase any shares of common stock under the stock repurchase program.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2018 and 2017 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2017	$	14		$	(39	)	$	(468	)	$	35		$	1		$	(457	)
Other comprehensive income (loss) before reclassifications	(2		)	41			—			—			2			41
Amounts reclassified out of accumulated other comprehensive loss	—			—			13			(5		)	(2		)	6
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	(2		)	41			10			(4		)	—			45
As of January 31, 2018	$	12		$	2		$	(458	)	$	31		$	1		$	(412	)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)

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Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2018 and 2017 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Unrealized gain (loss) on derivatives	$	2		$	(1	)	Cost of products
	—			—			Provision for income taxes
	2			(1		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(13		)	(17		)
Prior service credits	5			6
	(8		)	(11		)	Total before income tax
	2			3			Provision for income taxes
	(6		)	(8		)	Net of income tax
Total reclassifications for the period	$	(4	)	$	(9	)

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

Reclassifications of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost (see Note 12, "Retirement Plans and Post-Retirement Pension Plans").

16. SEGMENT INFORMATION

We provide electronic design and test instruments and systems and related software, software design tools, and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. Related services include start-up assistance, instrument productivity and application services and instrument calibration and repair. Additionally, we provide test, security and visibility solutions that validate, secure and optimize networks and applications from engineering concept to live deployment. We also offer customization, consulting and optimization services throughout the customer's product life cycle.

On April 18, 2017, we completed the acquisition of Ixia, which became our fourth reportable operating segment, the Ixia Solutions Group (“ISG”). As a result, Keysight now has four segments, Communications Solutions Group, Electronic Industrial Solutions Group, Ixia Solutions Group and Services Solutions Group.

Our operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

Descriptions of our four reportable operating segments are as follows:

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

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

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The Ixia Solutions Group helps customers validate the performance and security resilience of their networks and associated applications. The test, visibility and security solutions help organizations and their customers strengthen their physical and virtual networks. Enterprises, service providers, network equipment manufacturers, and governments worldwide rely on the group's solutions to validate new products before shipping and secure ongoing operation of their networks with better visibility and security. The group’s solutions consist of high-performance hardware platforms, software applications, and services, including warranty and maintenance offerings.

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

A significant portion of the segments' expenses, other than the Ixia Solutions Group expenses, arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include costs of centralized research and development, legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. The Ixia Solutions Group will not be allocated these charges until integrated into the shared services and infrastructure.

The following tables reflect the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformity with GAAP. The performance of each segment is measured based on several metrics, including income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding share-based compensation expense, restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, separation and related costs, amortization related to acquisition-related balances and other items as noted in the reconciliations below.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2018:
Total net revenue	$	420	$	203	$	108	$	106	$	837
Amortization of acquisition-related balances	—		—		19		—		19
Total segment revenue	$	420	$	203	$	127	$	106	$	856
Segment income from operations	$	59	$	37	$	18	$	17	$	131
Three Months Ended January 31, 2017:
Total net revenue	$	434	$	192	$	—	$	100	$	726
Amortization of acquisition-related balances	—		—		—		—		—
Total segment revenue	$	434	$	192	$	—	$	100	$	726
Segment income from operations	$	72	$	42	$	—	$	14	$	128

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Total reportable operating segments' income from operations	$	131		$	128
Share-based compensation expense	(19		)	(18		)
Restructuring and related costs	(2		)	(2		)
Amortization of acquisition-related balances	(89		)	(10		)
Acquisition and integration costs	(19		)	(6		)
Separation and related costs	(1		)	(6		)
Japan pension settlement gain	—			68
Northern California wildfire-related costs	(7		)	—
Other	1			8
Income (loss) from operations, as reported	(5		)	162
Interest income	3			1
Interest expense	(22		)	(12		)
Other income (expense), net	1			1
Income (loss) before taxes, as reported	$	(23	)	$	152

There has been no material change in total assets by segment since October 31, 2017.

17. IMPACT OF NORTHERN CALIFORNIA WILDFIRES

During the week of October 8, 2017, wildfires in northern California adversely impacted the Keysight corporate headquarters site in Santa Rosa, CA. Our headquarters was under mandatory evacuation for more than three weeks, and while direct damage to our core facilities was limited, our buildings did experience some smoke and other fire-related impacts. Cleaning and additional restoration efforts are ongoing in both production and non-production areas of the site. To ensure business continuity, the company leased temporary office space to support Santa Rosa employees who could not immediately reoccupy the site. Keysight is insured for the damage caused by the fire, including business interruption insurance, and though we do not expect the fire to have a significant impact on our business results, the disruption will impact the seasonality of revenue in the first half of fiscal 2018.

For the three months ended January 31, 2018, we recognized costs of $7 million, net of $31 million of estimated insurance recovery. Expenses included primarily cleaning, unabsorbed overhead, and other direct costs related to the impact of this event.

A summary of the net charges in the consolidated statement of operations resulting from the impact of the fire is shown below:

	Three months ended January 31, 2018
	(in millions)
Cost of products and services	$	5
Research and development	1
Selling, general and administrative	1
Total	$	7

As of January 31, 2018, we have received insurance proceeds of $10 million. We have increased our insurance receivable from $1.7 million at October 31, 2017 to $23 million at January 31, 2018 for known losses for which insurance reimbursement is probable. The receivable is included in other current assets in the condensed consolidated balance sheet. In many cases, our insurance coverage exceeds the amount of these covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes. We currently estimate that insurance recovery will range from $80 million to $110 million, which we believe will cover our expected losses and expenses related to the wildfires. There may be a difference in timing of costs incurred and the related insurance reimbursement.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)

 The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements including, without limitation, statements regarding trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, our future effective tax rate and tax valuation allowance, earnings from our foreign subsidiaries, remediation activities, new product and service introductions, the ability of our products to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of local government regulations on our ability to pay vendors or conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our completed acquisitions and other transactions, our transition to lower-cost regions, the existence of economic instability, and our and the combined group’s estimated or anticipated future results of operations, that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations, comprehensive income or cash flows. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarter periods.

Overview and Executive Summary

Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company”), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries. We provide electronic design and test instrumentation systems and related software, software design tools, and services that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems. Related services include start-up assistance, instrument productivity, application services and instrument calibration and repair. We also offer customization, consulting and optimization services throughout the customer's product lifecycle.

We invest in product development to address the changing needs of the market and facilitate growth. We are investing in research and development to design measurement solutions that will satisfy the changing needs of our customers. These opportunities are being driven by evolving technology standards and the need for faster data rates and new form factors.

On April 18, 2017, we completed the acquisition of Ixia, which became our fourth reportable operating segment, the Ixia Solutions Group (“ISG”). The group provides testing, visibility and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers and network equipment manufacturers. As a result, Keysight now has four segments, Communications Solutions Group, Electronic Industrial Solutions Group, Ixia Solutions Group and Services Solutions Group. Also, our global team of experts provides startup assistance, consulting, optimization and application support across all of our end markets.

Three months ended January 31, 2018 and 2017

Total orders for the three months ended January 31, 2018 were $964 million, an increase of 39 percent when compared to the same period last year and an increase of 37 percent excluding the impact of currency fluctuations. Orders associated with acquisitions accounted for 22 percentage points of order growth for the three months ended January 31, 2018 when compared to the same period last year.

Net revenue of $837 million for the three months ended January 31, 2018 increased 15 percent when compared to the same period last year and increased 14 percent excluding the impact of currency fluctuations. For the three months ended January 31, 2018, acquisitions added approximately 16 percentage points of revenue growth. The disruption from the northern California wildfires unfavorably impacted the seasonality of our first quarter revenue. While the recovery is progressing faster than our original projections due to the strong response and execution of our teams, full recovery is projected to extend at least into our third fiscal quarter. Across the business groups, strength in revenue from the Electronic Industrial Solutions Group and Services Solutions Group was partially offset by a decline in the Communications Solutions Group, which was most impacted by the wildfire disruption.

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Net income for the three months ended January 31, 2018 was $94 million compared to $109 million for the corresponding period last year. The decline in net income was driven by one-time gains in the three months ended January 31, 2017 from a Japan pension settlement and land sale, increases in the current period in amortization of acquisition-related balances, acquisition and integration costs, people-related costs and an unfavorable impact from the northern California wildfires, partially offset by favorable impacts from new U.S. tax legislation and higher revenue volume.

Impact of Northern California Wildfires

During the week of October 8, 2017, wildfires in northern California adversely impacted the Keysight corporate headquarters site in Santa Rosa, CA. Our headquarters was under mandatory evacuation for more than three weeks, and while direct damage to our core facilities was limited, our buildings did experience some smoke and other fire-related impacts. Cleaning and additional restoration efforts are ongoing in both production and non-production areas of the site. To ensure business continuity, the company leased temporary office space to support Santa Rosa employees who could not immediately reoccupy the site. Keysight is insured for the damage caused by the fire, including business interruption insurance, and though we do not expect the fire to have a significant impact on our business results, the disruption will impact the seasonality of revenue in the first half of fiscal 2018.

 For the three months ended January 31, 2018, we recognized costs of $7 million, net of $31 million of estimated insurance recovery. Expenses included primarily cleaning, unabsorbed overhead, and other direct costs related to the impact of this event.

As of January 31, 2018, we have received insurance proceeds of $10 million. We have increased our insurance receivable from $1.7 million at October 31, 2017 to $23 million at January 31, 2018 for known losses for which insurance reimbursement is probable. The receivable is included in other current assets in the condensed consolidated balance sheet. In many cases, our insurance coverage exceeds the amount of these covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes. We currently estimate that insurance recovery will range from $80 million to $110 million, which we believe will cover our expected losses and expenses related to the wildfires. There may be a difference in timing of costs incurred and the related insurance reimbursement.

Outlook

Looking forward, we believe our investments in R&D combined with our completed acquisitions, which have expanded of our technology portfolio and the size of our addressable market, position Keysight for growth. We remain focused on delivering value through innovative solutions targeted at faster growing markets where customers are investing in next-generation digital and electronic technologies. Internally, we are continuously working to improve operational efficiency within, and across, all functions. 

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. GAAP ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring and accounting for income taxes. For a detailed description of our critical accounting policies and estimates, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2017. Management bases estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management's best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates.

Adoption of New Pronouncements

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

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Foreign Currency

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

Results from Operations

Orders and Net Revenue

In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services. Consistent with our strategy, we are seeing an increase in solution sales, which have a longer order-to-revenue conversion cycle; however, the majority of recorded orders will be delivered within six months.

Revenue reflects the delivery and acceptance of the products and services as defined on the customer's terms and conditions. Cancellations are recorded in the period received from the customer and historically have not been material.

	Three Months Ended				Year over Year Change
	January 31,				Three
	2018		2017		Months
	(in millions)
Orders	$	964	$	695	39%
Net revenue:
Products	$	684	$	606	13%
Services and other	153		120		27%
Total net revenue	$	837	$	726	15%

Orders

Total orders for the three months ended January 31, 2018 were $964 million, an increase of 39 percent when compared to the same period last year and an increase of 37 percent excluding the impact of currency fluctuations. Orders associated with acquisitions accounted for 22 percentage points of order growth for the three months ended January 31, 2018 when compared to the same period last year. For the three months ended January 31, 2018, orders grew across all geographies.

Net Revenue

The following table provides the percent change in net revenue for the three months ended January 31, 2018 by geographic region including and excluding the impact of currency changes as compared to the same period last year.

	Year over Year % Change
	Three Months Ended
	January 31, 2018
Geographic Region	actual		currency adjusted
Americas	31	%	31	%
Europe	18	%	12	%
Japan	(10	)%	(10	)%
Asia Pacific ex-Japan	6	%	4	%
Total net revenue	15	%	14	%

Net revenue of $837 million for the three months ended January 31, 2018 increased 15 percent when compared to the same periods last year and increased 14 percent excluding the impact of currency fluctuations. Revenue associated with acquisitions

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accounted for 16 percentage points of revenue growth for the three months ended January 31, 2018 when compared to the same period last year.

Revenue from the Communications Solutions Group represented approximately 50 percent of total revenue for the three months ended January 31, 2018 and decreased 3 percent year-over-year. For the three months ended January 31, 2018, the Communications Solutions Group's contribution to the total revenue growth was a decline of 2 percentage points. The revenue decline was primarily driven by the impact of the northern California wildfires. While the recovery is progressing faster than our original projections due to the strong response and execution of our teams, full recovery is projected to extend at least into our third fiscal quarter. Revenue decline in Japan and Europe was partially offset by growth in the Americas, while Asia Pacific excluding Japan was flat.

Revenue from the Electronic Industrial Solutions Group represented approximately 24 percent of total revenue for the three months ended January 31, 2018 and grew 6 percent year-over-year. For the three months ended January 31, 2018, the Electronic Industrial Solutions Group's contribution to the total revenue growth was an increase of 1 percentage point, with growth in Europe and the Americas, partially offset by declines in Asia Pacific including Japan.

Revenue from the Ixia Solutions Group represented approximately 13 percent of total revenue for the three months ended January 31, 2018. The Ixia Solutions Group contribution to the total revenue growth was 15 percentage points for the three months ended January 31, 2018.

Revenue from the Services Solutions Group represented approximately 13 percent of total revenue for the three months ended January 31, 2018 and grew 6 percent year-over-year. For the three months ended January 31, 2018, the Services Solutions Group's contribution to the total revenue growth was an increase of 1 percentage point, with growth in the Americas and Asia Pacific excluding Japan, partially offset by declines in Japan and Europe.

Costs and Expenses

	Three Months Ended						Year over Year Change
	January 31,						Three
	2018			2017			Months
Total gross margin	51.1		%	55.7		%	(5) ppts
Operating margin	(0.6		)%	22.4		%	(23) ppts
in millions
Research and development	$	146		$	108		35%
Selling, general and administrative	$	290		$	213		36%
Other operating expense (income), net	$	(3	)	$	(79	)	(96)%

Gross margin decreased 5 percentage points for the three months ended January 31, 2018 compared to the same period last year. The decline in gross margin was driven by the unfavorable impact from amortization of acquisition-related balances, the northern California wildfire-related expenses, and an increase in warranty expenses and inventory charges, partially offset by favorable revenue mix.

Research and development expense increased 35 percent for the three months ended January 31, 2018 compared to the same period last year, driven by the addition of Ixia to the cost structure along with higher people-related costs. As a percentage of revenue, research and development expense was 17 percent for the three months ended January 31, 2018, as compared to 15 percent for the same period last year. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities in order to capture future growth.

Selling, general and administrative expenses increased 36 percent for the three months ended January 31, 2018 compared to the same period last year, primarily driven by the addition of Ixia to our cost structure, increases in amortization of acquisition-related balances, people-related costs, acquisition and integration costs, the unfavorable impact of foreign currency movements and the unfavorable impact from the northern California wildfire-related expenses, partially offset by a decline in separation and related costs.

Other operating expense (income), net for the three months ended January 31, 2018 and 2017 was income of $3 million and $79 million, respectively. The other operating income for the three months ended January 31, 2017 was largely driven by $68 million from a Japan pension settlement gain and $8 million of gain on sale of land.

Operating margin for the three months ended January 31, 2018 decreased 23 percentage points when compared to the same period last year, primarily driven by one-time gains in the three months ended January 31, 2017 from a Japan pension settlement

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and sale of land and increases in current period in amortization of acquisition-related balances, acquisition and integration costs, and people-related costs, partially offset by gains related to revenue volume.

As of January 31, 2018, our headcount was approximately 12,700 as compared to approximately 10,400 at January 31, 2017. The increase was primarily driven by acquisitions.

Interest Expense

Interest expense for the three months ended January 31, 2018 was $22 million as compared to $12 million for the comparable period last year. The increase in interest expense for the three months ended January 31, 2018 is primarily due to interest expense and amortization of debt issuance costs on $700 million of senior notes issued in April 2017 and interest on borrowings under a senior unsecured term loan.

Income Taxes

The company’s effective tax rate was a benefit of 515.8 percent for the three months ended January 31, 2018 and an expense of 28.3 percent for the three months ended January 31, 2017. The income tax benefit was $117 million for the three months ended January 31, 2018, and income tax expense was $43 million for the three months ended January 31, 2017. The increase in the total income tax benefit and discrete benefit for the three months ended January 31, 2018 is primarily due to changes in U.S. tax law. The income tax benefit for the three months ended January 31, 2018 included a net discrete benefit of $115 million, primarily due to $117 million of benefit resulting from changes in U.S. tax law. The income tax provision for the three months ended January 31, 2017 included a net discrete expense of $23 million, primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund (see Note 12).

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014 through the current tax year. For certain acquired U.S. entities, the tax years generally remain open back to year 2009. For foreign entities, the tax years remain open, at most, back to the year 2007. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

The company is being audited in Malaysia for the 2008 tax year. Although this tax year pre-dates our spin-off from Agilent, pursuant to the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, for certain entities including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal 2017, Keysight paid income taxes and penalties of $68 million on gains related to intellectual property rights, although we are currently in the process of appealing to the Special Commissioners of Income Tax (“SCIT”) in Malaysia. The company believes there are numerous defenses to the current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed and the income in question is exempt from tax in Malaysia. The company is disputing this assessment and pursuing all avenues to resolve this issue favorably for the company.

At January 31, 2018, our estimated annual effective tax rate is an expense of 7.5 percent excluding discrete items. We determine our interim tax provision using an estimated annual effective tax rate methodology except in jurisdictions where we anticipate a full year loss or we have a year-to-date ordinary loss for which no tax benefit can be recognized. In these jurisdictions, tax expense is computed separately. Our estimated annual effective tax rate differs from the U.S. statutory rate primarily due to the mix of earnings in non-U.S. jurisdictions taxed at lower rates, reserves for uncertain tax positions, the U.S. federal research and development tax credit and the impact of permanent differences.

Segment Overview

Keysight has four reportable operating segments: Communications Solutions Group, Electronic Industrial Solutions Group, Ixia Solutions Group and Services Solutions Group. The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets. Ixia Solutions Group (“ISG”). The group provides testing, visibility and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers and network equipment manufacturers. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight

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equipment. In addition, our global team of experts provides startup assistance, consulting, optimization and application support across all of our end markets.

The profitability of each segment is measured after excluding, among other things, charges related to the amortization of acquisition-related balances, the impact of restructuring and related costs, asset impairments, acquisition and integration costs, share-based compensation, separation and related costs, interest income and interest expense.

Communications Solutions Group

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

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2018		2017		Months
	(in millions)
Net revenue	$	420	$	434	(3)%

The Communications Solutions Group revenue for the three months ended January 31, 2018 decreased 3 percent when compared to the same period last year primarily driven by the impact of the northern California wildfires, leading to a decline in revenue from the aerospace, defense and government and commercial communication markets. While the recovery is progressing faster than our original projections due to the strong response and execution of our teams, full recovery is projected to extend at least into our third fiscal quarter.

Revenue from the commercial communications market represented approximately 58 percent of the total Communications Solutions Group revenue for the three months ended January 31, 2018, and decreased 4 percent year-over-year. For the three months ended January 31, 2018, revenue declines in Europe and Japan were partially offset by growth in the Americas and Asia Pacific excluding Japan when compared to the same period last year. The commercial communications market revenue decline was primarily driven by impact of the northern California wildfires. Decline in the data center market was partially offset by growth in 5G technologies, while 4G spending has stabilized.

Revenue from the aerospace, defense and government market represented approximately 42 percent of the total Communications Solutions Group revenue for the three months ended January 31, 2018 and decreased 3 percent year-over-year. For the three months ended January 31, 2018, revenue decline in Asia Pacific including Japan was partially offset by growth in Europe and the Americas. The aerospace, defense and government market revenue decline was primarily driven by impact of the northern California wildfires and weakness in China and the rest of Asia.

Gross Margin and Operating Margin

The following table shows the Communications Solutions Group margins, expenses and income from operations for the three months ended January 31, 2018 versus the three months ended January 31, 2017.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2018			2017			Months
Total gross margin	60.9		%	60.5		%	-
Operating margin	14.0		%	16.7		%	(3) ppts
in millions
Research and development	$	80		$	76		6%
Selling, general and administrative	$	118		$	117		1%
Other operating expense (income), net	$	(2	)	$	(2	)	(6)%
Income from operations	$	59		$	72		(19)%

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Gross margin for the three months ended January 31, 2018 increased slightly when compared to the same period last year. The gross margin growth for the three months ended January 31, 2018 was primarily driven by higher revenue from software, partially offset by higher warranty and inventory charges.

Research and development expense for the three months ended January 31, 2018 increased 6 percent compared to the same period last year, driven by continued investments in R&D programs. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities to capture future growth.

Selling, general and administrative expense for the three months ended January 31, 2018 increased 1 percent compared to the same period last year, primarily driven by an increase in infrastructure-related costs.

Other operating expense (income) for the three months ended January 31, 2018 and 2017 was income of $2 million.

Income from Operations

Income from operations for the three months ended January 31, 2018 decreased $13 million on a corresponding revenue decline of $14 million when compared to the same period last year.

Operating margin for the three months ended January 31, 2018 declined 3 percentage points when compared to the same period last year, driven by lower revenue and increased investments in R&D and infrastructure related costs.

Electronic Industrial Solutions Group

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

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2018		2017		Months
	(in millions)
Net revenue	$	203	$	192	6%

The Electronic Industrial Solutions Group revenue for the three months ended January 31, 2018 increased 6 percent when compared to the same period last year and grew 3 percent excluding the impact of acquisitions. Revenue growth was driven by strong growth in automotive and energy and semiconductor measurement markets, partially offset by decline in the general electronics measurement market. Strong revenue growth in Europe and the Americas was partially offset by a decline in Japan and Asia Pacific excluding Japan.

Gross Margin and Operating Margin

The following table shows the Electronic Industrial Solutions Group margins, expenses and income from operations for the three months ended January 31, 2018 versus the three months ended January 31, 2017.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2018			2017			Months
Total gross margin	59.0		%	59.9		%	(1) ppt
Operating margin	18.5		%	21.7		%	(3) ppts
in millions
Research and development	$	33		$	28		19%
Selling, general and administrative	$	50		$	46		8%
Other operating expense (income), net	$	(1	)	$	(1	)	(8)%
Income from operations	$	37		$	42		(10)%

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Gross margin for the three months ended January 31, 2018 declined 1 percentage point when compared to the same period last year, primarily driven by unfavorable revenue mix and an increase in warranty expense. 

Research and development expense for the three months ended January 31, 2018 increased 19 percent compared to the same period last year, primarily driven by continued investments in leading-edge technologies and key growth opportunities in our end markets and acquisition-related costs. We remain committed to investment in research and development and have focused our development efforts on strategic opportunities to capture future growth.

Selling, general and administrative expense for the three months ended January 31, 2018 increased 8 percent compared to the same period last year, primarily due to an increase in people-related costs, investments in sales resources and acquisition-related costs.

Other operating expense (income) for the three months ended January 31, 2018 and 2017 was income of $1 million.

Income from Operations

Income from operations for the three months ended January 31, 2018 decreased $5 million on a corresponding revenue increase of $11 million when compared to the same period last year.

Operating margin for the three months ended January 31, 2018 decreased 3 percentage points when compared to the same period last year, primarily driven by unfavorable mix and increased investments in R&D, sales resources and acquisition-related costs.

Ixia Solutions Group

The Ixia Solutions Group helps customers validate the performance and security resilience of their networks and associated applications. The test,visibility and security solutions help organizations and their customers strengthen their physical and virtual networks. Enterprises, service providers, network equipment manufacturers, and governments worldwide rely on the group's solutions to validate new products before shipping and secure ongoing operation of their networks with better visibility and security. The group’s solutions consist of our high-performance hardware platforms, software applications, and services, including warranty and maintenance offerings.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2018			2017			Months
Total gross margin	75.6		%	—		%	n/a
Operating margin	14.5		%	—		%	n/a
in millions
Net revenue	$	127		$	—		n/a
Research and development	$	25		$	—		n/a
Selling, general and administrative	$	52		$	—		n/a
Other operating expense (income), net	$	—		$	—		n/a
Income from operations	$	18		$	—		n/a

Revenue from the Ixia Solutions Group contributed 18 percentage points to the total Keysight revenue growth for the three months ended January 31, 2018. Revenue from the Ixia Solutions Group represented 15 percent of the total Keysight revenue for the three months ended January 31, 2018.

Services Solutions Group

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

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Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2018		2017		Months
	(in millions)
Net revenue	$	106	$	100	6%

The Services Solutions Group revenue for the three months ended January 31, 2018 increased 6 percent when compared to the same period last year and grew 4 percent excluding the impact of acquisitions. For the three months ended January 31, 2018, the revenue increase was driven by strong growth in sales of used equipment, complimented by steady growth in calibration services. Revenue growth in the Americas and Asia Pacific excluding Japan was partially offset by declines in Europe and Japan.

Gross Margin and Operating Margin

The following table shows the Services Solutions Group margins, expenses and income from operations for the three months ended January 31, 2018 versus the three months ended January 31, 2017.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2018			2017			Months
Total gross margin	40.3		%	39.4		%	1 ppt
Operating margin	15.6		%	14.4		%	1 ppt
in millions
Research and development	$	1		$	—		50%
Selling, general and administrative	$	26		$	25		4%
Other operating expense (income), net	$	(1	)	$	—		24%
Income from operations	$	17		$	14		15%

Gross margin for the three months ended January 31, 2018 increased 1 percentage point when compared to the same period last year primarily driven by higher volume and more favorable mix of remarketed products.

Research and development expense for the three months ended January 31, 2018 increased 50 percent compared to the same period last year. The increase is primarily driven by investments in a new software application to enable enhanced service offerings.

Selling, general and administrative expense for the three months ended January 31, 2018 increased 4 percent when compared to the same period last year, primarily due to investments in sales resources and an increase in acquisition-related people costs.

Other operating expense (income) for the three months ended January 31, 2018 and 2017 was income of $1 million and zero, respectively.

Income from Operations

Income from operations for the three months ended January 31, 2018 increased by $3 million on a corresponding revenue increase of $6 million when compared to the same period last year.

Operating margin for the three months ended January 31, 2018 increased 1 percentage point as compared to the same period last year, driven by higher gross margin partially offset by increased investments in R&D and sales resources from the acquisitions.

FINANCIAL CONDITION

Liquidity and Capital Resources

Our financial position as of January 31, 2018 consisted of cash and cash equivalents of $980 million as compared to $818 million as of October 31, 2017.

As of January31, 2018, approximately $923 million of our cash and cash equivalents was held outside of the U.S. in our foreign subsidiaries. Under U.S. tax legislation that was enacted on December 22, 2017, certain earnings currently held outside

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of the U.S. are deemed to be repatriated to the U.S., with foreign cash balances generally subject to an effective U.S. tax rate of 15.5 percent and certain cumulative foreign earnings in excess of foreign cash balances subject to an effective U.S. tax rate of 8 percent. Our cash and cash equivalents mainly consist of short-term deposits held at major global financial institutions, investments in institutional money market funds, and similar short duration instruments with original maturities of 90 days or less. We continuously monitor the creditworthiness of the financial institutions in which we invest our funds. We utilize a variety of funding strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. Most significant international locations have access to internal funding through an offshore cash pool for working capital needs, in addition to temporary local overdraft and short-term working capital lines of credit for a few locations which are unable to access internal funding.

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

Net Cash Provided by Operating Activities

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

Net cash provided by operating activities was $171 million for the three months ended January 31, 2018 compared to $115 million for the same period in 2017.

• Net income for the first three months of fiscal 2018 decreased $15 million. Changes to non-cash income and expenses included a $275 million decrease in deferred tax expense, primarily related to a one-time reduction in net deferred tax liabilities and corresponding income tax benefit of approximately $304 million due to the re-measurement of U.S. income taxes recorded on the undistributed earnings of foreign subsidiaries that were not considered permanently reinvested. It also included a $68 million decline in pension curtailment and settlement gain, a $46 million increase in depreciation and amortization expense, an $8 million decline in gain from sale of land, a $1 million increase in share-based compensation expense, a $3 million increase in excess and obsolete inventory-related charges and a $2 million increase in other miscellaneous non-cash expenses as compared to the same period last year. Additionally for the three months ended January 31, 2018, we recognized costs of $7 million, net of $31 million of estimated insurance recovery towards northern California wildfire-related expenses.

• The aggregate of accounts receivable, inventory and accounts payable provided net operating cash of $93 million during the first three months of fiscal 2018 compared to cash provided of $18 million in the comparable period last year. The inventory change includes $19 million of amortization related to fair value adjustments due to acquisitions for the three months ended January 31, 2018. Our operational cash flows were strengthened by significant timing-related reductions in working capital linked to the fire recovery, which we expect to balance out during the remainder of the first half of the year. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory and accounts payable depends upon the cash conversion cycle, which represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers and can be significantly impacted by the timing of shipments and purchases, as well as collections and payments in a period.

• The aggregate of employee compensation and benefits, income tax payable, deferred revenue and other assets and liabilities provided net operating cash of $126 million during the first three months of fiscal 2018 compared to cash used of $26 million in the comparable period last year. The difference is primarily due to an increase in income tax payable due to the impact of new U.S. tax legislation and an increase in deferred revenue balances as a result of acquisition activity, partially offset by higher variable compensation payments and other differences due to timing of accruals and collections versus payments between the periods. As of January 31, 2018, we have received insurance proceeds of $10 million towards northern California wildfire-related expenses. Additionally, we have increased our insurance receivable from $1.7 million at October 31, 2017 to $23 million at January 31, 2018 for known losses for which insurance reimbursement has been received in the month of February. Also during the quarter ending January 31, 2018, we have received insurance proceeds of $26 million towards Singapore fire-related expenses.

• We contributed $9 million to our non-U.S. defined benefit plans during the first three months of fiscal 2018 compared to $7 million in the same period last year. We expect to contribute approximately $29 million to our non-U.S. defined benefit plans during the remainder of 2018. For the three months ended January 31, 2018 and 2017, we did not contribute to our U.S. defined benefit plans or U.S. post-retirement benefit plan, and we do not expect to contribute to our U.S. defined benefit plans during the remainder of 2018.

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Net Cash Used in Investing Activities

Net cash used in investing activities was $27 million for the three months ended January 31, 2018 as compared to $8 million for the same period last year. Investments in property, plant and equipment were $24 million for the three months ended January 31, 2018 compared to $16 million in the same period last year. The increase in capital expenditures was primarily due to acquisitions and $3 million related to northern California wildfires. We received $8 million of proceeds from the sale of land in the three months ended January 31, 2017. We expect that total capital expenditures for the current year will be approximately $130 million, including $20 million to $30 million of capital related to recovery from the northern California wildfires, which is expected to be covered by insurance.

Net Cash Used in Financing Activities

Cash flows related to financing activities primarily consist of cash flows associated with the proceeds from the issuance of common stock under employee stock plans and payment of taxes related to net share settlement of equity awards. For the three months ended January 31, 2018, net cash provided by financing activities was $9 million compared to cash provided of $8 million for the same period in 2017. During the three months ended January 31, 2018, we issued common stock under employee stock plans of $24 million compared to $19 million for the same period last year. Additionally, we paid taxes related to net share settlement of equity awards of $15 million during first quarter of 2018 as compared to $11 million for the same period last year.

Short-Term Debt

Revolving Credit Facility

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that provides for a $450 million, five-year unsecured revolving credit facility that will expire on February 15, 2022. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. We may use amounts borrowed under the facility for general corporate purposes. During the three months ended January 31, 2018, we borrowed and repaid $40 million of under the Revolving Credit Facility. As of January 31, 2018, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2018.

Long-Term Debt

There have been no changes to the principal, maturity, interest rates and interest payment terms of the outstanding senior notes in the three months ended January 31, 2018 as compared to the senior notes as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017.

Senior Unsecured Term Loan

On February 15, 2017, we entered into a term credit agreement that provides for a three-year $400 million senior unsecured term loan that bears interest at an annual rate of LIBOR + 1.50%. The term loan was drawn upon the closing of the Ixia acquisition. As of January 31, 2018, we had borrowings outstanding under the term loan of $260 million, which was repaid in February 2018.

Other

There were no material changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2017, to our contractual commitments (including non-cancellable operating leases) in the first three months of 2018.

There were no material changes in our liabilities toward uncertain tax positions from our Annual Report on Form 10-K for the fiscal year ended October 31, 2017. We are unable to accurately predict when these will be realized or released. However, it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next 12 months due to either the expiration of a statute of limitations or a tax audit settlement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2017. There were no material changes during the three months ended January 31, 2018 to this information reported in the company’s 2017 Annual Report on Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended January 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial, employment and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are probable of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

ITEM 1A.  RISK FACTORS

Risks, Uncertainties and Other Factors That May Affect Future Results

Risks Related to Our Business

Depressed and uncertain general economic conditions may adversely affect our operating results and financial condition.

        Our business is sensitive to negative changes in general economic conditions, both inside and outside the United States. Global and regional economic uncertainty or depression may impact our business, resulting in:

• reduced demand for our products, delays in the shipment of orders or increases in order cancellations;

• increased risk of excess and obsolete inventories;

• increased price pressure for our products and services; and

• greater risk of impairment to the value, and a detriment to the liquidity, of our future investment portfolio.

In addition, global and regional macroeconomic developments, such as increased unemployment, decreased income, reduced access to credit, volatility in capital markets, decreased liquidity, uncertain or destabilizing national election results in the U.S., Europe, and Asia, and negative changes or volatility in general economic conditions in the U.S., Europe, and Asia could negatively affect our ability to conduct business in those territories. Financial difficulties experienced by our suppliers and customers, including distributors, due to economic volatility or negative changes could result in product delays and inventory issues. Economic risks related to accounts receivable could result in delays in collection and greater bad debt expense.

Our operating results and financial condition could be harmed if the markets into which we sell our products decline or do not grow as anticipated.

        Visibility into our markets is limited. Our quarterly sales and operating results are highly dependent on the volume and timing of technology-related spending and orders received during the fiscal quarter, which are difficult to forecast and may be cancelled by our customers. In addition, our revenues and earnings forecasts for future fiscal quarters are often based on the expected seasonality or cyclicality of our markets. However, the markets we serve do not always experience the seasonality or cyclicality that we expect. Any decline in our customers' markets would likely result in a reduction in demand for our products and services. The broader semiconductor market is one of the drivers for our business, and therefore, a decrease in the semiconductor market could harm our business. Also, if our customers' markets decline, we may not be able to collect on outstanding amounts due to us. Such declines could harm our financial position, results of operations, cash flows and stock price, and could limit our profitability. Also, in such an environment, pricing pressures could intensify. Since a significant portion of our operating expenses is relatively fixed in nature due to sales, R&D and manufacturing costs, if we were unable to respond quickly enough, these pricing pressures could further reduce our operating margins.

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If we do not introduce successful new products and services in a timely manner to address increased competition, rapid technological changes and changing industry standards, our products and services will become obsolete, and our operating results will suffer.

        We generally sell our products in industries that are characterized by increased competition through frequent new product and service introductions, rapid technological changes and changing industry standards. In addition, many of the markets in which we operate are seasonal and cyclical. Without the timely introduction of new products, services and enhancements, our products and services will become technologically obsolete over time, in which case our revenue and operating results would suffer. The success of new products and services will depend on several factors, including but not limited to our ability to:

• properly identify customer needs;

• innovate and develop new technologies, services and applications;

• successfully commercialize new technologies in a timely manner;

• manufacture and deliver our products in sufficient volumes and on time;

• differentiate our offerings from our competitors' offerings;

• price our products competitively;

• anticipate our competitors' development of new products, services or technological innovations; and control product quality in our manufacturing process.

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

        As part of our efforts to streamline operations and to cut costs, we outsource aspects of our manufacturing processes and other functions and continue to evaluate additional outsourcing. If our contract manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers may be unable to meet our demand requirements, which may preclude us from fulfilling our customers' orders on a timely basis. The ability of these manufacturers to perform is largely outside of our control. Additionally, changing or replacing our contract manufacturers or other outsourcees could cause disruptions or delays. In addition, we outsource significant portions of our information technology ("IT") and other administrative functions. Since IT is critical to our operations, any failure of our IT providers to perform could impair our ability to operate effectively. In addition to the risks outlined above, problems with manufacturing or IT outsourcing could result in lower revenues and unrealized efficiencies, and could impact our results of operations and stock price. Much of our outsourcing takes place in developing countries and, as a result, may be subject to geopolitical uncertainty.

Failure to adjust our purchases due to changing market conditions or failure to estimate our customers' demand could adversely affect our income.

        Our income could be harmed if we are unable to adjust our purchases to market fluctuations, including those caused by the seasonal or cyclical nature of the markets in which we operate. The sale of our products and services are dependent, to a large degree, on customers whose industries are subject to seasonal or cyclical trends in the demand for their products. For example, the consumer electronics market is particularly volatile, making demand difficult to anticipate. During a market upturn, we may not be able to purchase sufficient supplies or components to meet increasing product demand, which could materially affect our results. In the past, we have seen a shortage of parts for some of our products. In addition, some of the parts that require custom design are not readily available from alternate suppliers due to their unique design or the length of time necessary for design work. Should a supplier cease manufacturing such a component, we would be forced to reengineer our product. In addition to discontinuing parts, suppliers may also extend lead times, limit supplies or increase prices due to capacity constraints or other factors. In order to secure components for the production of products, we may continue to enter into non-cancellable purchase commitments with vendors, or at times make advance payments to suppliers, which could impact our ability to adjust our inventory to declining market demands. Prior commitments of this type have resulted in an excess of parts when demand for electronic products has decreased. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges.

Our operating results may suffer if our manufacturing capacity does not match the demand for our products.

Because we cannot immediately adapt our production capacity and related cost structures to rapidly changing market conditions, when demand does not meet our expectations, our manufacturing capacity will likely exceed our production requirements. If, during a general market upturn or an upturn in our business, we cannot increase our manufacturing capacity to meet product demand, we will not be able to fulfill orders in a timely manner, which could lead to order cancellations, contract breaches or indemnification obligations. This inability could materially and adversely limit our ability to improve our income, margin and

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operating results. By contrast, if, during an economic downturn, we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins and operating results.

Industry consolidation and consolidation among our customer base may lead to increased competition and may harm our operating results.

There is potential for industry consolidation in our markets. As companies attempt to strengthen or hold their market positions in an evolving industry, companies could be acquired or may be unable to continue operations. Companies that are strategic alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their business with us. We believe that industry consolidation may result in stronger competitors and could lead to more variability in our operating results and could have a material adverse effect on our business, operating results, and financial condition. Furthermore, particularly in the communications market, rapid consolidation would lead to fewer customers, with the effect that loss of a major customer could have a material impact on results not anticipated in a customer marketplace composed of more numerous participants.

Additionally, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could adversely affect our profitability. In addition, if, as a result of increased leverage, customer pressures require us to reduce our pricing such that our gross margins are diminished, we could decide not to sell our products under such less favorable terms, which would decrease our revenue. Consolidation among our customer base may also lead to reduced demand for our products, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could harm our operating results.

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

        Because we sell our products worldwide, our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue. However, there can be no assurances that our international sales will continue at existing levels or grow in accordance with our effort to increase foreign market penetration. In addition, many of our employees, contract manufacturers, suppliers, job functions and manufacturing facilities are located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including but not limited to:

• interruption to transportation flows for delivery of parts to us and finished goods to our customers;

• changes in foreign currency exchange rates;

• changes in a specific country's or region's political, economic or other conditions;

• trade protection measures, sanctions, and import or export licensing requirements or restrictions;

• negative consequences from changes in tax laws;

• difficulty in staffing and managing widespread operations;

• differing labor regulations;

• differing protection of intellectual property;

• unexpected changes in regulatory requirements; and

• volatile political environments or geopolitical turmoil, including regional conflicts, terrorism, and war.

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

        Additionally, we must comply with complex foreign and U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other local laws prohibiting corrupt payments to governmental officials, and anti-competition regulations. Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our products in one or more countries, and could also materially affect our brand, ability to attract and retain employees, international operations, business and operating results. Although we actively maintain policies and procedures designed to ensure ongoing compliance with these laws and regulations, there can be no assurance that our employees, contractors or agents will not violate these policies and procedures.

        In addition, although a substantial amount of our products are priced and paid for in U.S. Dollars, many of our products are priced in local currencies and a significant amount of certain types of expenses, such as payroll, utilities, tax and marketing expenses, are paid in local currencies. Our hedging programs are designed to reduce, but not entirely eliminate, within any given 12-month period, the impact of currency exchange rate movements, including those caused by currency controls, which could impact our business, operating results and financial condition by resulting in lower revenue or increased expenses. However, for expenses beyond a 12-month period, our hedging strategy will not mitigate our exchange rate risk. In addition, our currency hedging programs

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involve third-party financial institutions as counterparties. The weakening or failure of these counterparties may adversely affect our hedging programs and our financial condition through, among other things, a reduction in the number of available counterparties, increasingly unfavorable terms or the failure of counterparties to perform under hedging contracts.

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

        Certain key customers have substantial purchasing power and leverage in negotiating contractual arrangements with us. These customers may demand contract terms that differ considerably from our standard terms and conditions. Large orders may also include severe contractual liabilities for us if we fail to provide the quantity and quality of product at the required delivery times. While we attempt to contractually limit our potential liability under such contracts, we may have to agree to some or all of these types of provisions to secure these orders and to continue to grow our business. Such actions expose us to significant additional risks, which could result in a material adverse impact on our operating results and financial condition.

Our business will suffer if we are not able to retain and hire key personnel.

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

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

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

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

        In the normal course of business, we may engage in discussions with third parties relating to possible acquisitions, strategic alliances, joint ventures and divestitures. As a result of such transactions, our financial results may differ from our own or the investment community's expectations in a given fiscal quarter, or over the long term. If market conditions or other factors lead us to change our strategic direction, we may not realize the expected value from such transactions. Further, such transactions often have post-closing arrangements, including, but not limited to, post-closing adjustments, transition services, escrows or indemnifications, the financial results of which can be difficult to predict. In addition, acquisitions and strategic alliances may require us to integrate a different company culture, management team and business infrastructure. We may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances the performance of our businesses or product lines to realize the value from expected synergies. Depending on the size and complexity of an acquisition, the successful integration of the entity depends on a variety of factors, including but not limited to:

• the retention of key employees and/or customers;

• the management of facilities and employees in different geographic areas; and

• the compatibility of our infrastructure, policies and organizations with those of the acquired company.

If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.        

In addition, effective internal controls are necessary for us to provide reliable and accurate financial reports and to effectively prevent fraud. We are devoting significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes-Oxley Act of 2002. However, we cannot be certain that these measures will ensure that we design, implement and maintain adequate control over our financial processes and reporting in the future, especially in the context of acquisitions of other businesses. Any difficulties in the assimilation of acquired businesses into our control system could harm our operating results or cause us to fail to meet our financial reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock and our access to capital. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

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We have outstanding debt and may incur other debt in the future, which could adversely affect our financial condition, liquidity and results of operations.

We currently have outstanding debt as well as availability to borrow under a revolving credit facility. We may borrow additional amounts in the future and use the proceeds from any future borrowing for general corporate purposes, future acquisitions, expansion of our business or repurchases of our outstanding shares of common stock.

Our incurrence of this debt, and increases in our aggregate levels of debt, may adversely affect our operating results and financial condition by, among other things:

• requiring a portion of our cash flow from operations to make interest payments on this debt;

• increasing our vulnerability to general adverse economic and industry conditions;

• reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; and

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry.

Our current revolving credit facility and term loan imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control. In addition, the indenture governing our senior notes contains covenants that may adversely affect our ability to incur certain liens or engage in certain types of sale and leaseback transactions. If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, our outstanding indebtedness could be declared immediately due and payable.

Environmental contamination from past operations could subject us to unreimbursed costs and could harm on-site operations and the future use and value of the properties involved, and environmental contamination caused by ongoing operations could subject us to substantial liabilities in the future.

        Some of our properties are undergoing remediation by HP Inc. ("HP") for subsurface contaminations that were known at the time of Agilent's separation from HP in 1999. In connection with Agilent's separation from HP, HP and Agilent entered into an agreement pursuant to which HP agreed to retain the liability for this subsurface contamination, perform the required remediation and indemnify Agilent with respect to claims arising out of that contamination. Agilent has assigned its rights and obligations under this agreement to Keysight in respect of facilities transferred to us in the separation. As a result, HP will have access to a limited number of our properties to perform remediation. Although HP agreed to minimize interference with on-site operations at such properties, remediation activities and subsurface contamination may require us to incur unreimbursed costs and could harm on-site operations and the future use and value of the properties. In connection with the separation, Agilent will indemnify us directly for any liabilities related thereto. We cannot be sure that HP will continue to fulfill its remediation obligations or that Agilent will continue to fulfill its indemnification obligations.

        In connection with the separation from Agilent, Agilent also agreed to indemnify us for any liability associated with contamination from past operations at all properties transferred from Agilent to Keysight. We cannot be sure that Agilent will fulfill its indemnification obligations.

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

We and our customers are subject to various governmental regulations, compliance with which may cause us to incur significant expenses, and if we fail to maintain satisfactory compliance with certain regulations, we may be forced to recall products and cease their manufacture and distribution, and we could be subject to civil or criminal penalties.

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

        Our products and operations are also often subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies such as the U.S. Federal Communications Commission. We also must comply with work safety rules. If we fail to adequately address any of these regulations, our businesses could be harmed.

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Third parties may claim that we are infringing their intellectual property rights, and we could suffer significant litigation or licensing expenses or be prevented from selling products or services.

        From time to time, third parties may claim that one or more of our products or services infringe their intellectual property rights. We analyze and take action in response to such claims on a case-by-case basis. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming due to the complexity of our technology and the uncertainty of intellectual property litigation and could divert our management and key personnel from business operations. A claim of intellectual property infringement could cause us to enter into a costly or restrictive license agreement (which may not be available under acceptable terms, or at all), require us to redesign certain of our products (which would be costly and time-consuming) and/or subject us to significant damages or an injunction against the development and sale of certain products or services. In certain of our businesses, we rely on third-party intellectual property licenses, and we cannot ensure that these licenses will be available to us in the future on terms favorable to us or at all.

Third parties may infringe our intellectual property rights, and we may suffer competitive injury or expend significant resources enforcing our intellectual property rights.

        Our success depends in part on our proprietary technology, including technology we obtained through acquisitions. We rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish our proprietary rights. If we do not enforce our intellectual property rights successfully, our competitive position may suffer, which could harm our operating results.

        Our pending patent, copyright and trademark registration applications may not be allowed or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us with a significant competitive advantage. In preparation for the separation and distribution, we have applied for trademarks related to our new global brand name in various jurisdictions worldwide. Any successful opposition to our applications in material jurisdictions could impose material costs on us or make it more difficult to protect our brand. Different jurisdictions vary widely in the level of protection and priority they give to trademark and other intellectual property rights.

        We may be required to spend significant resources monitoring our intellectual property rights, and we may or may not be able to detect infringement of such rights by third parties. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights in a timely manner, or at all. In some circumstances, we may choose to not pursue enforcement due to a variety of reasons. In addition, competitors may avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries, which could make it easier for competitors to capture market share and could result in lost revenues to the company. Furthermore, some of our intellectual property is licensed to others, which allows them to compete with us using that intellectual property.

We are or will be subject to ongoing tax examinations of our tax returns by the IRS and other tax authorities. An adverse outcome of any such audit or examination by the IRS or other tax authority could have a material adverse effect on our results of operations, financial condition and liquidity.

        We are or will be subject to ongoing tax examinations of our tax returns by the IRS and other tax authorities in various jurisdictions. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to determine the adequacy of our provision for income taxes. These assessments can require considerable estimates and judgments. Intercompany transactions associated with the sale of inventory, services, intellectual property and cost sharing arrangements are complex and affect our tax liabilities. The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in multiple jurisdictions. The outcomes of any tax examinations could have an adverse effect on our operating results and financial condition. Due to the complexity of tax contingencies, the ultimate resolution of any tax matters related to operations may result in payments greater or less than amounts accrued.

Our operations may be adversely impacted by changes in our business mix or changes in the tax legislative landscape.

        Our effective tax rate may be adversely impacted by, among other things, changes in the mix of our earnings among countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, and changes in tax laws. We cannot give any assurance as to what our effective tax rate will be in the future because, among other things, there is uncertainty regarding the tax policies of the jurisdictions where we operate. Changes in tax laws, such as tax reform in the United States or changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address “base erosion and profit shifting” and the taxation of the “Digital Economy” could impact our effective tax rate.

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

        We benefit from tax incentives extended to certain of our foreign subsidiaries to encourage investment or employment. Several jurisdictions have granted us tax incentives that require renewal at various times in the future, the most significant being Singapore. We do not expect incentives granted by other jurisdictions to have a material impact on our financial statements. The Singapore tax incentive requires that specific conditions be satisfied, which include achieving thresholds of employment, ownership of certain assets, as well as specific types of investment activities within Singapore. We believe that we will satisfy such conditions in the future as needed, but cannot guarantee that such conditions will be satisfied. Our Singapore tax incentive is due for renewal in fiscal 2024, but we cannot guarantee that Singapore will not revoke the tax incentive earlier.

Singapore announced potential changes to its IP incentive programs in its 2017 budget. Such potential changes could result in a reduction in tax incentive benefits and an early termination of or changes to our existing Singapore incentive in 2021. No changes have been finalized, and it is unclear to what extent, if at all, changes will be made to the tax incentives or any specific conditions. We cannot guarantee that we will qualify for any new incentive regime or that such conditions will be satisfied.

        Our taxes could increase if the incentives are not renewed upon revocation or expiration. If we cannot or do not wish to satisfy all or portions of the tax incentive conditions, we may lose the related tax incentive and could be required to refund the benefits that the tax incentives previously provided. As a result, our effective tax rate could be higher than it would have been had we maintained the benefits of the tax incentives and could harm our operating results.

If we suffer a loss to our factories, facilities or distribution system due to a catastrophic event, our operations could be significantly harmed.

        Our factories, facilities and distribution system are subject to catastrophic loss due to fire, flood, terrorism or other natural or manmade disasters. In particular, several of our facilities could be subject to a catastrophic loss caused by earthquake or other natural disasters due to their locations. For example, our production facilities, headquarters and laboratories in California and our production facilities in Japan are all located in areas with above-average seismic activity. If any of these facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility. If such a disruption were to occur, we could breach our agreements, our reputation could be harmed and our business and operating results could be adversely affected. In addition, since we have consolidated our manufacturing facilities, we are more likely to experience an interruption to our operations in the event of a catastrophe in any one location. Although we carry insurance for property damage and business interruption, we do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism. Also, our third-party insurance coverage will vary from time to time in both type and amount depending on availability, cost and our decision with respect to risk retention. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which we are able to obtain third-party insurance. If our third-party insurance coverage is adversely affected, or to the extent we have elected to self-insure, we may be at a greater risk that our operations will be harmed by a catastrophic loss.

If we experience a significant disruption in, or breach in security of, our information technology systems, our business could be adversely affected.

       We rely on several centralized information technology systems to provide products and services, maintain financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. If we experience a prolonged system disruption in the information technology systems that involve our interactions with customers or suppliers, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business. In addition, our information technology systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, catastrophes or other unforeseen events. Furthermore, security breaches of our information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to the company or our employees, partners, customers or suppliers, which could result in significant financial or reputational damage to the company.

Man-made problems such as cybersecurity attacks, computer viruses or terrorism may disrupt our operations and harm our business, reputation and operating results

Despite our implementation of network security measures, our network may be vulnerable to cybersecurity attacks, computer viruses, break-ins and similar disruptions. Cybersecurity attacks, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data. Any such event could have a material adverse effect on our business, operating results and financial condition.

 Our daily business operations require us to retain sensitive data such as intellectual property, proprietary business information and data related to customers, suppliers and business partners within our networking infrastructure. The ongoing maintenance and

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security of this information is pertinent to the success of our business operations and our strategic goals, and organizations like Keysight are susceptible to multiple variations of attacks on our networks on a daily basis.

 Our networking infrastructure and related assets may be subject to unauthorized access by hackers, employee errors, or other unforeseen activities. Such issues could result in the disruption of business processes, network degradation and system downtime, along with the potential that a third party will exploit our critical assets such as intellectual property, proprietary business information and data related to our customers, suppliers and business partners. To the extent that such disruptions occur, they may cause delays in the manufacture or shipment of our products and the cancellation of customer orders and, as a result, our business operating results and financial condition could be materially and adversely affected resulting in a possible loss of business or brand reputation.

In addition, the effects of war or acts of terrorism could have a material adverse effect on our business, operating results and financial condition. The continued threat of terrorism and heightened security and military action in response to this threat, or any future acts of terrorism, may cause further disruption to the economy and create further uncertainties in the economy. Energy shortages, such as gas or electricity shortages, could have similar negative impacts. To the extent that such disruptions or uncertainties result in delays or cancellations of customer orders or the manufacture or shipment of our products, our business, operating results and financial condition could be materially and adversely affected.

Our business and financial results may be adversely affected by various legal and regulatory proceedings.

        We are subject to legal proceedings, lawsuits and other claims in the normal course of business and could become subject to additional claims in the future, some of which could be material. The outcome of existing proceedings, lawsuits and claims may differ from our expectations because the outcomes of litigation are often difficult to reliably predict. Various factors or developments can lead us to change current estimates of liabilities and related insurance receivables where applicable, or permit us to make such estimates for matters previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or changes in applicable law. A future adverse ruling, settlement or unfavorable development could result in charges that could adversely affect our business, operating results or financial condition.

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

        We may need to seek additional financing for our general corporate purposes. For example, we may need to increase our investment in R&D activities or need funds to make acquisitions. We may be unable to obtain any desired additional financing on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to fund our expansion, successfully develop or enhance products or respond to competitive pressures, any of which could negatively affect our business. If we finance acquisitions by issuing additional convertible debt or equity securities, our existing stockholders may experience share dilution, which could affect the market price of our stock. If we raise additional funds through the issuance of equity securities, our shareholders will experience dilution of their ownership interest. If we raise additional funds by issuing debt, we may be subject to further limitations on our operations and ability to pay dividends due to restrictive covenants.

Adverse conditions in the global banking industry and credit markets may adversely impact the value of our cash investments or impair our liquidity.

        Our cash and cash equivalents are invested or held in a mix of money market funds, time deposit accounts and bank demand deposit accounts. Disruptions in the financial markets may, in some cases, result in an inability to access assets such as money market funds that traditionally have been viewed as highly liquid. Any failure of our counterparty financial institutions or funds in which we have invested may adversely impact our cash and cash equivalent positions and, in turn, our results and financial condition.

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

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

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Risks Related to Our Common Stock

Our share price may fluctuate significantly.

Our common stock is listed on NYSE under the ticker symbol “KEYS.” The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including but not limited to:

• actual or anticipated fluctuations in our operating results due to factors related to our business;

• success or failure of our business strategy;

• our quarterly or annual earnings, or those of other companies in our industry;

• our ability to obtain third-party financing as needed;

• announcements by us or our competitors of significant acquisitions or dispositions;

• changes in accounting standards, policies, guidance, interpretations or principles;

• the failure of securities analysts to cover our common stock;

• changes in earnings estimates by securities analysts or our ability to meet those estimates;

• the operating and share price performance of other comparable companies;

• investor perception of our company;

• natural or other disasters that investors believe may affect us;

• overall market fluctuations;

• results from any material litigation or government investigations;

• changes in laws or regulations affecting our business; and

• general economic conditions and other external factors.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common stock.

In addition, when the market price of a company’s shares drops significantly, shareholders often institute securities class action lawsuits against the company. A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of management and other resources.

We do not currently pay dividends on our common stock.

        We do not currently pay dividends on our common stock. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders fall within the discretion of our board of directors. The board's decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements, regulatory constraints and other factors that the board deems relevant. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends.

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

        Our amended and restated certificate of incorporation and amended and restated bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include but are not limited to:

• the inability of our shareholders to call a special meeting;

• the inability of our shareholders to act without a meeting of shareholders;

• rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings;

• the right of our board to issue preferred stock without shareholder approval;

• the division of our board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult;

• a provision that shareholders may only remove directors with cause;

• the ability of our directors, and not shareholders, to fill vacancies on our board of directors; and

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• the requirement that the affirmative vote of shareholders holding at least 80% of our voting stock is required to amend certain provisions in our amended and restated certificate of incorporation (relating to the number, term and removal of our directors, the filling of our board vacancies, the advance notice to be given for nominations for elections of directors, the calling of special meetings of shareholders, shareholder action by written consent, the ability of the board of directors to amend the bylaws, elimination of liability of directors to the extent permitted by Delaware law, exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders and amendments of the certificate of incorporation) and certain provisions in our amended and restated bylaws (relating to the calling of special meetings of shareholders, the business that may be conducted or considered at annual or special meetings, the advance notice of shareholder business and nominations, shareholder action by written consent, the number, tenure, qualifications and removal of our directors, the filling of our board vacancies, director and officer indemnification and amendments of the bylaws).

        In addition, because we have not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the "DGCL"), this provision could also delay or prevent a change of control that some shareholders may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an "interested stockholder") shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of shareholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

        We believe these provisions will protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of the company and our shareholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

Our amended and restated certificate of incorporation designates that the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against the company and our directors and officers.

Our amended and restated certificate of incorporation provide that unless the board of directors otherwise determines, the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to the company or our shareholders, any action asserting a claim against us or any of our directors or officers arising pursuant to any provision of the DGCL or Keysight's amended and restated certificate of incorporation or bylaws, or any action asserting a claim against us or any of our directors or officers governed by the internal affairs doctrine. This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.

Risks Related to the Acquisition of Ixia

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

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

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In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of management's attention. The difficulties of combining the operations of the companies include but are not limited to:

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

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

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

• difficulties in the integration of operations and systems;

• difficulties in the assimilation of employees;

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

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

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

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

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

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

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

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

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

Risks Related to the Separation

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

        After the separation, there are several significant areas where the liabilities of Agilent may become our obligations. For example, under the Internal Revenue Code and the related rules and regulations, each corporation that was a member of the Agilent U.S. consolidated group during a taxable period or portion of a taxable period ending on or before the effective time of the distribution is severally liable for the U.S. federal income tax liability of the entire Agilent U.S. consolidated group for that taxable period. Consequently, if Agilent is unable to pay the consolidated U.S. federal income tax liability for a prior period, we could be required to pay the entire amount of such tax, which could be substantial and in excess of the amount allocated to it as agreed

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between us and Agilent at the time of separation. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans, as well as other contingent liabilities.

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

        A condition to the distribution is that Agilent received an opinion of Baker & McKenzie LLP, tax counsel to Agilent, regarding the qualification of the separation and the distribution as a reorganization within the meaning of Sections 355(a) and 368(a)(1)(D) of the Code. The opinion relies on certain facts, assumptions, representations and undertakings from Agilent and Keysight, including those regarding the past and future conduct of the companies' respective businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, Agilent and its shareholders may not be able to rely on the opinion, and could be subject to significant tax liabilities. Notwithstanding the opinion of tax counsel, the IRS could determine on audit that the distribution is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the opinion.

        If the distribution were determined to be taxable for U.S. federal income tax purposes, Agilent and its shareholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities. For example, if the distribution failed to qualify for tax-free treatment, Agilent would for U.S. federal income tax purposes be treated as if it had sold the Keysight common stock in a taxable sale for its fair market value, and Agilent's shareholders, who are subject to U.S. federal income tax, would be treated as receiving a taxable distribution in an amount equal to the fair market value of the Keysight common stock received in the distribution. In addition, if the separation and distribution failed to qualify for tax-free treatment under federal, state and local tax law and/or foreign tax law, Agilent and Keysight could each incur significant tax liabilities under U.S. federal, state, local and/or foreign tax law.

        Under the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, we are generally required to indemnify Agilent against taxes incurred by Agilent that arise as a result of our taking or failing to take, as the case may be, certain actions that result in the distribution failing to meet the requirements of a tax-free distribution under Section 355 of the Code. Under the agreement between Agilent and Keysight, as finalized at the time of separation, we may also be required to indemnify Agilent for other contingent tax liabilities, which could materially adversely affect our financial position.

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

ISSUER PURCHASES OF EQUITY SECURITIES

The table below summarizes information about the company’s purchases, based on trade date; of its equity securities registered pursuant to Section 12 of the Exchange Act during the quarterly period ended January 31, 2018.

Period	Total Number of Shares of Common Stock Purchased (1)	Weighted Average Price Paid per Share of Common Stock (2)	Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Approximate Dollar Value of Shares of Common Stock that May Yet Be Purchased Under the Program (1)
November 1, 2017 through November 30, 2017	—	N/A	—	$	138,515,618
December 1, 2017 through December 31, 2017	—	N/A	—	$	138,515,618
January 1, 2018 through January 31, 2018	—	N/A	—	$	138,515,618
Total	—	N/A	—

(1)

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

(2)

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

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ITEM 6. EXHIBITS

Exhibit
Number	Description
11.1	See Note 6, “Net Income (Loss) Per Share,” to our Condensed Consolidated Financial Statements.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Labels Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

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KEYSIGHT TECHNOLOGIES, INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:	March 8, 2018	By:	/s/ Neil Dougherty
			Neil Dougherty
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)
Dated:	March 8, 2018	By:	/s/ John C. Skinner
			John C. Skinner
			Vice President and Corporate Controller
			(Principal Accounting Officer)

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EX-31.1

Exhibit 31.1 

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 

I, Ronald S. Nersesian, certify that:

1. I have reviewed this Form 10-Q of Keysight Technologies, Inc. ("the Registrant"); 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	March 8, 2018
		/s/ Ronald S. Nersesian
		Ronald S. Nersesian
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 

I, Neil Dougherty, certify that:

1. I have reviewed this Form 10-Q of Keysight Technologies, Inc. ("the Registrant"); 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	March 8, 2018
		/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Quarterly Report of Keysight Technologies, Inc. (the "Company") on Form 10-Q for the period ended January 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ronald S. Nersesian, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	March 8, 2018	/s/ Ronald S. Nersesian
		Ronald S. Nersesian
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Quarterly Report of Keysight Technologies, Inc. (the "Company") on Form 10-Q for the period ended January 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Neil Dougherty, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	March 8, 2018	/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2018	Mar. 06, 2018
Entity Information [Line Items]
Entity Registrant Name	Keysight Technologies, Inc.
Entity Central Index Key	0001601046
Current Fiscal Year End Date	--10-31
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		187,542,645
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2018
Trading Symbol	KEYS

XML

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Net revenue [Abstract]
Products	$ 684	$ 606
Services and other	153	120
Total net revenue	837	726
Costs and expenses:
Cost of products	337	255
Cost of services and other	73	67
Total costs	410	322
Research and development	146	108
Selling, general and administrative	289	213
Other operating expense (income), net	(3)	(79)
Total costs and expenses	842	564
Income (loss) from operations	(5)	162
Interest income	3	1
Interest expense	(22)	(12)
Other income (expense), net	1	1
Income (loss) before taxes	(23)	152
Provision (benefit) for income taxes	(117)	43
Net income	$ 94	$ 109
Net income per share:
Basic (in dollars per share)	$ 0.50	$ 0.64
Diluted (in dollars per share)	$ 0.50	$ 0.63
Weighted average shares used in computing net income per share:
Basic (in shares)	187	171
Diluted (in shares)	189	173

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Other comprehensive income (loss):
Net income	$ 94	$ 109
Unrealized gain (loss) on investments, net of tax benefit (expense) of zero and ($1)	(2)	4
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of zero and $1	2	2
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of zero	(2)	1
Foreign currency translation, net of tax benefit (expense) of zero	41	(24)
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $3 and $13	10	28
Change in net prior service credit, net of tax benefit of $1 and $2	(4)	(4)
Other comprehensive income	45	7
Total comprehensive income	$ 139	$ 116

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract]
Unrealized gain (loss) on investments, tax	$ 0	$ (1)
Unrealized gain (loss) on derivative instruments, tax	0	1
Amounts reclassified into earnings related to derivative instruments, tax	0	0
Foreign currency translation, tax	0	0
Net defined benefit pension cost and post retirement plan costs, tax [Abstract]
Change in actuarial net loss, tax	(3)	(13)
Change in net prior service credit, tax	$ 1	$ 2

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Current assets:
Cash and cash equivalents	$ 980	$ 818
Accounts receivable, net	454	547
Inventory	609	588
Other current assets	232	224
Total current assets	2,275	2,177
Property, plant and equipment, net	539	530
Goodwill	1,894	1,882
Other intangible assets, net	807	855
Long-term investments	61	63
Long-term deferred tax assets	204	186
Other assets	270	240
Total assets	6,050	5,933
Current liabilities:
Current portion of long-term debt	20	10
Accounts payable	229	211
Employee compensation and benefits	170	217
Deferred revenue	354	291
Income and other taxes payable	35	28
Other accrued liabilities	78	62
Total current liabilities	886	819
Long-term debt	2,028	2,038
Retirement and post-retirement benefits	315	309
Long-term deferred revenue	105	101
Other long-term liabilities	232	356
Total liabilities	3,566	3,623
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	0	0
Common stock; $0.01 par value; 1 billion shares authorized; 190 million shares at January 31, 2018 and 188 million shares at October 31, 2017 issued	2	2
Treasury stock at cost; 2.3 million shares at January 31, 2018 and at October 31, 2017	(62)	(62)
Additional paid-in-capital	1,815	1,786
Retained earnings	1,141	1,041
Accumulated other comprehensive loss	(412)	(457)
Total stockholder's equity	2,484	2,310
Total liabilities and equity	$ 6,050	$ 5,933

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares shares in Millions	Jan. 31, 2018	Oct. 31, 2017
Stockholders' Equity Attributable to Parent [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100.0	100.0
Preferred stock, issued and outstanding (in shares)	0.0	0.0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000.0	1,000.0
Common Stock, Shares, Issued	190.0	188.0
Treasury Stock, Shares	2.3	2.3

XML

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Cash flows from operating activities:
Net Income	$ 94	$ 109
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	78	32
Share-based compensation	19	18
Deferred tax expense (benefit)	(235)	40
Excess and obsolete inventory-related charges	6	3
Gain on sale of land	0	(8)
Pension curtailment and settlement gains	0	(68)
Other non-cash expenses, net	2	0
Changes in assets and liabilities:
Accounts receivable	99	40
Inventory	(20)	(10)
Accounts payable	14	(12)
Employee compensation and benefits	(50)	(36)
Retirement and post-retirement benefits	(12)	(3)
Deferred Revenue	61	15
Income taxes payable	115	(15)
Other assets and liabilities	0	10
Net cash provided by operating activities	171	115
Cash flows from investing activities:
Investments in property, plant and equipment	(24)	(16)
Proceeds from sale of land	0	8
Acquisition of businesses and intangible assets, net of cash acquired	(3)	0
Net cash used in investing activities	(27)	(8)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	24	19
Payment of taxes related to net share settlement of equity awards	(15)	(11)
Excess tax benefit (deficiency) from share-based plans	1
Proceeds from revolving credit facility	40	0
Repayment of revolving credit facility	(40)	0
Net Cash provided by financing activities	9	8
Effect of exchange rate movements	9	(2)
Net increase in cash and cash equivalents	162	113
Cash and cash equivalents at beginning of period	818	783
Cash and cash equivalents at end of period	$ 980	$ 896

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jan. 31, 2018

Accounting Policies [Abstract]

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview. Keysight Technologies, Inc. ("we", "us", "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a measurement company providing electronic design and test solutions to communications and electronics industries. Following the acquisition of Ixia on April 18, 2017, the company also provides testing, visibility, and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers, and network equipment manufacturers.

Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our condensed consolidated balance sheet as of January 31, 2018 and October 31, 2017, condensed consolidated statement of comprehensive income for the three months ended January 31, 2018 and 2017, condensed consolidated statement of operations for the three months ended January 31, 2018 and 2017, and condensed consolidated statement of cash flows for the three months ended January 31, 2018 and 2017.

Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, restructuring, and accounting for income taxes.

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

Restricted Cash. As of January 31, 2018, restricted cash of approximately $2 million consisted of deposits held as collateral against bank guarantees and is classified within other assets in the condensed consolidated balance sheet. As of October 31, 2017, restricted cash of approximately $2 million consisted of deposits held as collateral against bank guarantees and is classified within other assets in the condensed consolidated balance sheet.

Update to Significant Accounting Policies. There have been no material changes to our significant accounting policies, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017.

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NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jan. 31, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

2. NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance which will replace numerous requirements in GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to show the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016. During 2016, the FASB issued several amendments to the standard, including clarification to the guidance on reporting revenues as a principal versus an agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability, presentation of sales taxes, impairment testing for contract costs and disclosure of performance obligations.

The two permitted transition methods under the new standard are (1) the full retrospective method, in which case the standard would be applied to each prior reporting period presented, and the cumulative effect of applying the standard would be recognized at the earliest period shown, or (2) the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. We currently anticipate adopting the standard on November 1, 2018 under the modified retrospective transition method. Based on the progress to date, we have not identified any material impacts of the new standard on the amount and timing of revenue recognition to our consolidated statement of operations; however, we have not completed our assessment, including the impact of our recent acquisitions of Ixia and ScienLab. We expect recognition of revenue for a majority of customer contracts to remain substantially unchanged. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for software license revenue, as under the new standard we expect to recognize software license revenue at the time of billing rather than over the contractual term since control of the software license is transferred, and our performance obligation is satisfied at that point in time. The new standard will also require the deferral of commissions that were previously expensed as incurred and may qualify for capitalization under the new standard.

In February 2016, the FASB issued guidance that will require organizations that lease assets to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting, that amends the accounting for stock-based compensation and requires excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits and deficiencies to be presented as operating activity in the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this guidance during the first quarter of 2018 and elected to recognize forfeitures as they occur. As a result, a $6 million cumulative-effect adjustment was recorded directly to retained earnings as of November 1, 2017, the beginning of the annual period of adoption, with a corresponding reduction to deferred tax liabilities. Additionally, we reported an income tax benefit of $1 million for the first quarter of 2018 due to recognition of excess tax benefits from share-based compensation.

We elected to apply the presentation requirements for cash flows related to excess tax benefits and employee taxes paid for withheld shares retrospectively to all periods presented, which resulted in the following change to our previously reported condensed consolidated statement of cash flows for the three months ended January 31, 2017:

	Three Months Ended January 31, 2017
	As Originally Reported		As Adjusted		Change
	(in millions)
Net cash provided by operating activities	$	102	$	115	$	13
Net cash provided by financing activities	$	21	$	8	$	(13	)

In March 2017, the FASB issued guidance that requires the service cost component of net periodic pension cost and net periodic post-retirement benefit cost to be included in operating expenses (together with other employee compensation costs) and the other components of the cost to be included in non-operating expenses. The standard is effective for annual and interim periods beginning after December 31, 2017. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The standard is effective for fiscal years beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In August 2017, the FASB issued guidance to enable entities to better portray the economics of their risk management activities in the financial statements and enhance transparency and understandability of hedge results. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

In February 2018, the FASB issued guidance that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted in December 2017. The standard is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are evaluating the impact of adopting this guidance on our consolidated financial statements.

Other amendments to GAAP that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

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ACQUISITIONS (Notes)

3 Months Ended

Jan. 31, 2018

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. ACQUISITIONS

Acquisitions in 2017

Acquisition of Ixia

On April 18, 2017, pursuant to the terms of an Agreement and Plan of Merger dated January 30, 2017, between Keysight and Ixia (the "Merger Agreement"), we acquired all of the outstanding common stock of Ixia for $1,622 million, net of $72 million of cash acquired, pursuant to an exchange offer for $19.65 per share (the "Merger Consideration"). Pursuant to the Merger Agreement, any outstanding and unexercised Ixia stock options with an exercise price below the Merger Consideration and any outstanding Ixia restricted stock awards were cancelled and converted into the right to receive a cash payment equal to the merger consideration of $19.65 per share (minus the exercise price for the Ixia stock options). The vested portion of the awards associated with prior service of Ixia employees represented approximately $47 million of the total consideration. We funded the acquisition with a combination of cash and proceeds from debt and equity financings. As a result of the acquisition, Ixia has become a wholly-owned subsidiary of Keysight. Accordingly, the results of Ixia are included in Keysight's consolidated financial statements from the date of the acquisition and are reported in the Ixia Solutions Group operating segment.

The Ixia acquisition was accounted for in accordance with the authoritative accounting guidance. The acquired assets and assumed liabilities were recorded by Keysight at their estimated fair values. Keysight determined the estimated fair values with the assistance of appraisals or valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management. We expect to leverage and expand the existing sales channels and product development resources, and utilize the assembled workforce. The company also anticipates opportunities for growth through expanded geographic and customer segment diversity and the ability to leverage additional products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Ixia's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

All goodwill was assigned to the Ixia Solutions Group. We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

A portion of the overall purchase price was allocated to acquired intangible assets. Amortization expense associated with acquired intangible assets is not deductible for tax purposes. Therefore, a deferred tax liability of approximately $186 million was established primarily for the future amortization of these intangibles and is included in "other long-term liabilities" in the table below.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of April 18, 2017 (in millions):

Cash and cash equivalents	$	72
Short-term investments	44
Accounts receivable	91
Inventory	107
Other current assets	34
Property, plant and equipment	50
Goodwill	1,117
Other intangible assets	744
Other assets	4
Total assets acquired	2,263
Accounts payable	(10		)
Employee compensation and benefits	(32		)
Deferred revenue	(35		)
Income and other taxes payable	(1		)
Other accrued liabilities	(32		)
Other long-term liabilities	(459		)
Net assets acquired	$	1,694

The fair values of cash and cash equivalents, short-term investments, accounts receivable, short-term investments, other current assets, accounts payable, employee compensation and benefits, and other accrued liabilities were generally determined using historical carrying values given the short-term nature of these assets and liabilities. The fair values for acquired inventory, property, plant and equipment, intangible assets, and deferred revenue were determined with the input from third-party valuation specialists. The fair values of certain other assets and certain other liabilities were determined internally using historical carrying values and estimates made by management. If additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of other intangible assets acquired in connection with the Ixia acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	423	4 years
Customer relationships	234		7 years
Tradenames and trademarks	12		3 years
Backlog	8		90 days
Total intangible assets subject to amortization	677
In-process research and development	67
Total intangible assets	$	744

As noted above, the intangible assets were valued with input from valuation specialists using the income approach, which includes the discounted cash flow, cost-savings, and relief from royalty methods. The in-process research and development was valued using the multi-period excess earnings method under the income approach by discounting forecasted cash flows directly related to the products expecting to result from the projects, net of returns on contributory assets. A discount rate of 14% was used to value the research and development projects, adjusted to reflect additional risks inherent in the acquired projects. The primary in-process projects acquired relate to next generation products which will be released in the near future. Total costs to complete for all Ixia in-process research and development were estimated at approximately $12 million as of the close date.

Acquisition and integration costs directly related to the Ixia acquisition were recorded in the condensed consolidated statement of operations as follows:

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	2	$	—
Research and development	1		—
Selling, general and administrative	15		2
Total acquisition and integration costs	$	18	$	2

Such costs are expensed in accordance with the authoritative accounting guidance.

Acquisition of ScienLab

On August 31, 2017, we acquired all of the outstanding common stock of ScienLab for $60 million, net of $2 million of cash acquired. ScienLab is a Germany-based company that provides test solutions to automotive original equipment manufacturers and Tier 1 suppliers in the automotive and energy markets. This acquisition complements our portfolio, allowing end-to-end solutions for hybrid electric vehicles, electric vehicles, and battery test solutions that address e-mobility market dynamics. We funded the acquisition using existing cash. As a result of the acquisition, ScienLab has become a wholly-owned subsidiary of Keysight. Accordingly, the results of ScienLab are included in Keysight's consolidated financial statements from the date of the acquisition and are reported in the Electronic Industrial Solutions Group operating segment.

The ScienLab acquisition was accounted for in accordance with the authoritative accounting guidance. The acquired assets and assumed liabilities were recorded by Keysight at their estimated fair values. Keysight determined the estimated fair values with the assistance of appraisals or valuations performed by third party specialists, discounted cash flow analysis, and estimates made by management. We expect to leverage and expand the existing sales channels and product development resources, and utilize the assembled workforce. The company also anticipates opportunities for growth through expanded geographic and customer segment diversity and the ability to leverage additional products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of ScienLab's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

All goodwill was assigned to the Electronic Industrial Solutions Group. We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

A portion of the overall purchase price was allocated to acquired intangible assets. Amortization expense associated with acquired intangible assets is not deductible for tax purposes. Therefore, a deferred tax liability of approximately $13 million was established primarily for the future amortization of these intangibles and is included in "other long-term liabilities" in the table below.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of August 31, 2017 (in millions):

Cash and cash equivalents	$	2
Accounts receivable	3
Inventory	16
Other current assets	1
Goodwill	23
Other intangible assets	40
Total assets acquired	85
Accounts payable	(1		)
Deferred revenue	(3		)
Income and other taxes payable	(2		)
Current portion of long-term debt	(1		)
Other long-term liabilities	(16		)
Net assets acquired	$	62

The fair values of cash and cash equivalents, accounts receivable, other current assets, accounts payable, deferred revenue, and current portion of long-term debt were generally determined using historical carrying values given the short-term nature of these assets and liabilities. The fair values for acquired inventory and intangible assets were determined with the input from third-party valuation specialists. The fair values of certain other liabilities were determined internally using historical carrying values and estimates made by management. As additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of intangible assets acquired in connection with the ScienLab acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	33	6 years
Customer relationships	4		5 years
Non-compete agreements	1		3 years
Tradenames and trademarks	1		3 years
Backlog	1		6 months
Total intangible assets	$	40

As noted above, the intangible assets were valued with input from valuation specialists using the income approach, which includes the discounted cash flow, cost-savings, and relief from royalty methods.

Acquisition and integration costs directly related to the ScienLab acquisition totaled $1 million for the three months ended January 31, 2018 which were recorded in selling, general and administrative expenses.

Supplemental Pro Forma Information (Unaudited)

The following represents pro forma operating results as if Ixia had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2017. Pro forma results of operations for ScienLab have not been presented because the effects of the acquisition were not material to the company’s financial results.

	Three Months Ended
in millions, except per share amounts	January 31, 2017
Net revenue	$	846
Net income	$	39
Net income per share - Basic	$	0.21
Net income per share - Diluted	$	0.21

The unaudited pro forma financial information for the three months ended January 31, 2017 combines the historical results of Keysight and Ixia for the three months ended January 31, 2017, assuming that the companies were combined as of November 1, 2016 and include business combination accounting effects from the acquisition including amortization and depreciation charges from acquired intangible assets, property plant and equipment, interest expense on the financing transactions used to fund the acquisition and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2017.

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SHARE-BASED COMPENSATION

3 Months Ended

Jan. 31, 2018

Share-based Compensation [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

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

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		4
Selling, general and administrative	12		11
Total share-based compensation expense	$	19	$	18

 At both January 31, 2018 and 2017, share-based compensation capitalized within inventory was $1 million.

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

	Three Months Ended
	January 31,
	2018		2017
LTP Program:
Volatility of Keysight shares	25	%	27	%
Volatility of selected index	14	%	15	%
Price-wise correlation with selected peers	57	%	57	%

Awards granted under the LTP Program are based on a variety of targets, such as total shareholder return (TSR) or financial metrics such as operating margin, cost synergies and others. The awards based on TSR were valued using a Monte Carlo simulation model and those based on financial metrics were valued based on the market price of Keysight’s common stock on the date of grant. We did not grant any option awards for the three months ended January 31, 2018 and 2017, respectively. Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.

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INCOME TAXES

3 Months Ended

Jan. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The company’s effective tax rate was a benefit of 515.8 percent for the three months ended January 31, 2018 and expense of 28.3 percent for the three months ended January 31, 2017. The income tax benefit was $117 million for the three months ended January 31, 2018, and income tax expense was $43 million for the three months ended January 31, 2017. The increase in the total income tax benefit and discrete benefit for the three months ended January 31, 2018 is primarily due to changes in U.S. tax law. The income tax benefit for the three months ended January 31, 2018 included a net discrete benefit of $115 million, primarily due to $117 million of benefit resulting from changes in U.S. tax law. The income tax provision for the three months ended January 31, 2017 included a net discrete expense of $23 million, primarily related to $22 million of tax resulting from the transfer of a portion of the Japanese Employees’ Pension Fund (see Note 12).

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The Singapore tax incentive is due for renewal in fiscal 2024.

For the majority of our entities, the open tax years for the IRS, state and most foreign audit authorities are from August 1, 2014 through the current tax year. For certain acquired U.S. entities, the tax years generally remain open back to year 2009. For foreign entities, the tax years remain open, at most, back to the year 2007. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

The company is being audited in Malaysia for the 2008 tax year. Although this tax year pre-dates our spin-off from Agilent, pursuant to the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, for certain entities including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal 2017, Keysight paid income taxes and penalties of $68 million on gains related to intellectual property rights, although we are currently in the process of appealing to the Special Commissioners of Income Tax (“SCIT”) in Malaysia. The company believes there are numerous defenses to the current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed and the income in question is exempt from tax in Malaysia. The company is disputing this assessment and pursuing all avenues to resolve this issue favorably for the company.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”).  The Tax Act includes significant changes to the U.S. corporate income tax system, including but not limited to: a federal corporate income tax rate reduction from 35 percent to 21 percent; limitations on the deductibility of interest expense and executive compensation; creation of new minimum taxes such as the base erosion anti-abuse tax (“BEAT”) and Global Intangible Low Taxed Income (“GILTI”) tax; and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which will result in a one time U.S. tax liability on those earnings which have not previously been repatriated to the U.S. (the “Transition Tax”).

The corporate tax rate reduction is effective as of January 1, 2018. Since the company has a fiscal year rather than a calendar year, it is subject to rules relating to transitional tax rates. As a result, the company’s fiscal year 2018 federal statutory rate will be a blended rate of 23.3 percent.

Due to the complexities involved in accounting for the enactment of the Tax Act, the SEC staff has issued Staff Accounting Bulletin 118 (“SAB 118”) directing companies to consider the impact of the Tax Act as “provisional” when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for the change in tax law. For the amounts which the company was able to reasonably estimate, the company has recognized a provisional discrete income tax benefit of approximately $117 million. This is made up of a one-time reduction in net deferred tax liabilities and corresponding income tax benefit of approximately $304 million due to the re-measurement of U.S. income taxes recorded on the undistributed earnings of foreign subsidiaries that were not considered permanently reinvested. This was offset by approximately $176 million of income tax expense and corresponding long-term income tax payable due to the one-time toll charge. The company also estimated a one-time reduction in net deferred tax assets and corresponding income tax expense of approximately $11 million due to the re-measurement of the U.S. deferred tax assets at the lower 21 percent U.S. federal corporate income tax rate. We have not completed our accounting for the income tax effects of certain elements of the Tax Act, including the new GILTI tax. Due to the complexity of these new tax rules, we are continuing to evaluate these provisions of the Tax Act and whether such taxes are recorded as a current-period expense when incurred or whether such amounts should be factored into a company’s measurement of its deferred taxes. As a result, we have not included an estimate of the tax expense/benefit related to these items for the period ended January 31, 2018.

We are continuing to evaluate the Tax Act and its requirements, as well as its application to our business and its impact on our effective tax rate. In accordance with SAB 118, the estimated discrete income tax benefit of $117 million represents our best estimate based on interpretation of the Tax Act. We are able to make reasonable estimates of the impact of the deemed repatriation transition tax, remeasurement of the deferred tax liability recorded on the undistributed earnings of foreign subsidiaries that were not considered reinvested and reduction in the U.S. corporate income tax rate. The final impact of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the U.S. Treasury, additional analysis of foreign earnings inherited from acquisitions, and changes to U.S. state conformance to the U.S. federal tax law change. In accordance with SAB 118, the estimated discrete income tax benefit of $117 million is considered provisional and any subsequent adjustment to these amounts will be recorded to tax expense in the quarter in which the analysis is complete, but no later than December 22, 2018.

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NET INCOME PER SHARE

3 Months Ended

Jan. 31, 2018

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Numerator:
Net income	$	94	$	109
Denominator:
Basic weighted-average shares	187		171
Potential common shares— stock options and other employee stock plans	2		2
Diluted weighted-average shares	189		173

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method. We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because the effect would be anti-dilutive. For the three months ended January 31, 2018 and 2017, we excluded no options from the calculation of diluted earnings per share. In addition, we exclude stock options, ESPP shares, LTP Program and restricted stock awards, of which the combined exercise price and unamortized fair value collectively was greater than the average market price of our common stock because the effect would be anti-dilutive. For the three months ended January 31, 2018 and 2017, we excluded approximately 668,100 shares and 424,400 shares, respectively.

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SUPPLEMENT CASH FLOW INFORMATION (Notes)

3 Months Ended

Jan. 31, 2018

Other Significant Noncash Transactions [Line Items]

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

. SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for income taxes was $1 million and $17 million for the three months ended January 31, 2018 and 2017, respectively. Cash paid for interest was $2 million and zero for the three months ended January 31, 2018 and 2017, respectively. The following table summarizes our non-cash investing activities that are not reflected in the condensed consolidated statement of cash flows:

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Capital expenditures in accounts payable	$	(3	)	$	(5	)
	$	(3	)	$	(5	)

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INVENTORY

3 Months Ended

Jan. 31, 2018

Inventory, Net [Abstract]

INVENTORY

INVENTORY

	January 31, 2018		October 31, 2017
	(in millions)
Finished goods	$	296	$	286
Purchased parts and fabricated assemblies	313		302
Total inventory	$	609	$	588

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Jan. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill balances and the movements for each of our reportable operating segments as of and for the three months ended January 31, 2018 were as follows:

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2017	$	441	$	240	$	1,117	$	84	$	1,882
Foreign currency translation impact	8		3		—		1		12
Goodwill as of January 31, 2018	$	449	$	243	$	1,117	$	85	$	1,894

Other intangible assets as of January 31, 2018 and October 31, 2017 consisted of the following:

	Other Intangible Assets as of January 31, 2018						Other Intangible Assets as of October 31, 2017
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	821	$	291	$	530	$	808	$	252	$	556
Backlog	13		13		—		13		12		1
Trademark/Tradename	33		10		23		33		8		25
Customer relationships	304		70		234		304		61		243
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,172		384		788		1,159		333		826
In-Process R&D	19		—		19		29		—		29
Total	$	1,191	$	384	$	807	$	1,188	$	333	$	855

 During the three months ended January 31, 2018, we recognized no additions to goodwill and other intangible assets.During the three months ended January 31, 2018, there was a $3 million foreign exchange translation impact to other intangible assets. During the three months ended January 31, 2018, we transferred $10 million from in-process R&D to developed technology as projects were successfully completed.

Amortization of other intangible assets was $51 million and $11 million for the three months ended January 31, 2018 and 2017, respectively. Future amortization expense related to existing finite-lived purchased intangible assets is estimated to be $152 million for the remainder of 2018, $202 million for 2019, $194 million for 2020, $127 million for 2021, $50 million for 2022 and $63 million thereafter.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

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

Fair Value Hierarchy

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

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

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

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

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

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2018 and October 31, 2017 were as follows:

	Fair Value Measurements at January 31, 2018								Fair Value Measurements at October 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	451	$	451	$	—	$	—	$	403	$	403	$	—	$	—
Derivative instruments (foreign exchange contracts)	9		—		9		—		6		—		6		—
Long-term
Trading securities	13		13		—		—		13		13		—		—
Available-for-sale investments	31		31		—		—		34		34		—		—
Total assets measured at fair value	$	504	$	495	$	9	$	—	$	456	$	450	$	6	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	4	$	—	$	4	$	—	$	1	$	—	$	1	$	—
Long-term
Deferred compensation liability	13		—		13		—		13		—		13		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	14	$	—	$	14	$	—

Our money market funds, trading securities, and available-for-sale investments are generally valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. Our deferred compensation liability is classified as Level 2 because the inputs used in the calculations are observable, although the values are not directly based on quoted market prices. Our derivative financial instruments are classified within Level 2 as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets.

Trading securities (which are earmarked to pay the deferred compensation liability) and deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized currently in earnings. Investments designated as available-for-sale and certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss). Realized gains and losses from the sale of these instruments are recorded in earnings.

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DERIVATIVES

3 Months Ended

Jan. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts and purchased options, to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates.

Cash Flow Hedges

We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities between one and twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. Ineffectiveness in the three months ended January 31, 2018 and 2017 was not significant.

Other Hedges

Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments.

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

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

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of January 31, 2018 was $2 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2018.

There were 121 foreign exchange forward contracts open as of January 31, 2018 that were designated as cash flow hedges. There were 63 foreign exchange forward contracts as of January 31, 2018 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2018 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	45
British Pound	—			(6		)
Singapore Dollar	11			1
Malaysian Ringgit	77			(5		)
Japanese Yen	(96		)	(34		)
Other currencies	(15		)	(10		)
Total	$	(23	)	$	(9	)

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2018 and October 31, 2017 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2018		October 31, 2017		Balance Sheet Location	January 31, 2018		October 31, 2017
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	7	$	5	Other accrued liabilities	$	2	$	—
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	2		1
Total derivatives	$	9	$	6		$	4	$	1

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2	$	3
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	2	$	(1	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	1	$	2

The estimated amount of existing net gain at January 31, 2018 expected to be reclassified from accumulated other comprehensive income to cost of sales within the next twelve months is $4 million.

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

3 Months Ended

Jan. 31, 2018

Defined Benefit Plan [Abstract]

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2018 and 2017, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2018			2017			2018			2017			2018			2017
	(in millions)
Service cost—benefits earned during the period	$	6		$	5		$	3		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			6			6			2			2
Expected return on plan assets	(9		)	(8		)	(21		)	(19		)	(4		)	(3		)
Amortization:
Net actuarial loss	3			4			6			9			4			5
Prior service credit	(2		)	(2		)	—			—			(3		)	(4		)
Settlement gain	—			—			—			(68		)	—			—
Net periodic benefit cost (benefit)	$	4		$	4		$	(6	)	$	(68	)	$	(1	)	$	—

We did not contribute to our U.S. Defined Benefit Plans and U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2018 and 2017. We contributed $9 million and $7 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2018 and 2017, respectively.

During the remainder of 2018, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $29 million to our Non-U.S. Defined Benefit Plans.

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

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WARRANTY, COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jan. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

WARRANTY, COMMITMENTS AND CONTINGENCIES

WARRANTY, COMMITMENTS AND CONTINGENCIES

Standard Warranty

Effective December 1, 2017, the Keysight warranty on products sold through direct sales channel is primarily one year. Warranties for products sold through distribution channels continue to be primarily three years. We accrue for standard warranty costs based on historical trends in warranty charges. The accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. Estimated warranty charges are recorded within cost of products at the time related product revenue is recognized.

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Beginning balance	$	45		$	44
Accruals for warranties including change in estimate	10			7
Settlements made during the period	(8		)	(8		)
Ending balance	$	47		$	43
Accruals for warranties due within one year	$	26		$	22
Accruals for warranties due after one year	21			21
Ending balance	$	47		$	43

Commitments

There were no material changes during the three months ended January 31, 2018 to the operating and capital lease commitments reported in the company’s 2017 Annual Report on Form 10-K.

Contingencies

We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows.

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DEBT (Notes)

3 Months Ended

Jan. 31, 2018

Debt Disclosure [Abstract]

DEBT

DEBT

Short-Term Debt

Revolving Credit Facility

On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that replaced our existing $450 million unsecured credit facility dated September 15, 2014. The Revolving Credit Facility provides for a $450 million, five-year unsecured revolving credit facility that will expire on February 15, 2022 and bears interest at an annual rate of LIBOR + 1.30%. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. We may use amounts borrowed under the facility for general corporate purposes. During the three months ended January 31, 2018, we borrowed and repaid $40 million of borrowings outstanding under the Revolving Credit Facility. As of January 31, 2018, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2018.

Long-Term Debt

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

	January 31, 2018		October 31, 2017
	(in millions)
2019 Senior Notes at 3.30% ($500 face amount less unamortized costs of $2 and $2)	$	498	$	498
2024 Senior Notes at 4.55% ($600 face amount less unamortized costs of $4 and $4)	596		596
2027 Senior Notes at 4.60% ($700 face amount less unamortized costs of $6 and $6)	694		694
Term loan ($260 face amount less unamortized costs of zero)	260		260
	2,048		2,048
Less: Current portion of long-term debt	20		10
Total	$	2,028	$	2,038

There have been no changes to the principal, maturity, interest rates and interest payment terms of the senior notes during the three months ended January 31, 2018 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017.

Senior Unsecured Term Loan

On February 15, 2017, we entered into a term credit agreement that provides for a three-year $400 million senior unsecured term loan that bears interest at an annual rate of LIBOR + 1.50%. The term loan was drawn upon the closing of the Ixia acquisition. As of January 31, 2018, we had borrowings outstanding under the term loan of $260 million, which was repaid in February 2018.

As of January 31, 2018 and October 31, 2017, we had $27 million and $26 million, respectively, of outstanding letters of credit unrelated to the credit facility that were issued by various lenders.

The fair value of our long-term debt, calculated from quoted prices that are primarily Level 1 inputs under the accounting guidance fair value hierarchy, was above the carrying value by approximately $58 million and $91 million as of January 31, 2018 and October 31, 2017, respectively.

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STOCKHOLDERS' EQUITY

3 Months Ended

Jan. 31, 2018

Statement of Comprehensive Income [Abstract]

STOCKHOLDERS EQUITY

STOCKHOLDERS' EQUITY

Stock Repurchase Program

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

For the three months ended January 31, 2018, we did not repurchase any shares of common stock under the stock repurchase program.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2018 and 2017 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2017	$	14		$	(39	)	$	(468	)	$	35		$	1		$	(457	)
Other comprehensive income (loss) before reclassifications	(2		)	41			—			—			2			41
Amounts reclassified out of accumulated other comprehensive loss	—			—			13			(5		)	(2		)	6
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	(2		)	41			10			(4		)	—			45
As of January 31, 2018	$	12		$	2		$	(458	)	$	31		$	1		$	(412	)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2018 and 2017 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Unrealized gain (loss) on derivatives	$	2		$	(1	)	Cost of products
	—			—			Provision for income taxes
	2			(1		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(13		)	(17		)
Prior service credits	5			6
	(8		)	(11		)	Total before income tax
	2			3			Provision for income taxes
	(6		)	(8		)	Net of income tax
Total reclassifications for the period	$	(4	)	$	(9	)

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

Reclassifications of prior service benefit and actuarial net loss in respect of retirement plans and post retirement pension plans are included in the computation of net periodic cost (see Note 12, "Retirement Plans and Post-Retirement Pension Plans").

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SEGMENT INFORMATION

3 Months Ended

Jan. 31, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We provide electronic design and test instruments and systems and related software, software design tools, and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. Related services include start-up assistance, instrument productivity and application services and instrument calibration and repair. Additionally, we provide test, security and visibility solutions that validate, secure and optimize networks and applications from engineering concept to live deployment. We also offer customization, consulting and optimization services throughout the customer's product life cycle.

On April 18, 2017, we completed the acquisition of Ixia, which became our fourth reportable operating segment, the Ixia Solutions Group (“ISG”). As a result, Keysight now has four segments, Communications Solutions Group, Electronic Industrial Solutions Group, Ixia Solutions Group and Services Solutions Group.

Our operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.

Descriptions of our four reportable operating segments are as follows:

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

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

The Ixia Solutions Group helps customers validate the performance and security resilience of their networks and associated applications. The test, visibility and security solutions help organizations and their customers strengthen their physical and virtual networks. Enterprises, service providers, network equipment manufacturers, and governments worldwide rely on the group's solutions to validate new products before shipping and secure ongoing operation of their networks with better visibility and security. The group’s solutions consist of high-performance hardware platforms, software applications, and services, including warranty and maintenance offerings.

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

A significant portion of the segments' expenses, other than the Ixia Solutions Group expenses, arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include costs of centralized research and development, legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. Charges are allocated to the segments, and the allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. The Ixia Solutions Group will not be allocated these charges until integrated into the shared services and infrastructure.

The following tables reflect the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformity with GAAP. The performance of each segment is measured based on several metrics, including income from operations. These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding share-based compensation expense, restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, separation and related costs, amortization related to acquisition-related balances and other items as noted in the reconciliations below.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2018:
Total net revenue	$	420	$	203	$	108	$	106	$	837
Amortization of acquisition-related balances	—		—		19		—		19
Total segment revenue	$	420	$	203	$	127	$	106	$	856
Segment income from operations	$	59	$	37	$	18	$	17	$	131
Three Months Ended January 31, 2017:
Total net revenue	$	434	$	192	$	—	$	100	$	726
Amortization of acquisition-related balances	—		—		—		—		—
Total segment revenue	$	434	$	192	$	—	$	100	$	726
Segment income from operations	$	72	$	42	$	—	$	14	$	128

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Total reportable operating segments' income from operations	$	131		$	128
Share-based compensation expense	(19		)	(18		)
Restructuring and related costs	(2		)	(2		)
Amortization of acquisition-related balances	(89		)	(10		)
Acquisition and integration costs	(19		)	(6		)
Separation and related costs	(1		)	(6		)
Japan pension settlement gain	—			68
Northern California wildfire-related costs	(7		)	—
Other	1			8
Income (loss) from operations, as reported	(5		)	162
Interest income	3			1
Interest expense	(22		)	(12		)
Other income (expense), net	1			1
Income (loss) before taxes, as reported	$	(23	)	$	152

There has been no material change in total assets by segment since October 31, 2017.

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Notes)

3 Months Ended

Jan. 31, 2018

Unusual or Infrequent Items, or Both [Abstract]

Unusual or Infrequent Items, or Both, Disclosure [Text Block]

IMPACT OF NORTHERN CALIFORNIA WILDFIRES

During the week of October 8, 2017, wildfires in northern California adversely impacted the Keysight corporate headquarters site in Santa Rosa, CA. Our headquarters was under mandatory evacuation for more than three weeks, and while direct damage to our core facilities was limited, our buildings did experience some smoke and other fire-related impacts. Cleaning and additional restoration efforts are ongoing in both production and non-production areas of the site. To ensure business continuity, the company leased temporary office space to support Santa Rosa employees who could not immediately reoccupy the site. Keysight is insured for the damage caused by the fire, including business interruption insurance, and though we do not expect the fire to have a significant impact on our business results, the disruption will impact the seasonality of revenue in the first half of fiscal 2018.

For the three months ended January 31, 2018, we recognized costs of $7 million, net of $31 million of estimated insurance recovery. Expenses included primarily cleaning, unabsorbed overhead, and other direct costs related to the impact of this event.

A summary of the net charges in the consolidated statement of operations resulting from the impact of the fire is shown below:

	Three months ended January 31, 2018
	(in millions)
Cost of products and services	$	5
Research and development	1
Selling, general and administrative	1
Total	$	7

As of January 31, 2018, we have received insurance proceeds of $10 million. We have increased our insurance receivable from $1.7 million at October 31, 2017 to $23 million at January 31, 2018 for known losses for which insurance reimbursement is probable. The receivable is included in other current assets in the condensed consolidated balance sheet. In many cases, our insurance coverage exceeds the amount of these covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes. We currently estimate that insurance recovery will range from $80 million to $110 million, which we believe will cover our expected losses and expenses related to the wildfires. There may be a difference in timing of costs incurred and the related insurance reimbursement.

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ACQUISITIONS ACQUISITIONS - PURCHASE PRICE ALLOCATION (Tables)

3 Months Ended

Jan. 31, 2018

Ixia [Member]

Business Acquisition [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of April 18, 2017 (in millions):

Cash and cash equivalents	$	72
Short-term investments	44
Accounts receivable	91
Inventory	107
Other current assets	34
Property, plant and equipment	50
Goodwill	1,117
Other intangible assets	744
Other assets	4
Total assets acquired	2,263
Accounts payable	(10		)
Employee compensation and benefits	(32		)
Deferred revenue	(35		)
Income and other taxes payable	(1		)
Other accrued liabilities	(32		)
Other long-term liabilities	(459		)
Net assets acquired	$	1,694

ScienLab [Member]

Business Acquisition [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of August 31, 2017 (in millions):

Cash and cash equivalents	$	2
Accounts receivable	3
Inventory	16
Other current assets	1
Goodwill	23
Other intangible assets	40
Total assets acquired	85
Accounts payable	(1		)
Deferred revenue	(3		)
Income and other taxes payable	(2		)
Current portion of long-term debt	(1		)
Other long-term liabilities	(16		)
Net assets acquired	$	62

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ACQUISITIONS ACQUISITIONS - FINITE AND INFINITE LIVED INTANGIBLE ASSETS ACQUIRED (Tables)

3 Months Ended

Jan. 31, 2018

Ixia [Member]

Business Acquisition [Line Items]

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The components of other intangible assets acquired in connection with the Ixia acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	423	4 years
Customer relationships	234		7 years
Tradenames and trademarks	12		3 years
Backlog	8		90 days
Total intangible assets subject to amortization	677
In-process research and development	67
Total intangible assets	$	744

ScienLab [Member]

Business Acquisition [Line Items]

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The components of intangible assets acquired in connection with the ScienLab acquisition were as follows (in millions):

	Estimated Fair Value		Estimated useful life
Developed product technology	$	33	6 years
Customer relationships	4		5 years
Non-compete agreements	1		3 years
Tradenames and trademarks	1		3 years
Backlog	1		6 months
Total intangible assets	$	40

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ACQUISITIONS ACQUISITIONS - PROFORMA FINANCIAL INFORMATION (Tables)

3 Months Ended

Jan. 31, 2018

Business Combinations [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

The following represents pro forma operating results as if Ixia had been included in the company's condensed consolidated statements of operations as of the beginning of fiscal 2017. Pro forma results of operations for ScienLab have not been presented because the effects of the acquisition were not material to the company’s financial results.

	Three Months Ended
in millions, except per share amounts	January 31, 2017
Net revenue	$	846
Net income	$	39
Net income per share - Basic	$	0.21
Net income per share - Diluted	$	0.21

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ACQUISITIONS ACQUISITIONS - ACQUISITION AND INTEGRATION COSTS (Tables)

3 Months Ended

Jan. 31, 2018

Ixia [Member]

Business Acquisition [Line Items]

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

Acquisition and integration costs directly related to the Ixia acquisition were recorded in the condensed consolidated statement of operations as follows:

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	2	$	—
Research and development	1		—
Selling, general and administrative	15		2
Total acquisition and integration costs	$	18	$	2

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Jan. 31, 2018

Share-based Compensation [Abstract]

Allocated Share-based compensation expense disclosure

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Cost of products and services	$	3	$	3
Research and development	4		4
Selling, general and administrative	12		11
Total share-based compensation expense	$	19	$	18

Share-based compensation arrangement by share-based payment award fair value assumptions and methodology schedule

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

	Three Months Ended
	January 31,
	2018		2017
LTP Program:
Volatility of Keysight shares	25	%	27	%
Volatility of selected index	14	%	15	%
Price-wise correlation with selected peers	57	%	57	%

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NET INCOME PER SHARE (Tables)

3 Months Ended

Jan. 31, 2018

Earnings Per Share [Abstract]

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

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Numerator:
Net income	$	94	$	109
Denominator:
Basic weighted-average shares	187		171
Potential common shares— stock options and other employee stock plans	2		2
Diluted weighted-average shares	189		173

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SUPPLEMENT CASH FLOW INFORMATION (Tables)

3 Months Ended

Jan. 31, 2018

Other Significant Noncash Transactions [Line Items]

Cash Flow, Supplemental Disclosures [Text Block]

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Capital expenditures in accounts payable	$	(3	)	$	(5	)
	$	(3	)	$	(5	)

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INVENTORY (Tables)

3 Months Ended

Jan. 31, 2018

Inventory, Net [Abstract]

INVENTORY

	January 31, 2018		October 31, 2017
	(in millions)
Finished goods	$	296	$	286
Purchased parts and fabricated assemblies	313		302
Total inventory	$	609	$	588

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Jan. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill balances and movements for each reportable segments during the period

Goodwill balances and the movements for each of our reportable operating segments as of and for the three months ended January 31, 2018 were as follows:

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total
	(in millions)
Goodwill as of October 31, 2017	$	441	$	240	$	1,117	$	84	$	1,882
Foreign currency translation impact	8		3		—		1		12
Goodwill as of January 31, 2018	$	449	$	243	$	1,117	$	85	$	1,894

Components of other intangibles during the period

Other intangible assets as of January 31, 2018 and October 31, 2017 consisted of the following:

	Other Intangible Assets as of January 31, 2018						Other Intangible Assets as of October 31, 2017
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	821	$	291	$	530	$	808	$	252	$	556
Backlog	13		13		—		13		12		1
Trademark/Tradename	33		10		23		33		8		25
Customer relationships	304		70		234		304		61		243
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,172		384		788		1,159		333		826
In-Process R&D	19		—		19		29		—		29
Total	$	1,191	$	384	$	807	$	1,188	$	333	$	855

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Assets And Liabilities Measured On Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2018 and October 31, 2017 were as follows:

	Fair Value Measurements at January 31, 2018								Fair Value Measurements at October 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	451	$	451	$	—	$	—	$	403	$	403	$	—	$	—
Derivative instruments (foreign exchange contracts)	9		—		9		—		6		—		6		—
Long-term
Trading securities	13		13		—		—		13		13		—		—
Available-for-sale investments	31		31		—		—		34		34		—		—
Total assets measured at fair value	$	504	$	495	$	9	$	—	$	456	$	450	$	6	$	—
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	4	$	—	$	4	$	—	$	1	$	—	$	1	$	—
Long-term
Deferred compensation liability	13		—		13		—		13		—		13		—
Total liabilities measured at fair value	$	17	$	—	$	17	$	—	$	14	$	—	$	14	$	—

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DERIVATIVES (Tables)

3 Months Ended

Jan. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Aggregated notional amounts by currency and designation

The aggregated notional amounts by currency and designation as of January 31, 2018 were as follows:

	Derivatives in Cash Flow Hedging Relationships			Derivatives Not Designated as Hedging Instruments
	Forward Contracts			Forward Contracts
Currency	Buy/(Sell)			Buy/(Sell)
	(in millions)
Euro	$	—		$	45
British Pound	—			(6		)
Singapore Dollar	11			1
Malaysian Ringgit	77			(5		)
Japanese Yen	(96		)	(34		)
Other currencies	(15		)	(10		)
Total	$	(23	)	$	(9	)

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

Derivative instruments are subject to master netting arrangements and are disclosed gross in the balance sheet in accordance with the authoritative guidance. The gross fair values and balance sheet location of derivative instruments held in the condensed consolidated balance sheet as of January 31, 2018 and October 31, 2017 were as follows:

Fair Values of Derivative Instruments
Asset Derivatives					Liability Derivatives
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2018		October 31, 2017		Balance Sheet Location	January 31, 2018		October 31, 2017
(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	7	$	5	Other accrued liabilities	$	2	$	—
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	2		1		Other accrued liabilities	2		1
Total derivatives	$	9	$	6		$	4	$	1

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

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

	Three Months Ended
	January 31,
	2018		2017
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	2	$	3
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	$	2	$	(1	)
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	1	$	2

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables)

3 Months Ended

Jan. 31, 2018

Defined Benefit Plan [Abstract]

Schedule of net pension and post-retirement benefit costs

For the three months ended January 31, 2018 and 2017, our net pension and post-retirement benefit cost (benefit) were comprised of the following:

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2018			2017			2018			2017			2018			2017
	(in millions)
Service cost—benefits earned during the period	$	6		$	5		$	3		$	4		$	—		$	—
Interest cost on benefit obligation	6			5			6			6			2			2
Expected return on plan assets	(9		)	(8		)	(21		)	(19		)	(4		)	(3		)
Amortization:
Net actuarial loss	3			4			6			9			4			5
Prior service credit	(2		)	(2		)	—			—			(3		)	(4		)
Settlement gain	—			—			—			(68		)	—			—
Net periodic benefit cost (benefit)	$	4		$	4		$	(6	)	$	(68	)	$	(1	)	$	—

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WARRANTY, COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Jan. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Standard warranty

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Beginning balance	$	45		$	44
Accruals for warranties including change in estimate	10			7
Settlements made during the period	(8		)	(8		)
Ending balance	$	47		$	43
Accruals for warranties due within one year	$	26		$	22
Accruals for warranties due after one year	21			21
Ending balance	$	47		$	43

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DEBT (Tables)

3 Months Ended

Jan. 31, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

	January 31, 2018		October 31, 2017
	(in millions)
2019 Senior Notes at 3.30% ($500 face amount less unamortized costs of $2 and $2)	$	498	$	498
2024 Senior Notes at 4.55% ($600 face amount less unamortized costs of $4 and $4)	596		596
2027 Senior Notes at 4.60% ($700 face amount less unamortized costs of $6 and $6)	694		694
Term loan ($260 face amount less unamortized costs of zero)	260		260
	2,048		2,048
Less: Current portion of long-term debt	20		10
Total	$	2,028	$	2,038

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Jan. 31, 2018

Statement of Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss by component and related tax effects for the three months ended January 31, 2018 and 2017 were as follows:

	Unrealized gain on equity securities			Foreign currency translation			Net defined benefit pension cost and post retirement plan costs						Unrealized gains (losses) on derivatives			Total
							Actuarial losses			Prior service credits
	(in millions)
As of October 31, 2017	$	14		$	(39	)	$	(468	)	$	35		$	1		$	(457	)
Other comprehensive income (loss) before reclassifications	(2		)	41			—			—			2			41
Amounts reclassified out of accumulated other comprehensive loss	—			—			13			(5		)	(2		)	6
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	(2		)	41			10			(4		)	—			45
As of January 31, 2018	$	12		$	2		$	(458	)	$	31		$	1		$	(412	)
As of October 31, 2016	$	10		$	(29	)	$	(646	)	$	50		$	(3	)	$	(618	)
Other comprehensive income (loss) before reclassifications	5			(24		)	24			—			3			8
Amounts reclassified out of accumulated other comprehensive loss	—			—			17			(6		)	1			12
Tax (expense) benefit	(1		)	—			(13		)	2			(1		)	(13		)
Other comprehensive income (loss)	4			(24		)	28			(4		)	3			7
As of January 31, 2017	$	14		$	(53	)	$	(618	)	$	46		$	—		$	(611	)

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2018 and 2017 were as follows:

Details about Accumulated Other Comprehensive Loss Components	Amounts Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Unrealized gain (loss) on derivatives	$	2		$	(1	)	Cost of products
	—			—			Provision for income taxes
	2			(1		)	Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(13		)	(17		)
Prior service credits	5			6
	(8		)	(11		)	Total before income tax
	2			3			Provision for income taxes
	(6		)	(8		)	Net of income tax
Total reclassifications for the period	$	(4	)	$	(9	)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jan. 31, 2018

Segment Reporting [Abstract]

Segment Reporting, Description of All Other Segments

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Services Solutions Group		Total Segments
	(in millions)
Three Months Ended January 31, 2018:
Total net revenue	$	420	$	203	$	108	$	106	$	837
Amortization of acquisition-related balances	—		—		19		—		19
Total segment revenue	$	420	$	203	$	127	$	106	$	856
Segment income from operations	$	59	$	37	$	18	$	17	$	131
Three Months Ended January 31, 2017:
Total net revenue	$	434	$	192	$	—	$	100	$	726
Amortization of acquisition-related balances	—		—		—		—		—
Total segment revenue	$	434	$	192	$	—	$	100	$	726
Segment income from operations	$	72	$	42	$	—	$	14	$	128

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SEGMENT INFORMATION Segment Profitability (Tables)

3 Months Ended

Jan. 31, 2018

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

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

	Three Months Ended
	January 31,
	2018			2017
	(in millions)
Total reportable operating segments' income from operations	$	131		$	128
Share-based compensation expense	(19		)	(18		)
Restructuring and related costs	(2		)	(2		)
Amortization of acquisition-related balances	(89		)	(10		)
Acquisition and integration costs	(19		)	(6		)
Separation and related costs	(1		)	(6		)
Japan pension settlement gain	—			68
Northern California wildfire-related costs	(7		)	—
Other	1			8
Income (loss) from operations, as reported	(5		)	162
Interest income	3			1
Interest expense	(22		)	(12		)
Other income (expense), net	1			1
Income (loss) before taxes, as reported	$	(23	)	$	152

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Tables)

3 Months Ended

Jan. 31, 2018

Unusual or Infrequent Item, or Both [Line Items]

Schedule of Unusual or Infrequent Items, or Both [Table Text Block]

A summary of the net charges in the consolidated statement of operations resulting from the impact of the fire is shown below:

	Three months ended January 31, 2018
	(in millions)
Cost of products and services	$	5
Research and development	1
Selling, general and administrative	1
Total	$	7

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Land Sale (Details) £ in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)	Jan. 31, 2017 USD ($)	Apr. 30, 2014 GBP (£)
Property, Plant and Equipment [Line Items]
Document Period End Date	Jan. 31, 2018
Date of Land Sale Agreeement	Apr. 30, 2014
Binding contract to sell land | £			£ 21
Gain (Loss) on Disposition of Assets | $	$ 0	$ 8

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted Cash (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Other Assets [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents	$ 2	$ 2

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OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Acquisition of Ixia (Details) - Ixia [Member] - USD ($) $ in Millions		3 Months Ended
	Apr. 18, 2017	Jan. 31, 2018
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition		Apr. 18, 2017
Payments to Acquire Businesses, Net of Cash Acquired	$ 1,622
Cash and Equivalents acquired	$ 72

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NEW ACCOUNTING PRONOUNCEMENTS ASU 2016-09 ADOPTION - Adjustments in Cash flow (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Net Cash Provided by (Used in) Operating Activities	$ 171	$ 115
Net Cash Provided by (Used in) Financing Activities	$ 9	8
Scenario, Previously Reported [Member]
Net Cash Provided by (Used in) Operating Activities		102
Net Cash Provided by (Used in) Financing Activities		21
Restatement Adjustment [Member]
Net Cash Provided by (Used in) Operating Activities		13
Net Cash Provided by (Used in) Financing Activities		$ (13)

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NEW ACCOUNTING PRONOUNCEMENTS ASU 2016-09 ADOPTION - textuals (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess Tax Benefit from Share-based Compensation, Financing Activities	$ 1
Accounting Standards Update 2016-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 6

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ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended
	Aug. 31, 2017	Apr. 18, 2017	Jan. 31, 2018	Jan. 31, 2017
Business Acquisition [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Ixia [Member]
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition			Apr. 18, 2017
Business Acquisition, Date of Acquisition Agreement			Jan. 30, 2017
Payments to Acquire Businesses, Net of Cash Acquired		$ 1,622
Cash and Equivalents acquired		72
Business Combination, Consideration Transferred, Other		$ 47
Business Acquisition, Share Price		$ 19.65
Estimated cost to complete in process research and development			$ 12
Deferred Tax Liabilities, Intangible Assets			186
Acquisition and integration costs			18	$ 2
Ixia [Member] | Cost of products and services
Business Acquisition [Line Items]
Acquisition and integration costs			2	0
Ixia [Member] | Research and development
Business Acquisition [Line Items]
Acquisition and integration costs			1	0
Ixia [Member] | Selling, general and administrative
Business Acquisition [Line Items]
Acquisition and integration costs			$ 15	$ 2
ScienLab [Member]
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition			Aug. 31, 2017
Payments to Acquire Businesses, Net of Cash Acquired	$ 60
Cash and Equivalents acquired	2
Deferred Tax Liabilities, Intangible Assets	$ 13

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ACQUISITIONS Purchase Price Allocation (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017	Aug. 31, 2017	Apr. 18, 2017
Business Acquisition [Line Items]
Goodwill	$ 1,894	$ 1,882
ScienLab [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 2
Accounts receivable			3
Inventory			16
Other current assets			1
Goodwill			23
Other intangible assets			40
Total assets acquired			85
Accounts payable			(1)
Deferred revenue			(3)
Income and other taxes payable			(2)
Current portion of long-term debt			(1)
Other long-term liabilities			(16)
Net assets acquired			$ 62
Ixia [Member]
Business Acquisition [Line Items]
Cash and cash equivalents				$ 72
Short-term investments				44
Accounts receivable				91
Inventory				107
Other current assets				34
Property, plant and equipment				50
Goodwill				1,117
Other intangible assets				744
Other assets				4
Total assets acquired				2,263
Accounts payable				(10)
Employee compensation and benefits				(32)
Deferred revenue				(35)
Income and other taxes payable				(1)
Other accrued liabilities				(32)
Other long-term liabilities				(459)
Net assets acquired				$ 1,694

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ACQUISITIONS Intangible assets acquired by class (Details) - USD ($) $ in Millions			3 Months Ended
	Aug. 31, 2017	Apr. 18, 2017	Jan. 31, 2018
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			$ 0
ScienLab [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 40
ScienLab [Member] | Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	6 years
Finite-lived Intangible Assets Acquired	$ 33
ScienLab [Member] | Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Finite-lived Intangible Assets Acquired	$ 4
ScienLab [Member] | Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Finite-lived Intangible Assets Acquired	$ 1
ScienLab [Member] | Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Finite-lived Intangible Assets Acquired	$ 1
ScienLab [Member] | Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	6 months
Finite-lived Intangible Assets Acquired	$ 1
Ixia [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Discount rate used to value In Process R&D			14.00%
Finite-lived Intangible Assets Acquired		$ 677
Total intangible assets		744
Ixia [Member] | Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired		$ 423
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		4 years
Ixia [Member] | Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired		$ 234
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Ixia [Member] | Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired		$ 12
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		3 years
Ixia [Member] | Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired		$ 8
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		90 days
Ixia [Member] | In Process Research and Development [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Indefinite-lived Intangible Assets Acquired		$ 67

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ACQUISITIONS Proforma financial information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Business Combinations [Abstract]
Business Acquisition, Pro Forma Information, Description	The unaudited pro forma financial information for the three months ended January 31, 2017 combines the historical results of Keysight and Ixia for the three months ended January 31, 2017, assuming that the companies were combined as of November 1, 2016 and include business combination accounting effects from the acquisition including amortization and depreciation charges from acquired intangible assets, property plant and equipment, interest expense on the financing transactions used to fund the acquisition and acquisition-related transaction costs and tax-related effects. The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2017.
Business Acquisition, Pro Forma Revenue		$ 846
Business Acquisition, Pro Forma Net Income (Loss)		$ 39
Business Acquisition, Pro Forma Earnings Per Share, Basic		$ 0.21
Business Acquisition, Pro Forma Earnings Per Share, Diluted		$ 0.21

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SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 19	$ 18
Share-based Compensation Capitalized within inventory	1	1
Cost of products and services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	3	3
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	4	4
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 12	$ 11

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SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - shares shares in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0
LTPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	The awards based on TSR were valued using a Monte Carlo simulation model and those based on financial metrics were valued based on the market price of Keysight’s common stock on the date of grant.
Volatility of Keysight shares (in hundredths)	25.00%	27.00%
Volatility of selected index	14.00%	15.00%
Price-wise correlation with selected peers (in hundredths)	57.00%	57.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Income Tax Examination [Line Items]
Income Tax Expense (Benefit)	$ (117)	$ 43
Income Tax Holiday, Description	Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, and several jurisdictions have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions.
Income Tax Holiday, Termination Date	The Singapore tax incentive is due for renewal in fiscal 2024.
Majority of company's entities [Member]
Income Tax Examination [Line Items]
Open Tax Year	2009
Certain foreign entities [Member]
Income Tax Examination [Line Items]
Open Tax Year	2007
Malaysia Tax Authority [Member]
Income Tax Examination [Line Items]
Income Tax Examination, Description	The company is being audited in Malaysia for the 2008 tax year. Although this tax year pre-dates our spin-off from Agilent, pursuant to the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, for certain entities including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal 2017, Keysight paid income taxes and penalties of $68 million on gains related to intellectual property rights, although we are currently in the process of appealing to the Special Commissioners of Income Tax (“SCIT”) in Malaysia. The company believes there are numerous defenses to the current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed and the income in question is exempt from tax in Malaysia. The company is disputing this assessment and pursuing all avenues to resolve this issue favorably for the company.
Internal Revenue Service (IRS) [Member]
Income Tax Examination [Line Items]
Effective Income Tax Rate, Percent	(515.80%)	28.30%
Income Tax Expense (Benefit)	$ (117)	$ 43
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	117
Net Discrete Tax expense (Benefit)	$ (115)	23
Increase in tax resulting from transfer of a portion of Japanese employees pension fund		$ 22

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INCOME TAXES Income taxes textuals (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)
Income Tax Examination [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	23.30%
Tax Cuts And Jobs Act Of 2017 Incomplete Accounting Withholding Tax For Undistributed Foreign Earnings Provisional Income Tax Expense Benefit	$ 304
Income tax expense due to one time toll charge	176
Reduction in income tax expense due to lower tax rate	$ 11

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NET INCOME PER SHARE NET INCOME PER SHARE - COMPUTATIONS (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Numerator:
Net income	$ 94	$ 109
Denominators:
Basic weighted-average shares	187	171
Potential common shares— stock options and other employee stock plans	2	2
Diluted weighted-average shares	189	173

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NET INCOME PER SHARE (Details) - shares	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Stock Options [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	0	0
Stock Options, ESPP, LTPP and restricted stock combined exercise price, unamortized fair value, excess tax benefits or shortfalls greater than average market price [Member] [Member]
Antidilutive Securities Excluded from EPS Computation
Antidilutive Securities Excluded from Computation of Earnings Per Share, Number	668,100	424,400

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SUPPLEMENT CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Other Significant Noncash Transactions [Line Items]
Capital expenditures in accounts payable	$ (3)	$ (5)
Accounts Payable [Member]
Other Significant Noncash Transactions [Line Items]
Capital expenditures in accounts payable	$ (3)	$ (5)

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SUPPLEMENT CASH FLOW INFORMATION Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Income Taxes Paid, Net [Abstract]
Income Taxes Paid, Net	$ 1	$ 17

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SUPPLEMENT CASH FLOW INFORMATION Interest paid (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 2	$ 0

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INVENTORY (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Inventory, Net [Abstract]
Finished goods	$ 296	$ 286
Purchased parts and fabricated assemblies	313	302
Total inventory	$ 609	$ 588

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GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)
Goodwill [Roll Forward]
Goodwill as of October 31, 2017	$ 1,882
Foreign currency translation impact	12
Goodwill arising from acquisitions	0
Goodwill as of January 31, 2018	1,894
Communications Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill as of October 31, 2017	441
Foreign currency translation impact	8
Goodwill as of January 31, 2018	449
Electronic Industrial Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill as of October 31, 2017	240
Foreign currency translation impact	3
Goodwill as of January 31, 2018	243
Ixia Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill as of October 31, 2017	1,117
Foreign currency translation impact	0
Goodwill as of January 31, 2018	1,117
Services Solutions Group [Member]
Goodwill [Roll Forward]
Goodwill as of October 31, 2017	84
Foreign currency translation impact	1
Goodwill as of January 31, 2018	$ 85

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GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	$ 1,172	$ 1,159
Accumulated Amortization and impairments	384	333
Amortizable intangible assets, Net book value	788	826
In-Process R&D	19	29
Intangible Assets, Gross (Excluding Goodwill)	1,191	1,188
Intangible Assets, Net (Excluding Goodwill)	807	855
Developed technology
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	821	808
Accumulated Amortization and impairments	291	252
Intangible Assets, Net (Excluding Goodwill)	530	556
Backlog
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	13	13
Accumulated Amortization and impairments	13	12
Intangible Assets, Net (Excluding Goodwill)	0	1
Trademark/Tradename
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	33	33
Accumulated Amortization and impairments	10	8
Intangible Assets, Net (Excluding Goodwill)	23	25
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	304	304
Accumulated Amortization and impairments	70	61
Intangible Assets, Net (Excluding Goodwill)	234	243
Noncompete Agreements [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	1	1
Accumulated Amortization and impairments	0	0
Intangible Assets, Net (Excluding Goodwill)	$ 1	$ 1

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS Textuals (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Goodwill [Line Items]
Goodwill arising from acquisitions and other adjustments	$ 0
Additions to other intangible assets	0
Impact to other intangibles due to foreign exchange translation	3
Transfer from In-process IPR&D to Developed technology	10
Amortization of intangible assets	$ 51	$ 11

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GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details) $ in Millions	Jan. 31, 2018 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Remainder of 2018	$ 152
Finite-Lived Intangible Assets, Amortization Expense, 2019	202
Finite-Lived Intangible Assets, Amortization Expense, 2020	194
Finite-Lived Intangible Assets, Amortization Expense, 2021	127
Finite-Lived Intangible Assets, Amortization Expense, 2022	50
Finite-Lived Intangible Assets, Amortization Expense, 2023 and thereafter	$ 63

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FAIR VALUE MEASUREMENTS, Fair value of assets and liabilities measured on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Assets Short - term [Abstract]
Derivative instruments (foreign exchange contracts)	$ 9	$ 6
Assets, Long-term [Abstract]
Trading securities	13	13
Available-for-sale investments	31	34
Total assets measured at fair value	504	456
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	4	1
Liabilities Long-term [Abstract]
Deferred compensation liability	13	13
Total liabilities measured at fair value	17	14
Level 1
Assets Short - term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Trading securities	13	13
Available-for-sale investments	31	34
Total assets measured at fair value	495	450
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Liabilities Long-term [Abstract]
Deferred compensation liability	0	0
Total liabilities measured at fair value	0	0
Level 2
Assets Short - term [Abstract]
Derivative instruments (foreign exchange contracts)	9	6
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	9	6
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	4	1
Liabilities Long-term [Abstract]
Deferred compensation liability	13	13
Total liabilities measured at fair value	17	14
Level 3
Assets Short - term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Trading securities	0	0
Available-for-sale investments	0	0
Total assets measured at fair value	0	0
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	0	0
Liabilities Long-term [Abstract]
Deferred compensation liability	0	0
Total liabilities measured at fair value	0	0
Money Market Funds [Member]
Assets Short - term [Abstract]
Cash equivalents	451	403
Money Market Funds [Member] | Level 1
Assets Short - term [Abstract]
Cash equivalents	451	403
Money Market Funds [Member] | Level 2
Assets Short - term [Abstract]
Cash equivalents	0	0
Money Market Funds [Member] | Level 3
Assets Short - term [Abstract]
Cash equivalents	$ 0	$ 0

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DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($) contracts
Derivative [Line Items]
Cash Flow Hedge Ineffectiveness is Immaterial	not significant
Derivative, Net Liability Position, Aggregate Fair Value	$ 2
Foreign Exchange Forward [Member] | Cash Flow Hedging
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	121
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	63
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell
Derivative [Line Items]
Total notional amount	$ (9)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | British Pound
Derivative [Line Items]
Total notional amount	(6)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Malaysian Ringgit
Derivative [Line Items]
Total notional amount	(5)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Japanese Yen
Derivative [Line Items]
Total notional amount	(34)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Other Currency [Member]
Derivative [Line Items]
Total notional amount	(10)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Euro
Derivative [Line Items]
Total notional amount	(45)
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Singapore Dollar
Derivative [Line Items]
Total notional amount	(1)
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	(23)
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Japanese Yen | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	(96)
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Other Currency [Member] | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	(15)
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	0
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | British Pound | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	0
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Singapore Dollar | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	(11)
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	$ (77)

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DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	$ 9	$ 6
Total derivatives Liabilities	4	1
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Assets [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	7	5
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Other Current Liabilities [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	2	0
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts | Other Current Assets [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	2	1
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts | Other Current Liabilities [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Liabilities	$ 2	$ 1

XML

DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Derivative [Line Items]
Cash Flow Hedge Gain (Loss) to be Reclassified within next Twelve Months	$ 4
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Accumulated Other Comprehensive Income (Loss)
Derivative [Line Items]
Gain (loss) recognized in accumulated other comprehensive income	2	$ 3
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Cost of products and services
Derivative [Line Items]
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	2	(1)
Not Designated as Hedging Instrument [Member] | Other (income) expense, net
Derivative [Line Items]
Gain (loss) recognized in other income (expense),net	$ 1	$ 2

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS RETIREMENT AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Defined benefit plan | US
Defined Benefit Plan Disclosure [Line Items]
Service cost—benefits earned during the period	$ 6	$ 5
Interest cost on benefit obligation	6	5
Expected return on plan assets	(9)	(8)
Net actuarial loss	3	4
Prior service credit	(2)	(2)
Settlement gain	0	0
Net periodic benefit cost (benefit)	4	4
Defined benefit plan | Non-US
Defined Benefit Plan Disclosure [Line Items]
Service cost—benefits earned during the period	3	4
Interest cost on benefit obligation	6	6
Expected return on plan assets	(21)	(19)
Net actuarial loss	6	9
Prior service credit	0	0
Settlement gain	0	(68)
Net periodic benefit cost (benefit)	(6)	(68)
Post-retirement Benefits Plan | US
Defined Benefit Plan Disclosure [Line Items]
Service cost—benefits earned during the period	0	0
Interest cost on benefit obligation	2	2
Expected return on plan assets	(4)	(3)
Net actuarial loss	4	5
Prior service credit	(3)	(4)
Settlement gain	0	0
Net periodic benefit cost (benefit)	$ (1)	$ 0

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Document Period End Date	Jan. 31, 2018
US | Post-retirement Benefits Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	$ 0
US | Defined benefit plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	0	0
Estimated future employer contributions in remainder of current fiscal year	0
Non-US | Defined benefit plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	9	$ 7
Estimated future employer contributions in remainder of current fiscal year	$ 29

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

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WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Guarantees [Abstract]
Standard Product Warranty Description	Effective December 1, 2017, the Keysight warranty on products sold through direct sales channel is primarily one year. Warranties for products sold through distribution channels continue to be primarily three years.
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance at beginning of period	$ 45	$ 44
Accruals for warranties including change in estimate	10	7
Settlements made during the period	(8)	(8)
Ending balance at end of period	47	43
Standard Product Warranty Disclosure [Abstract]
Accruals for warranties due within one year	26	22
Accruals for warranties due after one year	21	21
Ending balance at end of period	$ 47	$ 43

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DEBT Facility (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Term	5 years
Facility, Description	On February 15, 2017, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) that replaced our existing $450 million unsecured credit facility dated September 15, 2014. The Revolving Credit Facility provides for a $450 million, five-year unsecured revolving credit facility that will expire on February 15, 2022 and bears interest at an annual rate of LIBOR + 1.30%. In addition, the Revolving Credit Facility permits us to increase the total commitments under this credit facility by up to $150 million in the aggregate on one or more occasions upon request. We may use amounts borrowed under the facility for general corporate purposes. During the three months ended January 31, 2018, we borrowed and repaid $40 million of borrowings outstanding under the Revolving Credit Facility. As of January 31, 2018, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2018.
Facility, Initiation Date	Feb. 15, 2017
Facility, Maximum Borrowing Capacity	$ 450
Facility, Expiration Date	Feb. 15, 2022
Debt Instrument, Description of Variable Rate Basis	LIBOR + 1.30%
Additional drawings on credit facility	$ 150
Facility, Outstanding	0
Repayments	$ 40
Facility, Covenant Compliance	We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2018.
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.30%
Term Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Term	3 years
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR + 1.50%
Debt Instrument, Basis Spread on Variable Rate	1.50%

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DEBT Long Term Debt (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Oct. 31, 2017
Debt Instrument [Line Items]
Document Period End Date	Jan. 31, 2018
Long-term Debt	$ 2,048	$ 2,048
Current portion of long-term debt	20	10
Long-term Debt, Excluding current portion of long-term debt	2,028	2,038
Letters of Credit Outstanding, Amount	27	26
Long Term Debt Fair Value above carrying Value	58	91
2019 Senior Notes at 3.30% ($500 face amount less unamortized costs of $2 and $2)
Debt Instrument [Line Items]
Long-term Debt	498	498
2024 Senior Notes at 4.55% ($600 face amount less unamortized costs of $4 and $4)
Debt Instrument [Line Items]
Long-term Debt	596	596
2027 Senior Notes at 4.60% ($700 face amount less unamortized costs of $6 and $6)
Debt Instrument [Line Items]
Long-term Debt	694	694
Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 260	$ 260
Debt Instrument, Term	3 years

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DEBT LONG TERM DEBT - 2027 SENIOR NOTES (Details)	3 Months Ended
	Jan. 31, 2018
Debt Instrument [Line Items]
Document Period End Date	Jan. 31, 2018

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DEBT LONG TERM DEBT - SENIOR UNSECURED TERM LOAN (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Feb. 28, 2018	Jan. 31, 2018	Oct. 31, 2017
Debt Instrument [Line Items]
Long-term Debt, Current Maturities		$ 20	$ 10
Document Period End Date		Jan. 31, 2018
Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Issuance Date		Feb. 15, 2017
Debt Instrument, Term		3 years
Debt Instrument, Face Amount		$ 400
Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Description of Variable Rate Basis		LIBOR + 1.50%
Debt Instrument, Basis Spread on Variable Rate		1.50%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Term		5 years
Debt Instrument, Description of Variable Rate Basis		LIBOR + 1.30%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.30%
Subsequent Event [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Repayments of Debt	$ 260

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DEBT LONG TERM DEBT - UNAMORTIZED COSTS (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Senior Notes 2019 [Member]
Debt Instrument [Line Items]
Unamortized costs	$ 2	$ 2
Senior Notes 2024 [Member]
Debt Instrument [Line Items]
Unamortized costs	4	4
Senior Notes 2027 [Member]
Debt Instrument [Line Items]
Unamortized costs	6	6
Term Loan [Member]
Debt Instrument [Line Items]
Unamortized costs	$ 0	$ 0

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STOCKHOLDERS' EQUITY STOCKHOLDES' EQUITY - Stock Repurchase (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2018	Feb. 18, 2016
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract]
Stock Repurchase Program, Authorized Amount		$ 200
Treasury Stock, Shares, Acquired	0

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STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ (457)	$ (618)
Other comprehensive income (loss) before reclassifications	41	8
Amounts reclassified out of accumulated other comprehensive loss	6	12
Tax (expense) benefit	(2)	(13)
Other comprehensive income (loss)	45	7
Ending balance	(412)	(611)
Unrealized gain on equity securities [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	14	10
Other comprehensive income (loss) before reclassifications	(2)	5
Amounts reclassified out of accumulated other comprehensive loss	0	0
Tax (expense) benefit	0	(1)
Other comprehensive income (loss)	(2)	4
Ending balance	12	14
Foreign currency translation [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(39)	(29)
Other comprehensive income (loss) before reclassifications	41	(24)
Amounts reclassified out of accumulated other comprehensive loss	0	0
Tax (expense) benefit	0	0
Other comprehensive income (loss)	41	(24)
Ending balance	2	(53)
Net defined benefit pension cost and post retirement plan costs, actuarial losses [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(468)	(646)
Other comprehensive income (loss) before reclassifications	0	24
Amounts reclassified out of accumulated other comprehensive loss	13	17
Tax (expense) benefit	(3)	(13)
Other comprehensive income (loss)	10	28
Ending balance	(458)	(618)
Net defined benefit pension cost and post retirement plan costs, prior service credits [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	35	50
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified out of accumulated other comprehensive loss	(5)	(6)
Tax (expense) benefit	1	2
Other comprehensive income (loss)	(4)	(4)
Ending balance	31	46
Unrealized gain (losses) on derivatives [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	1	(3)
Other comprehensive income (loss) before reclassifications	2	3
Amounts reclassified out of accumulated other comprehensive loss	(2)	1
Tax (expense) benefit	0	(1)
Other comprehensive income (loss)	0	3
Ending balance	$ 1	$ 0

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STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Sales	$ (337)	$ (255)
Income Tax Expense (Benefit)	117	(43)
Net income	94	109
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	(23)	152
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net income	(4)	(9)
Unrealized gain (losses) on derivatives [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Sales	2	(1)
Income Tax Expense (Benefit)	0	0
Net income	2	(1)
Net defined benefit pension cost and post retirement plan costs, actuarial losses [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	(13)	(17)
Net defined benefit pension cost and post retirement plan costs, prior service credits [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	5	6
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income Tax Expense (Benefit)	2	3
Net income	(6)	(8)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	$ (8)	$ (11)

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SEGMENT INFORMATION Profitability (Details) $ in Millions	3 Months Ended
	Jan. 31, 2018 USD ($)	Jan. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments	4
Number of Operating Segments	4
Segment Reporting, Factors Used to Identify Entity's Reportable Segments	Our operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services and manufacturing are considered in determining the formation of these operating segments.
Segment Reporting, Additional Information about Entity's Reportable Segments	The Communications Solutions Group serves customers spanning the worldwide commercial communications end market, which includes internet infrastructure, and the aerospace, defense and government end market. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Electronic Industrial Solutions Group provides test and measurement solutions across a broad set of electronic industrial end markets, focusing on high-growth applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics manufacturing. The group provides electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Ixia Solutions Group helps customers validate the performance and security resilience of their networks and associated applications. The test, visibility and security products help organizations and their customers strengthen their physical and virtual networks. Enterprises, service providers, network equipment manufacturers, and governments worldwide rely on the group's solutions to validate new products before shipping and secure ongoing operation of their networks with better visibility and security. The group’s product solutions consist of high-performance hardware platforms, software applications, and services, including warranty and maintenance offerings. The Services Solutions Group provides repair, calibration and consulting services, and remarkets used Keysight equipment. In addition to providing repair and calibration support for Keysight equipment, we also calibrate non-Keysight equipment. The group serves the same markets as Keysight’s Communications Solutions and Electronic Industrial Solutions Groups, providing industry-specific services to deliver complete Keysight solutions and help customers reduce their total cost of ownership for their design and test equipment.
Total net revenue	$ 837	$ 726
Amortization of acquisition-related balances	19	0
Total segment revenue	856	726
Segment income from operations	131	128
Communications Solutions Group [Member]
Segment Reporting Information [Line Items]
Total net revenue	420	434
Amortization of acquisition-related balances	0	0
Total segment revenue	420	434
Segment income from operations	59	72
Electronic Industrial Solutions Group [Member]
Segment Reporting Information [Line Items]
Total net revenue	203	192
Amortization of acquisition-related balances	0	0
Total segment revenue	203	192
Segment income from operations	37	42
Ixia Solutions Group [Member]
Segment Reporting Information [Line Items]
Total net revenue	108	0
Amortization of acquisition-related balances	19	0
Total segment revenue	127	0
Segment income from operations	18	0
Services Solutions Group [Member]
Segment Reporting Information [Line Items]
Total net revenue	106	100
Amortization of acquisition-related balances	0	0
Total segment revenue	106	100
Segment income from operations	$ 17	$ 14

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SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable operating segments' income from operations	$ 131	$ 128
Share-based compensation expense	(19)	(18)
Restructuring and related costs	(2)	(2)
Amortization of acquisition-related balances	(89)	(10)
Acquisition and integration costs	(19)	(6)
Separation and related costs	(1)	(6)
Japan pension settlement gain	0	68
Northern California wildfire-related costs	(7)	0
Other	1	8
Income (loss) from operations	(5)	162
Interest income	3	1
Interest expense	(22)	(12)
Other income (expense), net	1	1
Income (loss) before taxes	$ (23)	$ 152

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SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions	Jan. 31, 2018	Oct. 31, 2017
Segment Reporting Information [Line Items]
Assets	$ 6,050	$ 5,933

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Oct. 31, 2017
Unusual or Infrequent Item, or Both [Line Items]
Insurance Settlements Receivable, Current	$ 23.0		$ 1.7
Unusual or Infrequent Item, or Both, Insurance Proceeds	10.0
Insurance Settlements Receivable	31.0
Loss from Catastrophes	$ 7.0	$ 0.0

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NORTHERN CALIFORNIA WILDFIRES IMPACT Charges in consolidated statement of operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	$ 7	$ 0
Cost of products and services
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	5
Research and development
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	1
Selling, general and administrative
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	$ 1

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NORTHERN CALIFORNIA WILDFIRES IMPACT Range of estimated losses (Details) $ in Millions	Jan. 31, 2018 USD ($)
Maximum [Member]
Loss due to catastrophe estimate	$ 110
Minimum [Member]
Loss due to catastrophe estimate	$ 80