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, 2019

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 every Interactive Data File required to be submitted 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 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 ¨
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 1, 2019 was 187,988,723. 

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	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
	Item 4.	Controls and Procedures	41
Part II.	Other Information		41
	Item 1.	Legal Proceedings	41
	Item 1A.	Risk Factors	41
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
	Item 6.	Exhibits	55
Signature			56

2

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

	Three Months Ended
	January 31,
	2019			2018
Net revenue:
Products	$	837		$	684
Services and other	169			153
Total net revenue	1,006			837
Costs and expenses:
Cost of products	347			339
Cost of services and other	81			73
Total costs	428			412
Research and development	173			150
Selling, general and administrative	288			295
Other operating expense (income), net	(4		)	(3		)
Total costs and expenses	885			854
Income (loss) from operations	121			(17		)
Interest income	4			3
Interest expense	(20		)	(22		)
Other income (expense), net	15			13
Income (loss) before taxes	120			(23		)
Provision (benefit) for income taxes	6			(117		)
Net income	$	114		$	94
Net income per share:
Basic	$	0.61		$	0.50
Diluted	$	0.60		$	0.50
Weighted average shares used in computing net income per share:
Basic	187			187
Diluted	190			189

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

3

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2019			2018
Net income	$	114		$	94
Other comprehensive income (loss):
Unrealized gain (loss) on investments, net of tax benefit of zero	—			(2		)
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of zero	(2		)	2
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of zero	1			(2		)
Foreign currency translation, net of tax benefit (expense) of zero	30			41
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $3	13			10
Change in net prior service credit, net of tax benefit of $1	(3		)	(4		)
Other comprehensive income (loss)	39			45
Total comprehensive income	$	153		$	139

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

4

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

	January 31, 2019			October 31, 2018
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,098		$	913
Accounts receivable, net	580			624
Inventory	641			619
Other current assets	225			222
Total current assets	2,544			2,378
Property, plant and equipment, net	558			555
Goodwill	1,181			1,171
Other intangible assets, net	594			645
Long-term investments	52			46
Long-term deferred tax assets	741			750
Other assets	308			279
Total assets	$	5,978		$	5,824
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	499		$	499
Accounts payable	222			242
Employee compensation and benefits	210			276
Deferred revenue	317			334
Income and other taxes payable	56			42
Other accrued liabilities	96			69
Total current liabilities	1,400			1,462
Long-term debt	1,291			1,291
Retirement and post-retirement benefits	219			224
Long-term deferred revenue	126			127
Other long-term liabilities	284			287
Total liabilities	3,320			3,391
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; 193 million shares at January 31, 2019 and 191 million shares at October 31, 2018 issued	2			2
Treasury stock at cost; 5.1 million shares at January 31, 2019 and 4.4 million shares at October 31, 2018	(222		)	(182		)
Additional paid-in-capital	1,925			1,889
Retained earnings	1,402			1,212
Accumulated other comprehensive loss	(449		)	(488		)
Total stockholders' equity	2,658			2,433
Total liabilities and equity	$	5,978		$	5,824

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

5

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in millions)

(Unaudited)

	Three Months Ended
	January 31,
	2019			2018
Cash flows from operating activities:
Net income	$	114		$	94
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	24			26
Amortization	52			52
Share-based compensation	27			19
Deferred tax benefit	(12		)	(235		)
Excess and obsolete inventory-related charges	7			6
Gain on divestiture	(1		)	—
Pension curtailment and settlement loss	2			—
Net unrealized gains on equity investments	(5		)	—
Other non-cash expenses, net	—			2
Changes in assets and liabilities:
Accounts receivable	56			99
Inventory	(26		)	(20		)
Accounts payable	(10		)	14
Employee compensation and benefits	(68		)	(50		)
Deferred revenue	43			61
Income taxes payable	10			115
Retirement and post-retirement benefits	(12		)	(12		)
Other assets and liabilities	39			—
Net cash provided by operating activities	240			171
Cash flows from investing activities:
Investments in property, plant and equipment	(31		)	(24		)
Proceeds from divestiture	2			—
Net cash used in investing activities	(29		)	(24		)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	30			24
Payment of taxes related to net share settlement of equity awards	(23		)	(15		)
Payment of acquisition-related contingent consideration	—			(3		)
Proceeds from revolving credit facility	—			40
Repayment of revolving credit facility	—			(40		)
Treasury stock repurchases	(40		)	—
Net cash provided (used) by financing activities	(33		)	6
Effect of exchange rate movements	7			9
Net increase in cash, cash equivalents, and restricted cash	185			162
Cash, cash equivalents, and restricted cash at beginning of period	917			820
Cash, cash equivalents, and restricted cash at end of period	$	1,102		$	982

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

6

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(in millions, except number of shares in thousands)

	Common Stock					Treasury Stock
	Number of Shares	Par Value		Additional Paid-in Capital		Number of Shares		Treasury Stock at Cost			Retained Earnings		Accumulated Other Comprehensive Income/(Loss)			Total Stockholders' Equity
Balance as of October 31, 2018	191,204	$	2	$	1,889	(4,364	)	$	(182	)	$	1,212	$	(488	)	$	2,433
Adjustment due to adoption of new accounting standards	—	—		—		—		—			76		—			76
Net income	—	—		—		—		—			114		—			114
Other comprehensive income, net of tax	—	—		—		—		—			—		39			39
Issuance of common stock	1,597	—		8		—		—			—		—			8
Share-based compensation	—	—		28		—		—			—		—			28
Repurchase of common stock	—	—		—		(686	)	(40		)	—		—			(40		)
Balance as of January 31, 2019	192,801	$	2	$	1,925	(5,050	)	$	(222	)	$	1,402	$	(449	)	$	2,658
Balance as of October 31, 2017	188,310	$	2	$	1,786	(2,289	)	$	(62	)	$	1,041	$	(457	)	$	2,310
Adjustment due to adoption of new accounting standards	—	—		—		—		—			6		—			6
Net income	—	—		—		—		—			94		—			94
Other comprehensive income, net of tax	—	—		—		—		—			—		45			45
Issuance of common stock	1,490	—		9		—		—			—		—			9
Share-based compensation	—	—		20		—		—			—		—			20
Repurchase of common stock	—	—		—		—		—			—		—			—
Balance as of January 31, 2018	189,800	$	2	$	1,815	(2,289	)	$	(62	)	$	1,141	$	(412	)	$	2,484

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

7

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 technology company providing electronic design and test solutions that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems to communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, instrument productivity, application services and instrument calibration and repair.

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 financial position as of January 31, 2019 and October 31, 2018, our results of operations and cash flows for the three months ended January 31, 2019 and 2018.

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, loss contingencies, restructuring, and accounting for income taxes.

Update to Significant Accounting Policies. Except as set forth in Note 2, "New Accounting Pronouncements," there have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

2. NEW ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update ("ASU") 2014-09, Revenue From Contracts With Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 and has since modified the standard with several ASUs (collectively, the “new revenue standard” or "ASC 606"). The new revenue standard requires entities to recognize revenue through the application of a five-step model, which includes: identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue as the entity satisfies the performance obligations. We adopted the new revenue standard on November 1, 2018, using the modified retrospective method with the cumulative effect of initially applying the guidance recognized at the date of adoption. Comparative information has not been restated and continues to be reported under the standards in effect for the prior periods presented. We have applied the new revenue standard only to contracts not completed as of the date of adoption, referred to as open contracts. We have elected the practical expedient that permits an entity to reflect the aggregate effect of all modifications (on a contract-by-contract basis) that occurred before the date of adoption in determining the transaction price, identifying the satisfied and unsatisfied performance obligations, and allocating the transaction price to the performance obligations.

The most significant impact of the new revenue standard was our accounting for software license revenue. Historically, we have deferred revenue for certain types of license arrangements and recognize the revenue ratably over the license term. Under the new revenue standard, we are no longer required to establish vendor-specific objective evidence to recognize software license revenue separately from the other elements, and we are required to recognize software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. The new revenue standard further requires certain costs, primarily sales-related commissions on contracts, to be capitalized rather than expensed. We reclassified our allowance for sales returns from accounts receivable, net to other accrued liabilities due to the adoption of the new revenue standard. See Note 3, "Revenue."

8

The cumulative effect of initially applying the new revenue standard to all open contracts as of November 1, 2018 was as follows:

	October 31, 2018		Adjustments Due to ASC 606			November 1, 2018
	(in millions)
Assets:
Accounts receivable, net	$	624	$	7		$	631
Other current assets	222		28			250
Long-term deferred tax assets	750		(15		)	735
Other assets	279		3			282
Liabilities:
Deferred revenue	$	334	$	(53	)	$	281
Income and other taxes payable	42		1			43
Other accrued liabilities	69		7			76
Long-term deferred revenue	127		(11		)	116
Other long-term liabilities	287		3			290
Stockholders' equity:
Retained earnings	$	1,212	$	76		$	1,288

The following tables summarize the impact of ASC 606 on our condensed consolidated financial statements:

	Three months ended
	January 31, 2019
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
	(in millions)
Net revenue:
Products	$	837		$	822		$	15
Services and other	169			170			(1		)
Total net revenue	1,006			992			14
Costs and expenses:
Cost of products	347			346			1
Cost of services and other	81			81			—
Total costs	428			427			1
Research and development	173			173			—
Selling, general and administrative	288			287			1
Other operating expense (income), net	(4		)	(4		)	—
Total costs and expenses	885			883			2
Income from operations	121			109			12
Interest income	4			4			—
Interest expense	(20		)	(20		)	—
Other income (expense), net	15			15			—
Income before taxes	120			108			12
Provision for income taxes	6			4			2
Net income	$	114		$	104		$	10
Net income per share:
Basic	$	0.61		$	0.55		$	0.06
Diluted	$	0.60		$	0.55		$	0.05

9

	January 31, 2019
	As Reported		Balances Without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in millions)
Assets:
Accounts receivable, net	$	580	$	572	$	8
Inventory	641		642		(1		)
Other current assets	225		198		27
Long-term deferred tax assets	741		758		(17		)
Other assets	308		304		4
Liabilities:
Deferred revenue	$	317	$	377	$	(60	)
Income and other taxes payable	56		54		2
Other accrued liabilities	96		89		7
Long-term deferred revenue	126		143		(17		)
Other long-term liabilities	284		281		3
Stockholders' equity:
Retained earnings	$	1,402	$	1,316	$	86

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued guidance related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Most prominent among the changes in the standard is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized in net income rather than other comprehensive income. We adopted the standard effective November 1, 2018 using a modified retrospective approach. We elected to prospectively measure equity investments without readily determinable fair values at cost with adjustments for observable changes in price or impairments. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements.

ASU 2016-02, Leases. In February 2016, the FASB issued guidance that will require substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We expect our leases designated as operating leases in Note 16 to the consolidated financial statements in our Annual Report on Form 10-K for fiscal year ended October 31, 2018 will be reported in the consolidated balance sheet upon adoption. 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. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. We expect to adopt the new standard on November 1, 2019 and will elect the transition package of practical expedients, which among other things, allows us to carry forward the historical lease classification. We do not plan to elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The company has selected a leasing software solution and is in the process of identifying changes to our business processes, systems, and controls to support adoption of the new standard.

ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued guidance that adds or clarifies guidance on eight cash flow classification issues that had been creating diversity in practice. We adopted this guidance during the first quarter of 2019 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, 2018 related to the classification of acquisition-related contingent consideration.

	Three Months Ended January 31, 2018
	As Originally Reported			As Adjusted			Change
	(in millions)
Net cash provided by operating activities	$	171		$	171		$	—
Net cash used in investing activities	$	(27	)	$	(24	)	$	3
Net cash provided by financing activities	$	9		$	6		$	(3	)

ASU 2016-18, Restricted Cash. In November 2016, the FASB issued guidance that requires an entity to include in its cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. We adopted this guidance during the first quarter of 2019 retrospectively to all periods presented. See Note 7, "Supplemental Cash Flow Information."

10

ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost. 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 presented in the statement of operations separately from the service cost component and outside of income from operations. We retrospectively adopted this guidance during the first quarter of 2019. The interest cost, expected return on assets, amortization of prior service credits and other costs have been reclassified from cost of products, research and development, selling, general and administrative, and other operating expenses (income) to other income (expense).

We elected to apply the practical expedient, which allows us to reclassify amounts disclosed previously in our retirement plans and post-retirement benefit plans note as the basis for applying retrospective presentation for comparative periods as it is impractical to determine the disaggregation of the components for amounts capitalized and reclassified in those periods. On a prospective basis, the service cost component of net periodic pension and post-retirement benefit cost is presented with other current compensation costs in operating income. The remaining components are included in other operating expense (income) and will not be included in amounts capitalized in inventory or property, plant, and equipment. The effect of the retrospective presentation change related to the retirement plans and post-retirement benefit plans to our previously reported condensed consolidated statement of operations for the three months ended January 31, 2018 was as follows:

	Three Months Ended January 31, 2018
	As Originally Reported		As Adjusted		Effect of Change Higher/(Lower)
	(in millions)
Cost of products	$	337	$	339	$	2
Research and development	146		150		4
Selling, general and administrative	289		295		6
Other income (expense), net	1		13		12

ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. 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. We adopted this guidance during the first quarter of 2019 and elected to continue to record changes in the fair value of components excluded from the effectiveness assessment of cash flow hedges in earnings. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements.

ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. 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 (the "Tax Act") enacted in December 2017. The standard is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We adopted this guidance on November 1, 2018. We elected to retain the income tax effects of the Tax Act as a component of accumulated other comprehensive income. Given this election, the adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued guidance that requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to defer and recognize as an asset and aligns the recognition of implementation costs to those incurred in an arrangement that includes an internal-use software license. Further, new disclosures about implementation costs for both internal-use software and hosting arrangements are required. The standard is effective for fiscal years beginning after December 15, 2019 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.

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.

11

3. REVENUE

Revenue Recognition

Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We primarily generate revenue from the sale of products (hardware and/or software), services, or a combination thereof. We enter into contracts that may involve multiple performance obligations, and we allocate the transaction price between each performance obligation on the basis of relative standalone selling price. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of Goods and Services

Product revenues are generated predominantly from the sales of various types of design and test hardware and associated software. Products consist of hardware, generally installed with basic software and software licenses that consist of perpetual and term-based licenses for optional software. Our hardware products generally do not have any substantive acceptance terms that would otherwise preclude the transfer of control. Performance obligations related to our software licenses, including the license portion of our software subscriptions, grant the customer the right to use our software via electronic delivery.

Service revenues consist of repair and calibration services, extended warranties, technical support for hardware and software, when-and-if available software updates and upgrades, and professional services, including installation and implementation, consulting, and training. Repair and calibration services for hardware products are sold both as per-incident customer services and as customer agreements to provide such services over the contractual period. Extended warranties are optional to the customer and provide warranty on hardware products for additional years beyond the standard one-year warranty. Technical support for software and when-and-if available software updates and upgrades are sold either together with our software licenses and software subscriptions, or separately as part of our customer support programs. These are considered stand-ready performance obligations where customers benefit from the services evenly throughout the license or service period. These performance obligations provide the customer access evenly over the contract period. Our professional services may be sold on a time and material basis (e.g., consulting) or on a fixed-fee basis (e.g., non-recurring engineering).

We also generate revenues from a combination of products and services ("custom solutions"), including combinations of hardware, software, installation or other start-up services, software subscriptions, and/or software support services. Custom solutions provide the customer with a combination of hardware, software and professional services to meet customers' unique specifications.

For our contracts with customers, we account for individual performance obligations separately if they are distinct. Our standard payment terms are net 30 to 90 days, and we generally do not offer extended payment terms beyond one year. Our contracts typically contain various forms of variable consideration, including trade discounts, trade-in credits, rebates, and rights of return. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for a majority of our products and services are estimated based on our established pricing practices and maximize the use of observable inputs. We have elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by Keysight from a customer (e.g., sales, use, value added, and some excise taxes). We have also elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.

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Our typical performance obligations include the following:

Performance Obligation	When performance obligation is typically satisfied	When payment is typically due	How standalone selling price is typically determined
Product Revenues
Hardware	When customer obtains control of the product, typically at delivery (point in time)	Within 30-90 days of shipment	Estimated based on established pricing practices or observable based on standalone sales for certain hardware products
Software licenses	Upon electronic delivery of the software, and the applicable license period has begun (point in time)	Within 30-90 days of the beginning of license period	Estimated based on established pricing practices or observable based on standalone sales for certain software products
Threat intelligence solutions	Ratably over the subscription period (over time)	Within 30-90 days of the beginning of subscription period	Estimated based on established pricing practices
Service Revenues
Calibration contracts	Ratably over the service contract period (over time)	Within 30-90 days of the beginning of service contract period	Estimated based on established pricing practices
Repair and calibration (per- incident)	As services are performed (point in time)	Within 30-90 days of invoicing for services rendered	Estimated based on established pricing practices
Extended hardware warranty	Ratably over the warranty period (over time)	Within 30-90 days of the beginning of warranty period	Estimated based on established pricing practices or observable based on standalone sales of certain hardware warranty contracts
Technical support and when-and-if-available software updates	Ratably over the license service contract period (over time)	Within 30-90 days of the beginning of license or service contract period	Estimated based on established pricing practices or observable based on standalone sales for certain support contracts
Professional services	As services are performed based on measures of progress (over time) or at a point in time	Within 30-90 days invoicing for services rendered	Estimated based on established pricing practices
Custom Solutions
Custom solutions (milestone-based)	As milestones are achieved based on transfer of control to customer (over time)	Within 30-90 days of milestone achievement	Transaction price, as pricing is custom and can vary significantly from contract to contract
Custom solutions (point in time)	When customer obtains control of the solution, typically at delivery (point in time)	Within 30-90 days of delivery of solution	Transaction price, as pricing is custom and can vary significantly from contract to contract

Significant Judgments

Judgment is required to determine the standalone selling price for each distinct performance obligation. As most of our products and services are not sold on a standalone basis, we typically estimate the standalone selling price. In doing so, we consider our internal price list for each product and service, which reflects our desired profitability, based on an expected level of sales, and adjust for factors such as competition, customer relationship, discount provided in the contract, geographic location, and the products and services purchased in the arrangement. We use a range based on actual historical sales to determine whether the calculated standalone selling price for a product or service is a fair representation of the standalone selling price.

For capitalized contract costs, we use judgment in determining the capitalized amount.

13

Our products are generally sold with a right of return and we may provide other credits, discounts, or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns, credits, and discounts are estimated at contract inception and updated at the end of each reporting period as additional information becomes available to the extent that it is probable a significant reversal of the cumulative amount of revenue recognized will not occur once the variability is subsequently resolved.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic region, end market, and timing of transfer of products and services to customers, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregated revenue is presented for each of our three reportable segments.

	Three Months Ended January 31, 2019
	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total
	(in millions)
Region
Americas	$	272	$	57	$	74	$	403
Europe	96		63		19		178
Asia Pacific	255		137		33		425
Total net revenue	$	623	$	257	$	126	$	1,006
End Market
Aerospace, Defense & Government	$	223	$	—	$	—	$	223
Commercial Communications	400		—		—		400
Electronic Industrial	—		257		—		257
Ixia Solutions	—		—		126		126
Total net revenue	$	623	$	257	$	126	$	1,006
Timing of Revenue Recognition
Revenue recognized at a point in time	$	570	$	235	$	82	$	887
Revenue recognized over time	53		22		44		119
Total net revenue	$	623	$	257	$	126	$	1,006

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue (contract liabilities) on our condensed consolidated balance sheet. In addition, we defer and capitalize certain costs incurred to obtain a contract (contract costs).

Contract assets - Contract assets represent unbilled amounts from arrangements for which we have performed by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer. Contract assets arise primarily from service agreements and products delivered pending a formal customer acceptance, which generally occurs within 30 days. The contract assets balance was $19 million at January 31, 2019 and is included in "accounts receivables, net" in our condensed consolidated balance sheet.

Contract costs - We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain employee and third-party representative commissions programs meet the requirements to be capitalized. Employee commissions are based on the achievement of order volume compared to a sales target. Third-party representative commission costs relate directly to a customer contract as the commission is tied to orders contracted through and contracts arranged by our third-party representatives. Without obtaining the contracts, the commissions would not be paid and, as such, are determined to be an incremental cost to obtaining a contract. We only defer these costs when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract.

Capitalized incremental costs are allocated to the individual performance obligations in proportion to the transaction price allocated to each performance obligation and amortized based on the pattern of performance for the underlying performance obligation. Contract costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another.

14

The following table provides a roll-forward of our capitalized contract costs, current and non-current:

	Three months ended
	January 31, 2019
	(in millions)
Balance at October 31, 2018	$	—
Costs capitalized on November 1, 2018 due to ASC 606 adoption	29
Costs capitalized during the period	17
Costs amortized during the period	(18		)
Foreign currency translation impact	1
Balance at January 31, 2019	$	29

Contract liabilities - Our contract liabilities consist of deferred revenue that arises when we receive consideration in advance of providing the goods or services promised in the contract. Contract liabilities are primarily generated from customer deposits received in advance of shipments for products or rendering of services and are recognized as revenue when services are provided to the customer. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. Contract liabilities are recognized as revenue when services are provided to the customer.

Changes in contract liabilities, current and non-current, during the three months ended January 31, 2019 were as follows:

	Contract Liabilities
	(in millions)
Balance at October 31, 2018	$	461
Impact of adopting new revenue standard	(64		)
Balance at November 1, 2018	397
Deferral of revenue billed in current period, net of recognition	167
Revenue recognized that was deferred as of the beginning of the period	(124		)
Foreign currency translation impact	3
Balance at January 31, 2019	$	443

Remaining Performance Obligations

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, was approximately $260 million as of January 31, 2019, and represents the company’s obligation to deliver products and services and obtain customer acceptance on delivered products. Since we typically invoice customers at contract inception, this amount is included in our current and long-term deferred revenue balances. As of January 31, 2019, we expect to recognize approximately 41 percent of the revenue related to these unsatisfied performance obligations during the remainder of 2019, 32 percent during 2020, and 27 percent thereafter.

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Practical Expedients

As discussed in Note 2, "New Accounting Pronouncements," and previously in this note, we have elected the following practical expedients in accordance with ASC 606:

• We do not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less.

• We determine incremental costs of obtaining a contract for a portfolio of contracts with similar characteristics as we reasonably expect that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within that portfolio.

• We exclude from the transaction price certain taxes (e.g., sales, use, value added, and some excise taxes).

• We do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

• We treat shipping and handling costs associated with outbound freight after control of a product has transferred to a customer as a fulfillment cost, included in cost of products.

• We have applied the guidance only to contracts that have not been completed as of the date of adoption (November 1, 2018).

• We did not evaluate individual modifications for those periods prior to the adoption date, but rather evaluated the aggregate effect of all modifications as of the adoption date.

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. 

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

	Three Months Ended
	January 31,
	2019		2018
	(in millions)
Cost of products and services	$	4	$	3
Research and development	6		4
Selling, general and administrative	17		12
Total share-based compensation expense	$	27	$	19

 Share-based compensation capitalized within inventory was $1 million at both January 31, 2019 and 2018.

The following assumptions were used to estimate the fair value of awards granted under the LTP Program that are based on total shareholder return ("TSR"):

	Three Months Ended
	January 31,
	2019		2018
Volatility of Keysight shares	25	%	25	%
Volatility of selected index	12	%	14	%
Price-wise correlation with selected peers	57	%	57	%

The TSR-based performance awards were valued using a Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. The estimated fair value of restricted stock awards and the financial metrics-based performance awards is determined based on the market price of Keysight’s common stock on the grant date. We did not grant any option awards for the three months ended January 31, 2019 and 2018, respectively.

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5.    INCOME TAXES

The company’s effective tax rate was 5.2 percent and 515.8 percent for the three months ended January 31, 2019 and 2018, respectively. The income tax expense was $6 million for the three months ended January 31, 2019 and an income tax benefit of $117 million for the three months ended January 31, 2018. The income tax expense for the three months ended January 31, 2019 included a net discrete benefit of $23 million, primarily related to a change in tax reserves resulting from a change in judgment. 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.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that 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. The impact of the tax incentives decreased the income tax provision for the three months ended January 31, 2019 by $8 million, resulting in a benefit to net income per share (diluted) of approximately $0.04 for the three months ended January 31, 2019.

The open tax years for the IRS and most states are from November 1, 2014 through the current tax year. For the majority of our foreign entities, the open tax years are from August 1, 2014 through the current tax year. For certain foreign entities, the tax years remain open, at most, back to the year 2008. 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 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.

The Tax Act, as enacted by the U.S. government on December 22, 2017, includes significant changes to the U.S. corporate income tax system, including but not limited to: the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which resulted in a one-time U.S. tax liability on those earnings which were not previously repatriated to the U.S. (the “Transition Tax”); creation of new minimum taxes such as the Global Intangible Low Taxed Income (“GILTI”) tax and the base erosion anti-abuse tax; creation of the foreign-derived intangible income (“FDII”) deduction; a federal corporate income tax rate reduction from 35 percent to 21 percent; and limitations on the deductibility of interest expense and executive compensation.

The company completed its accounting for the income tax effects of the Tax Act during the first quarter of fiscal 2019, in accordance with the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118. Finalizing the provisional adjustments related to the Tax Act did not have a material impact on our consolidated financial statements as of January 31, 2019. Legislation and clarifying guidance is expected to continue to be issued by the U.S. Treasury and various states in 2019, which could result in significant changes to currently computed income tax liabilities for past and current tax periods.

The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to impact the GILTI tax expense in future years or provide for the tax expense related to GILTI in each year in which the tax is incurred. The company has elected to recognize the tax on GILTI as a period expense in each period in which the tax is incurred.

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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,
	2019		2018
	(in millions)
Numerator:
Net income	$	114	$	94
Denominator:
Basic weighted-average shares	187		187
Potential common shares— stock options and other employee stock plans	3		2
Diluted weighted-average shares	190		189

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are collectively assumed to be used to repurchase hypothetical shares.

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 their effect would be anti-dilutive. For each of the three-month periods ended January 31, 2019 and 2018, we excluded zero options from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP Program and restricted stock awards, whose combined exercise price, unamortized fair value and excess tax benefits collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three months ended January 31, 2019 and 2018, we excluded approximately 417,400 shares and 668,100 shares, respectively.

7.    SUPPLEMENTAL CASH FLOW INFORMATION

Net cash paid for income taxes was $1 million for the three months ended January 31, 2019 and 2018. Cash paid for interest was zero and $2 million for the three months ended January 31, 2019 and 2018, 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,
	2019		2018
	(in millions)
Increase (decrease) in unpaid capital expenditures in accounts payable	$	11	$	(3	)
	$	11	$	(3	)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the amount shown in the condensed consolidated statement of cash flows:

	Three months ended
	January 31,
	2019		2018
	(in millions)
Cash and cash equivalents	$	1,098	$	980
Restricted cash included in other current assets	2		—
Restricted cash included in other assets	2		2
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	1,102	$	982

Restricted cash consisted primarily of deposits held as collateral against bank guarantees.

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8.    INVENTORY

	January 31, 2019		October 31, 2018
	(in millions)
Finished goods	$	286	$	283
Purchased parts and fabricated assemblies	355		336
Total inventory	$	641	$	619

Inventory-related excess and obsolescence charges recorded in total cost of products were $7 million and $6 million for the three months ended January 31, 2019 and January 31, 2018, respectively. We record excess and obsolete inventory charges for inventory at our sites as well as inventory at our contract manufacturers and suppliers, where we have non-cancellable purchase commitments.

9. GOODWILL AND OTHER INTANGIBLE ASSETS

The goodwill balances as of January 31, 2019 and October 31, 2018 and the activity for the three months ended January 31, 2019 for each of our reportable operating segments were as follows. Prior period amounts have been reclassified to conform to our organizational change as described in Note 16, "Segment Information."

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group			Total
	(in millions)
Balance as of October 31, 2018:
Goodwill	$	497	$	267	$	1,116		$	1,880
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	497		267		407			1,171
Foreign currency translation impact	9		1		—			10
Balance as of January 31, 2019	$	506	$	268	$	407		$	1,181
Components of goodwill as of January 31, 2019:
Goodwill	$	506	$	268	$	1,116		$	1,890
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	$	506	$	268	$	407		$	1,181

The company has not identified any triggering events that indicate an impairment of goodwill in the three months ended January 31, 2019.

Other intangible assets as of January 31, 2019 and October 31, 2018 consisted of the following:

	Other Intangible Assets as of January 31, 2019						Other Intangible Assets as of October 31, 2018
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	835	$	455	$	380	$	835	$	415	$	420
Backlog	13		13		—		13		13		—
Trademark/Tradename	33		16		17		33		14		19
Customer relationships	304		109		195		304		100		204
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,186		593		593		1,186		542		644
In-Process R&D	1		—		1		1		—		1
Total	$	1,187	$	593	$	594	$	1,187	$	542	$	645

During the three months ended January 31, 2019, there was no foreign exchange translation impact to other intangible assets. Amortization of other intangible assets was $51 million for each of the three-month periods ended January 31, 2019 and 2018.

19

Estimated intangible assets amortization expense for each of the five succeeding fiscal years is as follows:

	Amortization expense
	(in millions)
2019 (remainder)	$	152
2020	196
2021	128
2022	52
2023	44
Thereafter	21

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, 2019 and October 31, 2018 were as follows:

	Fair Value Measurements at
	January 31, 2019										October 31, 2018
	Total		Level 1		Level 2		Level 3		Other		Total		Level 1		Level 2		Level 3		Other
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	603	$	603	$	—	$	—	$	—	$	484	$	484	$	—	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		—		6		—		6		—		—
Long-term
Equity investments	36		36		—		—		—		30		30		—		—		—
Equity investments - other	16		—		—		—		16		16		—		—		—		16
Total assets measured at fair value	$	658	$	639	$	3	$	—	$	16	$	536	$	514	$	6	$	—	$	16
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	—	$	6	$	—	$	6	$	—	$	—
Long-term
Deferred compensation liability	13		—		13		—		—		13		—		13		—		—
Total liabilities measured at fair value	$	18	$	—	$	18	$	—	$	—	$	19	$	—	$	19	$	—	$	—

Net recognized gains (losses) on equity investments were as follows:

	Three Months Ended
	January 31,
	2019
	(in millions)
Net realized gains on investments sold	$	—
Net unrealized gains on investments still held	5
Other-than-temporary impairments of investments	—
Total	$	5

Our money market funds and equity investments with readily determinable fair values are measured at fair value using quoted market prices and, therefore, are classified within Level 1 of the fair value hierarchy. Equity investments without readily determinable fair values that are measured at cost adjusted for observable changes in price or impairments are not categorized in the fair value hierarchy and are presented as "other" in the tables above. 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.

Equity investments including securities that are earmarked to pay the deferred compensation liability and the deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized in earnings. 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.

21

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. The changes in the value of the derivative instrument included in the assessment of effectiveness are recognized in accumulated other comprehensive income and reclassified into earnings when the forecasted transaction occurs in the same financial statement line item in the consolidated statement of operations where the earnings effect of the hedged item is presented. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income will be reclassified into earnings in the current period. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness (forward points) are recognized immediately in earnings and are presented in the same financial statement line of the consolidated statement of operations where the earnings effect of the hedged item is presented. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings over the life of the option contract.

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, 2019 was $3 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2019.

There were 177 foreign exchange forward contracts open as of January 31, 2019 that were designated as cash flow hedges. There were 66 foreign exchange forward contracts as of January 31, 2019 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2019 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	$	13		$	48
British Pound	—			(39		)
Singapore Dollar	16			—
Malaysian Ringgit	87			(4		)
Japanese Yen	(75		)	(38		)
Other currencies	(14		)	(5		)
Total	$	27		$	(38	)

22

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, 2019 and October 31, 2018 were as follows:

Fair Values of Derivative Instruments
Derivative Assets					Derivative Liabilities
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2019		October 31, 2018		Balance Sheet Location	January 31, 2019		October 31, 2018
	(in millions)					(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	5	Other accrued liabilities	$	3	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	6		$	5	$	6

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,
	2019			2018
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(2	)	$	2
Gain (loss) reclassified from accumulated other comprehensive income into earnings:
Cost of products	$	—		$	2
Selling, general and administrative	$	(1	)	$	—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value:
Cost of products	$	1		$	—
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(3	)	$	1

The estimated amount of existing net loss at January 31, 2019 expected to be reclassified from accumulated other comprehensive income to earnings within the next twelve months is $2 million.

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12. RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

For the three months ended January 31, 2019 and 2018, 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,
	2019			2018			2019			2018			2019			2018
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	3		$	3		$	—		$	—
Interest cost on benefit obligation	7			6			6			6			2			2
Expected return on plan assets	(11		)	(9		)	(19		)	(21		)	(3		)	(4		)
Amortization:
Net actuarial loss	3			3			7			6			2			4
Prior service credit	(1		)	(2		)	—			—			(3		)	(3		)
Settlement loss	—			—			2			—			—			—
Net periodic benefit cost (benefit)	$	3		$	4		$	(1	)	$	(6	)	$	(2	)	$	(1	)

We did not contribute to our U.S. Defined Benefit Plans or U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2019 and 2018. We contributed $8 million and $9 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2019 and 2018, respectively.

For the remainder of 2019, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $23 million to our Non-U.S. Defined Benefit Plans.

On January 1, 2019, we transferred a portion of the assets and liabilities of our Switzerland defined benefit plan to an insurance company, resulting in the recognition of a settlement loss of $2 million, which is included in other income (expense) in the condensed consolidated statement of operations.

13. WARRANTY, COMMITMENTS AND CONTINGENCIES

Standard Warranty

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,
	2019			2018
	(in millions)
Beginning balance	$	45		$	45
Accruals for warranties including change in estimate	8			10
Settlements made during the period	(9		)	(8		)
Ending balance	$	44		$	47
Accruals for warranties due within one year	$	25		$	26
Accruals for warranties due after one year	19			21
Ending balance	$	44		$	47

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Commitments

During the three months ended January 31, 2019, there were no material changes to the operating and capital lease commitments reported in the company’s 2018 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

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

	January 31, 2019		October 31, 2018
	(in millions)
2019 senior unsecured notes at 3.30% (net of unamortized costs of $1 and $1)	$	499	$	499
2024 senior unsecured notes at 4.55% (net of unamortized costs of $3 and $3)	597		597
2027 senior unsecured notes at 4.60% (net of unamortized costs of $6 and $6)	694		694
Total debt	1,790		1,790
Less: short-term debt	499		499
Total long-term debt	$	1,291	$	1,291

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. As of January 31, 2019, 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, 2019.

2019 Senior Notes

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

Long-Term Debt

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

As of January 31, 2019 and October 31, 2018, we had $31 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 $25 million and $3 million as of January 31, 2019 and October 31, 2018, respectively.

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15.    STOCKHOLDERS' EQUITY

Stock Repurchase Program

On March 6, 2018, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to $350 million of the company’s common stock, replacing a previously approved 2016 program authorizing the purchase of up to $200 million of the company’s common stock. Under the new 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, 2019, we repurchased 686,398 shares of common stock for $40 million. 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, 2019 and 2018 were as follows:

	Unrealized gain (loss) on investments			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, 2018	$	—		$	(60	)	$	(445	)	$	19		$	(2	)	$	(488	)
Other comprehensive income (loss) before reclassifications	—			30			4			—			(2		)	32
Amounts reclassified out of accumulated other comprehensive loss	—			—			12			(4		)	1			9
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	—			30			13			(3		)	(1		)	39
As of January 31, 2019	$	—		$	(30	)	$	(432	)	$	16		$	(3	)	$	(449	)
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	)

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Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2019 and 2018 were as follows:

Details about Accumulated Other Comprehensive Loss Components							Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2019			2018
Unrealized gain (loss) on derivatives	$	—		$	2		Cost of products
	(1		)	—			Selling, general and administrative
	—			—			Provision for income taxes
	(1		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(12		)	(13		)
Prior service credits	4			5
	(8		)	(8		)	Total before income tax
	3			2			Provision for income taxes
	(5		)	(6		)	Net of income tax
Total reclassifications for the period	$	(6	)	$	(4	)

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 solutions that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems to communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, instrument productivity, application services and instrument calibration and repair.

In the first quarter of fiscal year 2019, in recognition of Keysight’s customer solutions-oriented go-to-market strategy and to fully reflect our services delivery within the markets served and further enable services growth, we completed an organizational change to align our services business with our customers and end markets. With this change, services that were previously reported as the Services Solutions Group are now reported as part of the Communications Solutions Group and Electronic Industrial Solutions Group. As a result, Keysight now has three segments: Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group. The new organizational structure continues to include centralized enterprise functions that provide support across the groups.

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 three reportable operating segments are as follows:

The Communications Solutions Group serves customers spanning the worldwide commercial communications and aerospace, defense and government end markets. The group provides electronic design and test software, instruments, systems and related services 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

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provides electronic design and test software, instruments, systems and related services used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment.

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

A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently optimize 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 was not allocated these shared services and infrastructure charges, with the exception of net periodic benefit costs, until fiscal 2019.

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

The profitability of each of the segments is measured after excluding share-based compensation expense, amortization of acquisition-related balances, acquisition and integration costs, northern California wildfire-related costs, interest income, interest expense and other items as noted in the reconciliations below.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total Segments
	(in millions)
Three months ended January 31, 2019:
Total net revenue	$	623	$	257	$	126	$	1,006
Amortization of acquisition-related balances	—		—		3		3
Total segment revenue	$	623	$	257	$	129	$	1,009
Segment income from operations	$	138	$	54	$	12	$	204
Three months ended January 31, 2018:
Total net revenue	$	500	$	229	$	108	$	837
Amortization of acquisition-related balances	—		—		19		19
Total segment revenue	$	500	$	229	$	127	$	856
Segment income from operations	$	63	$	38	$	18	$	119

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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,
	2019			2018
	(in millions)
Total reportable operating segments' income from operations	$	204		$	119
Share-based compensation expense	(27		)	(19		)
Amortization of acquisition-related balances	(54		)	(89		)
Acquisition and integration costs	(2		)	(19		)
Northern California wildfire-related costs	—			(7		)
Other	—			(2		)
Income (loss) from operations, as reported	121			(17		)
Interest income	4			3
Interest expense	(20		)	(22		)
Other income (expense), net	15			13
Income (loss) before taxes, as reported	$	120		$	(23	)

The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments and other assets.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total Segments
	(in millions)
Assets:
As of January 31, 2019	$	2,059	$	875	$	1,407	$	4,341
As of October 31, 2018	$	2,115	$	888	$	1,327	$	4,330

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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 restoration efforts are largely complete, and we have fully re-occupied the site. Keysight is insured for the damage caused by the fire.

For the three months ended January 31, 2019 and 2018, we recognized costs of zero and $7 million, net of estimated insurance recoveries of zero and $31 million, respectively. Expenses were primarily for cleaning and restoration activities, write-off of damaged fixed assets and other direct costs related to recovery from 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,
	2019		2018
	(in millions)
Cost of products and services	$	—	$	5
Research and development	—		1
Selling, general and administrative	—		1
Total	$	—	$	7

For the three months ended January 31, 2019 and 2018, we received insurance proceeds of $22 million and $10 million, respectively, for covered expenses incurred. Combined with $68 million received in fiscal 2018, we have received insurance proceeds related to recovery from the northern California wildfires of $90 million to date, which has substantially covered our total fire-related expenses in excess of our $10 million self-insured retention amount.

In addition, for the three months ended January 31, 2019 and 2018, we made investments in property, plant and equipment related to fire recovery of $10 million and $3 million, respectively. Combined with capital expenditures of $27 million in fiscal 2018, we have made investments in property, plant and equipment related to fire recovery of $37 million to date that are expected to be covered by insurance.

We currently estimate additional insurance proceeds of $30 million to $40 million in fiscal 2019. In certain cases, our insurance coverage exceeds the amount of the covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes. There may be a difference in timing of costs incurred and the related insurance reimbursement.

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 solution and service introductions, the ability of our solutions 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 political or 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

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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 technology company providing electronic design and test solutions that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems to communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, instrument productivity, application services and instrument calibration and repair.

We invest in research and development ("R&D") to align our business with available markets and position the company for growth. Our R&D efforts focus on improvements to existing software and hardware products and development to support new software and hardware product introductions and complete customer solutions aligned to our industry. We anticipate that we will continue to have significant R&D expenditures in order to maintain our competitive position with a continuous flow of innovative, high-quality software, customer solutions, products and services.

In the first quarter of fiscal year 2019, in recognition of Keysight’s customer solutions-oriented go-to-market strategy, and to fully reflect our services delivery within the markets served and further enable services growth, we completed an organizational change to align our services business with our customers and end markets. With this change, services that were previously reported as the Services Solutions Group are now reported as part of the Communications Solutions Group and Electronic Industrial Solutions Group. As a result, Keysight now has three segments: Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group. The new organizational structure continues to include centralized enterprise functions that provide support across the groups. Prior period segment results have been revised to conform to the new organizational structure.

Effective November 1, 2018, Keysight adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, using the modified retrospective transition method. Prior period comparative information has not been adjusted and is reported under the accounting standards in effect for that period. For the first quarter of fiscal 2019, the impact of adopting the new revenue standard increased our net sales by approximately $14 million, primarily driven by the strength of our subscription software sales. While the impact of the new standard is largely driven by our sales mix, which can vary from period to period, we do not expect the adoption of the new revenue standard to have a material impact on our net revenue during the remainder of fiscal 2019. See Note 2, "New Accounting Pronouncements," to the condensed consolidated financial statements for additional information.

Three months ended January 31, 2019 and 2018

Total orders for the three months ended January 31, 2019 were $1,016 million, an increase of 5 percent when compared to the same period last year and an increase of 7 percent excluding the impact of currency fluctuations and divestitures. Currency fluctuations and divestitures each contributed 1 percentage point unfavorable impact to the order growth for the three months ended January 31, 2019.

Net revenue for the three months ended January 31, 2019 was $1,006 million, an increase of 20 percent when compared to the same period last year and an increase of 22 percent excluding the impact of currency fluctuations and divestitures. Currency fluctuations and divestitures each contributed 1 percentage point unfavorable impact to the revenue growth for the three months ended January 31, 2019. The Communications Solutions Group led the overall revenue growth with strong growth in the commercial communications market, complemented by steady growth in the Ixia Solutions Group and the Electronic Industrial Solutions Group. Revenue from the Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group represented approximately 62 percent, 26 percent and 12 percent, respectively, of the total revenue for the three months ended January 31, 2019.

Net income for the three months ended January 31, 2019 was $114 million compared to $94 million for the corresponding period last year. The increase in net income for the three months ended January 31, 2019 was driven by higher revenue volume and a decline in both amortization of acquisition-related balances and acquisition and integration costs, partially offset by a favorable income tax benefit in the prior period from the new U.S. tax legislation, an increase in variable people-related costs and higher research and development investments in leading-edge technologies and key growth opportunities in our end markets.

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

31

to our core facilities was limited, our buildings did experience some smoke and other fire-related impacts. Cleaning and restoration efforts are largely complete, and we have fully re-occupied the site. Keysight is insured for the damage caused by the fire.

For the three months ended January 31, 2019 and 2018, we recognized costs of zero and $7 million, net of estimated insurance recoveries of zero and $31 million, respectively. Expenses were primarily for cleaning and restoration activities, write-off of damaged fixed assets and other direct costs related to recovery from this event.

For the three months ended January 31, 2019 and 2018, we received insurance proceeds of $22 million and $10 million, respectively, for covered expenses incurred. Combined with $68 million received in fiscal 2018, we have received $90 million to date, which has substantially covered our total fire-related expenses in excess of our $10 million self-insured amounts.

In addition, for the three months ended January 31, 2019 and 2018, we made investments in property, plant and equipment related to fire recovery of $10 million and $3 million, respectively. Combined with capital expenditures of $27 million in fiscal 2018, we made investments in property, plant and equipment related to fire recovery of $37 million to date that are expected to be covered by insurance.

We currently estimate additional insurance proceeds of $30 million to $40 million in fiscal 2019. In certain 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. 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 our technology portfolio and the size of our addressable market, position Keysight for growth. We remain focused on delivering value through differentiated and first-to-market 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 all functions. While current macro-economic and geopolitical uncertainties exist related to trade, tariffs, monetary and fiscal policies, we expect continued sales growth.

Critical Accounting Policies and Estimates

There were no material changes during the three months ended January 31, 2019 to the critical accounting estimates described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018. Changes to our accounting policy for revenue recognition as a result of adopting Accounting Standard Update 2014-09, Revenue from Contracts with Customers, are discussed in Note 2, "New Accounting Pronouncements," to the condensed consolidated financial statements.

Adoption of New Pronouncements

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

Foreign Currency

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

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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
	2019		2018		Months
Orders	$	1,016	$	964	5%
Net revenue:
Products	$	837	$	684	22%
Services and other	169		153		11%
Total net revenue	$	1,006	$	837	20%

Orders

Total orders for the three months ended January 31, 2019 were $1,016 million, an increase of 5 percent when compared to the same period last year and an increase of 7 percent excluding the impact of currency fluctuations and divestitures. Currency fluctuations and divestitures each contributed 1 percentage point unfavorable impact to the order growth for the three months ended January 31, 2019. For the three months ended January 31, 2019, order growth in Asia-Pacific and Europe was partially offset by a decline in the Americas.

Net Revenue

The following table provides the percent change in net revenue for the three months ended January 31, 2019 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, 2019
Geographic Region	Actual		Currency adjusted
Americas	18	%	18	%
Europe	5	%	8	%
Asia Pacific	31	%	32	%
Total net revenue	20	%	21	%

Net revenue for the three months ended January 31, 2019 was $1,006 million, an increase of 20 percent when compared to the same period last year, with growth across all regions and operating segments. Currency fluctuations and divestitures each contributed 1 percentage point unfavorable impact to the revenue growth for the three months ended January 31, 2019. Currency had an unfavorable impact of 3 percent and 1 percent on revenue growth in Europe and Asia Pacific respectively.

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Costs and Expenses

	Three Months Ended						Year over Year Change
	January 31,						Three
	2019			2018			Months
Total gross margin	57.4%			50.7%			7 ppts
Operating margin	12.0%			(2.0)%			14 ppts
in millions
Research and development	$	173		$	150		16%
Selling, general and administrative	$	288		$	295		(2)%
Other operating expense (income), net	$	(4	)	$	(3	)	27%

 Gross margin increased 7 percentage points for the three months ended January 31, 2019, compared to the same period last year, primarily driven by revenue volume, favorable mix and a decline in wildfire-related expenses, partially offset by an increase in variable people-related costs.

Research and development expense increased 16 percent for the three months ended January 31, 2019 compared to the same period last year, primarily driven by increases in variable and other people-related costs, greater investment in leading-edge technologies and key growth opportunities in our end markets and higher infrastructure-related costs. As a percentage of revenue, research and development expense was 17 percent for the three months ended January 31, 2019, as compared to 18 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 expense decreased 2 percent for the three months ended January 31, 2019 compared to the same period last year, primarily driven by decreases in acquisition and integration costs and favorable foreign currency movements, partially offset by increases in variable and other people-related costs.

Other operating expense (income), net for the three months ended January 31, 2019 and 2018 was income of $4 million and $3 million, respectively.

Operating margin for the three months ended January 31, 2019 increased 14 percentage points, compared to the same period last year, primarily driven by revenue volume, favorable mix and declines in acquisition and integration costs and wildfire-related expenses, partially offset by increases in variable and other people-related costs.

As of January 31, 2019, our headcount was approximately 13,000 as compared to approximately 12,700 at January 31, 2018.

Interest Expense

Interest expense for the three months ended January 31, 2019 was $20 million compared to $22 million for the comparable period last year and primarily relates to interest on our senior notes.

Other income (expense), net

Other income (expense), net for the three months ended January 31, 2019 was income of $15 million compared to $13 million for the comparable period last year and primarily includes interest cost, expected return on assets and amortization of net actuarial loss and prior service credits related to our defined benefit and post-retirement benefit plans. Beginning in fiscal 2019, other income (expense) also includes the change in fair value of our equity investments.

Income Taxes

The company’s effective tax rate was 5.2 percent and 515.8 percent for the three months ended January 31, 2019 and 2018, respectively. The income tax expense was $6 million for the three months ended January 31, 2019 and an income tax benefit of $117 million for the three months ended January 31, 2018. The income tax benefit for the three months ended January 31, 2019 included a net discrete benefit of $23 million, primarily related to a change in tax reserves resulting from the change in judgment. 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.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that 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

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tax incentive is due for renewal in fiscal 2024. The impact of the tax incentives decreased the income tax provision for the three months ended January 31, 2019 by $8 million, resulting in a benefit to net income per share (diluted) of approximately $0.04 for the three months ended January 31, 2019.

The open tax years for the IRS and most states are from November 1, 2014 through the current tax year. For the majority of our foreign entities, the open tax years are from August 1, 2014 through the current tax year. For foreign entities, the tax years remain open, at most, back to the year 2008. 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 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, 2019, our estimated annual effective tax rate for fiscal 2019 is an expense of 23.2 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 impact of the U.S. GILTI tax on earnings in non-U.S. jurisdictions net of U.S. foreign tax credits, 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

In the first quarter of fiscal year 2019, we completed an organizational change to align our services business with our customers and end markets. The alignment of services to the Communications Solutions Group and Electronic Industrial Solutions Group is a logical next step in Keysight’s customer solutions oriented go-to-market strategy by fully reflecting our services delivery within the markets served and further enabling services growth. With this change from four reportable segments to three, services that were previously reported as the Services Solutions Group are now reported as part of the Communications Solutions Group and Electronic Industrial Solutions Group. As a result, Keysight now has three segments: Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group.

The Communications Solutions Group provides electronic design and test software, instruments, systems and related services spanning the worldwide commercial communications and aerospace, defense and government end markets. The Electronic Industrial Solutions Group provides test and measurement solutions and related services across a broad set of electronic industrial end markets. The Ixia Solutions Group provides testing, visibility and security solutions, strengthening applications across physical and virtual networks for enterprises, service providers and network equipment manufacturers.

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 and aerospace, defense and government end markets. The group provides electronic design and test software, instruments, systems and related services used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. Prior period amounts have been revised to conform to our new organizational structure described previously in the Segment Overview.

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Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2019		2018		Months
	(in millions)
Net revenue	$	623	$	500	25%

The Communications Solutions Group revenue for the three months ended January 31, 2019 increased 25 percent compared to the same period last year, which was impacted by the northern California wildfires. Primarily, the growth was driven by momentum in 5G and data center investments in the commercial communications markets, complemented by stable spending in the aerospace defense and government market.

The commercial communications market revenue for the three months ended January 31, 2019 increased 41 percent compared to the same period last year, with growth across all the regions and was approximately 64 percent of total Communications Solutions Group revenue. The revenue growth was primarily driven by increased 5G R&D demand across the wireless ecosystem and growth in data-center-related next-generation 400 gigabit ethernet and higher digital test.

The aerospace, defense and government market revenue for the three months ended January 31, 2019 increased 3 percent compared to the same period last year with growth in the Americas and Asia-Pacific, partially offset by decline in Europe, and was approximately 36 percent of total Communications Solutions Group revenue. The revenue growth was driven by continued demand in space and satellite applications in the U.S.

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, 2019 versus the three months ended January 31, 2018.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2019			2018			Months
Total gross margin	61.1		%	57.2		%	4 ppts
Operating margin	22.2		%	12.6		%	10 ppts
in millions
Research and development	$	96		$	84		15%
Selling, general and administrative	$	148		$	142		5%
Other operating expense (income), net	$	(2	)	$	(2	)	(8)%
Income from operations	$	138		$	63		120%

Gross margin for three months ended January 31, 2019 increased 4 percentage points when compared to the same period last year due to higher revenue volume and favorable mix.

Research and development expense for the three months ended January 31, 2019 increased 15 percent compared to the same period last year, primarily driven by an increase in variable people-related costs, greater investment in leading-edge technologies and key growth opportunities in our end markets and higher infrastructure-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, 2019 increased 5 percent compared to the same period last year, primarily driven by increased marketing-related investments.

Other operating expense (income) for both the three months ended January 31, 2019 and 2018 was income of $2 million.

Income from Operations

Income from operations for the three months ended January 31, 2019 increased $75 million on a corresponding revenue increase of $123 million when compared to the same period last year.

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Operating margin for the three months ended January 31, 2019 increased 10 percentage points when compared to the same period last year, driven by higher revenue volume, partially offset by higher variable people-related costs and increased marketing-related investments.

Electronic Industrial Solutions Group

The Electronic Industrial Solutions Group provides test and measurement solutions and related services across a broad set of electronic industrial end markets, focusing on high-value applications in the automotive and energy industry and measurement solutions for semiconductor design and manufacturing, consumer electronics, education and general electronics design and manufacturing. The group provides electronic design and test software, instruments, systems and related services used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. Prior period amounts have been revised to conform to our new organizational structure described previously in the Segment Overview.

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2019		2018		Months
	(in millions)
Net revenue	$	257	$	229	13%

The Electronic Industrial Solutions Group revenue for the three months ended January 31, 2019 increased 13 percent when compared to the same period last year, led by strong growth for our solutions in the general electronics measurement market and automotive and energy market, complemented by steady growth in the semiconductor measurement market. The revenue growth increased across all geographies.

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, 2019 versus the three months ended January 31, 2018.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2019			2018			Months
Total gross margin	58.9		%	56.6		%	2 ppts
Operating margin	20.9		%	16.9		%	4 ppts
in millions
Research and development	$	39		$	34		16%
Selling, general and administrative	$	59		$	58		3%
Other operating expense (income), net	$	(1	)	$	(1	)	(7)%
Income from operations	$	54		$	38		39%

Gross margin for the three months ended January 31, 2019 increased 2 percentage points compared to the same period last year, primarily driven by higher revenue volume and favorable mix.

Research and development expense for the three months ended January 31, 2019 increased 16 percent compared to the same period last year, primarily driven by an increase in people-related costs and greater investment in leading-edge technologies and key growth opportunities in our markets. 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, 2019 increased 3 percent compared to the same period last year, primarily driven by increased marketing-related investments.

Other operating expense (income) was income of $1 million for both the three months ended January 31, 2019 and 2018.

Income from Operations

Income from operations for the three months ended January 31, 2019 increased $16 million on a corresponding revenue increase of $28 million compared to the same period last year.

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Operating margin for the three months ended January 31, 2019 increased 4 percentage points compared to the same period last year, driven by higher revenue volume and favorable mix, partially offset by increased marketing-related investments.

Ixia Solutions Group

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

Net Revenue

	Three Months Ended				Year over Year Change
	January 31,				Three
	2019		2018		Months
	(in millions)
Net revenue	$	129	$	127	1%

The Ixia Solutions Group revenue for the three months ended January 31, 2019 increased 1 percent compared to the same period last year, primarily driven by higher revenue from network visibility solutions, while revenue from network test solutions was consistent with the same period last year. Revenue growth in Asia-Pacific was partially offset by declines in Europe and Americas.

Gross Margin and Operating Margin

The following table shows the Ixia Solutions Group margins, expenses and income from operations for the three months ended January 31, 2019 versus the three months ended January 31, 2018.

	Three Months Ended						Year over Year Change
	January 31,						Three
	2019			2018			Months
Total gross margin	71.3		%	75.5		%	(4) ppts
Operating margin	9.2		%	14.1		%	(5) ppts
in millions
Research and development	$	32		$	26		26%
Selling, general and administrative	$	48		$	53		(8)%
Income from operations	$	12		$	18		(35)%

Gross margin for the three months ended January 31, 2019 decreased 4 percentage points, compared to the same period last year, primarily due to an increased share of the company's infrastructure-related costs after integration, unfavorable mix and higher variable people-related costs.

Research and development expense for the three months ended January 31, 2019 increased 26 percent compared to the same period last year primarily due to an increase in variable people-related costs and an increased share of the company's infrastructure-related costs after integration.

Selling, general and administrative expense for the three months ended January 31, 2019 decreased 8 percent compared to the same period last year primarily due to cost synergies with integration and lower selling costs.

Income from Operations

Income from operations for the three months ended January 31, 2019 decreased $6 million on a corresponding revenue increase of $2 million when compared to the same period last year.

Operating margin for the three months ended January 31, 2019 decreased 5 percentage points compared to the same period last year, driven by an unfavorable mix, higher variable people-related costs and increased share of the company's infrastructure-related costs after integration, partially offset by cost synergies resulting from integration and lower selling costs.

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FINANCIAL CONDITION

Liquidity and Capital Resources

Our financial position as of January 31, 2019 consisted of cash, cash equivalents and restricted cash of $1,102 million as compared to $917 million as of October 31, 2018.

As of January 31, 2019, approximately $979 million of our cash, cash equivalents and restricted cash was held outside of the U.S. in our foreign subsidiaries. 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, a few locations that are unable to access internal funding have access to temporary local overdraft and short-term working capital lines of credit.

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

Net Cash Provided by Operating Activities

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

Net cash provided by operating activities was $240 million for the three months ended January 31, 2019, compared to $171 million for the same period in 2018.

• Net income for the three months ended January 31, 2019 increased by $20 million compared to the same period last year. Non-cash adjustments increased $224 million primarily due to a decrease in deferred tax benefits as benefits from new U.S. tax legislation were recognized in the three months ended January 31, 2018.

• The aggregate of accounts receivable, inventory and accounts payable provided net operating cash of $20 million during the first three months of fiscal 2019 compared to net cash provided of $93 million in the comparable period last year. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory and accounts payable depends upon 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, including the impact of insurance proceeds, provided net operating cash of $24 million during the first three months of fiscal 2019 compared to net cash provided of $126 million in the comparable period last year. The difference is primarily due to less cash from income taxes payable as the income tax payable at January 31, 2018 included the establishment of a long-term transition tax liability associated with new U.S. tax legislation, and higher variable compensation payments, partially offset by lower cash outflow for fire-related recovery. For the three months ended January 31, 2019 and 2018, we received insurance proceeds of $22 million and $10 million, respectively, associated with the northern California wildfires. Also, for the three months ended January 31, 2018, we received insurance proceeds of $26 million for Singapore fire-related expenses.

• We contributed $8 million to our non-U.S. defined benefit plans during the first three months of fiscal 2019 compared to $9 million in the same period last year. We expect to contribute approximately $23 million to our non-U.S. defined benefit plans during the remainder of 2019. For the three months ended January 31, 2019 and 2018, 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 2019.

Net Cash Used in Investing Activities

Net cash used in investing activities was $29 million for the three months ended January 31, 2019 as compared to $24 million for the same period last year. For the three months ended January 31, 2019 and 2018, investments in property, plant and equipment were $31 million and $24 million, respectively, of which $10 million and $3 million, respectively, related to recovery from the

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northern California wildfires. In addition, for the three months ended January 31, 2019, we received $2 million from a divestiture closed last year.

We anticipate total 2019 capital spending to be approximately $135 million, which is $3 million higher than capital spending in fiscal 2018. 

Net Cash Used in Financing Activities

In the three months ended January 31, 2019, we used $33 million for financing activities, which included $40 million for treasury stock repurchases and $23 million for tax payments related to net share settlement of equity awards, partially offset by proceeds of $30 million from issuance of common stock under employee stock plans.

On March 6, 2018, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to $350 million of the company’s common stock, replacing a previously approved 2016 program authorizing the purchase of up to $200 million of the company’s common stock. 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, net cash provided by financing activities was $6 million, which included $24 million from the issuance of common stock under employee stock plans, partially offset by payment of $15 million for taxes related to net share settlement of equity awards and payment of $3 million for acquisition-related contingent consideration.

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, 2019, 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, 2019.

2019 Senior Notes

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

Long-Term Debt

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

Other

There were no material changes from our Annual Report on Form 10-K for the fiscal year ended October 31, 2018, to our contractual commitments (including non-cancellable operating leases) in the first three months of 2019.

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, 2018. 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, 2018. There were no material changes during the three months ended January 31, 2019 to this information reported in the company’s 2018 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

Effective November 1, 2018, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue From Contracts With Customers. Although the new revenue standard is expected to have an immaterial impact on our ongoing net income, we did implement changes to our processes and control activities related to revenue recognition, including changes to our information systems. These included the development of new policies based on the five-step model provided in the new revenue standard, new training, ongoing contract review requirements, and gathering of information provided for disclosures. There were no other changes in our internal control over financial reporting during the quarter ended January 31, 2019 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

Failure to introduce successful new solutions and services in a timely manner to address increased competition, rapid technological changes, and changing industry standards could result in our solutions and services becoming obsolete.

We generally sell our solutions in industries that are characterized by increased competition through frequent new solution 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 solutions, services and enhancements, our solutions and services will become technologically obsolete over time, in which case our revenue and operating results would suffer. Our ability to offer new solutions and services and to deploy them in a timely manner 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 solutions in sufficient volumes and on time;

• differentiate our offerings from our competitors' offerings;

• price our solutions competitively;

• anticipate our competitors' development of new solutions, services or technological innovations; and

• control product quality in our manufacturing process.

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Our future operating results may fluctuate significantly if our investments in innovative technologies are not as profitable as we anticipate.

On a regular basis, we review the existing technologies available in the market and identify strategic new technologies to develop and invest in. We are currently devoting significant resources to the 5G technology, in the automotive and battery industries, in the Internet of Things, and mobile industries. We are investing in R&D, developing relationships with customers and suppliers, and re-directing our corporate and operational resources to grow within these innovative technologies. Our income could be harmed if we fail to gain sufficient market share, if demand for our solutions is lower than we expect, or if our income related to the innovative technologies is lower than we anticipate. For example, when the 5G standards are published, we may not be able to produce a satisfactory return on investment if our strategic vision and the resources that we are spending on developing our presence in the 5G technology industry turn out to be misaligned with such standards.

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 solutions 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 re-engineer our solution. 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 solutions is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges.

Economic and political policies favoring national interests could adversely affect our results of operations.

Our overall performance depends largely upon domestic and international economic and political conditions. Many of our suppliers, vendors, partners, and other entities with whom we do business have strong ties to doing business in China and their ability to supply materials to us or otherwise work with us is strongly affected by their ability to do business in China. If the U.S.’s relationship with China deteriorates or results in trade protection measures, retaliatory actions, tariffs and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our operations may be adversely affected due to such changes in the economic and political ecosystem in which our suppliers, vendors, partners, and other entities with whom we do business operate.

We have significant operations, including a large number of employees, manufacturing facilities, and operations centers in the United States, the United Kingdom, the European Union, Singapore, Malaysia and China among other countries. Nationalistic economic policies and political trends in these territories, such as opposition to globalization and free trade, sanctions or trade restrictions, withdrawal from or re-negotiation of global trade agreements, tax policies that favor domestic industries and interests, the anticipated exit of the United Kingdom from the European Union (known as Brexit), the distancing or potential exit of other countries from the European Union, and other similar actions may result in increased transaction costs, reduced ability to hire employees, reduced access to supplies and materials, reduced demand or access to customers in international markets, and inability to conduct our operations as they have been conducted historically. Each of these factors may adversely affect our business.

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

Because we sell our solutions 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:

• changes in a specific country's or region's political, economic or other conditions, including but not limited to changes that favor national interests and economic volatility;

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• negative consequences from changes in tax laws;

• difficulty in protecting intellectual property;

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

• changes in foreign currency exchange rates;

• difficulty in staffing and managing foreign operations;

• local competition;

• differing labor regulations;

• unexpected changes in regulatory requirements;

• inadequate local infrastructure;

• potential incidences of corruption and fraudulent business practices; and

• volatile geopolitical turmoil, including popular uprisings, 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.

Further, even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage similar risks.

Our operating results and financial condition could be harmed if the markets into which we sell our solutions 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 solutions 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.

Uncertainty in 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 solutions, delays in the shipment of orders or increases in order cancellations;

• increased risk of excess and obsolete inventories;

• increased price pressure for our solutions 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

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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.

Dependence on contract manufacturing and outsourcing other portions of our supply chain may adversely affect our ability to bring solutions 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 solutions 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.

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

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. During a general market upturn or an upturn in our business, we cannot increase our manufacturing capacity to meet product demand, we will not be able to fulfill orders in a timely manner, which could lead to order cancellations, contract breaches or indemnification obligations. This inability could materially and adversely limit our ability to improve our income, margin and operating results. By contrast, if, during an economic downturn, we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins and operating results.

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.

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 solutions under such less favorable terms, which would decrease our revenue. Consolidation among our customer base may also lead to reduced demand for our solutions, 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.

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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 achievement of anticipated cost savings, synergies, business opportunities and growth prospects from combining the acquired company;

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

• the retention of key employees and/or customers;

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

• the management of relationships with our strategic partners, suppliers, and customer base.

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. Additionally, we may record significant goodwill and other assets as a result of acquisitions or investments, and we may be required to incur impairment charges, which could adversely affect our consolidated financial position and results of operations.

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.

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 solutions 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.

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:

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• 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.

If currency exchange rates fluctuate substantially in the future, our financial results could be adversely affected.

 A substantial amount of our solutions are priced and paid for in U.S. Dollars, although many of our solutions are priced in local currencies and a significant amount of certain types of expenses, such as payroll, utilities, tax and marketing expenses, are paid in local currencies. Our hedging programs are designed to reduce, but not entirely eliminate, within any given 12-month period, the impact of currency exchange rate movements, including those caused by currency controls, which could impact our business, operating results and financial condition by resulting in lower revenue or increased expenses. However, for expenses beyond a 12-month period, our hedging strategy will not mitigate our exchange rate risk. In addition, our currency hedging programs involve third-party financial institutions as counterparties. The weakening or failure of these counterparties may adversely affect our hedging programs and our financial condition through, among other things, a reduction in the number of available counterparties, increasingly unfavorable terms or the failure of counterparties to perform under hedging contracts.

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 solutions or services.

Third parties may claim that one or more of our solutions 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 solutions (which would be costly and time-consuming) and/or subject us to significant damages or an injunction against the development and sale of certain solutions 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

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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.

If we experience a significant cybersecurity attack or disruption in our IT systems, our business, reputation, and operating results could be adversely affected.

We rely on several centralized IT systems to provide solutions and services, maintain financial records, retain sensitive data such as intellectual property, proprietary business information, and data related to customers, suppliers, and business partners, process orders, manage inventory, process shipments to customers and operate other critical functions. The ongoing maintenance and security of this information is pertinent to the success of our business operations and our strategic goals.

Despite our implementation of network security measures, our network may be vulnerable to cybersecurity attacks, computer viruses, break-ins and similar disruptions. Our network security measures include, but are not limited to, the implementation of firewalls, antivirus protection, patches, log monitors, routine backups, offsite storage, network audits, and routine updates and modifications. Despite our efforts to create these security barriers, we may not be able to keep pace as new threats emerge and it is virtually impossible for us to entirely eliminate this risk. Cybersecurity attacks 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, reputation, operating results and financial condition, and no assurance can be given that our efforts to reduce the risk of such attacks will be successful.

In addition, our IT systems may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, telecommunication failures, user errors, catastrophes or other unforeseen events. Such events 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, our customers and partners may lose confidence in our solutions and we may lose business or brand reputation, resulting in a material and adverse effect on our business operating results and financial condition.

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 these 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.

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

We are subject to federal, state, and local taxes in the United States and numerous foreign jurisdictions. We devote significant resources to evaluating our tax positions and our worldwide provision for taxes. Our financial results and tax treatment are susceptible to changes in tax, accounting, and other laws, regulations, principles, and interpretations in the United States and in other jurisdictions where we do business. With the rise of economic and political policies that favor domestic interests, it is possible that more countries will enact tax laws that either increase the tax rates, or reduce or change the tax incentives available to multinational companies like ours. Upon a change in tax laws in any territory where we do significant business, such as the U.S., the European Union, or Singapore, we may not be able to maintain our current tax rate or qualify for or maintain the benefits of any tax incentives offered, to the extent such incentives are offered.

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We currently benefit from tax incentives extended to certain of our foreign subsidiaries to encourage investment or employment, the most significant of which being Singapore. The Singapore tax incentives require 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. Based on the current tax environment, we believe that we will satisfy such conditions in the future as needed, but cannot guarantee that the tax environment will not change or that such conditions will be satisfied.

Our Singapore tax incentives are due for renewal in fiscal 2024, but we cannot guarantee that Singapore will not revoke the tax incentives earlier. Our taxes could increase if the existing Singapore incentives are not renewed upon revocation or expiration. We cannot guarantee that we will qualify for any new incentive regime that may exist in fiscal 2024, or that such conditions will be satisfied. If we cannot or do not wish to satisfy all or portions of the tax incentives conditions, we may lose the related tax incentives 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.

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, including personnel joining our company through acquisitions. 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. If we fail to retain and hire a sufficient number of these personnel, we may not be able to meet key objectives, such as launching effective product innovations and meeting financial goals, and maintain or expand our business.

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 man-made 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 fail to maintain satisfactory compliance with certain regulations, we may be subject to substantial negative financial consequences and 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, data privacy, 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, high financial penalties, product recalls or impositions of fines, and restrictions on our ability to carry on or expand our operations. If demand for our solutions is adversely affected or our costs increase, our business would suffer.

In response to changes in data privacy regulations, such as the General Data Protection Regulation (“GDPR”) in the European Union, which became effective on May 25, 2018, we are modifying our data handling practices and devoting resources to keeping up with the changing regulatory environment on data privacy in the jurisdictions where we do business. New laws, amendments, or interpretations of regulations, industry standards, and contractual obligations relating to privacy or data may require us to incur additional costs and restrict our business operations. If we fail to comply with GDPR or other data privacy regulation, we may be subject to significant financial fines and civil or criminal penalties, and may suffer high damage to our reputation or brand, which could adversely affect our business and financial results.

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In addition, 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.

Failure to comply with anti-corruption laws could adversely affect our business and result in financial penalties.

Because we have extensive international operations, 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. 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. 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 solutions in one or more countries, and could also materially affect our brand, ability to attract and retain employees, international operations, business and operating results.

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.

Our internal controls may be determined to be ineffective, which may adversely affect investor confidence in our company, the value of our stock, and our access to capital.

The Sarbanes-Oxley Act of 2002 requires us to furnish a report by management on the effectiveness of our internal control over financial reporting, among other things. We are devoting significant resources and time to comply with such internal control over financial reporting requirements. 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 or on our access to capital, or cause us to be subject to investigation or sanctions by the SEC.

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.

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

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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.

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.

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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

• the requirement that the affirmative vote of shareholders holding at least 80 percent 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 percent 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 percent 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

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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.

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

52

costs may be incurred in the integration of the businesses. Additionally, we may record significant goodwill and other assets as a result of acquisitions or investments, and we may be required to incur impairment charges, which could adversely affect our consolidated financial position and results of operations. 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.

Risks Related to the Spin-off from Agilent

We are subject to continuing contingent liabilities of Agilent.

After our spin-off from Agilent on November 1, 2014, 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 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 spin-off 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.

53

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 July 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, 2018 through November 30, 2018	686,398	$58.26	686,398	189,873,335
December 1, 2018 through December 31, 2018	—	—	—	189,873,335
January 1, 2019 through January 31, 2019	—	—	—	189,873,335
Total	686,398		686,398

(1)

On March 6, 2018, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to $350 million of the company’s common stock, replacing a previously approved 2016 program authorizing the purchase of up to $200 million of the company’s common stock, and of which $139 million remained. Under the new 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.

(2)

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

54

ITEM 6. EXHIBITS

Exhibit
Number	Description
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

55

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 5, 2019	By:	/s/ Neil Dougherty
			Neil Dougherty
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)
Dated:	March 5, 2019	By:	/s/ John C. Skinner
			John C. Skinner
			Vice President and Corporate Controller
			(Principal Accounting Officer)

56

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 5, 2019
		/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 5, 2019
		/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, 2019, 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 5, 2019	/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, 2019, 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 5, 2019	/s/ Neil Dougherty
		Neil Dougherty
		Senior Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2019	Mar. 01, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Keysight Technologies, Inc.
Entity Central Index Key	0001601046
Current Fiscal Year End Date	--10-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		187,988,723
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2019
Trading Symbol	KEYS
Entity Emerging Growth Company	false
Entity Small Business	false

XML

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Net revenue:
Revenues	$ 1,006	$ 837
Costs and expenses:
Cost of Goods and Services Sold	428	412
Research and development	173	150
Selling, general and administrative	288	295
Other operating expense (income), net	(4)	(3)
Total costs and expenses	885	854
Income (loss) from operations	121	(17)
Interest income	4	3
Interest expense	(20)	(22)
Other income (expense), net	15	13
Income (loss) before taxes	120	(23)
Provision (benefit) for income taxes	6	(117)
Net income	$ 114	$ 94
Net income per share:
Basic (in dollars per share)	$ 0.61	$ 0.50
Diluted (in dollars per share)	$ 0.60	$ 0.50
Weighted average shares used in computing net income per share:
Basic (in shares)	187	187
Diluted (in shares)	190	189
Products
Net revenue:
Revenues	$ 837	$ 684
Costs and expenses:
Cost of Goods and Services Sold	347	339
Services and other
Net revenue:
Revenues	169	153
Costs and expenses:
Cost of Goods and Services Sold	$ 81	$ 73

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Other comprehensive income (loss):
Net income	$ 114	$ 94
Unrealized gain (loss) on investments, net of tax benefit of zero	0	(2)
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of zero	(2)	2
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of zero	1	(2)
Foreign currency translation, net of tax benefit (expense) of zero	30	41
Net defined benefit pension cost and post retirement plan costs:
Change in actuarial net loss, net of tax expense of $3	13	10
Change in net prior service credit, net of tax benefit of $1	(3)	(4)
Other comprehensive income (loss)	39	45
Total comprehensive income	$ 153	$ 139

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Other comprehensive income (loss), tax, parenthetical disclosures [Abstract]
Unrealized gain (loss) on investments, tax	$ 0	$ 0
Unrealized gain (loss) on derivative instruments, tax	0	0
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	3
Change in net prior service credit, tax	$ 1	$ 1

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Current assets:
Cash and cash equivalents	$ 1,098	$ 913
Accounts receivable, net	580	624
Inventory	641	619
Other current assets	225	222
Total current assets	2,544	2,378
Property, plant and equipment, net	558	555
Goodwill	1,181	1,171
Other intangible assets, net	594	645
Long-term investments	52	46
Long-term deferred tax assets	741	750
Other assets	308	279
Total assets	5,978	5,824
Current liabilities:
Short-term debt	499	499
Accounts payable	222	242
Employee compensation and benefits	210	276
Deferred revenue	317	334
Income and other taxes payable	56	42
Other accrued liabilities	96	69
Total current liabilities	1,400	1,462
Long-term debt	1,291	1,291
Retirement and post-retirement benefits	219	224
Long-term deferred revenue	126	127
Other long-term liabilities	284	287
Total liabilities	3,320	3,391
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; 193 million shares at January 31, 2019 and 191 million shares at October 31, 2018 issued	2	2
Treasury stock at cost; 5.1 million shares at January 31, 2019 and 4.4 million shares at October 31, 2018	(222)	(182)
Additional paid-in-capital	1,925	1,889
Retained earnings	1,402	1,212
Accumulated other comprehensive loss	(449)	(488)
Total stockholder's equity	2,658	2,433
Total liabilities and equity	$ 5,978	$ 5,824

XML

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares shares in Millions	Jan. 31, 2019	Oct. 31, 2018
Stockholders' equity:
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	193.0	191.0
Treasury Stock, Shares	5.1	4.4

XML

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Cash flows from operating activities:
Net Income	$ 114	$ 94
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	24	26
Amortization	52	52
Share-based compensation	27	19
Deferred tax benefit	(12)	(235)
Excess and obsolete inventory-related charges	7	6
Gain on divestiture	(1)	0
Pension curtailment and settlement loss	2	0
Unrealized Gain (Loss) on Investments	(5)	0
Other non-cash expenses, net	0	2
Changes in assets and liabilities:
Accounts receivable	56	99
Inventory	(26)	(20)
Accounts payable	(10)	14
Employee compensation and benefits	(68)	(50)
Retirement and post-retirement benefits	(12)	(12)
Deferred Revenue	43	61
Income taxes payable	10	115
Other assets and liabilities	39	0
Net cash provided by operating activities	240	171
Cash flows from investing activities:
Investments in property, plant and equipment	(31)	(24)
Proceeds from divestiture	2	0
Net cash used in investing activities	(29)	(24)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	30	24
Payment of taxes related to net share settlement of equity awards	(23)	(15)
Payment of acquisition-related contingent consideration	0	(3)
Proceeds from revolving credit facility	0	40
Repayment of revolving credit facility	0	(40)
Treasury stock repurchases	(40)	0
Net Cash provided (used) by financing activities	(33)	6
Effect of exchange rate movements	7	9
Net increase in cash, cash equivalents, and restricted cash	185	162
Cash, cash equivalents, and restricted cash at beginning of period	917	820
Cash, cash equivalents, and restricted cash at end of period	$ 1,102	$ 982

XML

CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement - USD ($) shares in Thousands, $ in Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 6				$ 6
Common Stock, Shares, Outstanding at Oct. 31, 2017		188,310
Common Stock, Shares, Outstanding at Jan. 31, 2018		189,800
Treasury Stock, Shares at Oct. 31, 2017				(2,289)
Treasury Stock, Shares at Jan. 31, 2018				(2,289)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Oct. 31, 2017	2,310	$ 2	$ 1,786	$ (62)	1,041	$ (457)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jan. 31, 2018	2,484	$ 2	1,815	$ (62)	1,141	(412)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures		1,490
Adjustments to Additional Paid in Capital, Fair Value	9		9
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition	20		20
Net Income	94				94
Other Comprehensive Income (Loss), Net of Tax	$ 45					45
Treasury Stock, Shares, Acquired	0			0
Treasury Stock, Value, Acquired, Cost Method	$ 0			$ 0
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 76				76
Common Stock, Shares, Outstanding at Oct. 31, 2018		191,204
Common Stock, Shares, Outstanding at Jan. 31, 2019		192,801
Treasury Stock, Shares at Oct. 31, 2018	4,400			(4,364)
Treasury Stock, Shares at Jan. 31, 2019	5,100			(5,050)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Oct. 31, 2018	$ 2,433	$ 2	1,889	$ (182)	1,212	(488)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jan. 31, 2019	2,658	$ 2	1,925	$ (222)	1,402	(449)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures		1,597
Adjustments to Additional Paid in Capital, Fair Value	8		8
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition	28		$ 28
Net Income	114				$ 114
Other Comprehensive Income (Loss), Net of Tax	$ 39					$ 39
Treasury Stock, Shares, Acquired	(686,398,000)			(686)
Treasury Stock, Value, Acquired, Cost Method	$ (40)			$ (40)

XML

OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jan. 31, 2019

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 technology company providing electronic design and test solutions that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems to communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, instrument productivity, application services and instrument calibration and repair.

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 financial position as of January 31, 2019 and October 31, 2018, our results of operations and cash flows for the three months ended January 31, 2019 and 2018.

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, loss contingencies, restructuring, and accounting for income taxes.

Update to Significant Accounting Policies. Except as set forth in Note 2, "New Accounting Pronouncements," there have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

XML

NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jan. 31, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

2. NEW ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update ("ASU") 2014-09, Revenue From Contracts With Customers. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 and has since modified the standard with several ASUs (collectively, the “new revenue standard” or "ASC 606"). The new revenue standard requires entities to recognize revenue through the application of a five-step model, which includes: identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue as the entity satisfies the performance obligations. We adopted the new revenue standard on November 1, 2018, using the modified retrospective method with the cumulative effect of initially applying the guidance recognized at the date of adoption. Comparative information has not been restated and continues to be reported under the standards in effect for the prior periods presented. We have applied the new revenue standard only to contracts not completed as of the date of adoption, referred to as open contracts. We have elected the practical expedient that permits an entity to reflect the aggregate effect of all modifications (on a contract-by-contract basis) that occurred before the date of adoption in determining the transaction price, identifying the satisfied and unsatisfied performance obligations, and allocating the transaction price to the performance obligations.

The most significant impact of the new revenue standard was our accounting for software license revenue. Historically, we have deferred revenue for certain types of license arrangements and recognize the revenue ratably over the license term. Under the new revenue standard, we are no longer required to establish vendor-specific objective evidence to recognize software license revenue separately from the other elements, and we are required to recognize software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. The new revenue standard further requires certain costs, primarily sales-related commissions on contracts, to be capitalized rather than expensed. We reclassified our allowance for sales returns from accounts receivable, net to other accrued liabilities due to the adoption of the new revenue standard. See Note 3, "Revenue."

The cumulative effect of initially applying the new revenue standard to all open contracts as of November 1, 2018 was as follows:

	October 31, 2018		Adjustments Due to ASC 606			November 1, 2018
	(in millions)
Assets:
Accounts receivable, net	$	624	$	7		$	631
Other current assets	222		28			250
Long-term deferred tax assets	750		(15		)	735
Other assets	279		3			282
Liabilities:
Deferred revenue	$	334	$	(53	)	$	281
Income and other taxes payable	42		1			43
Other accrued liabilities	69		7			76
Long-term deferred revenue	127		(11		)	116
Other long-term liabilities	287		3			290
Stockholders' equity:
Retained earnings	$	1,212	$	76		$	1,288

The following tables summarize the impact of ASC 606 on our condensed consolidated financial statements:

	Three months ended
	January 31, 2019
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
	(in millions)
Net revenue:
Products	$	837		$	822		$	15
Services and other	169			170			(1		)
Total net revenue	1,006			992			14
Costs and expenses:
Cost of products	347			346			1
Cost of services and other	81			81			—
Total costs	428			427			1
Research and development	173			173			—
Selling, general and administrative	288			287			1
Other operating expense (income), net	(4		)	(4		)	—
Total costs and expenses	885			883			2
Income from operations	121			109			12
Interest income	4			4			—
Interest expense	(20		)	(20		)	—
Other income (expense), net	15			15			—
Income before taxes	120			108			12
Provision for income taxes	6			4			2
Net income	$	114		$	104		$	10
Net income per share:
Basic	$	0.61		$	0.55		$	0.06
Diluted	$	0.60		$	0.55		$	0.05

	January 31, 2019
	As Reported		Balances Without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in millions)
Assets:
Accounts receivable, net	$	580	$	572	$	8
Inventory	641		642		(1		)
Other current assets	225		198		27
Long-term deferred tax assets	741		758		(17		)
Other assets	308		304		4
Liabilities:
Deferred revenue	$	317	$	377	$	(60	)
Income and other taxes payable	56		54		2
Other accrued liabilities	96		89		7
Long-term deferred revenue	126		143		(17		)
Other long-term liabilities	284		281		3
Stockholders' equity:
Retained earnings	$	1,402	$	1,316	$	86

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued guidance related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Most prominent among the changes in the standard is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized in net income rather than other comprehensive income. We adopted the standard effective November 1, 2018 using a modified retrospective approach. We elected to prospectively measure equity investments without readily determinable fair values at cost with adjustments for observable changes in price or impairments. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements.

ASU 2016-02, Leases. In February 2016, the FASB issued guidance that will require substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We expect our leases designated as operating leases in Note 16 to the consolidated financial statements in our Annual Report on Form 10-K for fiscal year ended October 31, 2018 will be reported in the consolidated balance sheet upon adoption. 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. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. We expect to adopt the new standard on November 1, 2019 and will elect the transition package of practical expedients, which among other things, allows us to carry forward the historical lease classification. We do not plan to elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The company has selected a leasing software solution and is in the process of identifying changes to our business processes, systems, and controls to support adoption of the new standard.

ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued guidance that adds or clarifies guidance on eight cash flow classification issues that had been creating diversity in practice. We adopted this guidance during the first quarter of 2019 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, 2018 related to the classification of acquisition-related contingent consideration.

	Three Months Ended January 31, 2018
	As Originally Reported			As Adjusted			Change
	(in millions)
Net cash provided by operating activities	$	171		$	171		$	—
Net cash used in investing activities	$	(27	)	$	(24	)	$	3
Net cash provided by financing activities	$	9		$	6		$	(3	)

ASU 2016-18, Restricted Cash. In November 2016, the FASB issued guidance that requires an entity to include in its cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. We adopted this guidance during the first quarter of 2019 retrospectively to all periods presented. See Note 7, "Supplemental Cash Flow Information."

ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost. 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 presented in the statement of operations separately from the service cost component and outside of income from operations. We retrospectively adopted this guidance during the first quarter of 2019. The interest cost, expected return on assets, amortization of prior service credits and other costs have been reclassified from cost of products, research and development, selling, general and administrative, and other operating expenses (income) to other income (expense).

We elected to apply the practical expedient, which allows us to reclassify amounts disclosed previously in our retirement plans and post-retirement benefit plans note as the basis for applying retrospective presentation for comparative periods as it is impractical to determine the disaggregation of the components for amounts capitalized and reclassified in those periods. On a prospective basis, the service cost component of net periodic pension and post-retirement benefit cost is presented with other current compensation costs in operating income. The remaining components are included in other operating expense (income) and will not be included in amounts capitalized in inventory or property, plant, and equipment. The effect of the retrospective presentation change related to the retirement plans and post-retirement benefit plans to our previously reported condensed consolidated statement of operations for the three months ended January 31, 2018 was as follows:

	Three Months Ended January 31, 2018
	As Originally Reported		As Adjusted		Effect of Change Higher/(Lower)
	(in millions)
Cost of products	$	337	$	339	$	2
Research and development	146		150		4
Selling, general and administrative	289		295		6
Other income (expense), net	1		13		12

ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. 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. We adopted this guidance during the first quarter of 2019 and elected to continue to record changes in the fair value of components excluded from the effectiveness assessment of cash flow hedges in earnings. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements.

ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. 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 (the "Tax Act") enacted in December 2017. The standard is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We adopted this guidance on November 1, 2018. We elected to retain the income tax effects of the Tax Act as a component of accumulated other comprehensive income. Given this election, the adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. In August 2018, the FASB issued guidance that requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to defer and recognize as an asset and aligns the recognition of implementation costs to those incurred in an arrangement that includes an internal-use software license. Further, new disclosures about implementation costs for both internal-use software and hosting arrangements are required. The standard is effective for fiscal years beginning after December 15, 2019 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.

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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REVENUE (Notes)

3 Months Ended

Jan. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

3. REVENUE

Revenue Recognition

Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We primarily generate revenue from the sale of products (hardware and/or software), services, or a combination thereof. We enter into contracts that may involve multiple performance obligations, and we allocate the transaction price between each performance obligation on the basis of relative standalone selling price. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of Goods and Services

Product revenues are generated predominantly from the sales of various types of design and test hardware and associated software. Products consist of hardware, generally installed with basic software and software licenses that consist of perpetual and term-based licenses for optional software. Our hardware products generally do not have any substantive acceptance terms that would otherwise preclude the transfer of control. Performance obligations related to our software licenses, including the license portion of our software subscriptions, grant the customer the right to use our software via electronic delivery.

Service revenues consist of repair and calibration services, extended warranties, technical support for hardware and software, when-and-if available software updates and upgrades, and professional services, including installation and implementation, consulting, and training. Repair and calibration services for hardware products are sold both as per-incident customer services and as customer agreements to provide such services over the contractual period. Extended warranties are optional to the customer and provide warranty on hardware products for additional years beyond the standard one-year warranty. Technical support for software and when-and-if available software updates and upgrades are sold either together with our software licenses and software subscriptions, or separately as part of our customer support programs. These are considered stand-ready performance obligations where customers benefit from the services evenly throughout the license or service period. These performance obligations provide the customer access evenly over the contract period. Our professional services may be sold on a time and material basis (e.g., consulting) or on a fixed-fee basis (e.g., non-recurring engineering).

We also generate revenues from a combination of products and services ("custom solutions"), including combinations of hardware, software, installation or other start-up services, software subscriptions, and/or software support services. Custom solutions provide the customer with a combination of hardware, software and professional services to meet customers' unique specifications.

For our contracts with customers, we account for individual performance obligations separately if they are distinct. Our standard payment terms are net 30 to 90 days, and we generally do not offer extended payment terms beyond one year. Our contracts typically contain various forms of variable consideration, including trade discounts, trade-in credits, rebates, and rights of return. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for a majority of our products and services are estimated based on our established pricing practices and maximize the use of observable inputs. We have elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by Keysight from a customer (e.g., sales, use, value added, and some excise taxes). We have also elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.

Our typical performance obligations include the following:

Performance Obligation	When performance obligation is typically satisfied	When payment is typically due	How standalone selling price is typically determined
Product Revenues
Hardware	When customer obtains control of the product, typically at delivery (point in time)	Within 30-90 days of shipment	Estimated based on established pricing practices or observable based on standalone sales for certain hardware products
Software licenses	Upon electronic delivery of the software, and the applicable license period has begun (point in time)	Within 30-90 days of the beginning of license period	Estimated based on established pricing practices or observable based on standalone sales for certain software products
Threat intelligence solutions	Ratably over the subscription period (over time)	Within 30-90 days of the beginning of subscription period	Estimated based on established pricing practices
Service Revenues
Calibration contracts	Ratably over the service contract period (over time)	Within 30-90 days of the beginning of service contract period	Estimated based on established pricing practices
Repair and calibration (per- incident)	As services are performed (point in time)	Within 30-90 days of invoicing for services rendered	Estimated based on established pricing practices
Extended hardware warranty	Ratably over the warranty period (over time)	Within 30-90 days of the beginning of warranty period	Estimated based on established pricing practices or observable based on standalone sales of certain hardware warranty contracts
Technical support and when-and-if-available software updates	Ratably over the license service contract period (over time)	Within 30-90 days of the beginning of license or service contract period	Estimated based on established pricing practices or observable based on standalone sales for certain support contracts
Professional services	As services are performed based on measures of progress (over time) or at a point in time	Within 30-90 days invoicing for services rendered	Estimated based on established pricing practices
Custom Solutions
Custom solutions (milestone-based)	As milestones are achieved based on transfer of control to customer (over time)	Within 30-90 days of milestone achievement	Transaction price, as pricing is custom and can vary significantly from contract to contract
Custom solutions (point in time)	When customer obtains control of the solution, typically at delivery (point in time)	Within 30-90 days of delivery of solution	Transaction price, as pricing is custom and can vary significantly from contract to contract

Significant Judgments

Judgment is required to determine the standalone selling price for each distinct performance obligation. As most of our products and services are not sold on a standalone basis, we typically estimate the standalone selling price. In doing so, we consider our internal price list for each product and service, which reflects our desired profitability, based on an expected level of sales, and adjust for factors such as competition, customer relationship, discount provided in the contract, geographic location, and the products and services purchased in the arrangement. We use a range based on actual historical sales to determine whether the calculated standalone selling price for a product or service is a fair representation of the standalone selling price.

For capitalized contract costs, we use judgment in determining the capitalized amount.

Our products are generally sold with a right of return and we may provide other credits, discounts, or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns, credits, and discounts are estimated at contract inception and updated at the end of each reporting period as additional information becomes available to the extent that it is probable a significant reversal of the cumulative amount of revenue recognized will not occur once the variability is subsequently resolved.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic region, end market, and timing of transfer of products and services to customers, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregated revenue is presented for each of our three reportable segments.

	Three Months Ended January 31, 2019
	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total
	(in millions)
Region
Americas	$	272	$	57	$	74	$	403
Europe	96		63		19		178
Asia Pacific	255		137		33		425
Total net revenue	$	623	$	257	$	126	$	1,006
End Market
Aerospace, Defense & Government	$	223	$	—	$	—	$	223
Commercial Communications	400		—		—		400
Electronic Industrial	—		257		—		257
Ixia Solutions	—		—		126		126
Total net revenue	$	623	$	257	$	126	$	1,006
Timing of Revenue Recognition
Revenue recognized at a point in time	$	570	$	235	$	82	$	887
Revenue recognized over time	53		22		44		119
Total net revenue	$	623	$	257	$	126	$	1,006

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue (contract liabilities) on our condensed consolidated balance sheet. In addition, we defer and capitalize certain costs incurred to obtain a contract (contract costs).

Contract assets - Contract assets represent unbilled amounts from arrangements for which we have performed by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer. Contract assets arise primarily from service agreements and products delivered pending a formal customer acceptance, which generally occurs within 30 days. The contract assets balance was $19 million at January 31, 2019 and is included in "accounts receivables, net" in our condensed consolidated balance sheet.

Contract costs - We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain employee and third-party representative commissions programs meet the requirements to be capitalized. Employee commissions are based on the achievement of order volume compared to a sales target. Third-party representative commission costs relate directly to a customer contract as the commission is tied to orders contracted through and contracts arranged by our third-party representatives. Without obtaining the contracts, the commissions would not be paid and, as such, are determined to be an incremental cost to obtaining a contract. We only defer these costs when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract.

Capitalized incremental costs are allocated to the individual performance obligations in proportion to the transaction price allocated to each performance obligation and amortized based on the pattern of performance for the underlying performance obligation. Contract costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another.

The following table provides a roll-forward of our capitalized contract costs, current and non-current:

	Three months ended
	January 31, 2019
	(in millions)
Balance at October 31, 2018	$	—
Costs capitalized on November 1, 2018 due to ASC 606 adoption	29
Costs capitalized during the period	17
Costs amortized during the period	(18		)
Foreign currency translation impact	1
Balance at January 31, 2019	$	29

Contract liabilities - Our contract liabilities consist of deferred revenue that arises when we receive consideration in advance of providing the goods or services promised in the contract. Contract liabilities are primarily generated from customer deposits received in advance of shipments for products or rendering of services and are recognized as revenue when services are provided to the customer. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. Contract liabilities are recognized as revenue when services are provided to the customer.

Changes in contract liabilities, current and non-current, during the three months ended January 31, 2019 were as follows:

	Contract Liabilities
	(in millions)
Balance at October 31, 2018	$	461
Impact of adopting new revenue standard	(64		)
Balance at November 1, 2018	397
Deferral of revenue billed in current period, net of recognition	167
Revenue recognized that was deferred as of the beginning of the period	(124		)
Foreign currency translation impact	3
Balance at January 31, 2019	$	443

Remaining Performance Obligations

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, was approximately $260 million as of January 31, 2019, and represents the company’s obligation to deliver products and services and obtain customer acceptance on delivered products. Since we typically invoice customers at contract inception, this amount is included in our current and long-term deferred revenue balances. As of January 31, 2019, we expect to recognize approximately 41 percent of the revenue related to these unsatisfied performance obligations during the remainder of 2019, 32 percent during 2020, and 27 percent thereafter.

Practical Expedients

As discussed in Note 2, "New Accounting Pronouncements," and previously in this note, we have elected the following practical expedients in accordance with ASC 606:

• We do not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less.

• We determine incremental costs of obtaining a contract for a portfolio of contracts with similar characteristics as we reasonably expect that the effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within that portfolio.

• We exclude from the transaction price certain taxes (e.g., sales, use, value added, and some excise taxes).

• We do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

• We treat shipping and handling costs associated with outbound freight after control of a product has transferred to a customer as a fulfillment cost, included in cost of products.

• We have applied the guidance only to contracts that have not been completed as of the date of adoption (November 1, 2018).

• We did not evaluate individual modifications for those periods prior to the adoption date, but rather evaluated the aggregate effect of all modifications as of the adoption date.

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SHARE-BASED COMPENSATION

3 Months Ended

Jan. 31, 2019

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,
	2019		2018
	(in millions)
Cost of products and services	$	4	$	3
Research and development	6		4
Selling, general and administrative	17		12
Total share-based compensation expense	$	27	$	19

 Share-based compensation capitalized within inventory was $1 million at both January 31, 2019 and 2018.

The following assumptions were used to estimate the fair value of awards granted under the LTP Program that are based on total shareholder return ("TSR"):

	Three Months Ended
	January 31,
	2019		2018
Volatility of Keysight shares	25	%	25	%
Volatility of selected index	12	%	14	%
Price-wise correlation with selected peers	57	%	57	%

The TSR-based performance awards were valued using a Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. The estimated fair value of restricted stock awards and the financial metrics-based performance awards is determined based on the market price of Keysight’s common stock on the grant date. We did not grant any option awards for the three months ended January 31, 2019 and 2018, respectively.

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INCOME TAXES

3 Months Ended

Jan. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The company’s effective tax rate was 5.2 percent and 515.8 percent for the three months ended January 31, 2019 and 2018, respectively. The income tax expense was $6 million for the three months ended January 31, 2019 and an income tax benefit of $117 million for the three months ended January 31, 2018. The income tax expense for the three months ended January 31, 2019 included a net discrete benefit of $23 million, primarily related to a change in tax reserves resulting from a change in judgment. 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.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that 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. The impact of the tax incentives decreased the income tax provision for the three months ended January 31, 2019 by $8 million, resulting in a benefit to net income per share (diluted) of approximately $0.04 for the three months ended January 31, 2019.

The open tax years for the IRS and most states are from November 1, 2014 through the current tax year. For the majority of our foreign entities, the open tax years are from August 1, 2014 through the current tax year. For certain foreign entities, the tax years remain open, at most, back to the year 2008. 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 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.

The Tax Act, as enacted by the U.S. government on December 22, 2017, includes significant changes to the U.S. corporate income tax system, including but not limited to: the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which resulted in a one-time U.S. tax liability on those earnings which were not previously repatriated to the U.S. (the “Transition Tax”); creation of new minimum taxes such as the Global Intangible Low Taxed Income (“GILTI”) tax and the base erosion anti-abuse tax; creation of the foreign-derived intangible income (“FDII”) deduction; a federal corporate income tax rate reduction from 35 percent to 21 percent; and limitations on the deductibility of interest expense and executive compensation.

The company completed its accounting for the income tax effects of the Tax Act during the first quarter of fiscal 2019, in accordance with the U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118. Finalizing the provisional adjustments related to the Tax Act did not have a material impact on our consolidated financial statements as of January 31, 2019. Legislation and clarifying guidance is expected to continue to be issued by the U.S. Treasury and various states in 2019, which could result in significant changes to currently computed income tax liabilities for past and current tax periods.

The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to impact the GILTI tax expense in future years or provide for the tax expense related to GILTI in each year in which the tax is incurred. The company has elected to recognize the tax on GILTI as a period expense in each period in which the tax is incurred.

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NET INCOME PER SHARE

3 Months Ended

Jan. 31, 2019

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,
	2019		2018
	(in millions)
Numerator:
Net income	$	114	$	94
Denominator:
Basic weighted-average shares	187		187
Potential common shares— stock options and other employee stock plans	3		2
Diluted weighted-average shares	190		189

The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and non-vested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are collectively assumed to be used to repurchase hypothetical shares.

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 their effect would be anti-dilutive. For each of the three-month periods ended January 31, 2019 and 2018, we excluded zero options from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP Program and restricted stock awards, whose combined exercise price, unamortized fair value and excess tax benefits collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. For the three months ended January 31, 2019 and 2018, we excluded approximately 417,400 shares and 668,100 shares, respectively.

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SUPPLEMENT CASH FLOW INFORMATION (Notes)

3 Months Ended

Jan. 31, 2019

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 for the three months ended January 31, 2019 and 2018. Cash paid for interest was zero and $2 million for the three months ended January 31, 2019 and 2018, 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,
	2019		2018
	(in millions)
Increase (decrease) in unpaid capital expenditures in accounts payable	$	11	$	(3	)
	$	11	$	(3	)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the amount shown in the condensed consolidated statement of cash flows:

	Three months ended
	January 31,
	2019		2018
	(in millions)
Cash and cash equivalents	$	1,098	$	980
Restricted cash included in other current assets	2		—
Restricted cash included in other assets	2		2
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	1,102	$	982

Restricted cash consisted primarily of deposits held as collateral against bank guarantees.

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INVENTORY

3 Months Ended

Jan. 31, 2019

Inventory, Net [Abstract]

INVENTORY

INVENTORY

	January 31, 2019		October 31, 2018
	(in millions)
Finished goods	$	286	$	283
Purchased parts and fabricated assemblies	355		336
Total inventory	$	641	$	619

Inventory-related excess and obsolescence charges recorded in total cost of products were $7 million and $6 million for the three months ended January 31, 2019 and January 31, 2018, respectively. We record excess and obsolete inventory charges for inventory at our sites as well as inventory at our contract manufacturers and suppliers, where we have non-cancellable purchase commitments.

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Jan. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The goodwill balances as of January 31, 2019 and October 31, 2018 and the activity for the three months ended January 31, 2019 for each of our reportable operating segments were as follows. Prior period amounts have been reclassified to conform to our organizational change as described in Note 16, "Segment Information."

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group			Total
	(in millions)
Balance as of October 31, 2018:
Goodwill	$	497	$	267	$	1,116		$	1,880
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	497		267		407			1,171
Foreign currency translation impact	9		1		—			10
Balance as of January 31, 2019	$	506	$	268	$	407		$	1,181
Components of goodwill as of January 31, 2019:
Goodwill	$	506	$	268	$	1,116		$	1,890
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	$	506	$	268	$	407		$	1,181

The company has not identified any triggering events that indicate an impairment of goodwill in the three months ended January 31, 2019.

Other intangible assets as of January 31, 2019 and October 31, 2018 consisted of the following:

	Other Intangible Assets as of January 31, 2019						Other Intangible Assets as of October 31, 2018
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	835	$	455	$	380	$	835	$	415	$	420
Backlog	13		13		—		13		13		—
Trademark/Tradename	33		16		17		33		14		19
Customer relationships	304		109		195		304		100		204
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,186		593		593		1,186		542		644
In-Process R&D	1		—		1		1		—		1
Total	$	1,187	$	593	$	594	$	1,187	$	542	$	645

During the three months ended January 31, 2019, there was no foreign exchange translation impact to other intangible assets. Amortization of other intangible assets was $51 million for each of the three-month periods ended January 31, 2019 and 2018.

Estimated intangible assets amortization expense for each of the five succeeding fiscal years is as follows:

	Amortization expense
	(in millions)
2019 (remainder)	$	152
2020	196
2021	128
2022	52
2023	44
Thereafter	21

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FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 31, 2019

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, 2019 and October 31, 2018 were as follows:

	Fair Value Measurements at
	January 31, 2019										October 31, 2018
	Total		Level 1		Level 2		Level 3		Other		Total		Level 1		Level 2		Level 3		Other
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	603	$	603	$	—	$	—	$	—	$	484	$	484	$	—	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		—		6		—		6		—		—
Long-term
Equity investments	36		36		—		—		—		30		30		—		—		—
Equity investments - other	16		—		—		—		16		16		—		—		—		16
Total assets measured at fair value	$	658	$	639	$	3	$	—	$	16	$	536	$	514	$	6	$	—	$	16
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	—	$	6	$	—	$	6	$	—	$	—
Long-term
Deferred compensation liability	13		—		13		—		—		13		—		13		—		—
Total liabilities measured at fair value	$	18	$	—	$	18	$	—	$	—	$	19	$	—	$	19	$	—	$	—

Net recognized gains (losses) on equity investments were as follows:

	Three Months Ended
	January 31,
	2019
	(in millions)
Net realized gains on investments sold	$	—
Net unrealized gains on investments still held	5
Other-than-temporary impairments of investments	—
Total	$	5

Our money market funds and equity investments with readily determinable fair values are measured at fair value using quoted market prices and, therefore, are classified within Level 1 of the fair value hierarchy. Equity investments without readily determinable fair values that are measured at cost adjusted for observable changes in price or impairments are not categorized in the fair value hierarchy and are presented as "other" in the tables above. 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.

Equity investments including securities that are earmarked to pay the deferred compensation liability and the deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized in earnings. 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, 2019

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. The changes in the value of the derivative instrument included in the assessment of effectiveness are recognized in accumulated other comprehensive income and reclassified into earnings when the forecasted transaction occurs in the same financial statement line item in the consolidated statement of operations where the earnings effect of the hedged item is presented. If it becomes probable that the forecasted transaction will not occur, the hedge relationship will be de-designated and amounts accumulated in other comprehensive income will be reclassified into earnings in the current period. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness (forward points) are recognized immediately in earnings and are presented in the same financial statement line of the consolidated statement of operations where the earnings effect of the hedged item is presented. We record the premium paid (time value) of an option on the date of purchase as an asset. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings over the life of the option contract.

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, 2019 was $3 million. The credit-risk-related contingent features underlying these agreements had not been triggered as of January 31, 2019.

There were 177 foreign exchange forward contracts open as of January 31, 2019 that were designated as cash flow hedges. There were 66 foreign exchange forward contracts as of January 31, 2019 that were not designated as hedging instruments. The aggregated notional amounts by currency and designation as of January 31, 2019 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	$	13		$	48
British Pound	—			(39		)
Singapore Dollar	16			—
Malaysian Ringgit	87			(4		)
Japanese Yen	(75		)	(38		)
Other currencies	(14		)	(5		)
Total	$	27		$	(38	)

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, 2019 and October 31, 2018 were as follows:

Fair Values of Derivative Instruments
Derivative Assets					Derivative Liabilities
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2019		October 31, 2018		Balance Sheet Location	January 31, 2019		October 31, 2018
	(in millions)					(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	5	Other accrued liabilities	$	3	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	6		$	5	$	6

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,
	2019			2018
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(2	)	$	2
Gain (loss) reclassified from accumulated other comprehensive income into earnings:
Cost of products	$	—		$	2
Selling, general and administrative	$	(1	)	$	—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value:
Cost of products	$	1		$	—
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(3	)	$	1

The estimated amount of existing net loss at January 31, 2019 expected to be reclassified from accumulated other comprehensive income to earnings within the next twelve months is $2 million.

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS

3 Months Ended

Jan. 31, 2019

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, 2019 and 2018, 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,
	2019			2018			2019			2018			2019			2018
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	3		$	3		$	—		$	—
Interest cost on benefit obligation	7			6			6			6			2			2
Expected return on plan assets	(11		)	(9		)	(19		)	(21		)	(3		)	(4		)
Amortization:
Net actuarial loss	3			3			7			6			2			4
Prior service credit	(1		)	(2		)	—			—			(3		)	(3		)
Settlement loss	—			—			2			—			—			—
Net periodic benefit cost (benefit)	$	3		$	4		$	(1	)	$	(6	)	$	(2	)	$	(1	)

We did not contribute to our U.S. Defined Benefit Plans or U.S. Post-Retirement Benefit Plan during the three months ended January 31, 2019 and 2018. We contributed $8 million and $9 million to our Non-U.S. Defined Benefit Plans during the three months ended January 31, 2019 and 2018, respectively.

For the remainder of 2019, we do not expect to contribute to our U.S. Defined Benefit Plans, and we expect to contribute $23 million to our Non-U.S. Defined Benefit Plans.

On January 1, 2019, we transferred a portion of the assets and liabilities of our Switzerland defined benefit plan to an insurance company, resulting in the recognition of a settlement loss of $2 million, which is included in other income (expense) in the condensed consolidated statement of operations.

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WARRANTY, COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jan. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

WARRANTY, COMMITMENTS AND CONTINGENCIES

WARRANTY, COMMITMENTS AND CONTINGENCIES

Standard Warranty

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,
	2019			2018
	(in millions)
Beginning balance	$	45		$	45
Accruals for warranties including change in estimate	8			10
Settlements made during the period	(9		)	(8		)
Ending balance	$	44		$	47
Accruals for warranties due within one year	$	25		$	26
Accruals for warranties due after one year	19			21
Ending balance	$	44		$	47

Commitments

During the three months ended January 31, 2019, there were no material changes to the operating and capital lease commitments reported in the company’s 2018 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, 2019

Debt Disclosure [Abstract]

DEBT

DEBT

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

	January 31, 2019		October 31, 2018
	(in millions)
2019 senior unsecured notes at 3.30% (net of unamortized costs of $1 and $1)	$	499	$	499
2024 senior unsecured notes at 4.55% (net of unamortized costs of $3 and $3)	597		597
2027 senior unsecured notes at 4.60% (net of unamortized costs of $6 and $6)	694		694
Total debt	1,790		1,790
Less: short-term debt	499		499
Total long-term debt	$	1,291	$	1,291

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. As of January 31, 2019, 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, 2019.

2019 Senior Notes

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

Long-Term Debt

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, 2019 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2018.

As of January 31, 2019 and October 31, 2018, we had $31 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 $25 million and $3 million as of January 31, 2019 and October 31, 2018, respectively.

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STOCKHOLDERS' EQUITY

3 Months Ended

Jan. 31, 2019

Statement of Comprehensive Income [Abstract]

STOCKHOLDERS EQUITY

STOCKHOLDERS' EQUITY

Stock Repurchase Program

On March 6, 2018, the Board of Directors approved a new stock repurchase program authorizing the purchase of up to $350 million of the company’s common stock, replacing a previously approved 2016 program authorizing the purchase of up to $200 million of the company’s common stock. Under the new 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, 2019, we repurchased 686,398 shares of common stock for $40 million. 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, 2019 and 2018 were as follows:

	Unrealized gain (loss) on investments			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, 2018	$	—		$	(60	)	$	(445	)	$	19		$	(2	)	$	(488	)
Other comprehensive income (loss) before reclassifications	—			30			4			—			(2		)	32
Amounts reclassified out of accumulated other comprehensive loss	—			—			12			(4		)	1			9
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	—			30			13			(3		)	(1		)	39
As of January 31, 2019	$	—		$	(30	)	$	(432	)	$	16		$	(3	)	$	(449	)
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	)

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2019 and 2018 were as follows:

Details about Accumulated Other Comprehensive Loss Components							Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2019			2018
Unrealized gain (loss) on derivatives	$	—		$	2		Cost of products
	(1		)	—			Selling, general and administrative
	—			—			Provision for income taxes
	(1		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(12		)	(13		)
Prior service credits	4			5
	(8		)	(8		)	Total before income tax
	3			2			Provision for income taxes
	(5		)	(6		)	Net of income tax
Total reclassifications for the period	$	(6	)	$	(4	)

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, 2019

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We provide electronic design and test solutions that are used in the design, development, manufacture, installation, deployment, validation, optimization and secure operation of electronics systems to communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, instrument productivity, application services and instrument calibration and repair.

In the first quarter of fiscal year 2019, in recognition of Keysight’s customer solutions-oriented go-to-market strategy and to fully reflect our services delivery within the markets served and further enable services growth, we completed an organizational change to align our services business with our customers and end markets. With this change, services that were previously reported as the Services Solutions Group are now reported as part of the Communications Solutions Group and Electronic Industrial Solutions Group. As a result, Keysight now has three segments: Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group. The new organizational structure continues to include centralized enterprise functions that provide support across the groups.

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 three reportable operating segments are as follows:

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

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

A significant portion of the segments' expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently optimize 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 was not allocated these shared services and infrastructure charges, with the exception of net periodic benefit costs, until fiscal 2019.

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

The profitability of each of the segments is measured after excluding share-based compensation expense, amortization of acquisition-related balances, acquisition and integration costs, northern California wildfire-related costs, interest income, interest expense and other items as noted in the reconciliations below.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total Segments
	(in millions)
Three months ended January 31, 2019:
Total net revenue	$	623	$	257	$	126	$	1,006
Amortization of acquisition-related balances	—		—		3		3
Total segment revenue	$	623	$	257	$	129	$	1,009
Segment income from operations	$	138	$	54	$	12	$	204
Three months ended January 31, 2018:
Total net revenue	$	500	$	229	$	108	$	837
Amortization of acquisition-related balances	—		—		19		19
Total segment revenue	$	500	$	229	$	127	$	856
Segment income from operations	$	63	$	38	$	18	$	119

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

	Three Months Ended
	January 31,
	2019			2018
	(in millions)
Total reportable operating segments' income from operations	$	204		$	119
Share-based compensation expense	(27		)	(19		)
Amortization of acquisition-related balances	(54		)	(89		)
Acquisition and integration costs	(2		)	(19		)
Northern California wildfire-related costs	—			(7		)
Other	—			(2		)
Income (loss) from operations, as reported	121			(17		)
Interest income	4			3
Interest expense	(20		)	(22		)
Other income (expense), net	15			13
Income (loss) before taxes, as reported	$	120		$	(23	)

The following table presents assets directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, investments and other assets.

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total Segments
	(in millions)
Assets:
As of January 31, 2019	$	2,059	$	875	$	1,407	$	4,341
As of October 31, 2018	$	2,115	$	888	$	1,327	$	4,330

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Notes)

3 Months Ended

Jan. 31, 2019

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 restoration efforts are largely complete, and we have fully re-occupied the site. Keysight is insured for the damage caused by the fire.

For the three months ended January 31, 2019 and 2018, we recognized costs of zero and $7 million, net of estimated insurance recoveries of zero and $31 million, respectively. Expenses were primarily for cleaning and restoration activities, write-off of damaged fixed assets and other direct costs related to recovery from 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,
	2019		2018
	(in millions)
Cost of products and services	$	—	$	5
Research and development	—		1
Selling, general and administrative	—		1
Total	$	—	$	7

For the three months ended January 31, 2019 and 2018, we received insurance proceeds of $22 million and $10 million, respectively, for covered expenses incurred. Combined with $68 million received in fiscal 2018, we have received insurance proceeds related to recovery from the northern California wildfires of $90 million to date, which has substantially covered our total fire-related expenses in excess of our $10 million self-insured retention amount.

In addition, for the three months ended January 31, 2019 and 2018, we made investments in property, plant and equipment related to fire recovery of $10 million and $3 million, respectively. Combined with capital expenditures of $27 million in fiscal 2018, we have made investments in property, plant and equipment related to fire recovery of $37 million to date that are expected to be covered by insurance.

We currently estimate additional insurance proceeds of $30 million to $40 million in fiscal 2019. In certain cases, our insurance coverage exceeds the amount of the covered losses, but no gain contingencies have been recognized as our ability to realize those gains remains uncertain for financial reporting purposes. There may be a difference in timing of costs incurred and the related insurance reimbursement.

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NEW ACCOUNTING PRONOUNCEMENTS NEW ACCOUNTING PRONOUNCEMENTS ASU 2016-15 (Tables)

3 Months Ended

Jan. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

	Three Months Ended January 31, 2018
	As Originally Reported		As Adjusted		Effect of Change Higher/(Lower)
	(in millions)
Cost of products	$	337	$	339	$	2
Research and development	146		150		4
Selling, general and administrative	289		295		6
Other income (expense), net	1		13		12

	Three Months Ended January 31, 2018
	As Originally Reported			As Adjusted			Change
	(in millions)
Net cash provided by operating activities	$	171		$	171		$	—
Net cash used in investing activities	$	(27	)	$	(24	)	$	3
Net cash provided by financing activities	$	9		$	6		$	(3	)

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NEW ACCOUNTING PRONOUNCEMENTS NEW REVENUE RECOGNITION (Tables)

3 Months Ended

Jan. 31, 2019

Revenue from Contract with Customer [Abstract]

New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification

The cumulative effect of initially applying the new revenue standard to all open contracts as of November 1, 2018 was as follows:

	October 31, 2018		Adjustments Due to ASC 606			November 1, 2018
	(in millions)
Assets:
Accounts receivable, net	$	624	$	7		$	631
Other current assets	222		28			250
Long-term deferred tax assets	750		(15		)	735
Other assets	279		3			282
Liabilities:
Deferred revenue	$	334	$	(53	)	$	281
Income and other taxes payable	42		1			43
Other accrued liabilities	69		7			76
Long-term deferred revenue	127		(11		)	116
Other long-term liabilities	287		3			290
Stockholders' equity:
Retained earnings	$	1,212	$	76		$	1,288

Schedule of Prospective Adoption of New Accounting Pronouncements [Table Text Block]

The following tables summarize the impact of ASC 606 on our condensed consolidated financial statements:

	Three months ended
	January 31, 2019
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
	(in millions)
Net revenue:
Products	$	837		$	822		$	15
Services and other	169			170			(1		)
Total net revenue	1,006			992			14
Costs and expenses:
Cost of products	347			346			1
Cost of services and other	81			81			—
Total costs	428			427			1
Research and development	173			173			—
Selling, general and administrative	288			287			1
Other operating expense (income), net	(4		)	(4		)	—
Total costs and expenses	885			883			2
Income from operations	121			109			12
Interest income	4			4			—
Interest expense	(20		)	(20		)	—
Other income (expense), net	15			15			—
Income before taxes	120			108			12
Provision for income taxes	6			4			2
Net income	$	114		$	104		$	10
Net income per share:
Basic	$	0.61		$	0.55		$	0.06
Diluted	$	0.60		$	0.55		$	0.05

	January 31, 2019
	As Reported		Balances Without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in millions)
Assets:
Accounts receivable, net	$	580	$	572	$	8
Inventory	641		642		(1		)
Other current assets	225		198		27
Long-term deferred tax assets	741		758		(17		)
Other assets	308		304		4
Liabilities:
Deferred revenue	$	317	$	377	$	(60	)
Income and other taxes payable	56		54		2
Other accrued liabilities	96		89		7
Long-term deferred revenue	126		143		(17		)
Other long-term liabilities	284		281		3
Stockholders' equity:
Retained earnings	$	1,402	$	1,316	$	86

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NEW ACCOUNTING PRONOUNCEMENTS NEW ACCOUNTING PRONOUNCEMENTS ASU 2017-07 (Tables)

3 Months Ended

Jan. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

	Three Months Ended January 31, 2018
	As Originally Reported		As Adjusted		Effect of Change Higher/(Lower)
	(in millions)
Cost of products	$	337	$	339	$	2
Research and development	146		150		4
Selling, general and administrative	289		295		6
Other income (expense), net	1		13		12

	Three Months Ended January 31, 2018
	As Originally Reported			As Adjusted			Change
	(in millions)
Net cash provided by operating activities	$	171		$	171		$	—
Net cash used in investing activities	$	(27	)	$	(24	)	$	3
Net cash provided by financing activities	$	9		$	6		$	(3	)

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REVENUE DISSAGGREGATION OF REVENUE (Tables)

3 Months Ended

Jan. 31, 2019

Revenue Recognition [Abstract]

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic region, end market, and timing of transfer of products and services to customers, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregated revenue is presented for each of our three reportable segments.

	Three Months Ended January 31, 2019
	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total
	(in millions)
Region
Americas	$	272	$	57	$	74	$	403
Europe	96		63		19		178
Asia Pacific	255		137		33		425
Total net revenue	$	623	$	257	$	126	$	1,006
End Market
Aerospace, Defense & Government	$	223	$	—	$	—	$	223
Commercial Communications	400		—		—		400
Electronic Industrial	—		257		—		257
Ixia Solutions	—		—		126		126
Total net revenue	$	623	$	257	$	126	$	1,006
Timing of Revenue Recognition
Revenue recognized at a point in time	$	570	$	235	$	82	$	887
Revenue recognized over time	53		22		44		119
Total net revenue	$	623	$	257	$	126	$	1,006

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REVENUE CAPITALIZED CONTRACTUAL COST (Tables)

3 Months Ended

Jan. 31, 2019

Capitalized Contract Cost [Line Items]

Capitalized Contract Cost [Abstract]

The following table provides a roll-forward of our capitalized contract costs, current and non-current:

	Three months ended
	January 31, 2019
	(in millions)
Balance at October 31, 2018	$	—
Costs capitalized on November 1, 2018 due to ASC 606 adoption	29
Costs capitalized during the period	17
Costs amortized during the period	(18		)
Foreign currency translation impact	1
Balance at January 31, 2019	$	29

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REVENUE CONTRACT LIABILITIES (Tables)

3 Months Ended

Jan. 31, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Changes in contract liabilities, current and non-current, during the three months ended January 31, 2019 were as follows:

	Contract Liabilities
	(in millions)
Balance at October 31, 2018	$	461
Impact of adopting new revenue standard	(64		)
Balance at November 1, 2018	397
Deferral of revenue billed in current period, net of recognition	167
Revenue recognized that was deferred as of the beginning of the period	(124		)
Foreign currency translation impact	3
Balance at January 31, 2019	$	443

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REVENUE Remaning Performace Obligations (Tables)

3 Months Ended

Jan. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block]

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, was approximately $260 million as of January 31, 2019, and represents the company’s obligation to deliver products and services and obtain customer acceptance on delivered products. Since we typically invoice customers at contract inception, this amount is included in our current and long-term deferred revenue balances. As of January 31, 2019, we expect to recognize approximately 41 percent of the revenue related to these unsatisfied performance obligations during the remainder of 2019, 32 percent during 2020, and 27 percent thereafter.

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SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Jan. 31, 2019

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,
	2019		2018
	(in millions)
Cost of products and services	$	4	$	3
Research and development	6		4
Selling, general and administrative	17		12
Total share-based compensation expense	$	27	$	19

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 awards granted under the LTP Program that are based on total shareholder return ("TSR"):

	Three Months Ended
	January 31,
	2019		2018
Volatility of Keysight shares	25	%	25	%
Volatility of selected index	12	%	14	%
Price-wise correlation with selected peers	57	%	57	%

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NET INCOME PER SHARE (Tables)

3 Months Ended

Jan. 31, 2019

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,
	2019		2018
	(in millions)
Numerator:
Net income	$	114	$	94
Denominator:
Basic weighted-average shares	187		187
Potential common shares— stock options and other employee stock plans	3		2
Diluted weighted-average shares	190		189

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SUPPLEMENT CASH FLOW INFORMATION (Tables)

3 Months Ended

Jan. 31, 2019

Other Significant Noncash Transactions [Line Items]

Cash Flow, Supplemental Disclosures [Text Block]

	Three months ended
	January 31,
	2019		2018
	(in millions)
Increase (decrease) in unpaid capital expenditures in accounts payable	$	11	$	(3	)
	$	11	$	(3	)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the amount shown in the condensed consolidated statement of cash flows:

	Three months ended
	January 31,
	2019		2018
	(in millions)
Cash and cash equivalents	$	1,098	$	980
Restricted cash included in other current assets	2		—
Restricted cash included in other assets	2		2
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	1,102	$	982

Restricted cash consisted primarily of deposits held as collateral against bank guarantees.

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INVENTORY (Tables)

3 Months Ended

Jan. 31, 2019

Inventory, Net [Abstract]

INVENTORY

	January 31, 2019		October 31, 2018
	(in millions)
Finished goods	$	286	$	283
Purchased parts and fabricated assemblies	355		336
Total inventory	$	641	$	619

Inventory-related excess and obsolescence charges recorded in total cost of products were $7 million and $6 million for the three months ended January 31, 2019 and January 31, 2018, respectively. We record excess and obsolete inventory charges for inventory at our sites as well as inventory at our contract manufacturers and suppliers, where we have non-cancellable purchase commitments.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Jan. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill balances and movements for each reportable segments during the period

oodwill balances as of January 31, 2019 and October 31, 2018 and the activity for the three months ended January 31, 2019 for each of our reportable operating segments were as follows. Prior period amounts have been reclassified to conform to our organizational change as described in Note 16, "Segment Information."

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group			Total
	(in millions)
Balance as of October 31, 2018:
Goodwill	$	497	$	267	$	1,116		$	1,880
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	497		267		407			1,171
Foreign currency translation impact	9		1		—			10
Balance as of January 31, 2019	$	506	$	268	$	407		$	1,181
Components of goodwill as of January 31, 2019:
Goodwill	$	506	$	268	$	1,116		$	1,890
Accumulated impairment losses	—		—		(709		)	(709		)
Goodwill as reported	$	506	$	268	$	407		$	1,181

Components of other intangibles during the period

The company has not identified any triggering events that indicate an impairment of goodwill in the three months ended January 31, 2019.

Other intangible assets as of January 31, 2019 and October 31, 2018 consisted of the following:

	Other Intangible Assets as of January 31, 2019						Other Intangible Assets as of October 31, 2018
	Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value		Gross Carrying Amount		Accumulated Amortization and Impairments		Net Book Value
	(in millions)
Developed technology	$	835	$	455	$	380	$	835	$	415	$	420
Backlog	13		13		—		13		13		—
Trademark/Tradename	33		16		17		33		14		19
Customer relationships	304		109		195		304		100		204
Non-compete agreements	1		—		1		1		—		1
Total amortizable intangible assets	1,186		593		593		1,186		542		644
In-Process R&D	1		—		1		1		—		1
Total	$	1,187	$	593	$	594	$	1,187	$	542	$	645

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 31, 2019

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, 2019 and October 31, 2018 were as follows:

	Fair Value Measurements at
	January 31, 2019										October 31, 2018
	Total		Level 1		Level 2		Level 3		Other		Total		Level 1		Level 2		Level 3		Other
	(in millions)
Assets:
Short-term
Cash equivalents
Money market funds	$	603	$	603	$	—	$	—	$	—	$	484	$	484	$	—	$	—	$	—
Derivative instruments (foreign exchange contracts)	3		—		3		—		—		6		—		6		—		—
Long-term
Equity investments	36		36		—		—		—		30		30		—		—		—
Equity investments - other	16		—		—		—		16		16		—		—		—		16
Total assets measured at fair value	$	658	$	639	$	3	$	—	$	16	$	536	$	514	$	6	$	—	$	16
Liabilities:
Short-term
Derivative instruments (foreign exchange contracts)	$	5	$	—	$	5	$	—	$	—	$	6	$	—	$	6	$	—	$	—
Long-term
Deferred compensation liability	13		—		13		—		—		13		—		13		—		—
Total liabilities measured at fair value	$	18	$	—	$	18	$	—	$	—	$	19	$	—	$	19	$	—	$	—

Net recognized gains (losses) on equity investments were as follows:

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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Net recognized gains losses on equity securities) (Tables)

3 Months Ended

Jan. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Gain (Loss) on Securities [Table Text Block]

Net recognized gains (losses) on equity investments were as follows:

	Three Months Ended
	January 31,
	2019
	(in millions)
Net realized gains on investments sold	$	—
Net unrealized gains on investments still held	5
Other-than-temporary impairments of investments	—
Total	$	5

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DERIVATIVES (Tables)

3 Months Ended

Jan. 31, 2019

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, 2019 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	$	13		$	48
British Pound	—			(39		)
Singapore Dollar	16			—
Malaysian Ringgit	87			(4		)
Japanese Yen	(75		)	(38		)
Other currencies	(14		)	(5		)
Total	$	27		$	(38	)

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, 2019 and October 31, 2018 were as follows:

Fair Values of Derivative Instruments
Derivative Assets					Derivative Liabilities
	Fair Value					Fair Value
Balance Sheet Location	January 31, 2019		October 31, 2018		Balance Sheet Location	January 31, 2019		October 31, 2018
	(in millions)					(in millions)
Derivatives designated as hedging instruments:
Cash flow hedges
Foreign exchange contracts
Other current assets	$	2	$	5	Other accrued liabilities	$	3	$	4
Derivatives not designated as hedging instruments:
Foreign exchange contracts
Other current assets	1		1		Other accrued liabilities	2		2
Total derivatives	$	3	$	6		$	5	$	6

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,
	2019			2018
	(in millions)
Derivatives designated as hedging instruments:
Cash Flow Hedges
Foreign exchange contracts:
Gain (loss) recognized in accumulated other comprehensive income	$	(2	)	$	2
Gain (loss) reclassified from accumulated other comprehensive income into earnings:
Cost of products	$	—		$	2
Selling, general and administrative	$	(1	)	$	—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value:
Cost of products	$	1		$	—
Derivatives not designated as hedging instruments:
Gain (loss) recognized in other income (expense), net	$	(3	)	$	1

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Tables)

3 Months Ended

Jan. 31, 2019

Defined Benefit Plan [Abstract]

Schedule of net pension and post-retirement benefit costs

For the three months ended January 31, 2019 and 2018, 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,
	2019			2018			2019			2018			2019			2018
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	3		$	3		$	—		$	—
Interest cost on benefit obligation	7			6			6			6			2			2
Expected return on plan assets	(11		)	(9		)	(19		)	(21		)	(3		)	(4		)
Amortization:
Net actuarial loss	3			3			7			6			2			4
Prior service credit	(1		)	(2		)	—			—			(3		)	(3		)
Settlement loss	—			—			2			—			—			—
Net periodic benefit cost (benefit)	$	3		$	4		$	(1	)	$	(6	)	$	(2	)	$	(1	)

	Pensions
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						U.S. Post-Retirement Benefit Plan
	Three Months Ended January 31,
	2019			2018			2019			2018			2019			2018
	(in millions)
Service cost—benefits earned during the period	$	5		$	6		$	3		$	3		$	—		$	—
Interest cost on benefit obligation	7			6			6			6			2			2
Expected return on plan assets	(11		)	(9		)	(19		)	(21		)	(3		)	(4		)
Amortization:
Net actuarial loss	3			3			7			6			2			4
Prior service credit	(1		)	(2		)	—			—			(3		)	(3		)
Settlement loss	—			—			2			—			—			—
Net periodic benefit cost (benefit)	$	3		$	4		$	(1	)	$	(6	)	$	(2	)	$	(1	)

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WARRANTY, COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Jan. 31, 2019

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,
	2019			2018
	(in millions)
Beginning balance	$	45		$	45
Accruals for warranties including change in estimate	8			10
Settlements made during the period	(9		)	(8		)
Ending balance	$	44		$	47
Accruals for warranties due within one year	$	25		$	26
Accruals for warranties due after one year	19			21
Ending balance	$	44		$	47

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DEBT (Tables)

3 Months Ended

Jan. 31, 2019

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

	January 31, 2019		October 31, 2018
	(in millions)
2019 senior unsecured notes at 3.30% (net of unamortized costs of $1 and $1)	$	499	$	499
2024 senior unsecured notes at 4.55% (net of unamortized costs of $3 and $3)	597		597
2027 senior unsecured notes at 4.60% (net of unamortized costs of $6 and $6)	694		694
Total debt	1,790		1,790
Less: short-term debt	499		499
Total long-term debt	$	1,291	$	1,291

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Jan. 31, 2019

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, 2019 and 2018 were as follows:

	Unrealized gain (loss) on investments			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, 2018	$	—		$	(60	)	$	(445	)	$	19		$	(2	)	$	(488	)
Other comprehensive income (loss) before reclassifications	—			30			4			—			(2		)	32
Amounts reclassified out of accumulated other comprehensive loss	—			—			12			(4		)	1			9
Tax (expense) benefit	—			—			(3		)	1			—			(2		)
Other comprehensive income (loss)	—			30			13			(3		)	(1		)	39
As of January 31, 2019	$	—		$	(30	)	$	(432	)	$	16		$	(3	)	$	(449	)
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	)

Reclassification out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive loss for the three months ended January 31, 2019 and 2018 were as follows:

Details about Accumulated Other Comprehensive Loss Components							Affected Line Item in Statement of Operations
	Three Months Ended
	January 31,
	2019			2018
Unrealized gain (loss) on derivatives	$	—		$	2		Cost of products
	(1		)	—			Selling, general and administrative
	—			—			Provision for income taxes
	(1		)	2			Net of income tax
Net defined benefit pension cost and post retirement plan costs:
Actuarial net loss	(12		)	(13		)
Prior service credits	4			5
	(8		)	(8		)	Total before income tax
	3			2			Provision for income taxes
	(5		)	(6		)	Net of income tax
Total reclassifications for the period	$	(6	)	$	(4	)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jan. 31, 2019

Segment Reporting [Abstract]

Segment Reporting, Description of All Other Segments

	Communications Solutions Group		Electronic Industrial Solutions Group		Ixia Solutions Group		Total Segments
	(in millions)
Three months ended January 31, 2019:
Total net revenue	$	623	$	257	$	126	$	1,006
Amortization of acquisition-related balances	—		—		3		3
Total segment revenue	$	623	$	257	$	129	$	1,009
Segment income from operations	$	138	$	54	$	12	$	204
Three months ended January 31, 2018:
Total net revenue	$	500	$	229	$	108	$	837
Amortization of acquisition-related balances	—		—		19		19
Total segment revenue	$	500	$	229	$	127	$	856
Segment income from operations	$	63	$	38	$	18	$	119

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SEGMENT INFORMATION Segment Profitability (Tables)

3 Months Ended

Jan. 31, 2019

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,
	2019			2018
	(in millions)
Total reportable operating segments' income from operations	$	204		$	119
Share-based compensation expense	(27		)	(19		)
Amortization of acquisition-related balances	(54		)	(89		)
Acquisition and integration costs	(2		)	(19		)
Northern California wildfire-related costs	—			(7		)
Other	—			(2		)
Income (loss) from operations, as reported	121			(17		)
Interest income	4			3
Interest expense	(20		)	(22		)
Other income (expense), net	15			13
Income (loss) before taxes, as reported	$	120		$	(23	)

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Tables)

3 Months Ended

Jan. 31, 2019

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,
	2019		2018
	(in millions)
Cost of products and services	$	—	$	5
Research and development	—		1
Selling, general and administrative	—		1
Total	$	—	$	7

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NEW ACCOUNTING PRONOUNCEMENTS Effect of ASU 2016-15 adoption - Adjustments in Cash flow (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities	$ 240	$ 171
Net cash used in investing activities	(29)	(24)
Net cash provided by financing activities	$ (33)	6
As originally reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities		171
Net cash used in investing activities		(27)
Net cash provided by financing activities		9
Change | Accounting Standards Update 2016-15 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by operating activities		0
Net cash used in investing activities		3
Net cash provided by financing activities		$ (3)

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NEW ACCOUNTING PRONOUNCEMENTS Effect of ASC 606 adoption on income statement (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Nov. 01, 2018	Oct. 31, 2018
Net revenue:
Revenues	$ 1,006	$ 837
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	428	412
Research and development	173	150
Selling, general and administrative	288	295
Other operating expense (income), net	(4)	(3)
Total costs and expenses	885	854
Income from operations	121	(17)
Interest income	4	3
Interest expense	(20)	(22)
Other income (expense), net	15	13
Income before taxes	120	(23)
Provision for income taxes	6	(117)
Net income	$ 114	$ 94
Net income per share:
Earnings Per Share, Basic	$ 0.61	$ 0.50
Earnings Per Share, Diluted	$ 0.60	$ 0.50
Assets:
Accounts receivable, net	$ 580		$ 631	$ 624
Inventory	641			619
Other current assets	225		250	222
Long-term deferred tax assets	741		735	750
Other assets	308		282	279
Liabilities:
Deferred revenue	317		281	334
Income and other taxes payable	56		43	42
Other accrued liabilities	96		76	69
Long-term deferred revenue	126		116	127
Other long-term liabilities	284		290	287
Stockholders' equity:
Retained earnings	1,402		1,288	1,212
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Net revenue:
Revenues	992
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	427
Research and development	173
Selling, general and administrative	287
Other operating expense (income), net	(4)
Total costs and expenses	883
Income from operations	109
Interest income	4
Interest expense	(20)
Other income (expense), net	15
Income before taxes	108
Provision for income taxes	4
Net income	$ 104
Net income per share:
Earnings Per Share, Basic	$ 0.55
Earnings Per Share, Diluted	$ 0.55
Assets:
Accounts receivable, net	$ 572			624
Inventory	642
Other current assets	198			222
Long-term deferred tax assets	758			750
Other assets	304			279
Liabilities:
Deferred revenue	377			334
Income and other taxes payable	54			42
Other accrued liabilities	89			69
Long-term deferred revenue	143			127
Other long-term liabilities	281			287
Stockholders' equity:
Retained earnings	1,316			$ 1,212
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Net revenue:
Revenues	14
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	1
Research and development	0
Selling, general and administrative	1
Other operating expense (income), net	0
Total costs and expenses	2
Income from operations	12
Interest income	0
Interest expense	0
Other income (expense), net	0
Income before taxes	12
Provision for income taxes	2
Net income	$ 10
Net income per share:
Earnings Per Share, Basic	$ 0.06
Earnings Per Share, Diluted	$ 0.05
Assets:
Accounts receivable, net	$ 8		7
Inventory	(1)
Other current assets	27		28
Long-term deferred tax assets	(17)		(15)
Other assets	4		3
Liabilities:
Deferred revenue	(60)		(53)
Income and other taxes payable	2		1
Other accrued liabilities	7		7
Long-term deferred revenue	(17)		(11)
Other long-term liabilities	3		3
Stockholders' equity:
Retained earnings	86		$ 76
Products
Net revenue:
Revenues	837	$ 684
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	347	339
Products | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Net revenue:
Revenues	822
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	346
Products | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Net revenue:
Revenues	15
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	1
Services and other
Net revenue:
Revenues	169	153
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	81	$ 73
Services and other | Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Net revenue:
Revenues	170
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	81
Services and other | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Net revenue:
Revenues	(1)
Costs and Expenses [Abstract]
Cost of Goods and Services Sold	$ 0

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NEW ACCOUNTING PRONOUNCEMENTS Cumulative effect adjustment from adoption of Topic 606 (Details) - USD ($) $ in Millions	Jan. 31, 2019	Nov. 01, 2018	Oct. 31, 2018
Assets:
Accounts receivable, net	$ 580	$ 631	$ 624
Other current assets	225	250	222
Long-term deferred tax assets	741	735	750
Other assets	308	282	279
Liabilities:
Deferred revenue	317	281	334
Income and other taxes payable	56	43	42
Other accrued liabilities	96	76	69
Long-term deferred revenue	126	116	127
Other long-term liabilities	284	290	287
Stockholders' equity:
Retained earnings	1,402	1,288	1,212
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Assets:
Accounts receivable, net	572		624
Other current assets	198		222
Long-term deferred tax assets	758		750
Other assets	304		279
Liabilities:
Deferred revenue	377		334
Income and other taxes payable	54		42
Other accrued liabilities	89		69
Long-term deferred revenue	143		127
Other long-term liabilities	281		287
Stockholders' equity:
Retained earnings	1,316		$ 1,212
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Assets:
Accounts receivable, net	8	7
Other current assets	27	28
Long-term deferred tax assets	(17)	(15)
Other assets	4	3
Liabilities:
Deferred revenue	(60)	(53)
Income and other taxes payable	2	1
Other accrued liabilities	7	7
Long-term deferred revenue	(17)	(11)
Other long-term liabilities	3	3
Stockholders' equity:
Retained earnings	$ 86	$ 76

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NEW ACCOUNTING PRONOUNCEMENTS Effect of ASU 2017-07 adoption - Adjustments in Income statement (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods and Services Sold	$ 428	$ 412
Research and development	173	150
Selling, general and administrative	288	295
Other income (expense), net	15	13
Change
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Research and development		4
Selling, general and administrative		6
Other income (expense), net		12
As originally reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Research and development		146
Selling, general and administrative		289
Other income (expense), net		1
Products
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods and Services Sold	$ 347	339
Products | Change
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods and Services Sold		2
Products | As originally reported
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods and Services Sold		$ 337

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REVENUE (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Disaggregation of Revenue [Line Items]
Revenues	$ 1,006	$ 837
Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	623
Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	257
Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	126	$ 108
Americas
Disaggregation of Revenue [Line Items]
Revenues	403
Americas | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	272
Americas | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	57
Americas | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	74
Europe
Disaggregation of Revenue [Line Items]
Revenues	178
Europe | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	96
Europe | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	63
Europe | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	19
Asia Pacific
Disaggregation of Revenue [Line Items]
Revenues	425
Asia Pacific | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	255
Asia Pacific | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	137
Asia Pacific | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	33
Transferred at Point in Time
Disaggregation of Revenue [Line Items]
Revenues	887
Transferred at Point in Time | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	570
Transferred at Point in Time | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	235
Transferred at Point in Time | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	82
Transferred over Time
Disaggregation of Revenue [Line Items]
Revenues	119
Transferred over Time | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	53
Transferred over Time | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	22
Transferred over Time | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	44
Aerospace, defense and government
Disaggregation of Revenue [Line Items]
Revenues	223
Aerospace, defense and government | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	223
Aerospace, defense and government | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Aerospace, defense and government | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Commercial Communications
Disaggregation of Revenue [Line Items]
Revenues	400
Commercial Communications | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	400
Commercial Communications | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Commercial Communications | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Electronic Industrial
Disaggregation of Revenue [Line Items]
Revenues	257
Electronic Industrial | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Electronic Industrial | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	257
Electronic Industrial | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Ixia Solutions
Disaggregation of Revenue [Line Items]
Revenues	126
Ixia Solutions | Communications Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Ixia Solutions | Electronic Industrial Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	0
Ixia Solutions | Ixia Solutions Group
Disaggregation of Revenue [Line Items]
Revenues	$ 126

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REVENUE Capitalized Contractual Cost (Details) - USD ($)	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Nov. 01, 2018
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Judgment		Capitalized incremental costs are allocated to the individual performance obligations in proportion to the transaction price allocated to each performance obligation and amortized based on the pattern of performance for the underlying performance obligation. Contract costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another.
Balance at October 31, 2018	$ 0
Cost capitalized on day1 due to ASC 606 adoption			$ 29
Costs capitalized during the period	17
Costs amortized during the period	(18)
Foreign currency translation impact	1
Balance at January 31, 2019	$ 29

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REVENUE CONTRACT LIABILITIES ROLL FORWARD (Details) - USD ($)	3 Months Ended
	Jan. 31, 2019	Nov. 01, 2018
Contract with Customer, Liability [Abstract]
Balance at October 31, 2018	$ 461
Impact of adopting new revenue standard	(64)
Balance at November 1, 2018	461	$ 397
Deferral of revenue billed in current period, net of recognition	167
Revenue recognized that was deferred as of the beginning of the period	(124)
Foreign currency translation impact	3
Balance at January 31, 2019	$ 443

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REVENUE Remaining performance obligations (Details) $ in Millions	Jan. 31, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 260
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-02-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Percentage	41.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-11-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Percentage	32.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Percentage	27.00%

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SHARE-BASED COMPENSATION Allocated Share-based compensation expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 27	$ 19
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	4	3
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	6	4
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 17	$ 12

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SHARE-BASED COMPENSATION Fair Value Assumptions (Details) - shares shares in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
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]
Volatility of Keysight shares (in hundredths)	25.00%	25.00%
Volatility of selected index	12.00%	14.00%
Price-wise correlation with selected peers (in hundredths)	57.00%	57.00%

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Income Tax Examination [Line Items]
Provision for income taxes	$ 6	$ (117)
Certain foreign entities [Member]
Income Tax Examination [Line Items]
Open Tax Year	2008
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 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	5.20%	(515.80%)
Provision for income taxes	$ 6	$ (117)
Net Discrete Tax expense (Benefit)	$ (23)	$ (115)
Open tax year, from date	Nov. 01, 2014
Foreign Tax Authority [Member] | Majority of company's entities [Member]
Income Tax Examination [Line Items]
Open tax year, from date	Aug. 01, 2014

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INCOME TAXES INCOME TAXES (Tax incentives) (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 31, 2019 USD ($) $ / shares
Income Tax Disclosure [Abstract]
Income Tax Holiday, Aggregate Dollar Amount | $	$ 8
Income Tax Holiday, Income Tax Benefits Per Share | $ / shares	$ 0.04
Income Tax Holiday, Termination Date	The Singapore tax incentive is due for renewal in fiscal 2024.
Income Tax Holiday, Description	Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that 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.

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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, 2019	Jan. 31, 2018
Numerator:
Net income	$ 114	$ 94
Denominator:
Basic weighted-average shares	187	187
Potential common shares— stock options and other employee stock plans	3	2
Diluted weighted-average shares	190	189

XML

NET INCOME PER SHARE (Details) - shares	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
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	417,400	668,100

XML

SUPPLEMENT CASH FLOW INFORMATION Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Income Taxes Paid, Net [Abstract]
Income Taxes Paid, Net	$ 1	$ 1

XML

SUPPLEMENT CASH FLOW INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Other Significant Noncash Transactions [Line Items]
Increase (decrease) in capital expenditure incurred but not yet paid	$ 11	$ (3)
Accounts Payable [Member]
Other Significant Noncash Transactions [Line Items]
Increase (decrease) in capital expenditure incurred but not yet paid	$ 11	$ (3)

XML

SUPPLEMENT CASH FLOW INFORMATION Interest paid (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Supplemental Cash Flow Elements [Abstract]
Cash paid for interest	$ 0	$ 2

XML

SUPPLEMENT CASH FLOW INFORMATION SUPPLEMENTAL CASH FLOW (Cash, cash equivalents an restricted cash reconciliation) (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018	Jan. 31, 2018	Oct. 31, 2017
Cash and cash equivalents	$ 1,098	$ 913	$ 980
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	1,102	$ 917	982	$ 820
Other Current Assets [Member]
Restricted cash included in other current assets	2		0
Other Assets [Member]
Restricted cash included in other assets	$ 2		$ 2

XML

INVENTORY (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Oct. 31, 2018
Inventory, Net [Abstract]
Finished goods	$ 286		$ 283
Purchased parts and fabricated assemblies	355		336
Total inventory	641		$ 619
Excess and obsolete inventory-related charges	$ 7	$ 6

XML

GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Roll forward (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Oct. 31, 2018
Goodwill [Roll Forward]
Goodwill, Gross	$ 1,890	$ 1,880
Goodwill, Impaired, Accumulated Impairment Loss	(709)	(709)
Goodwill, Beginning balance	1,171
Foreign currency translation impact	10
Balance as of January 31, 2019	1,181
Communications Solutions Group
Goodwill [Roll Forward]
Goodwill, Gross	506	497
Goodwill, Impaired, Accumulated Impairment Loss	0	0
Goodwill, Beginning balance	497
Foreign currency translation impact	9
Balance as of January 31, 2019	506
Electronic Industrial Solutions Group
Goodwill [Roll Forward]
Goodwill, Gross	268	267
Goodwill, Impaired, Accumulated Impairment Loss	0	0
Goodwill, Beginning balance	267
Foreign currency translation impact	1
Balance as of January 31, 2019	268
Ixia Solutions Group
Goodwill [Roll Forward]
Goodwill, Gross	1,116	1,116
Goodwill, Impaired, Accumulated Impairment Loss	(709)	$ (709)
Goodwill, Beginning balance	407
Foreign currency translation impact	0
Balance as of January 31, 2019	$ 407

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GOODWILL AND OTHER INTANGIBLE ASSETS Disclosures and Components of Purchased Other Intangibles (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	$ 1,186	$ 1,186
Accumulated Amortization and impairments	593	542
Amortizable intangible assets, Net book value	593	644
In-Process R&D	1	1
Intangible Assets, Gross (Excluding Goodwill)	1,187	1,187
Intangible Assets, Net (Excluding Goodwill)	594	645
Developed technology
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	835	835
Accumulated Amortization and impairments	455	415
Intangible Assets, Net (Excluding Goodwill)	380	420
Backlog
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	13	13
Accumulated Amortization and impairments	13	13
Intangible Assets, Net (Excluding Goodwill)	0	0
Trademark/Tradename
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	33	33
Accumulated Amortization and impairments	16	14
Intangible Assets, Net (Excluding Goodwill)	17	19
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Amortizable intangible assets, Gross carrying amount	304	304
Accumulated Amortization and impairments	109	100
Intangible Assets, Net (Excluding Goodwill)	195	204
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) $ in Millions	3 Months Ended
	Jan. 31, 2019 USD ($)
Goodwill [Line Items]
Document Period End Date	Jan. 31, 2019
Additions to other intangible assets	$ 0
Amortization of intangible assets	$ 51

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GOODWILL AND OTHER INTANGIBLE ASSETS Finite-Lived Assets Future Amortization Expense (Details)	Jan. 31, 2019 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Finite-Lived Intangible Assets, Amortization Expense, Remainder of 2019	$ 152
Finite-Lived Intangible Assets, Amortization Expense, 2020	196
Finite-Lived Intangible Assets, Amortization Expense, 2021	128
Finite-Lived Intangible Assets, Amortization Expense, 2022	52
Finite-Lived Intangible Assets, Amortization Expense, 2023	44
Finite-Lived Intangible Assets, Amortization Expense, thereafter	$ 21

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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, 2019	Oct. 31, 2018
Assets Short - term [Abstract]
Money market funds	$ 603	$ 484
Derivative instruments (foreign exchange contracts)	3	6
Assets, Long-term [Abstract]
Equity investments	36	30
Equity investments - other	16	16
Total assets measured at fair value	658	536
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	5	6
Liabilities Long-term [Abstract]
Deferred compensation liability	13	13
Total liabilities measured at fair value	18	19
Level 1
Assets Short - term [Abstract]
Money market funds	603	484
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Equity investments	36	30
Equity investments - other	0	0
Total assets measured at fair value	639	514
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]
Money market funds	0	0
Derivative instruments (foreign exchange contracts)	3	6
Assets, Long-term [Abstract]
Equity investments	0	0
Equity investments - other	0	0
Total assets measured at fair value	3	6
Liabilities, Short-term [Abstract]
Derivative instruments (foreign exchange contracts)	5	6
Liabilities Long-term [Abstract]
Deferred compensation liability	13	13
Total liabilities measured at fair value	18	19
Level 3
Assets Short - term [Abstract]
Money market funds	0	0
Derivative instruments (foreign exchange contracts)	0	0
Assets, Long-term [Abstract]
Equity investments	0	0
Equity investments - other	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

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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Net recognized gains losses on equity securities) (Details) $ in Millions	3 Months Ended
	Jan. 31, 2019 USD ($)
Debt and Equity Securities, Gain (Loss) [Abstract]
Net realized gains on investments sold	$ 0
Net unrealized gains on investments still held	5
Other-than-temporary impairments of investments	0
Total	$ 5

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DERIVATIVES, Disclosures and derivative instrument aggregated notional amounts by currency and designations (Details) $ in Millions	Jan. 31, 2019 USD ($) contracts
Derivative [Line Items]
Derivative, Net Liability Position, Aggregate Fair Value	$ 3
Foreign Exchange Forward [Member] | Cash Flow Hedging
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	177
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Foreign Currency Derivatives Held | contracts	66
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell
Derivative [Line Items]
Total notional amount	$ 38
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | British Pound
Derivative [Line Items]
Total notional amount	39
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Malaysian Ringgit
Derivative [Line Items]
Total notional amount	4
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Japanese Yen
Derivative [Line Items]
Total notional amount	38
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Sell | Other Currency [Member]
Derivative [Line Items]
Total notional amount	5
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Euro
Derivative [Line Items]
Total notional amount	48
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Buy | Singapore Dollar
Derivative [Line Items]
Total notional amount	0
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Japanese Yen | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	75
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Sell | Other Currency [Member] | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	14
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	27
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Euro | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	13
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	16
Foreign Exchange Forward [Member] | Designated as Hedging Instruments | Buy | Malaysian Ringgit | Cash Flow Hedging
Derivative [Line Items]
Total notional amount	$ 87

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DERIVATIVES, Fair value of derivative instruments and Consolidated Balance Sheet location (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	$ 3	$ 6
Total derivatives Liabilities	5	6
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	2	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	3	4
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts | Other Current Assets [Member]
Derivative Fair Value by Balance Sheet Location [Abstract]
Total derivatives Asset	1	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	$ 2

XML

DERIVATIVES, Effect of derivative instruments on Consolidated Statement of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Derivative [Line Items]
Cash Flow Hedge Gain (Loss) to be Reclassified within next Twelve Months	$ 2
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)	$ 2
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Cost of products and services
Derivative [Line Items]
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	0	2
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net	1	0
Designated as Hedging Instruments | Cash Flow Hedging | Foreign Exchange Contracts | Selling, general and administrative
Derivative [Line Items]
Gain (loss) reclassified from accumulated other comprehensive income into cost of sales	(1)	0
Not Designated as Hedging Instrument [Member] | Other (income) expense, net
Derivative [Line Items]
Gain (loss) recognized in other income (expense),net	$ (3)	$ 1

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS RETIREMENT AND POST RETIREMENT PENSION PLANS (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Defined benefit plan | US
Defined Benefit Plan Disclosure [Line Items]
Service cost—benefits earned during the period	$ 5	$ 6
Interest cost on benefit obligation	7	6
Expected return on plan assets	(11)	(9)
Net actuarial loss	3	3
Prior service credit	(1)	(2)
Settlement loss	0	0
Net periodic benefit cost (benefit)	3	4
Defined benefit plan | Non-US
Defined Benefit Plan Disclosure [Line Items]
Service cost—benefits earned during the period	3	3
Interest cost on benefit obligation	6	6
Expected return on plan assets	(19)	(21)
Net actuarial loss	7	6
Prior service credit	0	0
Settlement loss	2	0
Net periodic benefit cost (benefit)	(1)	(6)
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	(3)	(4)
Net actuarial loss	2	4
Prior service credit	(3)	(3)
Settlement loss	0	0
Net periodic benefit cost (benefit)	$ (2)	$ (1)

XML

RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS (Details) (Textual) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
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
US | Post-retirement Benefits Plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	0	0
Non-US | Defined benefit plan
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	8	$ 9
Estimated future employer contributions in remainder of current fiscal year	$ 23

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RETIREMENT PLANS AND POST RETIREMENT PENSION PLANS RETIREMENT AND POST RETIREMENT PENSION PLANS (Details) (Switzerland defined benefit plan settlement) - Defined benefit plan - Non-US - USD ($) $ in Millions		3 Months Ended
	Jan. 01, 2019	Jan. 31, 2019	Jan. 31, 2018
Defined Benefit Plan Disclosure [Line Items]
Settlement loss		$ 2	$ 0
Switzerland Defined Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Date of transfer of defined benefit plan assets	Jan. 01, 2019
Settlement loss		$ 2

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WARRANTIES AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Guarantees [Abstract]
Standard Product Warranty Description	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	$ 45
Accruals for warranties including change in estimate	8	10
Settlements made during the period	(9)	(8)
Ending balance at end of period	44	47
Standard Product Warranty Disclosure [Abstract]
Accruals for warranties due within one year	25	26
Accruals for warranties due after one year	19	21
Ending balance at end of period	$ 44	$ 47

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DEBT Facility (Details) - Revolving Credit Facility [Member] $ in Millions	3 Months Ended
	Jan. 31, 2019 USD ($)
Line of Credit Facility [Line Items]
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. As of January 31, 2019, 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, 2019.
Debt Instrument, Term	5 years
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
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.30%

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DEBT Long Term Debt (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Debt Instrument [Line Items]
Total debt	$ 1,790	$ 1,790
Short-term debt	499	499
Long-term debt	1,291	1,291
Senior Notes 2019
Debt Instrument [Line Items]
Total debt	499	499
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net	1	1
Senior Notes 2024
Debt Instrument [Line Items]
Total debt	597	597
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net	3	3
Senior Notes 2027
Debt Instrument [Line Items]
Total debt	694	694
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net	$ 6	$ 6

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DEBT Debt (Textuals) (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Debt Disclosure [Abstract]
Letters of Credit Outstanding, Amount	$ 31	$ 26
Long Term Debt Fair Value Over Carrying Value	$ 25	$ 3

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STOCKHOLDERS' EQUITY STOCKHOLDES' EQUITY - Stock Repurchase (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Mar. 16, 2018	Oct. 31, 2016
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract]
Stock Repurchase Program, Authorized Amount			$ 350	$ 200
Treasury Stock, Shares, Acquired	686,398	0
Treasury Stock, Value, Acquired, Cost Method	$ 40	$ 0

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STOCKHOLDER'S EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ (488)	$ (457)
Other comprehensive income (loss) before reclassifications	32	41
Amounts reclassified out of accumulated other comprehensive loss	9	6
Tax (expense) benefit	(2)	(2)
Other comprehensive income (loss)	39	45
Ending balance	(449)	(412)
Unrealized gain on equity securities [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	0	14
Other comprehensive income (loss) before reclassifications	0	(2)
Amounts reclassified out of accumulated other comprehensive loss	0	0
Tax (expense) benefit	0	0
Other comprehensive income (loss)	0	(2)
Ending balance	0	12
Foreign currency translation [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(60)	(39)
Other comprehensive income (loss) before reclassifications	30	41
Amounts reclassified out of accumulated other comprehensive loss	0	0
Tax (expense) benefit	0	0
Other comprehensive income (loss)	30	41
Ending balance	(30)	2
Net defined benefit pension cost and post retirement plan costs, actuarial losses [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(445)	(468)
Other comprehensive income (loss) before reclassifications	4	0
Amounts reclassified out of accumulated other comprehensive loss	12	13
Tax (expense) benefit	(3)	(3)
Other comprehensive income (loss)	13	10
Ending balance	(432)	(458)
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	19	35
Other comprehensive income (loss) before reclassifications	0	0
Amounts reclassified out of accumulated other comprehensive loss	(4)	(5)
Tax (expense) benefit	1	1
Other comprehensive income (loss)	(3)	(4)
Ending balance	16	31
Unrealized gain (losses) on derivatives [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(2)	1
Other comprehensive income (loss) before reclassifications	(2)	2
Amounts reclassified out of accumulated other comprehensive loss	1	(2)
Tax (expense) benefit	0	0
Other comprehensive income (loss)	(1)	0
Ending balance	$ (3)	$ 1

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STOCKHOLDERS' EQUITY - Reclassifications out of accumulated comprehensive income (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Goods and Services Sold	$ (428)	$ (412)
Selling, general and administrative	(288)	(295)
Income Tax Expense (Benefit)	(6)	117
Net income	114	94
Income before taxes	120	(23)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net income	(6)	(4)
Unrealized gain (losses) on derivatives [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Goods and Services Sold	0	2
Selling, general and administrative	(1)	0
Income Tax Expense (Benefit)	0	0
Net income	(1)	2
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 before taxes	(12)	(13)
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 before taxes	4	5
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Income Tax Expense (Benefit)	3	2
Net income	(5)	(6)
Income before taxes	$ (8)	$ (8)

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SEGMENT INFORMATION Profitability (Details) $ in Millions	3 Months Ended
	Jan. 31, 2019 USD ($)	Jan. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments	3
Number of Operating Segments	3
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 and aerospace, defense and government end markets. The group provides electronic design and test software, instruments, systems and related services 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, systems and related services 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.
Amortization of acquisition-related balances	$ 3	$ 19
Total segment revenue	1,006	837
Income from operations	121	(17)
Communications Solutions Group
Segment Reporting Information [Line Items]
Amortization of acquisition-related balances	0	0
Total segment revenue	623	500
Electronic Industrial Solutions Group
Segment Reporting Information [Line Items]
Amortization of acquisition-related balances	0	0
Total segment revenue	257	229
Ixia Solutions Group
Segment Reporting Information [Line Items]
Amortization of acquisition-related balances	3	19
Total segment revenue	126	108
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total segment revenue	1,009	856
Income from operations	204	119
Operating Segments [Member] | Communications Solutions Group
Segment Reporting Information [Line Items]
Total segment revenue	623	500
Income from operations	138	63
Operating Segments [Member] | Electronic Industrial Solutions Group
Segment Reporting Information [Line Items]
Total segment revenue	257	229
Income from operations	54	38
Operating Segments [Member] | Ixia Solutions Group
Segment Reporting Information [Line Items]
Total segment revenue	129	127
Income from operations	$ 12	$ 18

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SEGMENT INFORMATION Reconciliation of Reportable Results (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable operating segments' income from operations	$ 121	$ (17)
Share-based compensation expense	(27)	(19)
Amortization of acquisition-related balances	(54)	(89)
Acquisition and integration costs	(2)	(19)
Northern California wildfire-related costs	0	(7)
Other	0	(2)
Income (loss) from operations	121	(17)
Interest income	4	3
Interest expense	(20)	(22)
Other income (expense), net	15	13
Income (loss) before taxes	120	(23)
Operating Segments [Member]
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total reportable operating segments' income from operations	204	119
Income (loss) from operations	$ 204	$ 119

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SEGMENT INFORMATION Segment Assets (Details) - USD ($) $ in Millions	Jan. 31, 2019	Oct. 31, 2018
Segment Reporting Information [Line Items]
Assets	$ 5,978	$ 5,824
Communications Solutions Group
Segment Reporting Information [Line Items]
Assets	2,059	2,115
Electronic Industrial Solutions Group
Segment Reporting Information [Line Items]
Assets	875	888
Ixia Solutions Group
Segment Reporting Information [Line Items]
Assets	1,407	1,327
Operating Segments [Member]
Segment Reporting Information [Line Items]
Assets	$ 4,341	$ 4,330

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NORTHERN CALIFORNIA WILDFIRES IMPACT (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended	15 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Oct. 31, 2018	Jan. 31, 2019
Unusual or Infrequent Item, or Both [Line Items]
Document Period End Date	Jan. 31, 2019
Loss from Catastrophes	$ 0	$ 7
Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	0	7
Insurance Settlements Receivable	0	31		$ 0
Insurance Recoveries	22	10	$ 68	90
Property, Plant and Equipment [Member] | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Property, Plant and Equipment purchases	10	$ 3	$ 27	37
Uninsured Risk [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	10
Minimum | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Insurance Settlements Receivable, Current	30			30
Maximum | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Insurance Settlements Receivable, Current	$ 40			$ 40

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NORTHERN CALIFORNIA WILDFIRES IMPACT Charges in consolidated statement of operations (Details) - USD ($) $ in Millions	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	$ 0	$ 7
Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	0	7
Cost of products and services | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	0	5
Research and development | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	0	1
Selling, general and administrative | Northern California Wildfires [Member]
Unusual or Infrequent Item, or Both [Line Items]
Loss from Catastrophes	$ 0	$ 1