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OFFON

AGILENT TECHNOLOGIES, INC.

(A)
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AGILENT TECHNOLOGIES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

09/01/2021 | 06:07am EDT
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
growth opportunities, including for revenue and our end markets, strength and
drivers of the markets into which we sell, sales funnels, our strategic
direction, new product and service introductions and the position of our current
products and services, market demand for and adoption of our products, the
ability of our products and solutions to address customer needs and meet
industry requirements, our focus on differentiating our product solutions,
improving our customers' experience and growing our earnings, future financial
results, our operating margin, mix, our investments, including in manufacturing
infrastructure, research and development and expanding and improving our
applications and solutions portfolios, expanding our position in developing
countries and emerging markets, our focus on balanced capital allocation, our
contributions to our pension and other defined benefit plans, impairment of
goodwill and other intangible assets, the impact of foreign currency movements,
our hedging programs and other actions to offset the effects of tariffs and
foreign currency movements, our future effective tax rate, tax valuation
allowance and unrecognized tax benefits, the impact of local government
regulations on our ability to pay vendors or conduct operations, our ability to
satisfy our liquidity requirements, including through cash generated from
operations, the potential impact of adopting new accounting pronouncements,
indemnification, source and supply of materials used in our products, our sales,
our purchase commitments, our capital expenditures, the integration and effects
of our acquisitions and other transactions, our stock repurchase program and
dividends and the potential or anticipated direct or indirect impact of COVID-19
on our business 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 those 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 (loss) or cash flows. Our fiscal year-end is
October 31, and our fiscal quarters end on January 31, April 30 and July 31.
Unless otherwise stated, these dates refer to our fiscal year and fiscal
periods.

Executive Summary


Agilent Technologies, Inc. ("we", "Agilent" or the "company"), incorporated in
Delaware in May 1999, is a global leader in life sciences, diagnostics and
applied chemical markets, providing application focused solutions that include
instruments, software, services and consumables for the entire laboratory
workflow.

COVID-19 Pandemic


Both our domestic and international operations have been and continue to be
affected by the ongoing global pandemic of a novel strain of coronavirus
("COVID-19") and the resulting volatility and uncertainty it has caused in the
U.S. and international markets. During the three and nine months ended July 31,
2021, many businesses and countries, including the U.S., continued applying
preventative and precautionary measures to mitigate the spread of the virus such
as quarantine, shelter-in-place, travel and activity restrictions and similar
isolation measures, including government orders and other restrictions on the
conduct of business operations at different times.

Our factories continue to operate around the world in accordance with the
guidance issued by local, state and national government authorities. We continue
to take proactive measures to ensure the health and safety of our global
employee base. The markets that we serve have continued to operate at various
levels throughout the pandemic and are in varying stages of recovery. We
continue working closely with our customers to ensure their seamless operations.

The COVID-19 pandemic continues to be dynamic, and near-term challenges across
the economy remain. Although vaccines are being distributed and administered
around the world, the highly contagious new Delta variant of the virus has
caused the latest surge in COVID-19 cases in the U.S. and other countries around
the world. We will continue to actively monitor the pandemic and will continue
to take appropriate steps to mitigate the impacts to our employees and on our
business posed by the on-going pandemic.

Despite the economic challenges due to the COVID-19 pandemic, we ended our third
fiscal quarter of 2021 with revenue growth of 26 percent year over year. This
revenue growth was primarily non-COVID related revenue and came from all of our
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segments, key end markets and geographies. For the three months ended July 31,
2021, revenue growth was also partly due to weakened sales in the prior year as
the response to the early stages of the pandemic caused many of our customers to
close or reduce operating capacity. In the first nine months of fiscal year
2021, our overall business performance was strong which also resulted in
significant expense increases from our variable pay and long-term performance
plan-earnings per share ("LTPP-EPS") programs, along with sales commission
increases year over year, which was partially offset by the continued cost
savings actions which included reduction in travel and non-essential spending
that we implemented last year.

Acquisition


On April 15, 2021 we completed the acquisition of privately-owned Resolution
Bioscience, Inc., a biotechnology company focused on the development and
commercialization of next-generation sequencing-based ("NGS") precision oncology
solutions, for $550 million cash plus potential future contingent payments of up
to $145 million upon the achievement of certain milestones which are based on
certain revenue and technical targets. Resolution Bioscience complements and
expands our capabilities in NGS-based cancer diagnostics and provides us with
innovative technology to further serve the needs of the fast-growing precision
medicine market. The revised estimated fair value of the future potential
contingent payments was $110 million as of the date of the close, which
increased $14 million from our original estimate in the second quarter.

2022 Senior Notes


On January 21, 2021, we redeemed $100 million of the $400 million outstanding
aggregate principal amount of our 2022 senior notes due October 1, 2022. On
April 5, 2021, we redeemed the remaining outstanding $300 million of our 2022
senior notes. The redemption price of approximately $417 million was computed in
accordance with the terms of the 2022 senior notes as the present value of the
remaining scheduled payments of principal and unpaid interest on the notes being
redeemed. During the nine months ended July 31, 2021, we recorded a loss on
extinguishment of debt of $17 million in other income (expense), net in the
condensed consolidated statement of operations. In addition, $1 million of
accrued interest, up to but not including the applicable redemption date, was
paid. The make-whole premium less partial amortization of previously deferred
interest rate swap gain together with the amortization of debt issuance costs
and discount was recorded in other income (expense), net in the condensed
consolidated statement of operations.

2031 Senior Notes


On March 12, 2021, we issued an aggregate principal amount of $850 million in
senior notes ("2031 senior notes"). The 2031 senior notes were issued at 99.822%
of their principal amount. The 2031 senior notes will mature on March 12, 2031,
and bear interest at a fixed rate of 2.30% per annum. The interest is payable
semi-annually on March 12th and September 12th of each year and payments
commence on September 12, 2021.

Actual Results


Net revenue of $1,586 million and $4,659 million for the three and nine months
ended July 31, 2021 increased 26 percent and 21 percent, respectively, when
compared to the same periods last year. This revenue growth was primarily
non-COVID related revenue and came from increases in all of our segments, key
end markets and geographies. Foreign currency movements for the three and nine
months ended July 31, 2021 had an overall favorable impact on revenue of 5
percentage points and 4 percentage points, respectively, when compared to the
same periods last year. Revenue generated by our life sciences and applied
markets business in the three and nine months ended July 31, 2021 increased 22
percent and 21 percent, respectively, when compared to the same periods last
year. Foreign currency movements for both the three and nine months ended
July 31, 2021, had an overall favorable impact on revenue of 4 percentage points
when compared to the same periods last year. Revenue generated by our
diagnostics and genomics business for the three and nine months ended July 31,
2021 increased 44 percent and 27 percent, respectively, when compared to the
same periods last year. Foreign currency movements for both the three and nine
months ended July 31, 2021 had an overall favorable impact on revenue of 4
percentage points when compared to the same periods last year. Revenue generated
by our Agilent CrossLab business in the three and nine months ended July 31,
2021 increased 21 percent and 18 percent, respectively, when compared to the
same periods last year. Foreign currency movements for the three and nine months
ended July 31, 2021 had an overall favorable impact on revenue of 6 percentage
points and 5 percentage points, respectively, when compared to the same periods
last year.

Net income for the three and nine months ended July 31, 2021 was $264 million
and $768 million, respectively, compared to net income of $199 million and $497
million, respectively, for the corresponding periods last year. In the nine
months ended July 31, 2021, cash provided by operations was $1,044 million
compared to cash provided by operations of $544
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For the nine months ended July 31, 2021 and 2020, we paid cash dividends on the company's outstanding common stock of $177 million and $167 million, respectively.


On November 19, 2018 we announced that our board of directors had approved a
share repurchase program (the "2019 repurchase program") designed, among other
things, to reduce or eliminate dilution resulting from issuance of stock under
the company's employee equity incentive programs. The 2019 repurchase program
authorizes the purchase of up to $1.75 billion of our common stock at the
company's discretion and has no fixed termination date. The 2019 repurchase
program does not require the company to acquire a specific number of shares and
may be suspended, amended or discontinued at any time. During the three and nine
months ended July 31, 2020, we repurchased and retired approximately 362,000
shares for $33 million and 2.751 million shares for $219 million, respectively,
under this authorization. During the nine months ended July 31, 2021, we
repurchased and retired 3.050 million shares for $365 million under this
authorization. Effective February 18, 2021, the 2019 repurchase program was
terminated and replaced by the new share repurchase program. The remaining
authorization under the 2019 repurchase plan of $193 million expired on February
18, 2021.

On February 16, 2021 we announced that our board of directors had approved a new
share repurchase program (the "2021 repurchase program") designed, among other
things, to reduce or eliminate dilution resulting from issuance of stock under
the company's employee equity incentive programs. The 2021 repurchase program
authorizes the purchase of up to $2.0 billion of our common stock at the
company's discretion and has no fixed termination date. The 2021 repurchase
program which became effective on February 18, 2021, replaced and terminated the
2019 repurchase program on that date. The 2021 repurchase program does not
require the company to acquire a specific number of shares and may be suspended,
amended or discontinued at any time. During the three and nine months ended
July 31, 2021, we repurchased and retired 804,352 shares for $113 million and
2.192 million shares for $287 million, respectively, under this authorization.
As of July 31, 2021, we had remaining authorization to repurchase up to
approximately $1.713 billion of our common stock under the 2021 repurchase
program.

  Looking forward, as we continue to navigate the impacts of the COVID-19
pandemic, our top priority continues to be the health and safety of our
employees, customers and community, as well as supporting our customers'
operations. We expect to face additional supply chain pressures in the near term
that we will continue to mitigate through various sourcing strategies. We also
remain focused on improving our customers' experience, differentiating product
solutions and productivity especially during these extraordinary times. We
continue supporting our customers' needs related to the development of new
therapies and vaccines. With our strong results in the first nine months of
fiscal year 2021 and the continued recovery in our end markets, we remain
optimistic about our long-term growth opportunities in all of our end markets.

Critical Accounting Policies and Estimates


Management's Discussion and Analysis of Financial Condition and Results of
Operations is based upon our condensed consolidated financial statements, which
have been prepared in accordance with generally accepted accounting principles
("GAAP") in the U.S. The preparation of condensed consolidated financial
statements in conformity with GAAP in the U.S. requires management to make
estimates, judgments and assumptions that affect the amounts reported in our
condensed consolidated financial statements and accompanying notes. Our critical
accounting policies are those that affect our financial statements materially
and involve difficult, subjective or complex judgments by management. Those
policies are revenue recognition, inventory valuation, retirement and
post-retirement benefit plan assumptions, valuation of goodwill and purchased
intangible assets and accounting for income taxes. Other than the accounting for
goodwill impairment as described below, there have been no significant changes
to our critical accounting policies as described in our Annual Report on Form
10-K for the fiscal year ended October 31, 2020. Management bases its estimates
on historical experience and various other assumptions believed to be
reasonable. Although these estimates are based on management's best knowledge of
current events and actions that may impact the company in the future, actual
results may be different from the estimates.

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements.

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Goodwill Impairment Assessment. On November 1, 2020, we adopted new guidance
that simplifies the measurement of goodwill impairment.

Under the new authoritative guidance, we still have the option to perform a
qualitative assessment to determine whether further impairment testing is
necessary. The accounting standard gives us the option to first assess
qualitative factors to test a reporting unit's goodwill for impairment. If we
believe, as a result of our qualitative assessment, that it is
more-likely-than-not (i.e., greater than 50% chance) that the fair value of a
reporting unit is less than its carrying amount, the quantitative impairment
test will be required. Otherwise, no further testing will be required. In the
quantitative test, we are required to compare the fair value of each reporting
unit to its carrying value. Any excess of the reporting unit's carrying value
over its fair value will be recorded as an impairment loss.


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 and equity
are exposed to changes in foreign currency exchange rates as a result of our
global operating and financing activities. Foreign currency movements for the
nine months ended July 31, 2021 had an overall favorable impact on revenue of 4
percentage points when compared to the same period last year. When movements in
foreign currency exchange rates have a positive impact on revenue, they will
also have a negative impact by increasing our costs and expenses. We calculate
the impact of movements in foreign currency exchange rates by applying the
actual foreign currency exchange rates in effect during the last month of each
quarter of the current year to both the applicable current and prior year
periods. 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. We do experience some fluctuations within individual lines of
the condensed consolidated statement of operations and balance sheet 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
(up to a rolling thirteen-month period). We may also hedge equity balances
denominated in foreign currency on a long-term basis. To the extent that we are
required to pay for all, or portions, of an acquisition price in foreign
currencies, we may enter into foreign exchange contracts to reduce the risk that
currency movements will impact the U.S. dollar cost of the transaction.

Results from Operations

Net Revenue

                                            Three Months Ended                     Nine Months Ended                       Year over Year Change
                                                 July 31,                               July 31,                      Three                      Nine
                                           2021                2020              2021               2020             Months                     Months
                                                                 (in millions)
Net revenue:
Products                             $    1,188$   932$    3,510$ 2,878               28%                       22%
Services and other                          398                 329               1,149              978               21%                       18%
Total net revenue                    $    1,586$ 1,261$    4,659$ 3,856               26%                       21%



Net revenue of $1,586 million and $4,659 million for the three and nine months
ended July 31, 2021 increased 26 percent and 21 percent, respectively, when
compared to the same periods last year. Foreign currency movements for the three
and nine months ended July 31, 2021 had an overall favorable impact on revenue
of 5 percentage points and 4 percentage points, respectively, when compared to
the same periods last year. The favorable impact of COVID-related revenue for
the three and nine months ended July 31, 2021 was not material. In the three and
nine months ended July 31, 2021, net revenue increased in all three of our
business segments, geographic regions and all of our key end markets led by
strong growth from the pharmaceutical, chemical and energy and diagnostics and
clinical markets when compared to the same periods last year.

Revenue from products increased 28 percent and 22 percent for the three and nine
months ended July 31, 2021, respectively, when compared to the same periods last
year. The growth in product revenue was driven by increased sales within
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our liquid chromatography and mass spectrometry businesses with continued strong
growth in our nucleic acid solutions and cell analysis businesses.

Services and other revenue increased 21 percent and 18 percent for the three and
nine months ended July 31, 2021, respectively, when compared to the same periods
last year. Services and other revenue consist of revenue generated from our
three business segments: Agilent CrossLab, diagnostics and genomics and life
science and applied markets businesses. Some of the prominent services in the
Agilent CrossLab business include repair and maintenance on multi-vendor
instruments, compliance services and installation services. Services in the
diagnostics and genomics business include consulting services related to the
companion diagnostics and nucleic acid businesses. Services in the life science
and applied markets business include repair and maintenance and installation
services.

For the three and nine months ended July 31, 2021, the service revenue from the
Agilent CrossLab business increased 19 percent with a 5 percentage point
favorable currency impact and 17 percent with a 4 percentage point favorable
currency impact when compared to the same periods last year. Service revenue
increases for both the three and nine months ended July 31, 2021 reflected
strong results across our entire service portfolio.


Net Revenue By Segment

                                              Three Months Ended                     Nine Months Ended                       Year over Year Change
                                                   July 31,                               July 31,                      Three                      Nine
                                             2021                2020              2021               2020             Months                    
Months
                                                                   (in millions)
Net revenue by segment:
Life sciences and applied
markets                                $      680$   557$    2,076$ 1,721               22%                       21%
Diagnostics and genomics                      346                 241                 955              753               44%                       27%
Agilent CrossLab                              560                 463               1,628            1,382               21%                       18%
Total net revenue                      $    1,586$ 1,261$    4,659$ 3,856               26%                       21%



Revenue in the life sciences and applied markets business for the three and nine
months ended July 31, 2021 increased 22 percent and 21 percent, respectively,
when compared to the same periods last year. Foreign currency movements for both
the three and nine months ended July 31, 2021 had an overall favorable impact on
revenue of 4 percentage points when compared to the same periods last year. For
the three and nine months ended July 31, 2021, we saw revenue growth across all
key end markets when compared to the same period last year. Revenue growth was
led by strong demand for our products within the pharmaceutical and the chemical
and energy markets when compared to the same periods last year.

Revenue in the diagnostics and genomics business for the three and nine months
ended July 31, 2021, increased 44 percent and 27 percent, respectively, when
compared to the same periods last year. Foreign currency movements for both the
three and nine months ended July 31, 2021 had an overall favorable impact on
revenue of 4 percentage points when compared to the same periods last year. For
the three and nine months ended July 31, 2021, we saw revenue growth across all
key end markets when compared to the same periods last year. Revenue growth was
very strong within the pharmaceutical market led by performance from our nucleic
acid solutions and biomolecular analysis businesses. Revenue growth was strong
within the diagnostics and clinical markets led by performance from our
pathology and genomics businesses.

Revenue generated by Agilent CrossLab in the three and nine months ended
July 31, 2021, increased 21 percent and 18 percent, respectively, when compared
to the same periods last year. Foreign currency movements for the three and nine
months ended July 31, 2021 had an overall favorable impact on revenue of 6
percentage points and 5 percentage points, respectively, when compared to the
same periods last year. For the three and nine months ended July 31, 2021, we
saw revenue growth across all key end markets led by very strong growth from the
pharmaceutical and chemical and energy and food markets when compared to the
same periods last year.

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Operating Results

                                                      Three Months Ended                    Nine Months Ended                        Year over Year Change
                                                           July 31,                              July 31,                          Three                     Nine
                                                   2021                  2020             2021              2020                   Months                   Months
(in millions, except margin data)
Total gross margin                                 53.7   %              53.1  %           53.8  %          53.1  %                        1   ppt             1   ppt
Research and development                       $    113$   92$    325$   393                    24%                      (17)%
Selling, general and administrative            $    403$  347$  1,230$ 1,109                    16%                       11%
Operating margin                                   21.2   %              18.2  %           20.4  %          14.2  %                        3  ppts          6 ppts
Income from operations                         $    336$  230$    952$   547                    46%                       74%



Total gross margin for both the three and nine months ended July 31, 2021
increased 1 percentage point when compared to the same periods last year. Gross
margin for the three and nine months ended July 31, 2021 increased due to higher
sales volume which was partially offset by higher wages and variable pay, higher
intangible amortization expense, higher share-based compensation expense and
logistics costs. Gross margin in the nine months ended July 31, 2021 was also
impacted by higher inventory charges.

Research and development expenses for the three and nine months ended July 31,
2021 increased 24 percent and decreased 17 percent, respectively, when compared
to the same periods last year. Research and development expenses in the nine
months ended July 31, 2020 included an impairment charge of $97 million related
to the shutdown of our sequencer development program. Excluding the impairment
in 2020, research and development expenses for the three and nine months ended
July 31, 2021 increased due to increased wages and variable pay, higher program
investments, additional expenses related to our recent acquisition, and
unfavorable currency movements partially offset by savings from the shutdown of
our sequencer development program.

Selling, general and administrative expenses for the three and nine months ended
July 31, 2021 increased 16 percent and 11 percent, respectively, when compared
to the same periods last year. The increase in selling, general and
administrative expenses for the three months ended July 31, 2021 was due to
higher wages and variable pay, higher commissions and higher share-based
compensation expense partially offset by lower transformational initiatives
expenses and lower discretionary spending. The increase in selling, general and
administrative expenses for the nine months ended July 31, 2021 was due to
higher wages and variable pay, higher commissions and higher share-based
compensation expense partially offset by lower legal costs, lower
transformational initiatives expenses and lower intangible amortization of
intangible assets.

Total operating margin for the three and nine months ended July 31, 2021
increased 3 percentage points and 6 percentage points, respectively, when
compared to the same periods last year. Operating margin for the three and nine
months ended July 31, 2021 increased due to higher sales volume and increased
gross margin partially offset by increases in operating expenses.

Income from operations for the three and nine months ended July 31, 2021 increased $106 million or 46 percent and $405 million or 74 percent, respectively, on a corresponding revenue increase of $325 million and $803 million, respectively .

At July 31, 2021, our headcount was approximately 16,700 as compared to approximately 16,300 at July 31, 2020.

Other income (expense), net


In the three and nine months ended July 31, 2021 other income and expense, net
includes income of $2 million and $7 million, respectively, related to the
provision of site service costs to, and lease income from Keysight Technologies,
Inc. The costs associated with these services are reported within income from
operations. In the three months ended July 31, 2021 other income and expense,
net also includes net gains on the fair value of equity investments of
approximately $8 million. In the nine months ended July 31, 2021 other income
and expense, net also includes a $17 million loss on extinguishment of debt and
net gains on the fair value of equity investments of approximately $19 million.

In the three and nine months ended July 31, 2020 other income and expense, net
includes income of $3 million and $9 million, respectively, related to the
provision of site service costs to, and lease income from Keysight Technologies,
Inc. The costs associated with these services are reported within income from
operations. In the nine months ended July 31, 2020, other
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income (expense), net also includes $22 million of income related to the
settlement of our legal claim against Twist BioScience and net gains on the fair
value of equity investments of approximately $26 million.

Income Taxes


For the three and nine months ended July 31, 2021, our income tax expense was
$63 million with an effective tax rate of 19.3 percent and $144 million with an
effective tax rate of 15.8 percent, respectively. For the three and nine months
ended July 31, 2021, our effective tax rate and the resulting provision for
income taxes were impacted by the expiration of various foreign statutes of
limitations which resulted in the recognition of previously unrecognized tax
benefits of $8 million and $24 million, respectively. The income taxes for the
nine months ended July 31, 2021 also include the excess tax benefits from
stock-based compensation of $24 million.

Our calculation of income tax expense for the three and nine months ended
July 31, 2021 is dependent in part on forecasts of full year results. The impact
of the COVID-19 outbreak on the economic environment is uncertain and may change
these forecasts, which could impact tax expense.

For the three and nine months ended July 31, 2020, our income tax expense was
$20 million with an effective tax rate of 9.1 percent and $62 million with an
effective tax rate of 11.1 percent, respectively. For the three and nine months
ended July 31, 2020, our effective tax rate and the resulting provision for
income taxes were impacted by the expiration of the U.S. statute of limitations
in July 2020 for fiscal year 2016, which resulted in the recognition of
previously unrecognized tax benefits of $16 million. For the nine months ended
July 31, 2020, our effective tax rate and the resulting provision for income
taxes were also impacted by a discrete tax benefit of $15 million related to the
excess tax benefits from stock compensation.

In the U.S., tax years remain open back to the year 2017 for federal income tax
purposes and for significant states. In other major jurisdictions where the
company conducts business, the tax years generally remain open back to the year
2009.

With these jurisdictions and the U.S., it is reasonably possible there could be
significant changes to our unrecognized tax benefits in the next twelve months
due to either the expiration of a statute of limitation or a tax audit
settlement which will be partially offset by an anticipated tax liability
related to unremitted foreign earnings, where applicable. Given the number of
years and numerous matters that remain subject to examination in various tax
jurisdictions, management is unable to estimate the range of possible changes to
the balance of our unrecognized tax benefits.

Segment Overview

We continue to have three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business.

Life Sciences and Applied Markets


Our life sciences and applied markets business provides application-focused
solutions that include instruments and software that enable customers to
identify, quantify and analyze the physical and biological properties of
substances and products, as well as enable customers in the clinical and life
sciences research areas to interrogate samples at the molecular and cellular
level. Key product categories include: liquid chromatography ("LC") systems and
components; liquid chromatography mass spectrometry ("LCMS") systems; gas
chromatography ("GC") systems and components; gas chromatography mass
spectrometry ("GCMS") systems; inductively coupled plasma mass spectrometry
("ICP-MS") instruments; atomic absorption ("AA") instruments; microwave
plasma-atomic emission spectrometry ("MP-AES") instruments; inductively coupled
plasma optical emission spectrometry ("ICP-OES") instruments; raman
spectroscopy; cell analysis plate based assays; flow cytometer; real-time cell
analyzer; cell imaging systems; microplate reader; laboratory software for
sample tracking; information management and analytics; laboratory automation and
robotic systems; dissolution testing; vacuum pumps and measurement technologies.

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Net Revenue

                          Three Months Ended               Nine Months Ended             Year over Year Change
                               July 31,                        July 31,                Three                  Nine
                            2021             2020          2021          2020         Months                 Months
                                           (in millions)

  Net revenue       $      680$ 557$    2,076$ 1,721          22%                   21%



Life sciences and applied markets business revenue for the three and nine months
ended July 31, 2021 increased 22 percent and 21 percent, respectively, when
compared to the same periods last year. For both the three and nine months ended
July 31, 2021, foreign currency movements had an overall favorable impact on
revenue of 4 percentage points when compared to the same periods last year.

Geographically, revenue increased 30 percent in the Americas with a 1 percentage
point favorable currency impact, increased 40 percent in Europe with a 9
percentage point favorable currency impact and increased 10 percent in Asia
Pacific with a 3 percentage point favorable currency impact for the three months
ended July 31, 2021 compared to the same period last year. For the three months
ended July 31, 2021, revenue growth was strong across all businesses.

Revenue increased 23 percent in the Americas with no currency impact, increased
28 percent in Europe with a 7 percentage point favorable currency impact and
increased 15 percent in Asia Pacific with a 4 percentage point favorable
currency impact for the nine months ended July 31, 2021 compared to the same
period last year. For the nine months ended July 31, 2021, revenue growth was
strong across all businesses.

For the three and nine months ended July 31, 2021, all end markets delivered
strong revenue growth. Revenue growth in the pharmaceutical end market was
driven by our liquid chromatography, cell analysis and liquid chromatography
mass spectrometry with strong growth across the Americas, Europe and China.
Revenue growth in the academia and government end market was led by cell
analysis, liquid chromatography mass spectrometry business with strong growth in
the Americas. Revenue growth in the diagnostics and clinical markets was mainly
driven by strength in liquid chromatography mass spectrometry and cell analysis
business with strong growth in the Americas.

For the three months ended July 31, 2021, revenue growth in the chemical and
energy end market was led by spectroscopy, gas chromatography, gas
chromatography mass spectrometry and liquid chromatography business with strong
growth in the Americas, Europe and China. Revenue growth in the food market was
mainly driven by strength in gas chromatography mass spectrometry and
spectroscopy with broad based strength across all regions. Revenue growth in the
forensics and environmental end markets was mainly driven by strength in liquid
chromatography mass spectrometry mainly led by growth in the Americas.

For the nine months ended July 31, 2021, revenue growth, in the chemical and
energy end market was driven by spectroscopy, gas chromatography, liquid
chromatography and gas chromatography mass spectrometry led by strength in
Europe, Americas and China. Revenue growth in the food market was mainly driven
by strength in liquid chromatography mass spectrometry, gas chromatography, gas
chromatography mass spectrometry, liquid chromatography and spectroscopy with
broad based strength across regions. Revenue growth in the forensics and
environmental end markets was mainly driven by strength in liquid chromatography
mass spectrometry, gas chromatography and gas chromatography mass spectrometry
mainly led by growth in the Americas and Europe.

Looking forward, despite short term uncertainties and the adverse effects of the
COVID-19 pandemic, we are optimistic about our long-term growth opportunities in
the life sciences and applied markets as our broad portfolio of products and
solutions are well suited to address customer needs. We anticipate growth from
our new product introductions and acquisitions in the last couple of years as we
continue to invest in expanding and improving our applications and solutions
portfolio. While we anticipate volatility in our markets, we expect continued
growth across most end markets in the long term.

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Operating Results
                                                Three Months Ended                      Nine Months Ended                        Year over Year Change
                                                     July 31,                                July 31,                       Three                      Nine
                                             2021                  2020              2021                 2020             Months                     Months
(in millions, except margin data)
Gross margin                                 60.0   %              59.3  %           60.0   %             59.3  %           1 ppt                     1 

ppt

Research and development                 $     61$   53$    182$  161               15%                       13%
Selling, general and
administrative                           $    177$  152$    540$  477               17%                       13%
Operating margin                             25.0   %              22.6  %           25.2   %             22.2  %          2 ppts                     3 ppts
Income from operations                   $    170$  126$    523$  382               35%                       37%



Gross margin for products and services for both the three and nine months ended
July 31, 2021, increased 1 percentage point when compared to the same periods
last year. Gross margin for the three and nine months ended July 31, 2021 was
impacted by higher sales volume which was partially offset by higher wage and
variable pay, unfavorable currency impact and hedging losses.

Research and development expenses for the three and nine months ended July 31,
2021, increased 15 percent and 13 percent, respectively, when compared to the
same periods last year. Research and development expenses for the three months
ended July 31, 2021 increased due to higher wage and variable pay, unfavorable
currency impact and higher share-based compensation expense partially offset by
operational savings. Research and development expenses for the nine months ended
July 31, 2021 increased due to higher wage and variable pay, unfavorable
currency impact and higher share-based compensation expense.

Selling, general and administrative expenses for the three and nine months ended
July 31, 2021, increased 17 percent and 13 percent, respectively, when compared
to the same periods last year. Selling, general and administrative expenses for
the three and nine months ended July 31, 2021 increased due to higher wages and
variable pay, higher commissions, higher share-based compensation expense and
unfavorable currency movements.

Operating margin for products and services for the three and nine months ended
July 31, 2021 increased 2 percentage points and 3 percentage points,
respectively, when compared to the same periods last year. Operating margin for
the three and nine months ended July 31, 2021 increased due to higher sales
volume and favorable impact of currency on revenue which was partially offset by
higher wages and variable pay, unfavorable impact of currency on expenses and
higher share-based compensation.

Income from operations for the three and nine months ended July 31, 2021, increased $44 million or 35 percent and $141 million or 37 percent, respectively, on a corresponding revenue increase of $123 million and $355 million, respectively. Income from operations for the three and nine months ended July 31, 2021 increased primarily due to higher sales volume.

Diagnostics and Genomics

Our diagnostics and genomics business includes the genomics, nucleic acid contract manufacturing and research and development, pathology, companion diagnostics, reagent partnership and biomolecular analysis businesses.


Our diagnostics and genomics business is comprised of six areas of activity
providing active pharmaceutical ingredients ("APIs") for oligo-based
therapeutics as well as solutions that include reagents, instruments, software
and consumables, which enable customers in the clinical and life sciences
research areas to interrogate samples at the cellular and molecular
level. First, our genomics business includes arrays for DNA mutation detection,
genotyping, gene copy number determination, identification of gene
rearrangements, DNA methylation profiling, gene expression profiling, as well as
next generation sequencing ("NGS") target enrichment and genetic data management
and interpretation support software. This business also includes solutions that
enable clinical labs to identify DNA variants associated with genetic disease
and help direct cancer therapy. Second, our nucleic acid solutions business
provides equipment and expertise focused on production of synthesized
oligonucleotides under pharmaceutical good manufacturing practices ("GMP")
conditions for use as API in an emerging class of drugs that utilize nucleic
acid molecules for disease therapy. Third, our pathology solutions business is
focused on product offerings for cancer diagnostics and anatomic pathology
workflows. The broad portfolio of offerings includes immunohistochemistry
("IHC"), in situ hybridization ("ISH"), hematoxylin and eosin ("H&E") staining
and special staining. Fourth, we also collaborate with a number of major
pharmaceutical companies to develop new potential tissue and liquid-based
pharmacodiagnostics, also known as companion diagnostics, which may be used to
identify patients most likely to benefit from
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a specific targeted therapy. Fifth, the reagent partnership business is a
provider of reagents used for turbidimetry and flow cytometry. Finally, our
biomolecular analysis business provides complete workflow solutions, including
instruments, consumables and software, for quality control analysis of nucleic
acid samples. Samples are analyzed using quantitative and qualitative techniques
to ensure accuracy in further genomics analysis techniques utilized in clinical
and life science research applications.

Net Revenue

                                             Three Months Ended                  Nine Months Ended                      Year over Year Change
                                                  July 31,                            July 31,                     Three                      Nine
                                            2021              2020              2021             2020             Months                     Months
                                                                 (in millions)

Net revenue                             $      346$  241$     955$  753               44%                       27%



Diagnostics and genomics business revenue for the three and nine months ended
July 31, 2021 increased 44 percent and 27 percent, respectively, when compared
to the same periods last year. For both the three and nine months ended July 31,
2021, foreign currency movements had an overall favorable impact on revenue of 4
percentage points when compared to the same periods last year.

Geographically, revenue increased 55 percent in the Americas with a 1 percentage
point favorable currency impact, increased 33 percent in Europe with a 9
percentage point favorable currency impact and increased 32 percent in Asia
Pacific with a 2 percentage point favorable currency impact for the three months
ended July 31, 2021 compared to the same period last year. For the three months
ended July 31, 2021, the increase in the Americas was driven by strong
performance in our nucleic acid solutions and genomics portfolios. In both
Europe and Asia Pacific, the increase was due to strong demand for our genomics
solutions.

For the nine months ended July 31, 2021, revenue increased 37 percent in the
Americas with no currency impact, increased 18 percent in Europe with a 7
percentage point favorable currency impact and increased 14 percent in Asia
Pacific with a 3 percentage point favorable currency impact when compared to the
same period last year. For the nine months ended July 31, 2021, the increase in
the Americas was driven by strong performance in our nucleic acid solutions and
genomics portfolios. In Europe, we saw strong demand for our genomics solutions,
as well as an increase from our companion diagnostics business. In Asia Pacific,
revenue growth was driven by our pathology and genomics product portfolios.

For the three and nine months ended July 31, 2021, revenue performance in the
diagnostics and genomics business was led by strong revenue growth in our
nucleic acid solutions and genomics businesses. All key end markets had revenue
increases when compared to the same periods last year.

  Looking forward, we are optimistic about our long-term growth opportunities in
our end markets and continue to invest in expanding and improving our
applications and solutions portfolio. We remain positive about our growth in our
end markets as our product portfolio around OMNIS, PD-L1 assays and SureFISH
continues to gain strength with our customers in clinical oncology applications,
and our next generation sequencing target enrichment solutions continue to be
adopted. Market demand in the nucleic acid solutions business related to
therapeutic oligo programs continues, and with our newly opened and planned
extension of our nucleic acid solutions production facility in Frederick,
Colorado, we are well positioned to serve more of the market demand. The
acquisition of Resolution Bioscience will expand our capabilities in NGS-based
cancer diagnostics and provide innovative technology to further serve the needs
of the fast-growing precision medicine market. We will continue to invest in
research and development and seek to expand our position in developing countries
and emerging markets.

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Operating Results

                                              Three Months Ended                    Nine Months Ended                        Year over Year Change
                                                   July 31,                              July 31,                       Three                      Nine
                                             2021              2020              2021                 2020             Months                    

Months

(in millions, except margin data)
Gross margin                                 53.5   %          49.8  %           52.9   %             52.3  %          4 ppts                     1 ppt
Research and development                 $     33$    24$     92$   86               39%                        7%
Selling, general and
administrative                           $     74$    55$    211$  176               35%                       20%
Operating margin                             22.6   %          17.2  %           21.1   %             17.5  %          5 ppts                     4 ppts
Income from operations                   $     78$    41$    202$  132               89%                       53%



Gross margin for products and services for the three and nine months ended
July 31, 2021, increased 4 percentage points and 1 percentage point,
respectively, when compared to the same periods last year. Gross margin in the
three and nine months ended July 31, 2021 increased due to higher sales volume,
which was particularly strong in the three months ended July 31, 2021, more than
offsetting higher wages, variable pay, inventory charges and logistics expenses.

Research and development expenses for the three and nine months ended July 31,
2021, increased 39 percent and 7 percent, respectively, when compared to the
same periods last year. Research and development expenses for the three months
ended July 31, 2021 included higher program investments, wages and variable pay
and additional expenses related to our recent acquisition. Research and
development expenses for the nine months ended July 31, 2021 included higher
program investments, wages and variable pay, and additional expenses related to
our recent acquisition which were partially offset by the shutdown of the
sequencer development program in 2020.

Selling, general and administrative expenses for the three and nine months ended
July 31, 2021, increased 35 percent and 20 percent, respectively, when compared
to the same periods last year. Selling, general and administrative expenses for
the three and nine months ended July 31, 2021 increased due to higher
commissions, share based compensation expenses, higher wages and variable pay.

Operating margin for products and services for the three and nine months ended
July 31, 2021 increased 5 percentage points and 4 percentage points,
respectively, when compared to the same periods last year. Operating margin for
the three and nine months ended July 31, 2021 improved as the revenue growth
more than offset the increase in commissions, wages and variable pay.

Income from operations for the three and nine months ended July 31, 2021 increased $37 million or 89 percent and $70 million or 53 percent, respectively, on a corresponding revenue increase of $105 million and $202 million, respectively. Income from operations for the three and nine months ended July 31, 2021 increased due to strong revenue performance. Agilent CrossLab


The Agilent CrossLab business spans the entire lab with its extensive
consumables and services portfolio, which is designed to improve customer
outcomes. Most of the portfolio is vendor neutral, meaning Agilent can serve and
supply customers regardless of their instrument purchase choices. Solutions
range from chemistries and supplies to services and software helping to connect
the entire lab. Key product categories in consumables include GC and LC columns,
sample preparation products, custom chemistries, and a large selection of
laboratory instrument supplies. Services include startup, operational, training
and compliance support, software as a service, as well as asset management and
consultative services that help increase customer productivity. Custom service
and consumable bundles are tailored to meet the specific application needs of
various industries and to keep instruments fully operational and compliant with
the respective industry requirements.

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Net Revenue

                          Three Months Ended               Nine Months Ended             Year over Year Change
                               July 31,                        July 31,                Three                  Nine
                            2021             2020          2021          2020         Months                 Months
                                           (in millions)

  Net revenue       $      560$ 463$    1,628$ 1,382          21%                   18%



Agilent CrossLab business revenue for the three and nine months ended July 31,
2021 increased 21 percent and 18 percent, respectively, when compared to the
same periods last year. Foreign currency movements for the three and nine months
ended July 31, 2021 had an overall favorable impact on revenue of 6 percentage
points and 5 percentage points, respectively, when compared to the same periods
last year.

Geographically, revenue increased 24 percent in the Americas with a 2 percentage
point favorable currency impact, increased 24 percent in Europe with a 9
percentage point favorable currency impact and increased 17 percent in Asia
Pacific with a 7 percentage point favorable currency impact for the three months
ended July 31, 2021 compared to the same period last year. During the three
months ended July 31, 2021, the relatively stronger growth in the Americas and
Europe is partially due to last year's weakened sales when many of our customers
closed their sites or reduced their operating capacity in response to the
COVID-19 pandemic.

Geographically, revenue increased 15 percent in the Americas with no currency
impact, increased 17 percent in Europe with an 8 percentage point favorable
currency impact and increased 20 percent in Asia Pacific with a 5 percentage
point favorable currency impact for the nine months ended July 31, 2021 compared
to the same period last year. During the nine months ended July 31, 2021, the
solid growth across the regions reflected consistently high demand for products
and services across the entire product portfolio and end markets. Revenue growth
also reflected last year's weakened sales when many of our customers closed
their sites or reduced their operating capacity in response to the COVID-19
pandemic.

For the three and nine months ended July 31, 2021, the Agilent CrossLab business
continued to see exceptional growth from the pharmaceutical market and the food
market despite the strong performance set by those two markets during the same
period last year. The growth in the chemical and energy markets has accelerated
in recent quarters, with a portion of that growth being attributable to the
severe contraction that this market experienced during the overall business
environment at the beginning of the COVID-19 pandemic last year.

Looking forward, the Agilent CrossLab products and services are well positioned
to continue their success in our key end markets and with a growing installed
base of instruments to support. We have been taking advantage of digital and
remote capabilities to offer services and consumables to customers and will
continue to do so. Geographically, the business is well diversified across all
regions to take advantage of local market opportunities and to hedge against
weakness in any one region.

Operating Results

                                                Three Months Ended                      Nine Months Ended                        Year over Year Change
                                                     July 31,                                July 31,                       Three                      Nine
                                             2021                  2020              2021                 2020             Months                     Months
(in millions, except margin data)
Gross margin                                 52.5   %              52.6  %           51.9   %             52.3  %             -                         -
Research and development                 $     15$   14$     45$   43               6%                         5%
Selling, general and
administrative                           $    115$   98$    354$  307               17%                       15%
Operating margin                             29.3   %              28.4  %           27.4   %             27.0  %           1 ppt                       -
Income from operations                   $    164$  132$    447$  373               24%                       20%



Gross margin for products and services for both the three and nine months ended
July 31, 2021 were flat when compared to the same periods last year. Higher
volumes and targeted price increases did help elevate margins, but those
benefits were offset by higher service delivery costs, higher variable pay and
higher hedging losses.

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Research and development expenses for the three and nine months ended July 31,
2021 increased 6 percent and 5 percent, respectively, when compared to the same
periods last year. Research and development investment within the Agilent
CrossLab business increased due to higher wages and a continued focus on digital
service offerings.

Selling, general and administrative expenses for the three months ended July 31,
2021 increased 17 percent when compared to the same period last year due to
higher wages, sales commissions, share-based compensation expense, and marketing
program expense. Selling, general and administrative expenses for the nine
months ended July 31, 2021 increased 15 percent when compared to the same period
last year due to higher wages and variable pay, sales commissions, share-based
compensation expense and marketing program expense.

Operating margin for products and services for the three months ended July 31,
2021 increased 1 percentage point when compared to the same period last year
mostly driven by higher sales volume. Operating margin for products and services
for the nine months ended July 31, 2021 was flat compared to the same period
last year due to higher sales volume offset by higher wages and variable pay,
higher service delivery costs and hedging losses.

Income from operations for the three and nine months ended July 31, 2021 increased $32 million or 24 percent and $74 million or 20 percent, respectively, on a corresponding revenue increase of $97 million and $246 million, respectively. Income from operations for the three and nine months ended July 31, 2021 increased primarily due to higher sales.

FINANCIAL CONDITION

Liquidity and Capital Resources


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, stock repurchases, cash dividends,
contractual obligations, commitments, principal and interest payments on debt,
and other liquidity requirements associated with our operations.

Economic stimulus legislation was passed in many countries in response to
COVID-19. In March 2020 in the U.S., the Coronavirus Aid, Relief, and Economic
Security Act ("CARES Act") was enacted to provide for tax relief and government
loans, subsidies and other relief for entities in affected industries. In March
2021 in the U.S., the American Rescue Plan Act ("ARP Act") was enacted. The ARP
Act strengthens and extends certain federal programs enacted through the CARES
Act and other COVID-19 relief measures and establishes new federal programs. As
of July 31, 2021, the CARES Act, the ARP Act and other government benefits
outside the U.S. did not have a material impact on our condensed consolidated
financial statements and related disclosures.
Our financial position as of July 31, 2021 consisted of cash and cash
equivalents of $1,428 million as compared to $1,441 million as of October 31,
2020.

As of July 31, 2021, $1,388 million of our cash and cash equivalents was held
outside of the U.S. by our foreign subsidiaries and can be repatriated to the
U.S. as local working capital and other regulatory conditions permit. We utilize
a variety of funding strategies to ensure that our worldwide cash is available
in the locations in which it is needed.

We may, from time to time, retire certain outstanding debt of ours through open
market cash purchases, privately-negotiated transactions or otherwise. Such
transactions, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors.

Net Cash Provided by Operating Activities


Net cash inflow from operating activities was $1,044 million for the nine months
ended July 31, 2021 compared to cash inflow of $544 million for the same period
in 2020. Net cash paid for income taxes in the nine months ended July 31, 2021
was approximately $164 million compared to income taxes paid of $325 million
which included a one-time payment of $226 million related to the transfer of
intellectual property in the prior year. For the nine months ended July 31,
2021, deferred tax cash inflows were $41 million compared to cash outflows of $1
million in the prior year. For the nine months ended July 31, 2021 there was a
net unrealized gain on the fair value of equity investments of $19 million
compared to $26 million in 2020. For the nine months ended July 31, 2021, there
was an asset impairment charge of $2 million compared to an asset impairment
charge of $99 million which was related to the closure of a business in our
diagnostics and genomics group. For the nine
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months ended July 31, 2021, other assets and liabilities had cash outflow of $12
million compared to cash outflow of $192 million for the same period in 2020.
Cash outflow in the nine months ended July 31, 2021 compared to the nine months
ended July 31, 2020 was largely the result of lower income tax payments and
pension contributions in 2021.

In the nine months ended July 31, 2021, accounts receivable used cash of $69
million compared to cash provided of $1 million for the same period in
2020. Days' sales outstanding as of July 31, 2021 and 2020 was 64 days and 66
days, respectively. Cash used for inventory was $115 million for the nine months
ended July 31, 2021 compared to cash used of $86 million for the same period in
2020. Inventory days on-hand was 100 days as of July 31, 2021 compared to 113
days as of July 31, 2020 mainly due to higher sales. In the nine months ended
July 31, 2021, accounts payable provided cash of $46 million compared to cash
used of $35 million for the same period in 2020. The change in the employee
compensation and benefits liability was $38 million for the nine months ended
July 31, 2021 compared to cash used of $32 million for the same period in 2020.
This was largely due to an increase in the vacation liability and variable and
incentive pay liability. In the nine months ended July 31, 2021 and 2020 we paid
approximately $119 million and $79 million, respectively, under our variable and
incentive pay programs. Beginning in fiscal year 2020, all of our variable and
incentive pay programs changed to be paid annually versus semi-annually in the
prior years. The amount paid in the nine months ended July 31, 2021 for our
variable and incentive pay programs reflects an annual payment versus a
semi-annual payment in 2020.
We contributed approximately $16 million and $28 million to our defined benefit
plans in both the nine months ended July 31, 2021 and 2020, respectively. Our
annual contributions are highly dependent on the relative performance of our
assets versus our projected liabilities, among other factors. We expect to
contribute approximately $6 million to our defined benefit plans during the
remainder of 2021.

Net Cash Used in Investing Activities


Net cash used in investing activities was $690 million for the nine months ended
July 31, 2021 as compared to net cash used in investing activities of $120
million in the same period of 2020. Investments in property, plant and equipment
were $126 million for the nine months ended July 31, 2021 compared to $92
million in the same period of 2020. We expect that total capital expenditures
for the current year will be approximately $200 million. Cash used to purchase
fair value investments for the nine months ended July 31, 2021 was $15 million
compared to $20 million in the same period in 2020. In the nine months ended
July 31, 2021, we invested $546 million in our acquisition of Resolution
Bioscience.

Net Cash Used in Financing Activities

Net cash used in financing activities for the nine months ended July 31, 2021 was $372 million compared to net cash used in financing activities of $448 million for the same period of 2020.

Treasury Stock Repurchases


On November 19, 2018 we announced that our board of directors had approved a
share repurchase program (the "2019 repurchase program") designed, among other
things, to reduce or eliminate dilution resulting from issuance of stock under
the company's employee equity incentive programs. The 2019 repurchase program
authorizes the purchase of up to $1.75 billion of our common stock at the
company's discretion and has no fixed termination date. The 2019 repurchase
program does not require the company to acquire a specific number of shares and
may be suspended, amended or discontinued at any time. During the three and nine
months ended July 31, 2020, we repurchased and retired approximately 362,000
shares for $33 million and 2.751 million shares for $219 million, respectively,
under this authorization. During the nine months ended July 31, 2021, we
repurchased and retired 3.050 million shares for $365 million under this
authorization. Effective February 18, 2021, the 2019 repurchase program was
terminated and replaced by the new share repurchase program. The remaining
authorization under the 2019 repurchase plan of $193 million expired on February
18, 2021.

On February 16, 2021 we announced that our board of directors had approved a new
share repurchase program (the "2021 repurchase program") designed, among other
things, to reduce or eliminate dilution resulting from issuance of stock under
the company's employee equity incentive programs. The 2021 repurchase program
authorizes the purchase of up to $2.0 billion of our common stock at the
company's discretion and has no fixed termination date. The 2021 repurchase
program which became effective on February 18, 2021, replaced and terminated the
2019 repurchase program on that date. The 2021 repurchase program does not
require the company to acquire a specific number of shares and may be suspended,
amended or discontinued at any time. During the three and nine months ended
July 31, 2021, we repurchased and retired 804,352 shares for $113 million and
2.192 million shares for $287 million, respectively, under this authorization.
As of July 31, 2021, we had remaining authorization to repurchase up to
approximately $1.713 billion of our common stock under the 2021 repurchase
program.
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Dividends


During the nine months ended July 31, 2021 and 2020, we paid cash dividends of
$0.582 per common share or $177 million, and $0.540 per common share or $167
million, respectively, on the company's common stock. The timing and amounts of
any future dividends are subject to determination and approval by our board of
directors.

Credit Facilities and Short-Term Debt


On March 13, 2019, we entered into a credit agreement with a group of financial
institutions which, as amended, provided for a $1 billion five-year unsecured
credit facility that will expire on March 13, 2024 and incremental term loan
facilities in an aggregate amount of up to $500 million. On April 21, 2021, we
entered into an incremental assumption agreement, pursuant to which the
aggregate amount available for borrowing under the revolving credit facility was
increased to $1.35 billion and the aggregate amount available for incremental
facilities was refreshed to remain at $500 million. As of July 31, 2021, we had
no borrowings outstanding under the credit facility and no borrowings under the
incremental facilities. We were in compliance with the covenants for the credit
facility during the nine months ended July 31, 2021.

Commercial Paper


In May 2020, we established a U.S. commercial paper program, under which the
company may issue and sell unsecured, short-term promissory notes in the
aggregate principal amount not to exceed $1.0 billion with up to 397-day
maturities. In June 2021, we increased the authorized maximum amount of notes
that may be outstanding to $1.35 billion. At any point in time, the company
intends to maintain available commitments under its revolving credit facility in
an amount at least equal to the amount of the commercial paper notes
outstanding. Amounts available under the program may be borrowed, repaid and
re-borrowed from time to time. The proceeds from issuances under the program may
be used for general corporate purposes. As of July 31, 2021, borrowings of
$130 million were outstanding under our U.S. commercial paper program and had a
weighted average annual interest rate of 0.17 percent and a weighted average
remaining maturity of approximately four days.

Long-Term Debt

2022 Senior Notes


On September 13, 2012, the company issued an aggregate principal amount of
$400 million in senior notes ("2022 senior notes"). The 2022 senior notes were
issued at 99.80% of their principal amount. The notes will mature on October 1,
2022, and bear interest at a fixed rate of 3.20% per annum. The interest is
payable semi-annually on April 1st and October 1st of each year and payments
commenced on April 1, 2013.

On January 21, 2021, we redeemed $100 million of the $400 million outstanding
aggregate principal amount of our 2022 senior notes due October 1, 2022. On
April 5, 2021, we redeemed the remaining outstanding $300 million of our 2022
senior notes. The redemption price of approximately $417 million was computed in
accordance with the terms of the 2022 senior notes as the present value of the
remaining scheduled payments of principal and unpaid interest on the notes being
redeemed. During the nine months ended July 31, 2021, we recorded a loss on
extinguishment of debt of $17 million in other income (expense), net in the
condensed consolidated statement of operations. In addition, $1 million of
accrued interest, up to but not including the applicable redemption date, was
paid. The make-whole premium less partial amortization of previously deferred
interest rate swap gain together with the amortization of debt issuance costs
and discount was recorded in other income (expense), net in the condensed
consolidated statement of operations.

2031 Senior Notes


On March 12, 2021, we issued an aggregate principal amount of $850 million in
senior notes ("2031 senior notes"). The 2031 senior notes were issued at 99.822%
of their principal amount. The 2031 senior notes will mature on March 12, 2031,
and bear interest at a fixed rate of 2.30% per annum. The interest is payable
semi-annually on March 12th and September 12th of each year and payments
commence on September 12, 2021.

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Other than the full redemption of the 2022 senior notes and issuance of the 2031
senior notes, there have been no other changes to the principal, maturity,
interest rates and interest payment terms of the Agilent outstanding senior
notes in the nine months ended July 31, 2021 as compared to the senior notes as
described in our Annual Report on Form 10-K for the fiscal year ended
October 31, 2020.

Other


Our commitments to contract manufacturers and suppliers increased by
$195 million from $557 million as reported in our Annual Report on Form 10-K for
the fiscal year ended October 31, 2020. These commitments are related to a
variety of suppliers, and we use several contract manufacturers to provide
manufacturing services for our products. During the normal course of business,
we issue purchase orders with estimates of our requirements several months ahead
of the delivery dates. These open purchase orders with our suppliers have not
yet been received and our agreements usually provide us the option to cancel,
reschedule and adjust our requirements based on our business needs prior to the
firm orders being placed. There were no other substantial changes from our
Annual Report on Form 10-K for the fiscal year ended October 31, 2020 to our
contractual commitments in the first nine months of fiscal 2021. We have no
other material non-cancelable guarantees or commitments.

Other long-term liabilities as of July 31, 2021 and October 31, 2020 include
$307 million and $323 million, respectively, related to long-term income tax
liabilities. Of these amounts, $183 million and $199 million related to
uncertain tax positions as of July 31, 2021 and October 31, 2020,
respectively. We are unable to accurately predict when these amounts will be
realized or released. However, it is reasonably possible that there could be
significant changes to our unrecognized tax benefits in the next twelve months
due to either the expiration of a statute of limitations or a tax audit
settlement. The remaining $124 million in other long-term liabilities relates to
the one-time transition tax payable.

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10/14VC DAILY : Sprinter Health Collects $33 Million to Join Home-Healthcare Race
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10/13AGILENT TECHNOLOGIES : Eli Lilly Get FDA's OK for Assay to Identify Early Breast Cancer
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10/13AGILENT TECHNOLOGIES : Receives FDA Companion Diagnostic Approval for Ki-67 IHC MIB-1 phar..
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10/13Agilent Receives FDA Companion Diagnostic Approval for Ki-67 IHC MIB-1 pharmDx in High-..
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10/12Akadeum Life Sciences, Inc. announced that it has received $17.5 million in funding fro..
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10/04AGILENT TECHNOLOGIES, INC. : Ex-dividend day for
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09/28AGILENT TECHNOLOGIES : Announces Thought Leader Award to Bernhard Lendl at the TU Wien (Vi..
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09/24AGILENT TECHNOLOGIES : Dr. Mikael Dolsten Named to Agilent Board of Directors, Pfizer exec..
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09/23AGILENT TECHNOLOGIES : Pfizer executive brings strong scientific and medical expertise to ..
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09/23AGILENT TECHNOLOGIES, INC. : Change in Directors or Principal Officers, Regulation FD Disc..
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