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SEGMENT INFORMATION | 12 Months Ended
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Oct. 31, 2019
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION We provide electronic design and test instruments and systems and related software, software design tools, and related services that are used in the design, development, manufacture, installation, deployment and operation of electronics equipment. Related services include start-up assistance, instrument productivity and application services and instrument calibration and repair. Additionally, we provide test, security and visibility solutions that validate, secure and optimize networks and applications from engineering concept to live deployment. We also offer customization, consulting and optimization services throughout the customer's product life cycle. In 2019 we completed an organizational change to align our services business with our customer-solutions-oriented, go-to-market strategy as reflected by our Keysight Leadership Model ("KLM"). This change was made to fully reflect our services delivery within the markets served and further enable the growth of our services solutions portfolio. Prior period segment results were revised to conform to the presentation. As a result, Keysight has three segments: Communications Solutions Group, Electronic Industrial Solutions Group and Ixia Solutions Group. The organizational structure continues to include centralized enterprise functions that provide support across the groups. To more effectively and efficiently address customer solution needs across the communications ecosystem as the network transforms, in the first quarter of fiscal 2020, we completed an organizational change to manage our Ixia Solutions Group within our Communications Solutions Group. We believe this realignment will create improved go-to-market and product development alignment, as well as accelerate solution synergies in 5G as this new technology is deployed globally. As a result, beginning with our first quarter of fiscal 2020, we will have two reportable operating segments, Communications Solutions Group (“CSG”) and Electronic Industrial Solutions Group (“EISG”). 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 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 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 consumer electronics, education, general electronics design and manufacturing, and semiconductor design and manufacturing. The group provides electronic design and test software, instruments and systems and related services used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The Ixia Solutions Group helps customers design, validate and optimize the performance and security resilience of their networks and associated components and applications. Network test, network visibility and security solutions help organizations and their customers strengthen their physical and virtual networks. The group’s solutions consist of software applications and services, including warranty and maintenance offerings, and high-performance hardware platforms. 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 use resources. These expenses, collectively called corporate charges, include 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 considered to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. 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. The profitability of each of the segments is measured after excluding share-based compensation expense, restructuring and related costs, amortization of acquisition-related balances, acquisition and integration costs, acquisition-related compensation expense, separation and related costs, pension curtailment and settlement loss (gain), northern California wildfire-related costs, goodwill impairment, legal settlement, gain on divestitures, 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)
Year ended October 31, 2019: |  |  |  |  |  |  |
Total net revenue | $ | 2,688 |  |  | $ | 1,135 |  |  | $ | 480 |  |  | $ | 4,303 |
Amortization of acquisition-related balances | — |  |  | — |  |  | 9 |  |  | 9 |
Total segment revenue | $ | 2,688 |  |  | $ | 1,135 |  |  | $ | 489 |  |  | $ | 4,312 |
Segment income from operations | $ | 714 |  |  | $ | 294 |  |  | $ | 29 |  |  | $ | 1,037 |
Depreciation expense | $ | 55 |  |  | $ | 22 |  |  | $ | 19 |  |  | $ | 96 |
Year ended October 31, 2018: |  |  |  |  |  |  |
Total net revenue | $ | 2,391 |  |  | $ | 1,071 |  |  | $ | 416 |  |  | $ | 3,878 |
Amortization of acquisition-related balances | 1 |  |  | — |  |  | 35 |  |  | 36 |
Total segment revenue | $ | 2,392 |  |  | $ | 1,071 |  |  | $ | 451 |  |  | $ | 3,914 |
Segment income from operations | $ | 474 |  |  | $ | 245 |  |  | $ | 16 |  |  | $ | 735 |
Depreciation expense | $ | 64 |  |  | $ | 23 |  |  | $ | 16 |  |  | $ | 103 |
Year ended October 31, 2017: |  |  |  |  |  |  |
Total net revenue | $ | 2,063 |  |  | $ | 929 |  |  | $ | 197 |  |  | $ | 3,189 |
Amortization of acquisition-related balances | 1 |  |  | — |  |  | $ | 59 |  |  | 60 |
Total segment revenue | $ | 2,064 |  |  | $ | 929 |  |  | $ | 256 |  |  | $ | 3,249 |
Segment income from operations | $ | 347 |  |  | $ | 209 |  |  | $ | 42 |  |  | $ | 598 |
Depreciation expense | $ | 62 |  |  | $ | 23 |  |  | $ | 7 |  |  | $ | 92 |
The following table reconciles reportable segments' income from operations to our total enterprise income before taxes:
| Year Ended October 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Total reportable segments' income from operations | $ | 1,037 |  |  | $ | 735 |  |  | $ | 598 |
Share-based compensation expense | (82 | ) |  | (59 | ) |  | (56 | )
Restructuring and related costs | (9 | ) |  | (17 | ) |  | (11 | )
Amortization of acquisition-related balances | (224 | ) |  | (265 | ) |  | (256 | )
Acquisition and integration costs | (9 | ) |  | (49 | ) |  | (57 | )
Acquisition-related compensation expense | — |  |  | — |  |  | (28 | )
Separation and related costs | — |  |  | (2 | ) |  | (20 | )
Northern California wildfire-related costs | — |  |  | (7 | ) |  | (16 | )
Goodwill impairment | — |  |  | (709 | ) |  | — |
Legal settlement | — |  |  | (25 | ) |  | — |
Gain on divestitures | 1 |  |  | 20 |  |  | — |
Other | (3 | ) |  | (16 | ) |  | (6 | )
Income (loss) from operations, as reported | 711 |  |  | (394 | ) |  | 148 |
Interest income | 23 |  |  | 12 |  |  | 7 |
Interest expense | (80 | ) |  | (83 | ) |  | (80 | )
Other income (expense), net | 61 |  |  | 54 |  |  | 104 |
Income (loss) before taxes, as reported | $ | 715 |  |  | $ | (411 | ) |  | $ | 179 |
Major customers. No customer represented 10 percent or more of our total net revenue in 2019, 2018 or 2017. The following table presents assets and capital expenditures directly managed by each segment. Unallocated assets primarily consist of cash and cash equivalents, prepaid expenses, investments, long-term and other receivables and other assets.
| Communications Solutions Group |  | Electronic Industrial Solutions Group |  | Ixia Solutions Group |  | Total Segments
| (in millions)
As of and for the year ended October 31, 2019: |  |  |  |  |  |  |
Assets | $ | 2,267 |  |  | $ | 928 |  |  | $ | 1,404 |  |  | $ | 4,599 |
Capital expenditures | $ | 71 |  |  | $ | 29 |  |  | $ | 20 |  |  | $ | 120 |
As of and for the year ended October 31, 2018: |  |  |  |  |  |  |
Assets | $ | 2,115 |  |  | $ | 888 |  |  | $ | 1,327 |  |  | $ | 4,330 |
Capital expenditures | $ | 90 |  |  | $ | 32 |  |  | $ | 10 |  |  | $ | 132 |
The following table reconciles segment assets to our total assets:
| October 31,
| 2019 |  | 2018
| (in millions)
Total reportable segments' assets | $ | 4,599 |  |  | $ | 4,330 |
Cash and cash equivalents | 1,598 |  |  | 913 |
Prepaid expenses | 130 |  |  | 106 |
Other current assets | 3 |  |  | 9 |
Investments | 46 |  |  | 46 |
Long-term and other receivables | 94 |  |  | 118 |
Other | 153 |  |  | 302 |
Total assets | $ | 6,623 |  |  | $ | 5,824 |
The other category primarily includes pension assets and also represents the difference between how segments report deferred taxes and intangible assets at the initial purchased amount. The following table presents summarized information for net revenue and long-lived assets by geographic region. Revenues from external customers are generally attributed to countries based upon the location of the Keysight sales representative. Long lived assets consist of property, plant, and equipment, long-term receivables and other long-term assets excluding intangible assets. The rest of the world primarily consists of rest of Asia and Europe.
| United States |  | China |  | Japan |  | Rest of the World |  | Total
| (in millions)
Net revenue: |  |  |  |  |  |  |  |  |
Year ended October 31, 2019 | $ | 1,584 |  |  | $ | 822 |  |  | $ | 389 |  |  | $ | 1,508 |  |  | $ | 4,303 |
Year ended October 31, 2018 | $ | 1,398 |  |  | $ | 710 |  |  | $ | 342 |  |  | $ | 1,428 |  |  | $ | 3,878 |
Year ended October 31, 2017 | $ | 1,054 |  |  | $ | 608 |  |  | $ | 338 |  |  | $ | 1,189 |  |  | $ | 3,189 |
| United States |  | Japan |  | Malaysia |  | UK | Rest of the World |  | Total
| (in millions)
Long-lived assets: |  |  |  |  |  |  |  |  |  |
October 31, 2019 | $ | 314 |  |  | $ | 245 |  |  | $ | 75 |  |  | $ | 177 |  | $ | 129 |  |  | $ | 940 |
October 31, 2018 | $ | 310 |  |  | $ | 222 |  |  | $ | 72 |  |  | $ | 145 |  | $ | 121 |  |  | $ | 870 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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