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SEGMENT INFORMATION | 6 Months Ended
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Apr. 30, 2019
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION We provide electronic design and test solutions, which 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 to customers 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, restructuring and related 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 April 30, 2019: |  |  |  |  |  |  |
Total net revenue | $ | 676 |  |  | $ | 299 |  |  | $ | 115 |  |  | $ | 1,090 |
Amortization of acquisition-related balances | — |  |  | — |  |  | 3 |  |  | 3 |
Total segment revenue | $ | 676 |  |  | $ | 299 |  |  | $ | 118 |  |  | $ | 1,093 |
Segment income from operations | $ | 187 |  |  | $ | 78 |  |  | $ | 3 |  |  | $ | 268 |
Three months ended April 30, 2018: |  |  |  |  |  |  |
Total net revenue | $ | 626 |  |  | $ | 282 |  |  | $ | 82 |  |  | $ | 990 |
Amortization of acquisition-related balances | 1 |  |  | — |  |  | 8 |  |  | 9 |
Total segment revenue | $ | 627 |  |  | $ | 282 |  |  | $ | 90 |  |  | $ | 999 |
Segment income (loss) from operations | $ | 132 |  |  | $ | 68 |  |  | $ | (10 | ) |  | $ | 190 |
| Communications Solutions Group |  | Electronic Industrial Solutions Group |  | Ixia Solutions Group |  | Total Segments
| (in millions)
Six months ended April 30, 2019: |  |  |  |  |  |  |
Total net revenue | $ | 1,299 |  |  | $ | 556 |  |  | $ | 241 |  |  | $ | 2,096 |
Amortization of acquisition-related balances | — |  |  | — |  |  | 6 |  |  | 6 |
Total segment revenue | $ | 1,299 |  |  | $ | 556 |  |  | $ | 247 |  |  | $ | 2,102 |
Segment income from operations | $ | 325 |  |  | $ | 132 |  |  | $ | 15 |  |  | $ | 472 |
Six months ended April 30, 2018: |  |  |  |  |  |  |
Total net revenue | $ | 1,126 |  |  | $ | 511 |  |  | $ | 190 |  |  | $ | 1,827 |
Amortization of acquisition-related balances | 1 |  |  | — |  |  | 27 |  |  | 28 |
Total segment revenue | $ | 1,127 |  |  | $ | 511 |  |  | $ | 217 |  |  | $ | 1,855 |
Segment income from operations | $ | 195 |  |  | $ | 106 |  |  | $ | 8 |  |  | $ | 309 |
The following table reconciles reportable operating segments’ income from operations to our total enterprise income before taxes:
| Three Months Ended |  | Six Months Ended
| April 30, |  | April 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (in millions)
Total reportable operating segments' income from operations | $ | 268 |  |  | $ | 190 |  |  | $ | 472 |  |  | $ | 309 |
Share-based compensation expense | (23 | ) |  | (15 | ) |  | (50 | ) |  | (34 | )
Amortization of acquisition-related balances | (54 | ) |  | (65 | ) |  | (108 | ) |  | (154 | )
Acquisition and integration costs | — |  |  | (17 | ) |  | (2 | ) |  | (36 | )
Restructuring and related costs | (6 | ) |  | (11 | ) |  | (6 | ) |  | (13 | )
Northern California wildfire-related costs | — |  |  | — |  |  | — |  |  | (7 | )
Other | — |  |  | 4 |  |  | — |  |  | 4 |
Income from operations, as reported | 185 |  |  | 86 |  |  | 306 |  |  | 69 |
Interest income | 6 |  |  | 2 |  |  | 10 |  |  | 5 |
Interest expense | (20 | ) |  | (21 | ) |  | (40 | ) |  | (43 | )
Other income (expense), net | 22 |  |  | 16 |  |  | 37 |  |  | 29 |
Income before taxes, as reported | $ | 193 |  |  | $ | 83 |  |  | $ | 313 |  |  | $ | 60 |
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 April 30, 2019 | $ | 2,126 |  |  | $ | 912 |  |  | $ | 1,403 |  |  | $ | 4,441 |
As of October 31, 2018 | $ | 2,115 |  |  | $ | 888 |  |  | $ | 1,327 |  |  | $ | 4,330 |

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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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