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SEGMENT INFORMATION | 12 Months Ended
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Oct. 31, 2023
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION Description of Segments. We are 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. We have three business segments comprised of life sciences and applied markets, diagnostics and genomics and Agilent CrossLab, each of which comprises a reportable segment. The three operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its 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. A description of our three reportable segments is as follows: Our life sciences and applied markets business provides application-focused solutions that include instruments, consumables 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. Our consumables portfolio 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 to supplies. Key product categories in consumables include GC and LC columns, sample preparation products, custom chemistries, and a large selection of laboratory instrument supplies. 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 is a contract and development manufacturing organization that provides services related to and the production of synthesized oligonucleotides under pharmaceutical good manufacturing practices ("GMP") conditions for use as API in a 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 pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Fifth, the reagent partnership business provides clinical flow cytometry reagents for routine cancer diagnostics. This business also provides bulk antibodies as raw materials and associated assay development services to IVD manufacturers, biotechnology and pharmaceutical companies. 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 including NGS, utilized in clinical and life science research applications. The Agilent CrossLab business spans the entire lab with its extensive services portfolio, which is designed to improve customer outcomes. The majority of the portfolio is vendor neutral, meaning we can serve and supply customers regardless of their instrument purchase choices. The services portfolio include repairs, parts, maintenance, installations, training, compliance support, software as a service, asset management, consulting and various other custom services to support the customers' laboratory operations. Custom services are tailored to meet the specific application needs of various industries and to keep instruments fully operational and compliant with the respective industry requirements. A significant portion of the segments' expenses arises 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, tax, real estate, insurance services, information technology services, treasury, order administration, other corporate infrastructure expenses, costs of centralized research and development and joint sales and marketing costs. 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. In addition, we do not allocate certain costs to the operating margin for each segment because management does not include this information in its measurement of the performance of the operating segments. Unallocated costs consist of asset impairments, amortization of acquisition-related intangible assets, acquisition and integration costs, changes in the fair value of acquisition-related contingent consideration, transformational initiatives expenses, restructuring and other related costs, business exit and divestiture costs and certain other charges. Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers, site consolidations, legal entity and other business reorganizations, in-sourcing or outsourcing of activities. The performance of each segment is measured based on several metrics, including segment 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 following tables reflect segment results under our management reporting system after excluding certain unallocated costs as noted in the reconciliations below:
| Years Ended October 31,
| 2023 |  | 2022 |  | 2021
| (in millions)
Net Revenue: |  |  |  |  |
Life Sciences and Applied Markets | $ | 3,856 |  |  | $ | 4,007 |  |  | $ | 3,663 |
Diagnostics and Genomics | 1,409 |  |  | 1,389 |  |  | 1,296 |
Agilent CrossLab | 1,568 |  |  | 1,452 |  |  | 1,360 |
Total net revenue | $ | 6,833 |  |  | $ | 6,848 |  |  | $ | 6,319 |
Income from Operations: |  |  |  |  |
Life Sciences and Applied Markets | $ | 1,116 |  |  | $ | 1,186 |  |  | $ | 1,017 |
Diagnostics and Genomics | 296 |  |  | 301 |  |  | 273 |
Agilent CrossLab | 463 |  |  | 370 |  |  | 323 |
Total reportable segment income from operations | 1,875 |  |  | 1,857 |  |  | 1,613 |
Share-Based Compensation Expense: |  |  |  |  |
Life Sciences and Applied Markets | $ | 66 |  |  | $ | 69 |  |  | $ | 60 |
Diagnostics and Genomics | 22 |  |  | 25 |  |  | 22 |
Agilent CrossLab | 24 |  |  | 26 |  |  | 24 |
Unallocated share-based compensation expenses (1) | — |  |  | 6 |  |  | 5 |
Total share-based compensation expense | $ | 112 |  |  | $ | 126 |  |  | $ | 111 |
Depreciation Expense: |  |  |  |  |
Life Sciences and Applied Markets | $ | 63 |  |  | $ | 59 |  |  | $ | 60 |
Diagnostics and Genomics | 40 |  |  | 39 |  |  | 39 |
Agilent CrossLab | 25 |  |  | 22 |  |  | 23 |
Total depreciation expense | $ | 128 |  |  | $ | 120 |  |  | $ | 122 |
(1) Share-based compensation expense amounts not allocated to the segments relate to accelerated share-based compensation expense from workforce reduction and from acquisition of businesses.
Segment assets include allocations of corporate assets, goodwill, net other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, prepaid expenses, long-term investments, deferred tax assets, right-of use assets and other assets.
The following table reflects segment assets and capital expenditures under our management reporting system.
|  | October 31,
|  | 2023 |  | 2022
|  | (in millions)
Assets: |  |  |  |
Life Sciences and Applied Markets |  | $ | 3,820 |  |  | $ | 3,955 |
Diagnostics and Genomics |  | 3,307 |  |  | 3,489 |
Agilent CrossLab |  | 897 |  |  | 869 |
Total reportable segment assets |  | $ | 8,024 |  |  | $ | 8,313 |
Capital Expenditures: |  |  |  |
Life Sciences and Applied Markets |  | $ | 70 |  |  | $ | 77 |
Diagnostics and Genomics |  | 206 |  |  | 181 |
Agilent CrossLab |  | 22 |  |  | 33 |
Total capital expenditures |  | $ | 298 |  |  | $ | 291 |
Major Customers. No customer represented 10 percent or more of our total net revenue in 2023, 2022 or 2021.
The following table reconciles reportable segments' income from operations to Agilent's total enterprise income before taxes:
| Years Ended October 31,
| 2023 |  | 2022 |  | 2021
| (in millions)
Total reportable segments' income from operations | $ | 1,875 |  |  | $ | 1,857 |  |  | $ | 1,613 |
Unallocated Costs |  |  |  |  |
Amortization of intangible assets related to business combinations | (139) |  |  | (191) |  |  | (194) |
Acquisition and integration costs | (16) |  |  | (25) |  |  | (41) |
Transformational initiatives | (25) |  |  | (30) |  |  | (37) |
Asset impairments | (277) |  |  | — |  |  | (2) |
Business exit and divestiture costs | — |  |  | (7) |  |  | (5) |
Change in fair value of contingent consideration | (1) |  |  | 25 |  |  | 21 |
Restructuring and other related costs | (46) |  |  | — |  |  | — |
Other | (21) |  |  | (11) |  |  | (8) |
Total unallocated costs | (525) |  |  | (239) |  |  | (266) |
Income from operations | 1,350 |  |  | 1,618 |  |  | 1,347 |
Interest income | 51 |  |  | 9 |  |  | 2 |
Interest expense | (95) |  |  | (84) |  |  | (81) |
Other income (expense, net | 33 |  |  | (39) |  |  | 92 |
Income before taxes | $ | 1,339 |  |  | $ | 1,504 |  |  | $ | 1,360 |
The following table reconciles segment assets to Agilent's total assets:
|  | October 31,
|  | 2023 |  | 2022
|  | (in millions)
Total reportable segments' assets |  | $ | 8,024 |  |  | $ | 8,313 |
Cash and cash equivalents |  | 1,590 |  |  | 1,053 |
Prepaid expenses |  | 139 |  |  | 119 |
Long-term investments |  | 164 |  |  | 195 |
Long-term and other receivables |  | 127 |  |  | 134 |
Deferred tax assets |  | 284 |  |  | 246 |
Right of use assets |  | 154 |  |  | 150 |
Others |  | 281 |  |  | 322 |
Total assets |  | $ | 10,763 |  |  | $ | 10,532 |
The other category primarily includes over funded pension plans which are not allocated to the segments. The following table presents summarized information for net revenue by geographic region. Revenues from external customers are generally attributed to countries based upon the customers' location.
| Years Ended October 31,
| 2023 |  | 2022 |  |  |  | 2021
| (in millions)
Net revenue: |  |  |  |  |  |  |
United States | $ | 2,410 |  |  | $ | 2,385 |  |  |  |  | $ | 2,159 |
China including Hong Kong | 1,383 |  |  | 1,499 |  |  |  |  | 1,273 |
Rest of the world | 3,040 |  |  | 2,964 |  |  |  |  | 2,887 |
Total net revenue | 6,833 |  |  | 6,848 |  |  |  |  | 6,319 |
The following table presents summarized information for long-lived assets by geographic region. Long lived assets consist of property, plant, and equipment, right-of-use assets, long-term receivables and other long-term assets excluding intangible assets. The rest of the world primarily consists of Asia and the rest of Europe.
| October 31,
| 2023 |  |  |  | 2022
| (in millions)
Long-lived Assets: |  |  |  |  |
United States | $ | 1,188 |  |  |  |  | $ | 1,080 |
Germany | 192 |  |  |  |  | 151 |
Rest of World | 471 |  |  |  |  | 492 |
Total Long-lived Assets | $ | 1,851 |  |  |  |  | $ | 1,723 |

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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