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SEGMENT INFORMATION (Notes) | 9 Months Ended
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Jul. 31, 2024
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. In the first quarter of fiscal year 2024, we announced a change in our operating segments to move our cell analysis business from our life sciences and applied markets segment to our diagnostics and genomics operating segment in order to further strengthen growth opportunities for both organizations. All historical financial segment information has been recast to conform to this new presentation. There was no change to our Agilent CrossLab business segment. Following this reorganization, we continue to have three business segments comprised of life sciences and applied markets, diagnostics and genomics and Agilent CrossLab, each of which continues to comprise 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; 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 seven 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 cell analysis business includes instruments, reagents, software, and labware associated with unique live-cell analysis platforms in addition to mainstream flow cytometers, plate-readers, and plate washers/dispensers which are used across a broad range of applications. 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. Sixth, our genomics business includes arrays and next generation sequencing ("NGS"). This business also includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy. 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 includes 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 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, 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 amortization of acquisition-related intangible assets, asset impairments, acquisition and integration costs, transformational initiatives expenses, restructuring and other related costs and certain other charges to the operating margin for each segment because management does not include this information in its measurement of the performance of the operating segments. 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 following tables reflect the results of our reportable segments under our management reporting system. 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 profitability of each of the segments is measured after excluding items such as transformational initiatives, acquisition and integration costs, amortization of intangible assets related to business combinations, interest income, interest expense and other items as noted in the reconciliations below:
| Three Months Ended |  | Nine Months Ended
| July 31, |  | July 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
| (in millions)
Net Revenue: |  |  |  |  |  |  |
Life Sciences and Applied Markets | $ | 782 |  |  | $ | 854 |  |  | $ | 2,382 |  |  | $ | 2,671 |
Diagnostics and Genomics | 385 |  |  | 422 |  |  | 1,209 |  |  | 1,310 |
Agilent CrossLab | 411 |  |  | 396 |  |  | 1,218 |  |  | 1,164 |
Total net revenue | $ | 1,578 |  |  | $ | 1,672 |  |  | $ | 4,809 |  |  | $ | 5,145 |
Segment Income From Operations: |  |  |  |  |  |  |
Life Sciences and Applied Markets | $ | 222 |  |  | $ | 265 |  |  | $ | 644 |  |  | $ | 809 |
Diagnostics and Genomics | 70 |  |  | 96 |  |  | 226 |  |  | 262 |
Agilent CrossLab | 140 |  |  | 129 |  |  | 385 |  |  | 335 |
Total segment income from operations | $ | 432 |  |  | $ | 490 |  |  | $ | 1,255 |  |  | $ | 1,406 |
The following table reconciles segment income from operations to Agilent’s total enterprise income before taxes:
| Three Months Ended |  | Nine Months Ended
| July 31, |  | July 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
| (in millions)
Total segment income from operations | $ | 432 |  |  | $ | 490 |  |  | $ | 1,255 |  |  | $ | 1,406 |
Unallocated costs: |  |  |  |  |  |  |
Amortization of intangible assets related to business combinations | (25) |  |  | (38) |  |  | (77) |  |  | (112) |
Acquisition and integration costs | (4) |  |  | (5) |  |  | (5) |  |  | (12) |
Transformational initiatives | (1) |  |  | (19) |  |  | (5) |  |  | (31) |
Asset impairment | — |  |  | (277) |  |  | (8) |  |  | (277) |
Change in fair value of contingent consideration | — |  |  | — |  |  | — |  |  | (1) |
Restructuring and other related costs | (67) |  |  | — |  |  | (71) |  |  | — |
Other | (2) |  |  | (18) |  |  | (9) |  |  | (31) |
Total unallocated costs | (99) |  |  | (357) |  |  | (175) |  |  | (464) |
Income from operations | 333 |  |  | 133 |  |  | 1,080 |  |  | 942 |
Interest income | 19 |  |  | 13 |  |  | 56 |  |  | 34 |
Interest expense | (22) |  |  | (24) |  |  | (64) |  |  | (73) |
Other income (expense), net (1) | 13 |  |  | 10 |  |  | 48 |  |  | 16 |
Income before taxes, as reported | $ | 343 |  |  | $ | 132 |  |  | $ | 1,120 |  |  | $ | 919 |
(1) For the nine months ended July 31, 2024, other income (expense), net includes primarily income related to foreign currency translation reclassified out of accumulated comprehensive income (loss) and the defined benefit retirement and post-retirement benefit plans. The following table reflects segment and unallocated assets. Segment assets include allocations of corporate assets, goodwill, net other intangibles and other assets. Unallocated assets primarily consist of cash, cash equivalents, short-term and long-term investments, deferred tax assets, right-of-use assets and other assets.
| July 31, 2024 |  | October 31, 2023
| (in millions)
Assets: |  |  |
Life Sciences and Applied Markets | $ | 3,106 |  |  | $ | 3,161 |
Diagnostics and Genomics | 3,986 |  |  | 3,966 |
Agilent CrossLab | 916 |  |  | 897 |
Unallocated Assets | 2,988 |  |  | 2,739 |
Total assets | $ | 10,996 |  |  | $ | 10,763 |

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- Definition The entire disclosure for reporting segments including data and tables. 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