SEGMENT INFORMATION
12 Months Ended
Oct. 31, 2017
Segment Reporting [Abstract]  
SEGMENT INFORMATION
19.   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.
Agilent has three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business 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 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; laboratory software and informatics systems; laboratory automation; dissolution testing; vacuum pumps and measurement technologies.

Our diagnostics and genomics business is comprised of five areas of activity providing active pharmaceutical ngredients ("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 our new acquisition “Multiplicom” a leading European diagnostics company with state-of-the-art genetic testing technology and products. Multiplicom’s solutions 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 active pharmaceutical ingredients ("API") in an emerging class of drugs that utilize nucleic acid molecules for disease therapy. Next, our pathology solutions business is focused on product offerings to 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. We also collaborate with a number of major pharmaceutical companies to develop new potential pharmacodiagnostics, also known as companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Finally, the reagent partnership business is a provider of reagents used for turbidimetry and flow cytometry.

The Agilent CrossLab business spans the entire lab with its extensive consumables and services portfolio, which is designed to improve customer outcomes. The majority 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

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, other corporate infrastructure expenses and costs of centralized research and development. 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 and impairment of acquisition-related intangible assets, restructuring and transformational expenses, acquisition and integration 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.

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 restructuring and asset impairment charges, investment gains and losses, interest income, interest expense, acquisition and integration costs, non-cash amortization and other items as noted in the reconciliations below.
 
Life Sciences and Applied Markets
 
Diagnostics and Genomics
 
Agilent CrossLab
 
Total
Segments
 
(in millions)
Year ended October 31, 2017:
 
 
 
 
 
 
 
Total net revenue
$
2,169

 
$
772

 
$
1,531

 
$
4,472

Income from operations
$
487

 
$
149

 
$
338

 
$
974

Depreciation expense
$
35

 
$
30

 
$
29

 
$
94

Share-based compensation expense
$
30

 
$
10

 
$
21

 
$
61

Year ended October 31, 2016:
 
 
 
 
 
 
 
Total net revenue
$
2,073

 
$
709

 
$
1,420

 
$
4,202

Income from operations
$
429

 
$
114

 
$
316

 
$
859

Depreciation expense
$
36

 
$
31

 
$
28

 
$
95

Share-based compensation expense
$
29

 
$
10

 
$
21

 
$
60

Year ended October 31, 2015:
 
 
 
 
 
 
 
Total net revenue
$
2,046

 
$
662

 
$
1,330

 
$
4,038

Income from operations
$
380

 
$
88

 
$
299

 
$
767

Depreciation expense
$
27

 
$
37

 
$
34

 
$
98

Share-based compensation expense
$
27

 
$
9

 
$
18

 
$
54




The following table reconciles reportable segments' income from operations to Agilent's total enterprise income before taxes:

 
Years Ended October 31,
 
2017
 
2016
 
2015
 
(in millions)
Total reportable segments' income from operations
$
974

 
$
859

 
$
767

Business exit and divestiture costs ( primarily our NMR business)

 
(11
)
 
(12
)
Asset Impairments

 
(4
)
 
(3
)
Transformational initiatives
(12
)
 
(38
)
 
(56
)
Amortization of intangible assets related to business combinations
(117
)
 
(152
)
 
(156
)
Acquisition and integration costs
(30
)
 
(41
)
 
(13
)
Acceleration of share-based compensation expense related to workforce reduction

 

 
(2
)
Pension curtailment gain

 
15

 

Pension settlement gain
32

 
1

 

Impairment of loans

 
(7
)
 

Other
(6
)
 
(7
)
 
(3
)
Interest Income
22

 
11

 
7

Interest Expense
(79
)
 
(72
)
 
(66
)
Other income (expense), net
19

 
(10
)
 
17

Income from continuing operations before taxes, as reported
$
803

 
$
544

 
$
480



Major Customers.    No customer represented 10 percent or more of our total net revenue in 2017, 2016 or 2015.

The following table presents assets and capital expenditures attributed to each segment. Unallocated assets primarily consist of cash, cash equivalents, accumulated amortization of other intangibles and other assets.

 
Life Sciences and Applied Markets
 
Diagnostics and Genomics
 
Agilent CrossLab
 
Total
Segments
 
(in millions)
As of October 31, 2017:
 
 
 
 
 
 
 
Assets
$
1,753

 
$
2,119

 
$
1,138

 
$
5,010

Capital expenditures
$
39

 
$
111

 
$
26

 
$
176

As of October 31, 2016:
 
 
 
 
 
 
 
Assets
$
1,687

 
$
1,960

 
$
1,082

 
$
4,729

Capital expenditures
$
53

 
$
41

 
$
45

 
$
139


The following table reconciles segment assets to Agilent's total assets:

 
October 31,
 
2017
 
2016
 
(in millions)
Total reportable segments' assets
$
5,010

 
$
4,729

Cash, cash equivalents
2,678

 
2,289

Prepaid expenses
92

 
92

Investments
138

 
135

Long-term and other receivables
105

 
92

Other
403

 
457

Total assets
$
8,426

 
$
7,794



The other category primarily includes deferred tax assets which are not allocated to the segments.

The following table represents total revenue by product category:
 
Years Ended October 31,
 
2017
 
2016
 
2015
 
(in millions)
Instrumentation
$
1,946

 
$
1,871

 
$
1,827

Analytical lab services
991

 
910

 
843

Analytical lab consumables
540

 
510

 
489

Diagnostics and genomics solutions
772

 
709

 
662

Informatics and other
223

 
202

 
217

Total
$
4,472

 
$
4,202

 
$
4,038



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 customer's location. 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(1)
 
Rest of the
World
 
Total
 
(in millions)
Net revenue:
 
 
 
 
 
 
 
Year ended October 31, 2017
$
1,314

 
$
900

 
$
2,258

 
$
4,472

Year ended October 31, 2016
$
1,251

 
$
839

 
$
2,112

 
$
4,202

Year ended October 31, 2015
$
1,214

 
$
693

 
$
2,131

 
$
4,038

1.
China also includes Hong Kong net revenue. Prior periods have been revised to conform with current year presentation.

 
United
States
 
Germany
 
Rest of the
World
 
Total
 
(in millions)
Long-lived assets:
 
 
 
 
 
 
 
October 31, 2017
$
556

 
$
118

 
$
358

 
$
1,032

October 31, 2016
$
449

 
$
89

 
$
266

 
$
804