SHARE-BASED COMPENSATION
 6 Months Ended
Apr. 30, 2017
Share-based Compensation [Abstract]  
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION
Keysight accounts for share-based awards in accordance with the provisions of the authoritative accounting guidance, which requires the measurement and recognition of compensation expense for all share-based payment awards made to our employees and directors, including employee stock option awards, restricted stock units ("RSUs"), employee stock purchases made under our Employee Stock Purchase Plan (“ESPP”) and performance share awards granted to selected members of our senior management under the Long-Term Performance (“LTP”) Program based on estimated fair values. 
The impact of share-based compensation on our results was as follows:

Three Months Ended
 
Six Months Ended

April 30,
 
April 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
Cost of products and services
$
3

 
$
4

 
$
6

 
$
7

Research and development
2

 
2

 
6

 
5

Selling, general and administrative
8

 
7

 
19

 
17

Total share-based compensation expense
$
13

 
$
13

 
$
31

 
$
29

 At April 30, 2017 and 2016, there was no share-based compensation capitalized within inventory. For the three and six months ended April 30, 2017, the income tax benefit realized from the exercised stock options and similar awards recognized was zero and $2 million, respectively. For the three and six months ended April 30, 2016, the income tax deficiency realized from the exercised stock options and similar awards was $1 million and zero million, respectively.
The following assumptions were used to estimate the fair value of LTP Program grants.
 
Three Months Ended
 
Six Months Ended
 
April 30,
 
April 30,
 
2017
 
2016
 
2017
 
2016
LTP Program:
 
 
 
 
 
 
 
Volatility of Keysight shares
26
%
 
25
%
 
27
%
 
25
%
Volatility of selected index (2017)/peer-company shares (2016)
15
%
 
14%-54%

 
15
%
 
14%-54%

Price-wise correlation with selected peers
57
%
 
38
%
 
57
%
 
38
%
 Shares granted under the LTP Program were valued using a Monte Carlo simulation model. In the first quarter of fiscal 2017, the company began awarding an additional type of performance award based on operating margin performance. These awards were valued based on the market price of Keysight’s common stock on the date of grant. The fair value of employee stock option awards granted before October 31, 2015 was estimated using the Black-Scholes option pricing model. We did not grant any option awards for the three and six months ended April 30, 2017 and 2016. Both the Black-Scholes and Monte Carlo simulation fair value models require the use of highly subjective and complex assumptions, including the option’s expected life and the price volatility of the underlying stock. The estimated fair value of restricted stock awards is determined based on the market price of Keysight’s common stock on the date of grant.