0001601046October 312021Q1false9100016010462020-11-012021-01-31xbrli:shares00016010462021-02-26iso4217:USD0001601046us-gaap:ProductMember2020-11-012021-01-310001601046us-gaap:ProductMember2019-11-012020-01-310001601046us-gaap:ServiceMember2020-11-012021-01-310001601046us-gaap:ServiceMember2019-11-012020-01-3100016010462019-11-012020-01-310001601046us-gaap:RetainedEarningsMember2020-11-012021-01-310001601046us-gaap:RetainedEarningsMember2019-11-012020-01-31iso4217:USDxbrli:shares00016010462021-01-3100016010462020-10-3100016010462019-10-3100016010462020-01-310001601046us-gaap:CommonStockMember2020-10-310001601046us-gaap:AdditionalPaidInCapitalMember2020-10-310001601046us-gaap:TreasuryStockMember2020-10-310001601046us-gaap:RetainedEarningsMember2020-10-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-10-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-11-012021-01-310001601046us-gaap:CommonStockMember2020-11-012021-01-310001601046us-gaap:AdditionalPaidInCapitalMember2020-11-012021-01-310001601046us-gaap:TreasuryStockMember2020-11-012021-01-310001601046us-gaap:CommonStockMember2021-01-310001601046us-gaap:AdditionalPaidInCapitalMember2021-01-310001601046us-gaap:TreasuryStockMember2021-01-310001601046us-gaap:RetainedEarningsMember2021-01-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-01-310001601046us-gaap:CommonStockMember2019-10-310001601046us-gaap:AdditionalPaidInCapitalMember2019-10-310001601046us-gaap:TreasuryStockMember2019-10-310001601046us-gaap:RetainedEarningsMember2019-10-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2019-10-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2019-11-012020-01-310001601046us-gaap:CommonStockMember2019-11-012020-01-310001601046us-gaap:AdditionalPaidInCapitalMember2019-11-012020-01-310001601046us-gaap:TreasuryStockMember2019-11-012020-01-310001601046us-gaap:CommonStockMember2020-01-310001601046us-gaap:AdditionalPaidInCapitalMember2020-01-310001601046us-gaap:TreasuryStockMember2020-01-310001601046us-gaap:RetainedEarningsMember2020-01-310001601046us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-01-310001601046srt:AmericasMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:AmericasMember2020-11-012021-01-310001601046srt:AmericasMember2020-11-012021-01-310001601046srt:AmericasMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:AmericasMember2019-11-012020-01-310001601046srt:AmericasMember2019-11-012020-01-310001601046srt:EuropeMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:EuropeMember2020-11-012021-01-310001601046srt:EuropeMember2020-11-012021-01-310001601046srt:EuropeMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:EuropeMember2019-11-012020-01-310001601046srt:EuropeMember2019-11-012020-01-310001601046srt:AsiaPacificMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:AsiaPacificMember2020-11-012021-01-310001601046srt:AsiaPacificMember2020-11-012021-01-310001601046srt:AsiaPacificMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMembersrt:AsiaPacificMember2019-11-012020-01-310001601046srt:AsiaPacificMember2019-11-012020-01-310001601046keys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMember2020-11-012021-01-310001601046keys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMember2019-11-012020-01-310001601046keys:AerospacedefenseandgovernmentMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:AerospacedefenseandgovernmentMember2020-11-012021-01-310001601046keys:AerospacedefenseandgovernmentMember2020-11-012021-01-310001601046keys:AerospacedefenseandgovernmentMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:AerospacedefenseandgovernmentMember2019-11-012020-01-310001601046keys:AerospacedefenseandgovernmentMember2019-11-012020-01-310001601046keys:CommercialCommunicationsMemberMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:CommercialCommunicationsMemberMember2020-11-012021-01-310001601046keys:CommercialCommunicationsMemberMember2020-11-012021-01-310001601046keys:CommercialCommunicationsMemberMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:CommercialCommunicationsMemberMember2019-11-012020-01-310001601046keys:CommercialCommunicationsMemberMember2019-11-012020-01-310001601046keys:ElectronicindustrialMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:ElectronicindustrialMember2020-11-012021-01-310001601046keys:ElectronicindustrialMember2020-11-012021-01-310001601046keys:ElectronicindustrialMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberkeys:ElectronicindustrialMember2019-11-012020-01-310001601046keys:ElectronicindustrialMember2019-11-012020-01-310001601046us-gaap:TransferredAtPointInTimeMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberus-gaap:TransferredAtPointInTimeMember2020-11-012021-01-310001601046us-gaap:TransferredAtPointInTimeMember2020-11-012021-01-310001601046us-gaap:TransferredAtPointInTimeMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberus-gaap:TransferredAtPointInTimeMember2019-11-012020-01-310001601046us-gaap:TransferredAtPointInTimeMember2019-11-012020-01-310001601046us-gaap:TransferredOverTimeMemberkeys:CommunicationsSolutionsGroupMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberus-gaap:TransferredOverTimeMember2020-11-012021-01-310001601046us-gaap:TransferredOverTimeMember2020-11-012021-01-310001601046us-gaap:TransferredOverTimeMemberkeys:CommunicationsSolutionsGroupMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberus-gaap:TransferredOverTimeMember2019-11-012020-01-310001601046us-gaap:TransferredOverTimeMember2019-11-012020-01-310001601046us-gaap:AccountsReceivableMember2021-01-310001601046us-gaap:AccountsReceivableMember2020-10-31xbrli:pure00016010462021-02-012021-01-3100016010462021-11-012021-01-3100016010462022-11-012021-01-310001601046us-gaap:CostOfSalesMember2020-11-012021-01-310001601046us-gaap:CostOfSalesMember2019-11-012020-01-310001601046us-gaap:ResearchAndDevelopmentExpenseMember2020-11-012021-01-310001601046us-gaap:ResearchAndDevelopmentExpenseMember2019-11-012020-01-310001601046us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-11-012021-01-310001601046us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-11-012020-01-310001601046keys:LtppMember2020-11-012021-01-310001601046keys:LtppMember2019-11-012020-01-310001601046us-gaap:InternalRevenueServiceIRSMember2020-11-012021-01-310001601046keys:MalaysiaTaxAuthorityMember2020-11-012021-01-310001601046keys:MalaysiaTaxAuthorityMember2018-02-012018-04-300001601046us-gaap:EmployeeStockOptionMember2019-11-012020-01-310001601046us-gaap:EmployeeStockOptionMember2020-11-012021-01-310001601046keys:StockOptionsLtppAndRestrictedStockCombinedExercisePriceUnamortizedFairValueExcessTaxBenefitsOrShortfallsGreaterThanAverageMarketPriceMemberMember2019-11-012020-01-310001601046us-gaap:OtherCurrentAssetsMember2021-01-310001601046us-gaap:OtherCurrentAssetsMember2020-10-310001601046us-gaap:OtherAssetsMember2021-01-310001601046us-gaap:OtherAssetsMember2020-10-310001601046keys:CommunicationsSolutionsGroupMemberMember2020-10-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMember2020-10-310001601046keys:CommunicationsSolutionsGroupMemberMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMember2020-11-012021-01-310001601046keys:CommunicationsSolutionsGroupMemberMember2021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMember2021-01-310001601046us-gaap:DevelopedTechnologyRightsMember2021-01-310001601046us-gaap:DevelopedTechnologyRightsMember2020-10-310001601046us-gaap:OrderOrProductionBacklogMember2021-01-310001601046us-gaap:OrderOrProductionBacklogMember2020-10-310001601046us-gaap:TrademarksMember2021-01-310001601046us-gaap:TrademarksMember2020-10-310001601046us-gaap:CustomerRelationshipsMember2021-01-310001601046us-gaap:CustomerRelationshipsMember2020-10-310001601046us-gaap:NoncompeteAgreementsMember2021-01-310001601046us-gaap:NoncompeteAgreementsMember2020-10-310001601046keys:CommunicationsSolutionsGroupMemberMember2020-12-302020-12-300001601046us-gaap:DevelopedTechnologyRightsMember2020-11-012021-01-310001601046us-gaap:CustomerRelationshipsMember2020-11-012021-01-310001601046us-gaap:FairValueMeasurementsRecurringMember2021-01-310001601046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-01-310001601046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-01-310001601046us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-01-310001601046us-gaap:FairValueMeasurementsRecurringMember2020-10-310001601046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-10-310001601046us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-10-310001601046us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-310001601046us-gaap:TreasuryLockMember2021-01-31keys:contracts0001601046us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-310001601046currency:EURus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-310001601046currency:EURus-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMemberus-gaap:ForeignExchangeForwardMembercurrency:GBPus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:ShortMemberus-gaap:ForeignExchangeForwardMembercurrency:GBPus-gaap:NondesignatedMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMembercurrency:SGDus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:LongMembercurrency:SGDus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMembercurrency:MYR2021-01-310001601046us-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMembercurrency:MYR2021-01-310001601046currency:JPYus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ShortMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-310001601046currency:JPYus-gaap:ShortMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberkeys:OtherCurrencyMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:ShortMemberus-gaap:ForeignExchangeForwardMemberkeys:OtherCurrencyMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:ShortMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-10-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberkeys:OtherAccruedLiabilitiesMember2021-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberkeys:OtherAccruedLiabilitiesMember2020-10-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:TreasuryLockMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherAssetsMemberus-gaap:TreasuryLockMemberus-gaap:CashFlowHedgingMember2020-10-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:TreasuryLockMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:TreasuryLockMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2020-10-310001601046us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2021-01-310001601046us-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2020-10-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMemberkeys:OtherAccruedLiabilitiesMember2021-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMemberkeys:OtherAccruedLiabilitiesMember2020-10-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:AccumulatedOtherComprehensiveIncomeMemberus-gaap:CashFlowHedgingMember2020-11-012021-01-310001601046us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:AccumulatedOtherComprehensiveIncomeMemberus-gaap:CashFlowHedgingMember2019-11-012020-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedOtherComprehensiveIncomeMemberus-gaap:CashFlowHedgingMember2020-11-012021-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedOtherComprehensiveIncomeMemberus-gaap:CashFlowHedgingMember2019-11-012020-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2020-11-012021-01-310001601046us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2019-11-012020-01-310001601046us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-11-012021-01-310001601046us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2019-11-012020-01-310001601046us-gaap:NondesignatedMemberus-gaap:CostOfSalesMember2020-11-012021-01-310001601046us-gaap:NondesignatedMemberus-gaap:CostOfSalesMember2019-11-012020-01-310001601046us-gaap:NondesignatedMemberus-gaap:OtherIncomeMember2020-11-012021-01-310001601046us-gaap:NondesignatedMemberus-gaap:OtherIncomeMember2019-11-012020-01-310001601046us-gaap:PensionPlansDefinedBenefitMembercountry:US2020-11-012021-01-310001601046us-gaap:PensionPlansDefinedBenefitMembercountry:US2019-11-012020-01-310001601046us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2020-11-012021-01-310001601046us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2019-11-012020-01-310001601046country:USus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-11-012021-01-310001601046country:USus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-11-012020-01-310001601046us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2021-01-310001601046keys:SeniorNotes2024Member2021-01-310001601046keys:SeniorNotes2024Member2020-10-310001601046keys:SeniorNotes2027Member2021-01-310001601046keys:SeniorNotes2027Member2020-10-310001601046keys:SeniorNotes2029Member2021-01-310001601046keys:SeniorNotes2029Member2020-10-310001601046us-gaap:RevolvingCreditFacilityMember2021-01-310001601046us-gaap:RevolvingCreditFacilityMember2020-11-012021-01-3100016010462020-11-1800016010462019-05-290001601046us-gaap:AccumulatedTranslationAdjustmentMember2020-10-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-10-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2020-10-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-10-310001601046us-gaap:AccumulatedTranslationAdjustmentMember2020-11-012021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-11-012021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2020-11-012021-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-11-012021-01-310001601046us-gaap:AccumulatedTranslationAdjustmentMember2021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2021-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-01-310001601046us-gaap:AccumulatedTranslationAdjustmentMember2019-10-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-10-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2019-10-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-10-310001601046us-gaap:AccumulatedTranslationAdjustmentMember2019-11-012020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2019-11-012020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2019-11-012020-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-11-012020-01-310001601046us-gaap:AccumulatedTranslationAdjustmentMember2020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2020-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-11-012021-01-310001601046us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-11-012020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-11-012021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-11-012020-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-11-012021-01-310001601046us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-11-012020-01-310001601046us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-11-012021-01-310001601046us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-11-012020-01-310001601046us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-11-012021-01-310001601046us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-11-012020-01-31keys:segment0001601046keys:CommunicationsSolutionsGroupMemberMemberus-gaap:OperatingSegmentsMember2020-11-012021-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMemberus-gaap:OperatingSegmentsMember2020-11-012021-01-310001601046us-gaap:OperatingSegmentsMember2020-11-012021-01-310001601046keys:CommunicationsSolutionsGroupMemberMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMember2019-11-012020-01-310001601046keys:CommunicationsSolutionsGroupMemberMemberus-gaap:OperatingSegmentsMember2019-11-012020-01-310001601046keys:ElectronicIndustrialSolutionsGroupMemberMemberus-gaap:OperatingSegmentsMember2019-11-012020-01-310001601046us-gaap:OperatingSegmentsMember2019-11-012020-01-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 
(MARK ONE) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2021
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 
FOR THE TRANSITION PERIOD FROM              TO        
 COMMISSION FILE NUMBER: 001-36334
 KEYSIGHT TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware46-4254555
(State or other jurisdiction of(IRS employer
incorporation or organization)Identification no.)
1400 Fountaingrove Parkway 
Santa RosaCalifornia95403
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code: (800) 829-4444  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareKEYSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the exchange act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a)of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No  
The number of shares of common stock outstanding at February 26, 2021 was 185,994,432.


Table of Contents

TABLE OF CONTENTS
 
   Page
Number
 
 
  
  
  
  
 
 
 
 
 
 
 
  

2

Table of Contents
PART I. FINANCIAL INFORMATION
 
Item 1. Condensed Consolidated Financial Statements (Unaudited)
 
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(Unaudited)
 
Three Months Ended
 January 31,
 20212020
Revenue:
Products$970 $902 
Services and other210 193 
Total revenue1,180 1,095 
Costs and expenses:
Cost of products392 359 
Cost of services and other81 81 
Total costs473 440 
Research and development199 187 
Selling, general and administrative301 300 
Other operating expense (income), net(5)(35)
Total costs and expenses968 892 
Income from operations212 203 
Interest income1 6 
Interest expense(20)(19)
Other income (expense), net2 12 
Income before taxes195 202 
Provision for income taxes23 39 
Net income $172 $163 
Net income per share:
Basic$0.93 $0.87 
Diluted$0.92 $0.86 
Weighted average shares used in computing net income per share:
Basic186 188 
Diluted188 191 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in millions)
(Unaudited)
Three Months Ended
 January 31,
 20212020
Net income$172 $163 
Other comprehensive income (loss):
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $(5) and $(1)
18 1 
Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of zero
 1 
Foreign currency translation, net of tax benefit (expense) of zero
31  
Net defined benefit pension cost and post retirement plan costs:
Change in net actuarial loss, net of tax expense of $5 and zero
14 17 
Change in net prior service credit, net of tax benefit of zero and $1
 (2)
Other comprehensive income63 17 
Total comprehensive income$235 $180 

The accompanying notes are an integral part of these condensed consolidated financial statements.
    
4

Table of Contents
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions, except par value and share data)
(Unaudited)

 January 31, 2021October 31, 2020
ASSETS  
Current assets:  
Cash and cash equivalents$1,887 $1,756 
Accounts receivable, net654 606 
Inventory760 757 
Other current assets265 255 
Total current assets3,566 3,374 
Property, plant and equipment, net597 595 
Operating lease right-of-use assets215 182 
Goodwill1,588 1,537 
Other intangible assets, net356 361 
Long-term investments62 61 
Long-term deferred tax assets700 740 
Other assets410 368 
Total assets$7,494 $7,218 
LIABILITIES AND EQUITY
Current liabilities:  
Accounts payable$228 $224 
Employee compensation and benefits253 289 
Deferred revenue456 391 
Income and other taxes payable56 64 
Operating lease liabilities42 43 
Other accrued liabilities89 70 
Total current liabilities1,124 1,081 
Long-term debt1,790 1,789 
Retirement and post-retirement benefits362 362 
Long-term deferred revenue166 175 
Long-term operating lease liabilities184 149 
Other long-term liabilities332 365 
Total liabilities3,958 3,921 
Commitments and contingencies (Note 14)
Stockholders’ equity:  
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding
  
Common stock; $0.01 par value; 1 billion shares authorized; 197 million shares at January 31, 2021 and 196 million shares at October 31, 2020 issued
2 2 
Treasury stock at cost; 10.9 million shares at January 31, 2021 and 10.7 million shares at October 31, 2020
(772)(752)
Additional paid-in-capital2,134 2,110 
Retained earnings2,708 2,536 
Accumulated other comprehensive loss(536)(599)
Total stockholders' equity3,536 3,297 
Total liabilities and equity$7,494 $7,218 
    
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
 January 31,
 20212020
Cash flows from operating activities:  
Net income$172 $163 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation 28 24 
Amortization59 56 
Share-based compensation43 39 
Deferred tax expense1 18 
Excess and obsolete inventory-related charges7 7 
Gain on insurance proceeds received for damage to property, plant and equipment (32)
Other non-cash expense (income), net7 1 
Changes in assets and liabilities:  
Accounts receivable(38)(3)
Inventory (36)
Accounts payable4 (26)
Employee compensation and benefits(54)(63)
Deferred revenue50 29 
Income taxes payable(1)10 
Retirement and post-retirement benefits(1)(3)
Other assets and liabilities18 13 
Net cash provided by operating activities295 197 
Cash flows from investing activities:  
Investments in property, plant and equipment(28)(32)
Acquisition of businesses and intangible assets, net of cash acquired(96)(5)
Insurance proceeds received for damage to property, plant and equipment 32 
Net cash used in investing activities(124)(5)
Cash flows from financing activities:  
Proceeds from issuance of common stock under employee stock plans28 26 
Payment of taxes related to net share settlement of equity awards(49)(49)
Treasury stock repurchases(20)(76)
Payment of acquisition-related contingent consideration(2) 
Net cash used in financing activities(43)(99)
Effect of exchange rate movements8  
Net increase in cash, cash equivalents, and restricted cash136 93 
Cash, cash equivalents, and restricted cash at beginning of period1,767 1,600 
Cash, cash equivalents, and restricted cash at end of period$1,903 $1,693 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(in millions, except number of shares in thousands)
(Unaudited)
 Common StockTreasury Stock  
 Number of SharesPar ValueAdditional Paid-in CapitalNumber of SharesTreasury Stock at CostRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity
Balance as of October 31, 2020195,661 $2 $2,110 (10,732)$(752)$2,536 $(599)$3,297 
Net income— — — — — 172 — 172 
Other comprehensive income, net of tax— — — — — — 63 63 
Issuance of common stock1,193 — 28 — — — — 28 
Taxes related to net share settlement of equity awards— — (49)— — — — (49)
Share-based compensation— — 45 — — — — 45 
Repurchase of common stock— — — (137)(20)— — (20)
Balance as of January 31, 2021196,854 $2 $2,134 (10,869)$(772)$2,708 $(536)$3,536 
Balance as of October 31, 2019193,769 $2 $2,013 (6,458)$(342)$1,909 $(578)$3,004 
Net income— — — — — 163 — 163 
Other comprehensive income, net of tax— — — — — — 17 17 
Issuance of common stock1,270 — 26 — — — — 26 
Taxes related to net share settlement of equity awards— — (49)— — — — (49)
Share-based compensation— — 41 — — — — 41 
Repurchase of common stock— — — (732)(75)— — (75)
Balance as of January 31, 2020195,039 $2 $2,031 (7,190)$(417)$2,072 $(561)$3,127 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Table of Contents
KEYSIGHT TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Overview. Keysight Technologies, Inc. ("we," "us," "Keysight" or the "company"), incorporated in Delaware on December 6, 2013, is a technology company that helps enterprises, service providers and governments accelerate innovation to connect and secure the world by providing electronic design and test solutions that are used in the simulation, design, validation, manufacture, installation, optimization and secure operation of electronics systems in the communications, networking and electronics industries. We also offer customization, consulting and optimization services throughout the customer's product lifecycle, including start-up assistance, asset management, up-time services, application services and instrument calibration and repair.
Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarters.
Basis of Presentation. We have prepared the accompanying financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to such rules and regulations. The accompanying financial statements and information should be read in conjunction with our Annual Report on Form 10-K.
In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly our financial position as of January 31, 2021 and October 31, 2020, our results of operations for the three months ended January 31, 2021 and 2020 and cash flows for the three months ended January 31, 2021 and 2020.
Use of Estimates. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, inventory valuation, share-based compensation, retirement and post-retirement plan assumptions, valuation of goodwill and other intangible assets, warranty, loss contingencies, restructuring, and accounting for income taxes.
Update to Significant Accounting Policies. There have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2020.
New Accounting Pronouncements. Accounting standard updates in the first quarter of fiscal 2021 that have been issued by the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies are not material to our condensed consolidated financial statements. Other amendments to GAAP that do not require adoption until a future date are not expected to have a material impact on our condensed consolidated financial statements upon adoption.
8

Table of Contents
2.    REVENUE
Disaggregation of Revenue
We disaggregate our revenue from contracts with customers by geographic region, end market, and timing of revenue recognition, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregated revenue is presented for each of our reportable segments.
Three Months Ended
January 31,
20212020
Communications Solutions GroupElectronic Industrial Solutions GroupTotalCommunications Solutions GroupElectronic Industrial Solutions GroupTotal
 (in millions)
Region
Americas$401 $67 $468 $386 $61 $447 
Europe132 70 202 115 71 186 
Asia Pacific319 191 510 317 145 462 
Total revenue$852 $328 $1,180 $818 $277 $1,095 
End Market
Aerospace, Defense & Government$294 $ $294 $245 $ $245 
Commercial Communications558  558 573  573 
Electronic Industrial 328 328  277 277 
Total revenue$852 $328 $1,180 $818 $277 $1,095 
Timing of Revenue Recognition
Revenue recognized at a point in
time
$712 $284 $996 $701 $250 $951 
Revenue recognized over time140 44 184 117 27 144 
Total revenue$852 $328 $1,180 $818 $277 $1,095 
Our point-in-time revenues are generated predominantly from the sale of various types of design and test software and hardware, and per-incident repair and calibration services. Perpetual software and the portion of term software subscription revenue in this category represents revenue recognized up front upon transfer of control at the time of electronic delivery. Revenue on per-incident repair and calibration services is recognized as services are performed. Over-time revenues are generated predominantly from the repair and calibration contracts, extended warranties, technical support for hardware and software, certain software subscription and Software as a Service ("SaaS") product offerings, and professional services. Technical support for software and when-and-if available software updates and upgrades are sold either together with our software licenses and software subscriptions, including SaaS, or separately as part of our customer support programs.
Additionally, we provide custom solutions that include combinations of hardware, software, software subscriptions, installation, professional services, and other support services, and revenue may be recognized either up front on delivery or over time depending upon the terms of the contract.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue (contract liabilities) on our condensed consolidated balance sheet. In addition, we defer and capitalize certain costs incurred to obtain a contract (contract costs).
Contract assets. Contract assets represent unbilled amounts from arrangements for which we have performed by transferring goods or services to the customer in advance of invoicing for such goods and services. Contract assets arise primarily from service agreements and products delivered pending a formal customer acceptance, which generally occurs within 30 days. The contract assets balance was $51 million and $61 million at January 31, 2021 and October 31, 2020, respectively, and is included in "accounts receivables, net" in our condensed consolidated balance sheet.
9

Table of Contents
Contract costs. We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain employee and third-party representative commissions programs meet the requirements to be capitalized. Employee commissions are based on the achievement of order volume compared to a sales target. Third-party representative commission costs relate directly to a customer contract as the commission is tied to orders contracted through and contracts arranged by our third-party representatives. Without obtaining the contracts, the commissions would not be paid and, as such, are determined to be an incremental cost to obtaining a contract. We only defer these costs when we have determined the commissions are, in fact, incremental and would not have been incurred absent the customer contract.
Capitalized incremental costs are allocated to the individual performance obligations in proportion to the transaction price allocated to each performance obligation and amortized based on the pattern of performance for the underlying performance obligation. Contract costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another.
The following table provides a roll-forward of our capitalized contract costs, current and non-current:
Three Months Ended
January 31,
20212020
(in millions)
Beginning balance$31 $28 
Costs capitalized during the period21 16 
Costs amortized during the period(18)(16)
Ending balance$34 $28 
Contract liabilities. Our contract liabilities consist of deferred revenue that arises when we receive consideration in advance of providing the goods or services promised in the contract. Contract liabilities are primarily generated from customer deposits received in advance of shipments for products or rendering of services and are recognized as revenue when services are provided to the customer. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. Contract liabilities are recognized as revenue when services are provided to the customer.
The following table provides a roll-forward of our contract liabilities, current and non-current:
Three Months Ended
January 31,
20212020
(in millions)
Balance at October 31$566 $510 
Deferral of revenue billed in current period, net of recognition214 161 
Deferred revenue arising out of acquisitions2  
Revenue recognized that was deferred as of the beginning of the period(164)(132)
Foreign currency translation impact4  
Balance at January 31$622 $539 
Remaining Performance Obligations
Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, was approximately $353 million as of January 31, 2021, and represents the company’s obligation to deliver products and services and obtain customer acceptance on delivered products. Since we typically invoice customers at contract inception, this amount is included in our current and long-term deferred revenue balances. As of January 31, 2021, we expect to recognize 39% of the revenue related to these unsatisfied performance obligations during the remainder of 2021, 36% during 2022, and 25% thereafter.
3.    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 restricted stock units ("RSUs"), employee stock purchases made under our Employee Stock Purchase Plan (“ESPP”), employee stock option awards, and performance share awards granted to selected members of our senior management under the Long-Term Performance (“LTP”) Program, based on estimated fair values. 
10

Table of Contents
Three Months Ended
January 31,
 20212020
 (in millions)
Cost of products and services$7 $5 
Research and development9 8 
Selling, general and administrative27 26 
Total share-based compensation expense$43 $39 
Share-based compensation capitalized within inventory was $2 million at both January 31, 2021 and January 31, 2020.
Performance awards based on total shareholder return ("TSR") are valued using a Monte Carlo simulation model, which requires the use of highly subjective and complex assumptions, including the price volatility of the underlying stock. The valuation is done once every year in the first quarter at the time of annual grants. The following assumptions were used to estimate the fair value of TSR based performance awards:
Three Months Ended
January 31,
 20212020
Volatility of Keysight shares36 %28 %
Volatility of index23 %13 %
Price-wise correlation with selected peers67 %61 %
The estimated fair value of RSUs and the financial metrics-based performance awards is determined based on the market price of Keysight’s common stock on the grant date. The compensation cost for financial metrics-based performance awards reflects the cost of awards that are probable to vest at the end of the performance period. We did not grant option awards in the three months ended January 31, 2021 and 2020.
4.    INCOME TAXES
The company’s effective tax rate was 11.6 percent and 19.1 percent for the three months ended January 31, 2021 and 2020, respectively. The income tax expense was $23 million and $39 million for the three months ended January 31, 2021 and 2020, respectively. The income tax expense for the three months ended January 31, 2021 included a net discrete benefit of $11 million. The income tax expense for the three months ended January 31, 2020 included a net discrete expense of $3 million. The decrease in tax expense for the three months ended January 31, 2021 is primarily due to the increased benefit of U.S. state R&D credits and a reduction in U.S. states taxes on foreign earnings.
Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of the tax incentives decreased the income tax provision by $10 million and $15 million for the three months ended January 31, 2021 and 2020, respectively, resulting in a benefit to net income per share (diluted) of approximately $0.05 and $0.08 for the three months ended January 31, 2021 and 2020, respectively. The Singapore tax incentive is due for renewal in 2024. The incentive in Malaysia is due for renewal in 2025.
The open tax years for the IRS and most states are from November 1, 2016 through the current tax year. Keysight’s 2018 U.S. federal income tax return is currently under examination by the IRS. This is the year in which the Tax Cuts and Jobs Act was enacted and the one-time U.S. tax on earnings not previously repatriated to the U.S., known as the Transition Tax, was reported. For the majority of our foreign entities, the open tax years are from November 1, 2015 through the current tax year. For certain foreign entities, the tax years remain open, at most, back to the year 2008. At this time, management does not believe that the outcome of any ongoing examination will have a material impact on our consolidated financial statements. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. If resolution of any tax issues addressed in our current open examinations are inconsistent with management’s expectations, we may be required to adjust our tax provision for income taxes in the period such resolution occurs.
Keysight’s 2008 Malaysian income tax return was examined by the Malaysian Tax Authority. This tax year pre-dates our separation from Agilent. However, pursuant to the tax matters agreement between Agilent and Keysight that was finalized at the time of separation, for certain entities, including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal year 2017, Keysight paid income taxes and penalties to the Malaysian Tax Authority of $68 million on gains related to intellectual property rights. Our appeal to the Special Commissioners of Income Tax in Malaysia was unsuccessful. An appeal has now been lodged with the High Court. The company believes there are numerous defenses to the
11

Table of Contents
current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed, and the income in question is exempt from tax in Malaysia. The company is pursuing all avenues to resolve this issue favorably for the company.
5.    NET INCOME PER SHARE
The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented below:
Three Months Ended
January 31,
 20212020
 (in millions)
Numerator:
Net income$172 $163 
Denominator:
Basic weighted-average shares186 188 
Potential common shares— stock options and other employee stock plans2 3 
Diluted weighted-average shares188 191 
The dilutive effect of share-based awards is reflected in diluted net income per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and non-vested RSUs. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are collectively assumed to be used to repurchase hypothetical shares.
We exclude stock options with exercise prices greater than the average market price of our common stock from the calculation of diluted earnings per share because their effect would be anti-dilutive. For both the three months ended January 31, 2021 and 2020, we excluded zero options from the calculation of diluted earnings per share. In addition, we also exclude from the calculation of diluted earnings per share, stock options, ESPP, LTP awards and RSUs, whose combined exercise price and unamortized fair value collectively were greater than the average market price of our common stock because their effect would also be anti-dilutive. We excluded approximately 251,000 shares for the three months ended January 31, 2021. The impact was immaterial for the three months ended January 31, 2020.
6.    SUPPLEMENTAL CASH FLOW INFORMATION
Net cash paid for income taxes was $22 million and $9 million for the three months ended January 31, 2021 and 2020, respectively. Cash paid for interest was zero for both the three months ended January 31, 2021 and 2020.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the amount shown in the condensed consolidated statement of cash flows:
January 31, 2021October 31, 2020
(in millions)
Cash and cash equivalents$1,887 $1,756 
Restricted cash included in other current assets14 9 
Restricted cash included in other assets2 2 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$1,903 $1,767 
Restricted cash included in other current assets primarily relates to short-term deficit reduction contribution to an escrow account for one of our non-U.S. defined benefit pension plans, and restricted cash included in other assets is primarily deposits held as collateral against bank guarantees.
12

Table of Contents
7.    INVENTORY
 January 31, 2021October 31, 2020
 (in millions)
Finished goods$335 $342 
Purchased parts and fabricated assemblies425 415 
Total inventory$760 $757 
Inventory-related excess and obsolescence charges recorded in total cost of products was $7 million for both the three months ended January 31, 2021 and 2020. We record excess and obsolete inventory charges for inventory at our sites as well as inventory at our contract manufacturers and suppliers, where we have non-cancellable purchase commitments.
8.    GOODWILL AND OTHER INTANGIBLE ASSETS
The goodwill balance as of January 31, 2021 and October 31, 2020 and the activity for the three months ended January 31, 2021 for each of our reportable operating segments were as follows:
 Communications Solutions GroupElectronic Industrial Solutions GroupTotal
 (in millions)
Goodwill at October 31, 2020$984 $553 $1,537 
Foreign currency translation impact2 8 10 
Goodwill arising from acquisitions41  41 
Goodwill at January 31, 2021$1,027 $561 $1,588 
Components of goodwill:
Goodwill$1,693 $553 $2,246 
Accumulated impairment losses(709) (709)
Goodwill at October 31, 2020$984 $553 $1,537 
Goodwill$1,736 $561 $2,297 
Accumulated impairment losses(709) (709)
Goodwill at January 31, 2021$1,027 $561 $1,588 
Other intangible assets as of January 31, 2021 and October 31, 2020 consisted of the following:
 January 31, 2021October 31, 2020
 Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
 (in millions)
Developed technology$942 $793 $149 $915 $749 $166 
Backlog17 15 2 17 14 3 
Trademark/Tradename36 26 10 35 25 10 
Customer relationships380 195 185 363 183 180 
Non-compete agreements3 1 2 1 1  
Total amortizable intangible assets1,378 1,030 348 1,331 972 359 
In-Process R&D8 — 8 2 — 2 
Total$1,386 $1,030 $356 $1,333 $972 $361 
During the three months ended January 31, 2021, we acquired Sanjole Inc. ("Sanjole") for $96 million, net of $11 million cash acquired, and recognized additions to goodwill and other intangible assets of $41 million and $51 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed. All goodwill was assigned to the Communications Solutions Group. We expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes. The identified intangible assets primarily consist of developed technology of $24 million, customer relationships of $17 million and in-process R&D of $7 million. The estimated useful lives of developed technology and customer relationships is 7 years and 9 years, respectively. Sanjole is a leader in wireless test and measurement solutions for protocol decoding and interoperability.
13

Table of Contents
Goodwill is assessed for impairment on a reporting unit basis at least annually in the fourth quarter of each year, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The company has not identified any triggering events that indicate an impairment of goodwill for the three months ended January 31, 2021.
During the three months ended January 31, 2021, other intangible assets increased $3 million due to the impact of foreign exchange translation. Amortization of other intangible assets was $58 million and $55 million for the three months ended January 31, 2021 and 2020, respectively. During the three months ended January 31, 2021, we transferred $1 million from in-process R&D to developed technology as projects were successfully completed.
Estimated intangible assets amortization expense for each of the five succeeding fiscal years is as follows:
Amortization expense
(in millions)
2021 (remainder)$114 
2022$95 
2023$72 
2024$32 
2025$16 
Thereafter$19 
9.    FAIR VALUE MEASUREMENTS
The authoritative guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.
Fair Value Hierarchy
The guidance establishes a fair value hierarchy that prioritizes inputs used in valuation techniques into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:
Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. 
Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability such as: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in less active markets; or other inputs that can be derived principally from, or corroborated by, observable market data.
Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
14

Table of Contents
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2021 and October 31, 2020 were as follows:
Fair Value Measurements at
 January 31, 2021October 31, 2020
 TotalLevel 1Level 2Level 3OtherTotalLevel 1Level 2Level 3Other
 (in millions)
Assets:        
Short-term        
Cash equivalents
Money market funds$1,121 $1,121 $ $ $— $1,047 $1,047 $ $ $— 
Derivative instruments (foreign exchange contracts)6  6  — 3  3  — 
Long-term
Derivative instruments (interest rate swaps)43  43  — 23  23  — 
Equity investments52 52   — 52 52   — 
Equity investments - other10    10 9    9 
Total assets measured at fair value$1,232 $1,173 $49 $ $10 $1,134 $1,099 $26 $ $
Liabilities:        
Short-term
Derivative instruments (foreign exchange contracts)$4 $ $4 $ $— $4 $ $4 $ $— 
Long-term
Deferred compensation liability20  20  — 18  18  — 
Total liabilities measured at fair value$24 $ $24 $ $— $22 $ $22 $ $— 
Net realized gains (losses) on sale of our equity investments were zero for both the three months ended January 31, 2021 and 2020. Net unrealized losses on our equity investments still held were $2 million and zero for the three months ended January 31, 2021 and 2020, respectively.
Our money market funds and equity investments with readily determinable fair values are measured at fair value using quoted market prices and, therefore, are classified within Level 1 of the fair value hierarchy. Equity investments without readily determinable fair values that are measured at cost adjusted for observable changes in price or impairments are not categorized in the fair value hierarchy and are presented as "Equity investments - other" in the table above. Our deferred compensation liability is classified as Level 2 because the inputs used in the calculations are observable, although the values are not directly based on quoted market prices. Our derivative financial instruments are classified within Level 2 as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets.
Equity investments, including securities that are earmarked to pay the deferred compensation liability, and the deferred compensation liability are reported at fair value, with gains or losses resulting from changes in fair value recognized in earnings. Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (loss).
10.    DERIVATIVES
We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts, to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates.
Cash Flow Hedges
We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities based on a rolling period of up to twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance.
15

Table of Contents
In fiscal 2020, we entered into forward starting interest rate swaps with an aggregate notional amount of $600 million associated with future interest payments on anticipated debt issuances through fiscal year 2024. The contract terms allow us to lock-in a treasury rate on anticipated debt issuances. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance.
Non-designated Hedges
Additionally, we enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. These foreign exchange contracts are carried at fair value and do not qualify for hedge accounting treatment and are not designated as hedging instruments.
The number of open foreign exchange forward contracts designated as "cash flow hedges" and "not designated as hedging instruments" was 190 and 98, respectively, as of January 31, 2021. The aggregated notional amounts by currency and designation as of January 31, 2021 were as follows:
 Derivatives in Cash Flow
Hedging Relationships
Derivatives Not Designated as Hedging Instruments
 Forward
Contracts
Forward
Contracts
CurrencyBuy/(Sell)