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AGILENT TECHNOLOGIES INC

For the period ended Mar 14, 2024. Filed Feb 2, 2024.

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Mar 14, 2024 · Filed Feb 2, 2024

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Contents

APPENDIX A

APPENDIX A TOPROXY STATEMENT

OF

AGILENT TECHNOLOGIES, INC.

The reconciliation of non-GAAP net income and diluted EPS for the years ended October 31, 2023, 2022 and 2021 follows:

ADJUSTED NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS

(In millions, except per share amounts)

(Unaudited)

Years Ended
October 31,
2023 · Diluted EPS · 2022 · Diluted EPS · 2021 · Diluted EPS
GAAP net income$1,240$4.19$1,254$4.18$1,210$3.94
Non-GAAP adjustments:
Asset impairments2770.94——20.01
Restructuring and other related costs460.16————
Intangible amortization1390.471910.641940.63
Transformational initiatives250.08300.10370.12
Acquisition and integration costs160.05250.08410.13
Business exit and divestiture costs (gain)(43)(0.15)70.0250.02
Net loss (gain) on equity securities420.14630.21(92)(0.30)
Pension settlement loss40.0140.011—
Special compliance costs90.03————
Change in fair value of contingent consideration1—(25)(0.08)(21)(0.07)
Loss on extinguishment of debt——90.03170.06
Other110.04120.0490.02
Adjustment for taxes (a)(158)(0.52)(5)(0.01)(71)(0.22)
Non-GAAP net income$1,609$5.44$1,565$5.22$1,332$4.34
Acquisitions60.02——80.03
Currency and hedging(32)(0.11)200.07(2)(0.01)
Impact of tax rate adjustment——(33)(0.11)——
Impact of share count adjustment———(0.04)——
Adjusted non-GAAP net income$1,583$5.35$1,552$5.14$1,338$4.36
Diluted shares - as reported296300307
Add back share repurchases in excess of plan—2—
Diluted shares - as adjusted296302307

(a)

The adjustment for taxes excludes tax benefits that management believes are not directly related to on-going operations and which are either isolated or cannot be expected to occur again with any regularity or predictability such as the realized gain/loss due to sale of a business, windfall benefits on stock compensation, and the impact of R&D capitalization under section 174 of the Tax Cuts and Jobs Act of 2017. For the year ended October 31, 2023, management used a non-GAAP effective tax rate of 13.75%. For t`he year ended October 31, 2022, management used a non-GAAP effective tax rate of 14.00%. For the year ended October 31, 2021, management used a non-GAAP effective tax rate of 14.25%.

We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to asset impairments, restructuring and other related costs, amortization of intangibles, transformational initiatives, acquisition and integration costs, business exit and divestiture costs (gain), net loss (gain) on equity securities, pension settlement loss, special compliance costs, change in fair value of contingent consideration and loss on extinguishment of debt.

Asset impairments include assets that have been written down to their fair value.

Restructuring and other related costs include incremental expenses incurred in the period associated with restructuring programs, usually aimed at changes in business and/or cost structure. Such costs may include one-time termination benefits, facility-related costs and contract termination fees.

Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers including costs to move manufacturing, small site consolidations, legal entity and other business reorganizations, insourcing or outsourcing of activities. Such costs may include move and relocation costs, one-time termination benefits and other one-time reorganization costs. Included in this category are also expenses associated with company programs to transform our product lifecycle management (PLM) system, human resources and financial systems.

Acquisition and Integration costs include all incremental expenses incurred to effect a business combination. Such acquisition costs may include advisory, legal, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of business and facility operations, the transfer of assets and intellectual property, information technology systems and infrastructure and other employee-related costs.

Business exit and divestiture costs (gain)include costs and gain associated with business divestitures.

Net loss (gain) on equity securities relates to the realized and unrealized mark-to-market adjustments for our marketable and non-marketable equity securities.

Pension settlement loss relates to the relief of the US Retirement Plan pension obligation due to increased lump sum payouts over a specified accounting threshold.

Special compliance costs include costs associated with transforming our processes to implement new regulations such as environmental compliance costs related to a prior acquisition, NASD site costs and certain tax reporting requirements.

Change in fair value of contingent consideration represents changes in the fair value estimate of acquisition-related contingent consideration.

Loss on extinguishment of debtfor the year ended October 31, 2022 relates to the net loss recorded on the redemption of the $600 million outstanding 3.875% 2023 senior notes due on July 15, 2023, called on April 4, 2022 and settled on May 4, 2022. For the year ended October 31, 2021, it relates to the net loss recorded on the redemption of the $100 million of the $400 million outstanding 3.2% 2022 senior notes due on October 1, 2022, called on December 22, 2020 and settled on January 21, 2021 and the net loss recorded on the redemption of the remaining $300 million called on March 5, 2021 and settled on April 5, 2021.

Other includes acceleration of share-based compensation expense and certain legal costs and settlements in addition to other miscellaneous adjustments.

Impact of tax rate adjustment relates to the impact of applying tax rate of 15.75% for LTPP (long-term performance plan) EPS calculation versus FY22 non-GAAP tax rate of 14.00%.

Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.

Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit, a critical one, of the company’s performance.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

The reconciliation of adjusted non-GAAP income from operations and operating margins for the years ended October 31, 2023 and 2022 follows:

RECONCILIATION OF ADJUSTED NON-GAAP INCOME FROM OPERATIONS AND OPERATING MARGINS

(In millions, except margin data)

(Unaudited)

Operating · Operating
FY23 · Margin % · FY22 · Margin %
Revenue:$6,833$6,848
Adjustments:
Currency(174)180
Acquisitions—(2)
Adjusted revenue$6,659$7,026
Income from operations:
GAAP Income from operations$1,35019.8%$1,61823.6%
Add:
Asset impairments277—
Restructuring and other related costs46—
Intangible amortization139191
Transformational initiatives2530
Acquisition and integration costs1625
Special compliance costs9—
Change in fair value of contingent consideration1(25)
Business exit and divestiture costs—7
Other1211
Non-GAAP income from operations$1,87527.4%$1,85727.1%
Adjust:
Currency and hedging(37)23
Acquisitions6—
Adjusted non-GAAP income from operations$1,84427.7%$1,88026.8%

We provide non-GAAP income from operations and non-GAAP operating margins amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to asset impairments, restructuring and other related costs, amortization of intangibles, transformational initiatives, acquisition and integration costs, special compliance costs, change in fair value of contingent consideration and business exit and divestiture costs.

Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 1:00am, Eastern Time, on March 14, 2024. Online Go to www.envisionreports.com/agilent or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/agilent Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board of Directors recommends a vote FOR all the listed nominees, a vote FOR Proposals 2 and 3 and has no recommendation A for Proposal 4. 1. Election of Directors: To elect four directors to a three-year term. At the annual meeting, the Board of Directors intends to present the following nominees for election as directors: For Against Abstain For Against Abstain For Against Abstain 01 - Mala Anand 02 - Koh Boon Hwee 03 - Michael R. McMullen 04 - Daniel K. Podolsky, M.D For Against Abstain For Against Abstain 2. To approve, on a non-binding advisory basis, the compensation of our named executive officers. 3. To ratify the Audit and Finance Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. 5. To consider such other business as may properly come before the annual meeting. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.

The 2024 Annual Meeting of Stockholders of Agilent Technologies, Inc. will be held at 5301 Stevens Creek Blvd., Santa Clara CA 95051 on Thursday, March 14, 2024 at 8 a.m., Pacific Time PLEASE NOTE To attend the annual meeting, you will need to have pre-registered by 5:00 p.m., Pacific Time, on March 1, 2024. Specific instructions on pre-registration can be found in the General Information section of the proxy statement. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/agilent IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy — AGILENT TECHNOLOGIES, INC. Annual Meeting of Stockholders—March 14, 2024 This Proxy is solicited on behalf of the Board of Directors. The undersigned hereby appoints Michael R. McMullen and P. Diana Chiu, and each of them, as proxies for the undersigned, with full power of substitution, to act and to vote all the shares of Common Stock of Agilent Technologies, Inc. held of record by the undersigned on January 23, 2024, at the Annual Meeting of Stockholders to be held on Thursday, March 14, 2024, or any postponement, adjournment or continuations thereof. IMPORTANT—This Proxy must be signed and dated on the reverse side. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE BOARD’S NOMINEES AND PROPOSALS 2 AND 3 AND VOTED ABSTAIN FOR PROPOSAL 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED If you vote by telephone or the Internet, please DO NOT mail back this proxy card. (Continued and to be voted on reverse side.) C Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below.

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