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Item 7. Management’s Discussion and Analysis

2022-12-21 compared with 2021-12-17 · 271 added, 295 removed, 514 unchanged (52% of the section changed)

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("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is 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 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers.

Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment.

We also moved BioTek's service revenue and related cost of sales from our life sciences and applied markets business segment to our Agilent CrossLab business segment.

We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022.

Historical financial segment information has been recast to conform to this new presentation in our financial statements and accompanying notes.

There was no change to our diagnostics and genomics business segment.

COVID-19 Pandemic

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and international markets.

During the year ended October 31, 2021, many businesses and countries, including the U.S., continued applying preventative and precautionary measures to mitigate the spread of the virus including government orders and other restrictions on the conduct of business operations.

The health and safety of our employees is a top priority for us.

In response to the COVID-19 pandemic, we took proactive actions to protect the health and safety of our employees, customers, partners and suppliers.

We enacted safety measures, including social distancing protocols, encouraging employees to work from home when possible, suspending non-essential work travel, implementing various access controls at our facilities, frequently disinfecting our workspaces and providing appropriate personal protective equipment to employees who are physically present at our facilities.

As COVID-19 conditions improved, we began implementing a phased reopening process, required our U.S.

employees to be fully vaccinated pursuant to federal, state and local guidelines and continued to prioritize health and safety.

We expect to continue to implement appropriate safety measures until the COVID-19 pandemic is contained.

We may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, partners and suppliers.

Currently, most of our employees are still working from home.

When we determine it is safe for our employees to return to the office, we will be moving towards a hybrid work model, giving our employees the flexibility to work offsite or at our onsite locations.

The COVID-19 pandemic continues to be dynamic, and near-term challenges across the economy remain.

The ongoing effects of COVID-19 remain difficult to predict due to numerous uncertainties, including the severity, duration and resurgence of the outbreak, new variants, the effectiveness of health and safety measures including vaccines, managing the different pace of return-to-office in different locations, the pace and strength of the economic recovery, and supply chain pressures, among others.

In fiscal 2022, many businesses and countries, including the U.S., continued applying preventative and precautionary measures to mitigate the spread of the virus.

In the latter part of our second quarter, we had to shut down our primary gas chromatography production facility and logistics center in Shanghai in compliance with lockdown measures related to COVID-19.

We successfully managed the unplanned shutdown of our facility and fully recognized the revenue that was delayed from our second quarter within fiscal year 2022.

While conditions related to the COVID-19 pandemic have improved in 2022 compared to 2021, the pandemic continues to be dynamic, and near-term challenges across the economy remain.

The ongoing effects of COVID-19 remain difficult to predict due to numerous uncertainties, including the severity, duration and resurgence of the outbreak, new variants and the contagiousness of these new variants, the effectiveness of health and safety measures including vaccines and therapies, government and community responses including additional lockdowns, the pace and strength of the economic recovery, supply chain pressures, delivery and installation delays due to variable access to customer sites, among others.

We will continue to actively monitor the effects of the pandemic and will continue to take appropriate steps to mitigate the impacts to our employees and on our business results.

Despite the economic challenges due to the COVID-19 pandemic, we ended our fiscal year 2021 with revenue growth of 18 percent year over year.

This revenue growth was primarily non-COVID related revenue and came from all of our segments, key end markets and geographies.

Revenue growth was also partly due to weakened sales in the prior year as the response to the early stages of the pandemic caused many of our customers to close or reduce operating capacity.

In fiscal year 2021, our overall business performance was strong which also resulted in significant expense increases from our variable pay and long-term performance plan-earnings per share ("LTPP-EPS") programs, along with sales commission increases year over year, which was partially offset by the continued cost savings actions which included reduction in travel and non-essential spending that we implemented last year.

On April 15, 2021 we completed the acquisition of privately-owned Resolution Bioscience, Inc., a biotechnology company focused on the development and commercialization of next-generation sequencing-based ("NGS") precision oncology solutions, for $561 million cash plus potential future contingent payments of up to $145 million upon the achievement of certain milestones which are based on certain revenue and technical targets.

Resolution Bioscience complements and expands our capabilities in NGS-based cancer diagnostics within our diagnostics and genomics segment and provides us with innovative technology to further serve the needs of the fast-growing precision medicine market.

The fair value of the contingent consideration as of October 31, 2021 was $89 million which included a decrease of $21 million from the estimated fair value as of the end of our third quarter.

2022 Senior Notes

On January 21, 2021, we redeemed $100 million of the $400 million outstanding aggregate principal amount of our 2022 senior notes due October 1, 2022.

On April 5, 2021, we redeemed the remaining outstanding $300 million of our 2022 senior notes.

Russia-Ukraine Conflict

In response to the ongoing conflict in Ukraine, at the beginning of March, we suspended sales prohibited by sanctions, halted the shipment of products to Russia with the exception of diagnostics and healthcare products and limited our in-country service to those diagnostics and healthcare customers.

Subsequently, effective May 23, 2022, we ceased major operations within Russia, and as a result, we recorded an immaterial expense associated with the shutdown of operations for the three months ended April 30, 2022.

For the year ended October 31, 2022 and 2021, sales derived from customers based in Russia represented an immaterial percentage of our total revenue.

Term Loan Facility

On April 15, 2022, we entered into a term loan agreement with a group of financial institutions, which provided for a $600 million delayed draw term loan that will mature on April 15, 2025.

As of October 31, 2022, we had $600 million borrowings outstanding under the term loan facility and had a weighted average interest rate of 3.98 percent.

Loans under the term loan agreement bear interest, at our option, either at:

(i) the alternate base rate, as defined in the term loan agreement, plus the applicable margin for such loans or (ii) adjusted term SOFR, as defined in the term loan agreement, plus the applicable margin for such loans.

The term loan agreement contains customary representations and warranties as well as customary affirmative and negative covenants.

We were in compliance with the covenants for the term loan during the year ended October 31, 2022.

On May 4, 2022, we used the proceeds from the term loan facility and repaid the $600 million outstanding aggregate principal amount of our 2023 senior notes.

The total redemption price of approximately $609 million was computed in accordance with the terms of the 2023 senior notes as the present value of the remaining scheduled payments of principal and unpaid interest on the notes being redeemed.

During the year ended October 31, 2021, we recorded a loss on extinguishment of debt of $17 million in other income (expense), net in the consolidated statement of operations.

In May 2022, we recorded a loss on extinguishment of debt of $9 million in other income (expense), net in the consolidated statement of operations.

In addition, $7 million of accrued interest, up to but not including the applicable redemption date, was paid.

The make-whole premium less partial amortization of previously deferred interest rate swap gain together with the amortization of debt issuance costs and discount was recorded in other income (expense), net in the consolidated statement of operations.

2031 Senior Notes

On March 12, 2021, we issued an aggregate principal amount of $850 million in senior notes ("2031 senior notes").

The 2031 senior notes were issued at 99.822% of their principal amount.

The 2031 senior notes will mature on March 12, 2031, and bear interest at a fixed rate of 2.30% per annum.

The interest is payable semi-annually on March 12th and September 12th of each year and payments commenced on September 12, 2021.

Actual Results

During 2022, we navigated through a challenging environment marked by supply chain and logistics pressures, high inflation, a COVID-related shutdown in China and were able to deliver strong results.

Agilent's net revenue of $6,848 million in 2022 increased 8 percent when compared to 2021.

Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 2 percentage points when compared to 2020.

Net revenue increased in all business segments, geographic regions and key end markets.

The favorable impact of COVID-related revenue and revenue from our recent acquisition for the year ended October 31, 2021 was not material.

Foreign currency movements for 2022 had an overall unfavorable impact on revenue growth of 4 percentage points when compared to 2021.

Net revenue increased in all business segments, geographic regions and most key end markets.

Revenue in the life sciences and applied markets business increased 9 percent in 2022 when compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 2 percentage points in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

Revenue in the diagnostics and genomics business increased 7 percent in 2022 when compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

Revenue in the Agilent CrossLab business increased 7 percent in 2022 when compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

Agilent's net revenue of $6,319 million increased 18 percent in 2021 when compared to 2020.

Foreign currency movements for 2020 had an overall unfavorable impact on revenue growth of 1 percentage point when compared to 2019.

In 2020, acquisitions from 2019 had an overall favorable impact of 3 percentage points when compared to 2019.

Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 3 percentage points when compared to 2020.

Net revenue increased in all business segments, geographic regions and key end markets compared to 2020.

Revenue in the life sciences and applied markets business increased 18 percent in 2021 when compared to 2020.

In 2021, acquisitions from 2019 had an overall favorable impact of 7 percentage points when compared to 2020.

Foreign currency movements had no overall

impact on revenue growth in 2020 when compared to 2019.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

Revenue in the diagnostics and genomics business increased 24 percent in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

Revenue in the Agilent CrossLab business increased 16 percent in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.

Net income was $1,254 million in 2022 compared to net income of $1,210 million and $719 million in 2021 and 2020, respectively.

Net income in 2022 was impacted by higher sales volume partially offset by supply chain, logistics and inflationary pressures increasing our costs.

Net income in 2021 was impacted by higher sales volume and net gains on fair value of equity securities partially offset by significant expense increases from our variable pay, share-based compensation expense and sales commissions.

Net income for the year ended October 31, 2020 was impacted by revenue declines in certain of our businesses associated with the COVID-19 pandemic and increased costs and expenses which included an impairment charge of $98 million related to the closure of our sequencer development program.

Net income for the year ended October 31, 2019 was impacted by a discrete tax benefit of $299 million related to the extension of the company's tax incentives in Singapore.

Net income in 2020 was impacted by revenue declines in certain of our businesses associated with the COVID-19 pandemic and increased costs and expenses which included an impairment charge of $98 million related to the closure of our sequencer development program.

As of October 31, 2022 and 2021, we had cash and cash equivalents balances of $1,053 million and $1,484 million, respectively.

On November 19, 2018 we announced that our board of directors had approved a new share repurchase program (the "2019 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs.

The 2019 share repurchase program authorizes the purchase of up to $1.75 billion of our common stock at the company's discretion and has no fixed termination date.

The 2019 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time.

During the year ended October 31, 2019, we repurchased and retired 10.4 million shares for $723 million under this authorization.

2019 Repurchase Program.

During the year ended October 31, 2020, we repurchased and retired 5.2 million shares for $469 million under the 2019 repurchase program authorization.

During the year ended October 31, 2021, we repurchased and retired 3.1 million shares for $365 million under this authorization.

During the year ended October 31, 2021, we repurchased and retired approximately 3.1 million shares for $365 million under this authorization.

Effective February 18, 2021, the 2019 repurchase program was terminated and replaced by the new share repurchase program.

Effective February 18, 2021, the 2019 repurchase program was terminated and replaced by the 2021 repurchase program.

The remaining authorization under the 2019 repurchase plan of $193 million expired on February 18, 2021.

On February 16, 2021 we announced that our board of directors had approved a new share repurchase program (the "2021 repurchase program") designed, among other things, to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs.

The 2021 repurchase program authorizes the purchase of up to $2.0 billion of our common stock at the company's discretion and has no fixed termination date.

The 2021 repurchase program which became effective on February 18, 2021, replaced and terminated the 2019 repurchase program on that date.

The 2021 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time.

2021 Repurchase Program.

During the year ended October 31, 2021, we repurchased and retired 3.0 million shares for $423 million under the 2021 repurchase program authorization.

During the year ended October 31, 2022, we repurchased and retired 8.4 million shares for $1,139 million under this authorization.

As of October 31, 2021, we had remaining authorization to repurchase up to approximately $1.577 billion of our common stock under the 2021 repurchase program.

As of October 31, 2022, we had remaining authorization to repurchase up to approximately $438 million of our common stock under the 2021 repurchase program.

During the year ended October 31, 2022, cash dividends of $0.840 per share, or $250 million were declared and paid on the company's outstanding common stock.

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The timing and amounts of any future dividends are subject to determination and approval by our board of directors.

Looking forward, as we continue to navigate the impacts of the COVID-19 pandemic, our top priority continues to be the health and safety of our employees, customers and community, as well as supporting our customers' operations.

We expect to face additional logistical pressures, such as longer lead times and limited sources of supply in the near term that we will continue to mitigate through various sourcing strategies.

We also remain focused on improving our customers’ experience, differentiating product solutions and productivity.

We continue supporting our customers' needs related to the development of new therapies and vaccines.

With our strong results in fiscal year 2021 and the continued recovery in our end markets, we remain optimistic about our long-term growth opportunities in all of our end markets.

Looking forward, we remain focused on improving our customers’ experience, differentiating product solutions and productivity.

We expect to face continued inflationary and logistical pressures (such as longer lead times and limited sources of supply in the near term) which we will continue to mitigate through targeted pricing and various sourcing strategies.

While we anticipate an increasingly uncertain macroeconomic environment in fiscal year 2023, we remain optimistic about our growth opportunities in all of our key end markets in fiscal year 2023.

Critical Accounting Policies and Estimates

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Revenue Recognition .

On November 1, 2018, we adopted Accounting Standard Codification Topic 606, Revenue from Contracts with Customers ("ASC 606").

We enter into contracts to sell products, services or combinations of products and services.

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We derive revenue primarily from the sale of analytical and diagnostics products and services.

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606.

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under Accounting Standard Codification Topic 606, Revenue from Contracts with Customers, (“ASC 606’’).

Revenue is recognized when control of the promised products or services is transferred to our customers and the performance obligation is fulfilled in an amount that reflects the consideration that we expect to be entitled in exchange for those products or services, the transaction price.

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We use present right to payment, legal title, physical possession of the asset, and risks and rewards of ownership as indicators to determine the transfer of control to the customer.

For products that transfer control over time, revenue is recognized as the performance obligation is satisfied.

Product over time revenue is assessed against the following criteria:

the performance creates an asset that the customer controls as the asset is created;

the asset has no alternative use;

and we have an enforceable right to payment.

Where acceptance is not a formality, the customer must have documented their acceptance of the product or service.

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We estimate the standalone selling price by calculating the average historical selling price of our products and services per country for each performance obligation.

Stand-alone selling

prices are determined for each distinct good or service in the contract and then we allocate the transaction price in proportion to those standalone selling prices by performance obligations.

Stand-alone selling prices are determined for each distinct good or service in the contract, and then we allocate the transaction price in proportion to those standalone selling prices by performance obligations.

A portion of our revenue relates to lease arrangements.

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In 2022, discount rates for the U.S.

retiree medical plans increased marginally compared to the previous year due to the increase in the corporate bond rates.

pension and retiree medical plans increased compared to the previous year due to the increase in the corporate bond rates.

For 2022 and 2021, the discount rates for non-U.S.

plans were generally based on published rates for high quality corporate bonds and in 2021, increased marginally compared to the previous year.

If we changed our discount rate by 1 percent, the impact would be less than $1 million in U.S.

plans were generally based on published rates for high quality corporate bonds and in 2022, increased compared to the previous year.

If we had changed our discount rate by 1 percent, the impact would have been approximately $3 million on U.S.

pension expense and $16 million on non-U.S.

pension expense.

Lower discount rates increase present values of the pension benefit obligation and subsequent year pension expense;

higher discount rates decrease present values of the pension benefit obligation and subsequent year pension expense.

pension expense for the year ended October 31, 2022.

Lower discount rates usually increase present values of the pension benefit obligation and subsequent year pension expense;

higher discount rates usually decrease present values of the pension benefit obligation and subsequent year pension expense.

The company uses alternate methods of amortization as allowed by the authoritative guidance which amortizes the actuarial gains and losses on a consistent basis for the years presented.

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Post-Retirement Benefit Plans, gains and losses are amortized using a separate layer for each year's gains and losses.

In the U.S., target asset allocations for our retirement and post-retirement benefit plans were approximately 80 percent to equities and approximately 20 percent to fixed income investments as of October 31, 2020 and were changed to approximately 50 percent to equities and approximately 50 percent to fixed income investments as of October 31, 2021.

Our Deferred Profit-Sharing Plan target asset allocation is approximately 60 percent to equities and approximately 40 percent to fixed income investments.

In the U.S., target asset allocations for our retirement and post-retirement benefit plans were approximately 50 percent to equities and approximately 50 percent to fixed income investments as of October 31, 2022.

Our Deferred Profit-Sharing Plan

target asset allocation is approximately 60 percent to equities and approximately 40 percent to fixed income investments.

Approximately 1 percent of the retirement and post-retirement plans consists of limited partnerships.

Outside the U.S., our target asset allocation ranges from 15 percent to 60 percent to equities, from 38 percent to 85 percent to fixed income investments, and from zero to 25 percent to real estate, depending on the plan.

Outside the U.S., our target asset allocation ranges from 15 percent to 60 percent to equities, from 30 percent to 80 percent to fixed income investments, from zero to 25 percent to real estate and from zero to 55 percent to annuity contracts, depending on the plan.

All plans' assets are broadly diversified.

Due to fluctuations in equity markets, our actual allocations of plan assets at October 31, 2021 and 2020 differ from the target allocation.

Due to fluctuations in equity and bond markets, our actual allocations of plan assets at October 31, 2022, may differ from the target allocation.

Our policy is to bring the actual allocation in line with the target allocation.

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Fixed income securities include a global portfolio of corporate bonds of companies from diversified industries, government securities, mortgage-backed securities, asset-backed securities, derivative instruments and other.

The annuity contract is an insurance buy-in contract issued by a third-party insurance company for a portion of benefit obligations of listed pensioners under the U.K.

defined benefit plan, and is funded with existing pension plan assets with no adjustment made to the benefit obligations.

Real estate securities include holdings of managed investment funds which invest primarily in the equity instruments of real estate investment trusts and other similar real estate investments.

Other investments include a group trust consisting primarily of private equity partnerships.

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Plan assets are valued at fair value.

If we changed our estimated return on assets by 1 percent, the impact would be $5 million on U.S.

pension expense and $10 milion on non-U.S.

pension expense.

The net periodic pension and post-retirement benefit costs recorded were a $24 million expense in 2021, $22 million expense in 2020 and $10 million expense in 2019.

The years ended October 31, 2021 and 2020 included a loss on settlement of $1 million and $4 million, respectively.

If we had changed our estimated return on assets by 1 percent, the impact would have been $6 million on U.S.

pension expense and $10 million on non-U.S.

pension expense for the year ended October 31, 2022.

The total periodic pension and post-retirement benefit costs recorded were a $2 million benefit in 2022, $24 million expense in 2021 and $22 million expense in 2020.

These costs included a loss on settlement of $4 million, $1 million and $4 million, for the years ended October 31, 2022, 2021 and 2020, respectively.

Goodwill and Purchased Intangible Assets.

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life sciences and applied markets, diagnostics and genomics and Agilent CrossLab.

We performed a quantitative test for goodwill impairment of the three reporting units as of November 1, 2021, due to the change in our segment structure.

As of November 1, 2021, there was no impairment of goodwill.

We performed a qualitative test for goodwill impairment of the three reporting units, as of September 30, 2022, our annual impairment test date.

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There was no impairment of goodwill during the years ended October 31, 2022, 2021 and 2020.

Purchased intangible assets consist primarily of acquired developed technologies, proprietary know-how, trademarks, and customer relationships and are amortized using the best estimate of the asset's useful life that reflect the pattern in which the economic benefits are consumed or used up or a straight-line method ranging from 6 months to 15 years.

Purchased intangible assets consist primarily of acquired developed technologies, proprietary know-how, trademarks, and customer relationships and are amortized using the best estimate of the asset's useful life that reflects the pattern in which the economic benefits are consumed or used up or a straight-line method ranging from 6 months to 15 years.

Our determination of the fair value of the intangible assets acquired involves the use of significant estimates and assumptions.

Specifically, our determination of the fair value of the developed product technology and in-process research and development ("IPR&D") acquired involves significant estimates and assumptions related to revenue growth rates and discount rates.

Specifically, our determination of the fair value of the developed product technology and in-process research and development ("IPR&D")

acquired involves significant estimates and assumptions related to revenue growth rates and discount rates.

Our determination of the fair value of customer relationships acquired involves significant estimates and assumptions related to revenue growth rates, discount rates, and customer attrition rates.

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We performed a qualitative test for impairment of indefinite-lived intangible assets as of September 30, 2022.

Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair value of these indefinite-lived intangible assets is greater than their respective carrying values.

Based on the results of our qualitative testing, we believe that it is more-likely-than-not that the fair values of these indefinite-lived intangible assets are greater than their respective carrying values.

Each quarter we review the events and circumstances to determine if impairment of indefinite-lived intangible assets is indicated.

During the year ended October 31, 2020, we recorded an impairment of in-process research and development of $90 million related to the shutdown of our sequencer development program in our diagnostics and genomics segment.

During the year ended October 31, 2022 and 2021 there were no impairments of indefinite-lived intangible assets.

Accounting for Income Taxes.

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Foreign Currency

Our revenues, costs and expenses, and monetary assets and liabilities are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities.

Foreign currency movements for the year ended October 31, 2021 had an overall favorable impact on revenue of 2 percentage points when compared to the same period last year.

Foreign currency movements for the year ended October 31, 2020, had an overall unfavorable impact on revenue of 1 percentage point when compared to 2019.

When movements in foreign currency exchange rates have a positive impact on revenue, they will also have a negative impact by increasing our costs and expenses.

Our revenues, costs and expenses, and monetary assets and liabilities and equity are exposed to changes in foreign currency exchange rates as a result of our global operating and financing activities.

Foreign currency movements for the year ended October 31, 2022, had an overall unfavorable impact on revenue of 4 percentage points when compared to the same period last year.

Foreign currency movements for the year ended October 31, 2021, had an overall favorable impact on revenue of 3 percentage points when compared to 2020.

When movements in foreign currency exchange rates have a negative impact on revenue, they will also have a positive impact by reducing our costs and expenses.

We calculate the impact of movements in foreign currency exchange rates by applying the actual foreign currency exchange rates in effect during the last month of each quarter of the current year to both the applicable current and prior year periods.

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% of total net revenue:

Products 75 % 75 % 75 % — —

Services and other 25 % 25 % 25 % — —

Products 76 % 75 % 75 % 1 ppt.

Services and other 24 % 25 % 25 % (1) ppt.

Total 100 % 100 % 100 %

Agilent's net revenue of $6,848 million for the year ended October 31, 2022, increased 8 percent when compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 2 percentage points in 2021 when compared to 2020.

The favorable impact of COVID-related revenue and revenue from our recent acquisition for the year ended October 31, 2021 was not material.

Net revenue increased in all business segments, geographic regions and key end markets led by strong growth from the pharmaceutical, chemical and energy and diagnostics and clinical markets when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

For the year ended October 31, 2022, net revenue increased in all our segments, geographic regions and most of our key end markets.

Agilent's net revenue of $6,319 million increased 18 percent in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

Product revenue includes revenue generated from the sales of our analytical instrumentation, software and consumables.

Revenue from products increased 9 percent for the year ended October 31, 2022, when compared to 2021.

The growth in product revenue was driven by increased sales within our liquid chromatography and mass spectrometry businesses with continued strong growth in our nucleic acid solutions and cell analysis businesses.

Product revenue growth in the year ended October 31, 2022, was primarily driven by increased sales within our liquid chromatography, spectroscopy, nucleic acid solutions and consumables businesses.

Revenue from products increased 19 percent for the year ended October 31, 2021, when compared to 2020.

Revenue in 2020 was impacted by the global COVID-19 pandemic within most of our product lines as customers curtailed equipment spending at various times when countries around the world were in the lockdown phase of the COVID-19 pandemic.

Growth was due to our cell analysis business, automation products and our nucleic acid solutions business.

The increase in the cell analysis business was primarily due to the contributions from our acquisitions and the increased demand for our products for use in COVID-19 testing and vaccine research.

Services and other revenue consist of revenue generated from our three business segments:

Agilent CrossLab, diagnostics and genomics and our life science and applied markets businesses.

Some of the prominent services in the Agilent CrossLab business include repair and maintenance on multi-vendor instruments, compliance services and installation services.

Services in the diagnostics and genomics business include consulting services related to the companion diagnostics and nucleic acid businesses.

Services in the life science and applied markets business include repair and maintenance and installation services.

Services and other revenue consist of contract repair, preventative maintenance, compliance services, repair and maintenance, installation services, and consulting services related to the companion diagnostics and nucleic acid solutions businesses.

Services and other revenue increased 6 percent in 2022 as compared to 2021.

Service revenue from the Agilent CrossLab business increased 16 percent, with a 3 percentage point favorable currency impact, for the year ended October 31, 2021 when compared to the same period last year.

This strength in the Agilent CrossLab service business was evident across all service regions and from contract services, on-demand repairs and nearly all other service types.

Services sold with instrument sales grew more than twice as fast as the growth in after-market service revenue during that same period.

For the year ended October 31, 2021, service revenue within our diagnostics and genomics business increased 22 percent when compared to 2020, primarily due to increases from our companion diagnostics and pathology businesses.

For the year ended October 31, 2021, service revenue within our life sciences and applied markets business increased 16 percent when compared to 2020, primarily due to increases from our cell analysis business.

Service revenue increases reflected strong growth from contract repair services, compliance services, installation services, consultative services and relocation services in all key end markets except the academia and government markets.

Services and other revenue increased 16 percent in 2021 as compared to 2020.

For the year ended October 31, 2020, the service revenue from the Agilent CrossLab business increased 4 percent when compared to 2019, with a 1 percentage point unfavorable currency impact.

This growth for the year ended October 31, 2020 is reflective of the resilience of the contracted service business throughout the year, as well as the recovery of the on-demand and installation service businesses in the latter half of 2020, as customer sites gradually reopened following their COVID-19 related closures earlier in the year.

Those site re-openings were fastest in China.

For the year ended October 31, 2020, the service revenue from the diagnostics and genomics business remained flat when compared to 2019.

For the year ended October 31, 2020, the service revenue from the life sciences and applied markets business increased 28 percent when compared to 2019.

The increase in life sciences and applied markets service revenue was due to the additional service revenue within the cell analysis business due to the Lionheart Technologies LLC ("BioTek") acquisition.

Service revenue was strong across all service regions and from contract services, on-demand repairs and nearly all other service types.

Services sold with instrument sales grew more than twice as fast as the growth in after-market service revenue during that same period.

Increase in services from our companion diagnostics, cell analysis and pathology businesses also contributed to the increase in service revenue in 2021.

Net Revenue By Segment

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Revenue in the life sciences and applied markets business increased 9 percent in 2022 when compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 2 percentage points in 2021 when compared to 2020.

For the year ended October 31, 2021, we saw revenue growth across all key end markets when compared to the same period last year.

Revenue growth was led by strong demand for our products within the pharmaceutical and the chemical and energy markets when compared to the same periods last year.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

For the year ended October 31, 2022, revenue growth was strong within the chemicals and advanced materials markets driven by demand for our spectroscopy, gas chromatography and consumable products.

Revenue growth was strong within the pharmaceutical market driven by demand for our liquid chromatography, cell analysis and liquid chromatography mass spectrometry products.

Revenue in the life sciences and applied markets business increased 18 percent in 2021 when compared to 2020.

Foreign currency movements had no overall impact on revenue growth in 2020 when compared to 2019.

Revenue growth within the life sciences and applied markets was driven by strong growth in the academia and government, the pharmaceutical and the diagnostics and clinical markets with moderate growth from the food market partially offset by declines in revenue within the environmental and forensics and chemical and energy markets.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

For the year ended October 31, 2021, we saw revenue growth across all key end markets when compared to 2020.

Revenue growth was led by strong demand for our products within the pharmaceutical and the chemicals and advanced materials markets when compared to 2020.

Revenue in the diagnostics and genomics business increased 7 percent in 2022 when compared to 2021.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

Revenue growth was strong within the pharmaceutical market led by performance from our nucleic acid solutions business.

Revenue in the diagnostics and genomics business increased 24 percent in 2021 when compared to 2020.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

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Revenue growth was strong within the diagnostics and clinical markets led by performance from our pathology, companion diagnostics and genomics businesses.

Revenue in the diagnostics and genomics business increased 2 percent in 2020 when compared to 2019.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Revenue growth within the diagnostics and genomics business was driven by strong growth in our nucleic acid solutions and biomolecular analysis businesses partially offset by declines in our genomics business.

Revenue in the Agilent CrossLab business increased 7 percent in 2022 when compared to 2021.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to 2021.

For the year ended October 31, 2022, we saw revenue growth across most of our end markets led by strong revenue growth from the pharmaceutical and chemicals and advanced materials markets when compared to the same periods last year.

generated by Agilent CrossLab increased 16 percent in 2021 when compared to 2020.

Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.

For the year ended October 31, 2021, we saw revenue growth across all key end markets led by strong growth from the pharmaceutical and chemical and energy and food markets when compared to the same period last year.

Revenue generated by Agilent CrossLab increased 3 percent in 2020 when compared to 2019.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Revenue growth within Agilent CrossLab business was strong within the pharmaceutical and food markets which was partially offset by declines in the academia and government and clinical and diagnostics markets.

For the year ended October 31, 2021, we saw revenue growth across all key end markets led by strong growth from the pharmaceutical and chemical and advanced materials and food markets when compared to 2020.

Costs and Expenses

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Total gross margin for the year ended October 31, 2022 increased 1 percentage point when compared to 2021.

Total gross margin was impacted by higher sales volume, targeted price increases and lower inventory charges which were offset by higher material costs, shipping and logistics costs, wages, transformational initiative costs and intangible amortization expense.

Total gross margin for the year ended October 31, 2021 increased 1 percentage point when compared to 2020.

Total gross margin increased due to higher sales volume and favorable product mix which was partially offset by higher wages and variable pay, higher shipping and logistics costs, higher intangible amortization expense and higher share-based compensation expense.

Total gross margin for the year ended October 31, 2020 decreased 1 percentage point when compared to 2019.

Gross margin declined due to the impacts of pricing pressure, higher intangible amortization expense, higher wages, net unfavorable currency impact and higher fixed costs related to the new manufacturing facility in Frederick, Colorado, partially offset by lower period and travel costs.

Gross inventory charges were $24 million in 2022, $29 million in 2021 and $28 million in 2020.

Sales of previously written down inventory were $11 million in 2022, $8 million in 2021 and $7 million in 2020.

Research and development expenses for the year ended October 31, 2021 decreased 11 percent when compared to 2020.

Excluding the intangible and other assets impairments recorded in 2020, research and development expenses for the year ended October 31, 2021 increased 11 percent due to increased wages and variable pay, higher program investments in our life sciences and applied markets and diagnostics and genomics businesses, additional expenses related to our recent acquisition, and higher share-based compensation expense.

Research and development expenses for the year ended October 31, 2022 increased 6 percent when compared to 2021.

Research and development expenses increased primarily due to intangible and other asset impairments of $97 million related to the shutdown of our sequencer development program.

The increase was also due to higher wages and additional expenses related to our acquisition of BioTek partially offset by lower discretionary expenditures including lower travel costs and favorable currency impact.

Research and development expenses increased due to higher wages and program investments in our diagnostics and genomics segment and in our mass spectrometry business within our our life sciences and applied markets segment, and additional research and development expenses related to the Resolution Bioscience acquisition.

Research and development expenses for the year ended October 31, 2021 decreased 11 percent when compared to 2020.

Excluding the intangible and other assets impairments recorded in 2020, research and development expenses for the year ended October 31, 2021 increased 11 percent due to increased wages and variable pay, higher program investments in our life sciences and applied markets and diagnostics and genomics businesses, additional expenses related to an acquisition, and higher share-based compensation expense.

Selling, general and administrative expenses increased 1 percent in 2022 when compared to 2021.

The increase was due to higher wages and variable pay, higher commissions and higher share-based compensation expense partially offset by a decrease related to the change in the fair value of contingent consideration for our recent acquisition, lower legal costs and lower transformational initiatives expenses.

The increase was due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, acquisition and integration costs, variable pay, transformational initiatives and a decrease related to the change in the fair value of contingent consideration.

Selling, general and administrative expenses increased 8 percent in 2021 compared to 2020.

The increase in selling, general and administrative expenses was due to higher wages, higher intangible amortization

expense and higher transformational initiative expenses, which was partially offset by lower discretionary expenditures including lower travel costs and favorable currency impact.

The increase was due to higher wages and variable pay, higher commissions and higher share-based compensation expense partially offset by a decrease related to the change in the fair value of an acquisition-related contingent consideration, lower legal costs and lower transformational initiatives expenses.

Total operating margin for the year ended October 31, 2022 increased 2 percentage points when compared to 2021.

Operating margin increased due to higher sales volume, increased gross margin, lower commissions and variable pay partially offset by increases in wages, share-based compensation expense and inflationary pressures.

Total operating margin for the year ended October 31, 2021, increased 6 percentage points when compared to 2020.

Operating margin increased due to higher sales volume and increased gross margin partially offset by increases in wages and variable pay, commissions, share-based compensation expense and amortization of intangible assets.

Total operating margin for the year ended October 31, 2020, decreased 2 percentage points when compared to 2019.

Operating margin declined due to intangible and other asset impairments, higher wages, higher intangible amortization expense and higher transformational initiative expenses partially offset by lower discretionary expenditures including lower travel costs and favorable currency impact.

Interest income for the year ended October 31, 2022, 2021 and 2020 was $9 million, $2 million and $8 million, respectively.

The decrease in interest income in 2021 and 2020 was primarily due to lower interest rates for our cash and cash equivalents.

Interest expense for the years ended October 31, 2021, 2020 and 2019 was $81 million, $78 million and $74 million, respectively, and relates to the interest charged on our senior notes, credit facilities, commercial paper and the amortization of the deferred loss recorded upon termination of the forward starting interest rate swap contracts partially offset by the amortization of deferred gains recorded upon termination of interest rate swap contracts.

The increase in interest income in 2022 was primarily due to increases in interest rates for our cash and cash equivalents.

Interest expense for the years ended October 31, 2022, 2021 and 2020 was $84 million, $81 million and $78 million, respectively, and relates to the interest charged on our senior notes, term loan, credit facilities, commercial paper and the amortization of the deferred loss recorded upon termination of the forward starting interest rate swap contracts partially offset by the amortization of deferred gains recorded upon termination of interest rate swap contracts.

At October 31, 2022, our headcount was approximately 18,100 compared to 17,000 in 2021.

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The costs associated with these services are reported within income from operations.

Other income (expense), net includes $25 million income related to the defined benefit retirement and post-retirement benefit plans (interest cost, expected return on assets, amortization of net actuarial (gain) loss and settlement loss) offset by the net loss on the fair value of equity securities of approximately $67 million and $9 million loss on extinguishment of debt.

For the year ended October 31, 2021, other income (expense), net includes income of $7 million related to the provision of site service costs to, and lease income from, Keysight.

The costs associated with these services are reported within income from operations.

Other income (expense), net includes a $17 million loss on extinguishment of debt and net gains on the fair value of equity securities of approximately $98 million.

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Other income (expense), net also includes net gains on the fair value of equity securities of approximately $27 million and income of $22 million related to the settlement of our legal claim against Twist Bioscience Corporation.

For the year ended October 31, 2019, other income (expense), net includes income of $12 million related to the provision of site service costs to, and lease income from, Keysight and $9 million loss on the extinguishment of debt.

Years Ended October 31,

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For 2022, our income tax expense was $250 million with an effective tax rate of 16.6 percent.

For the year ended October 31, 2022, our effective tax rate and the resulting provision for income taxes were impacted by the tax benefit of $46 million related to foreign-derived intangible income.

For 2021, our income tax expense was $150 million with an effective tax rate of 11 percent.

For the year ended October 31, 2021, our effective tax rate and the resulting provision for income taxes were impacted by the discrete benefit of $93 million related to the release of tax reserves in various jurisdictions due to audit settlements and the expiration of statutes of limitations.

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For the year ended October 31, 2020, our effective tax rate and the resulting provision for income taxes were impacted by foreign income taxed at lower rates.

For 2019, our income tax benefit was $152 million with an effective tax rate of (16.5) percent.

For the year ended October 31, 2019, our effective tax rate and the resulting provision for income taxes were significantly impacted by the discrete benefit of $299 million related to the extension of the company’s tax incentive in Singapore.

We have negotiated a tax holiday in Singapore.

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The benefit of the tax holiday on net income per share (diluted) was approximately $0.18, $0.11, and $0.23 in 2022, 2021 and 2020, respectively.

Of the $1.16 benefit of the tax incentives on net income per share (diluted) in 2019, $0.94 of the benefit relates to one-time items from the extension of the company’s tax incentive in Singapore.

With these jurisdictions and the U.S., it is reasonably possible that there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable.

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If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary.

We include interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of operations.

Segment Overview

In the first quarter of fiscal year 2022, we announced a change in organizational structure designed to enable our growth strategies and strengthen our focus on customers.

Our chemistries and supplies business and our remarketed instruments business moved from our Agilent CrossLab business segment to our life sciences and applied markets business segment.

We also moved BioTek's service revenue and related cost of sales from our life sciences and applied markets business segment to our Agilent CrossLab business segment.

Following this reorganization, we continue to have three business segments (life sciences and applied markets, diagnostics and genomics and Agilent CrossLab), each of which continues to comprise a reportable segment.

We began reporting under this new structure with the Quarterly Report on Form 10-Q for the period ended January 31, 2022.

Historical financial segment information have been recast to conform to this new presentation in our financial statements and accompanying notes.

There was no change to our diagnostics and genomics business segment.

Through October 31, 2022, we have three business segments comprised of the life sciences and applied markets business, diagnostics and genomics business and the Agilent CrossLab business.

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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.

Years Ended October 31, 2022 over 2021

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Life science and applied markets business revenue in 2022 increased 9 percent compared to 2021.

Foreign currency movements had an overall favorable impact on revenue growth of 2 percentage points in 2021 when compared to the same period last year.

Geographically, revenue increased 21 percent in the Americas with no currency impact, increased 22 percent

in Europe with a 5 percentage point favorable currency impact and increased 14 percent in Asia Pacific with a 3 percentage point favorable currency impact.

In 2021, revenue increases were broad based across our portfolio driven primarily by liquid chromatography, liquid chromatography mass spectrometry, cell analysis and spectroscopy products when compared to the same period last year.

End market revenue performance in 2021 was mixed with pharmaceutical, chemical and energy, diagnostics and clinical and food markets delivering strong results, academia and government delivering moderate results and forensics and environmental markets delivering modest results.

The revenue growth in the pharmaceutical end market was driven by liquid chromatography, liquid chromatography mass spectrometry and cell analysis products led by broad based strength across all regions.

Revenue growth in the chemical and energy market was mainly driven by strength in spectroscopy, vacuum, gas chromatography, and gas chromatography mass spectrometry products with broad based strength across regions.

Revenue growth in the food and diagnostics and clinical markets was across all products and regions.

Revenue growth in the academia and government end market was moderate with strong growth in cell analysis partially offset by declines in gas phase mass spectrometry and spectroscopy products.

Environmental and forensics delivered modest growth with vacuum products delivering strong growth and the rest of the products delivering modest results.

Foreign currency movements had an overall unfavorable impact on revenue growth of 4 percentage points in 2022 when compared to the same period last year.

Geographically, revenue increased 11 percent in the Americas with no currency impact, increased 2 percent in Europe with a 7 percentage point unfavorable currency impact and increased 13 percent in Asia Pacific with a 3 percentage point unfavorable currency impact.

The increase in Asia Pacific was led by strong demand in liquid chromatography systems in China.

In 2022, revenue growth was driven by strong growth in liquid chromatography, spectroscopy products and consumables portfolio when compared to the same period last year.

End market revenue performance in 2022 was mixed with pharmaceutical, chemicals and advanced materials markets and diagnostics and clinical market delivering strong revenue growth, food and environmental and forensics delivering modest revenue growth while academia and government remained relatively flat when compared to the same period last year.

Revenue growth in the pharmaceutical market was primarily driven by our liquid chromatography, cell analysis and consumables businesses.

Revenue growth in the chemicals and advanced materials market was mainly driven by strength in our gas chromatography and spectroscopy portfolio as compared to the same period last year.

The academia and government market revenue growth was relatively flat with strength in our liquid chromatography and gas chromatography mass spectrometry businesses offset by other product categories when compared to the same period last year.

Life science and applied markets business revenue in 2021 increased 18 percent compared to 2020.

Foreign currency movements for 2020 had no overall impact on revenue growth when compared to 2019.

Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 3 percentage points when compared to 2020.

Acquisitions had an overall favorable impact on revenue growth of 8 percentage points when compared to 2020.

Geographically, revenue increased 13 percent in the Americas with a 1 percentage point unfavorable currency impact, decreased 2 percent in Europe with no currency impact and increased 1 percent in Asia Pacific with no currency impact.

In 2020, revenue increases in our automation, liquid chromatography mass spectrometry and cell analysis products from our acquisitions, primarily in the Americas, were partially offset by declines in other parts of the portfolio when compared to the same period last year.

End market revenue performance in 2020 was mixed with academia and government and diagnostics and clinical markets delivering strong growth and the pharmaceutical and food markets delivering moderate growth which was partially offset by chemical and energy and forensics and environmental markets.

In 2020, despite the unfavorable impact from COVID-19, revenue growth in the academia and government and pharmaceutical and diagnostics and clinical markets was primarily driven by strong performance of our cell analysis products from the Lionheart Technologies LLC ("BioTek") acquisition.

The growth in the diagnostics and clinical business was also due to the strength in liquid phase mass spectrometry and cell analysis products.

Looking forward, despite short term uncertainties and the adverse effects of the COVID-19 pandemic, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs.

We anticipate growth from our new product introductions and acquisitions in the last couple of years as we continue to invest in expanding and improving our applications and solutions portfolio.

While we anticipate volatility in our markets, we expect continued growth across most end markets in the long term.

Geographically, revenue increased 20 percent in the Americas with a 1 percentage point favorable currency impact, increased 20 percent in Europe with a 5 percentage point favorable currency impact and increased 15 percent in Asia Pacific with a 3 percentage point favorable currency impact.

In 2021, revenue increases were broad based across our portfolio driven primarily by liquid chromatography, liquid chromatography mass spectrometry, cell analysis, spectroscopy products and our consumables portfolio when compared to 2020.

End market revenue performance in 2021 was strong with all end markets (pharmaceutical, chemicals and advanced materials, diagnostics and clinical, food, academia and government and environmental and forensic market) delivering strong results when compared to the same period last year.

The revenue growth in the pharmaceutical end market was driven by liquid chromatography, liquid chromatography mass spectrometry, cell analysis products and our consumables portfolio led by broad based strength across all regions.

Revenue growth in the chemicals and advanced materials market was mainly driven by strength in spectroscopy, vacuum, consumables, gas chromatography, and gas chromatography mass spectrometry products with broad based strength across regions.

Revenue growth in the food and diagnostics and clinical markets was across all products and regions.

Revenue growth in the academia and government end market was driven by strong growth in cell analysis and consumables portfolio.

Revenue growth in the environmental and forensics market was driven by strong growth in vacuum products and consumables portfolio as compared to the same period last year.

Looking forward, despite supply chain and inflationary pressures and COVID-19 uncertainties, we are optimistic about our long-term growth opportunities in the life sciences and applied markets as our broad portfolio of products and solutions are well suited to address customer needs.

While we anticipate volatility in our markets, we expect continued growth across most end markets in the long term from our new product introductions and acquisitions in the last couple of years as we continue to invest in expanding and improving our applications and solutions portfolio.

Gross Margin and Operating Margin

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Income from operations $ 1,186 $ 1,017 $ 792 17% 28%

Gross margin was flat in 2022 compared to 2021.

Gross margin was impacted by higher materials and logistics costs which were fully offset by price increases, higher sales volume and favorable cash flow hedging gains.

Gross margin increased 1 percentage point in 2021 compared to 2020.

Gross margin was favorably impacted by higher sales volume which was partially offset by higher wage and variable pay, higher material costs and unfavorable currency impact and hedging losses.

Gross margin decreased 2 percentage points in 2020 compared to 2019.

Gross margin declined due to the increased impact of pricing pressures and a net unfavorable impact from currency movements partially offset by favorable product mix and material cost savings.

Gross margin was favorably impacted by higher sales volume which was partially offset by higher wage and variable pay, higher material costs and unfavorable currency impact and cash flow hedging losses.

Research and development expenses increased 8 percent in 2022 when compared to 2021.

Research and development expenses increased due to higher wage and variable pay, higher program investments in informatics and cell analysis, unfavorable currency impact and higher share-based compensation expense.

Research and development expenses increased due to higher wages and program investments in our mass spectrometry and cell analysis businesses.

Research and development expenses increased 11 percent in 2021 when compared to 2020.

Research and development expenses increased due to higher wages and additional expenses related to the BioTek acquisition partially offset by lower discretionary spending and favorable impact from foreign currency movements.

Selling, general and administrative expenses increased 2 percent in 2022 compared to 2021.

Selling, general and administrative expenses increased due to higher wages and variable pay, higher commissions, higher share-based compensation expense and unfavorable currency movements.

Selling, general and administrative expenses increased due to higher wages and marketing expenses partially offset by lower commissions, variable pay and favorable currency movements when compared to same period last year.

Selling, general and administrative expenses increased 11 percent in 2021 compared to 2020.

Selling, general and administrative expenses increased due to higher wages and additional expenses related to the BioTek acquisition partially offset by favorable impact from foreign currency movements and lower travel costs.

Selling, general and administrative expenses increased due to higher wages and variable pay, higher commissions, higher share-based compensation expense and unfavorable currency movements.

Operating margin increased 2 percentage points in 2022 compared to 2021.

Operating margin was impacted by higher sales volume and favorable currency movements on expenses partially offset by higher wages, material and logistics costs.

Operating margin increased 2 percentage points in 2021 compared to 2020.

Operating margin increased due to higher sales volume and favorable impact of currency on revenue which was partially offset by higher wages and variable pay, unfavorable impact of currency on expenses and higher share-based compensation.

Operating margin decreased 1 percentage point in 2020 compared to 2019.

Operating margin declined due to additional expenses related to our recent acquisitions and unfavorable gross margin due to pricing pressures partially offset by operational savings and favorable currency impact.

Income from Operations

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Income from operations in 2021 increased by $225 million or 28 percent when compared to 2020 on a revenue increase of $548 million.

The increase in income from operations was mainly due to the impact of the BioTek acquisition.

The increase in income from operations was primarily due to higher sales volume.

Diagnostics and Genomics

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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 solutions that 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 API in an emerging class of drugs that utilize nucleic acid molecules for disease therapy.

This business also

includes solutions that enable clinical labs to identify DNA variants associated with genetic disease and help direct cancer therapy.

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.

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Fourth, we also collaborate with a number of major pharmaceutical companies to develop new potential tissue and liquid-based 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 is a provider of reagents used for turbidimetry and flow cytometry.

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.

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 utilized in clinical and life science research applications.

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.

Years Ended October 31, 2022 over 2021

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Diagnostics and genomics business revenue increased 7 percent in 2022 compared to 2021.

Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 3 percentage points when compared to the same period last year.

Foreign currency movements for 2022 had an overall unfavorable impact on revenue growth of 4 percentage points when compared to the same period last year.

Geographically, revenue increased 13 percent in the Americas with no currency impact, decreased 1 percent in Europe with a 7 percentage point unfavorable currency impact and increased 6 percent in Asia Pacific with a 7 percentage point unfavorable currency impact.

The increase in the Americas was driven by strong performance in our nucleic acid solutions, biomolecular analysis, reagent partnership and genomics portfolios.

In Europe, the 7 percentage point unfavorable impact of currency on revenue was partially offset by revenue growth in our reagent partnership, pathology and companion diagnostics businesses.

Revenue growth in Asia Pacific was primarily driven by an increase in China as well as a strong performance across our entire portfolio.

In 2022, revenue performance in the pharmaceutical market was led by double-digit revenue growth in our nucleic acid solutions and single digit growth in biomolecular analysis and genomics businesses.

We also saw moderate revenue growth in diagnostics and clinical and academia and government markets led by our biomolecular analysis, pathology, genomics and reagent partnership businesses when compared to the same period last year.

Diagnostics and genomics business revenue in 2021 increased 24 percent compared to 2020.

Foreign currency movements had an overall favorable impact on revenue growth of 3 percentage points in 2021 when compared to 2020.

Geographically, revenue increased 35 percent in the Americas with a 1 percentage point favorable currency impact, increased 12 percent in Europe with a 5 percentage point favorable currency impact and increased 16 percent in Asia Pacific with a 2 percentage point favorable currency impact.

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All key end markets had revenue increases when compared to 2020.

Diagnostics and genomics business revenue in 2020 increased 2 percent compared to 2019.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Geographically, revenue increased 2 percent in the Americas with no currency impact, increased 1 percent in Europe with no currency impact and increased 7 percent in Asia Pacific with no currency impact.

The increase in the Americas was driven by strong performance in the nucleic acid solutions and reagent partnership businesses.

Revenue growth in the Americas was partly offset by a decline in the pathology and genomics business driven by the COVID-19 related reduction in routine and cancer testing, as well as the closure of academic and research laboratories.

In Europe, strong revenue from our biomolecular analysis business was partially offset by the COVID-19 related declines from our genomics business.

In Asia Pacific, revenue growth was driven by the pathology and biomolecular analysis businesses.

In 2020 revenue performance in the diagnostics and genomics business was led by strong revenue growth in the nucleic acid solutions and biomolecular analyses businesses.

This was partly offset by a COVID-19 related reduction in routine and cancer testing, as well as the closure of most academic and research laboratories.

The diagnostics and clinical research end markets remain strong long-term and growing driven by an aging population and lifestyle developments such as poor diet and physical inactivity.

Looking forward, we are optimistic about our long-term growth opportunities in our end markets and continue to invest in expanding and improving our applications and solutions portfolio.

We remain positive about our growth in our end markets as our product portfolio around OMNIS, PD-L1 assays and SureFISH continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing target enrichment solutions continue to be adopted.

Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, and with our newly opened and planned extension of our nucleic acid solutions production facility in Frederick, Colorado, we are well positioned to serve more of the market demand.

The acquisition of Resolution Bioscience will expand our capabilities in NGS-based cancer diagnostics and provide innovative technology to further serve the needs of the fast-growing precision medicine market.

We remain positive about our growth in our end markets as our product portfolio around OMNIS and PD-L1 assays continues to gain strength with our customers in clinical oncology applications, and our next generation sequencing target enrichment solutions continue to be adopted.

Market demand in the nucleic acid solutions business related to therapeutic oligo programs continues, and with the planned extension of our nucleic

acid solutions production facility in Frederick, Colorado, we are well positioned to serve more of the market demand.

We are expanding our capabilities in NGS-based cancer diagnostics and will provide innovative technology to further serve the needs of the fast-growing precision medicine market.

We will continue to invest in research and development and seek to expand our position in developing countries and emerging markets.

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Selling, general and administrative $ 303 $ 283 $ 238 7% 19%

Operating margin 21.0 % 18.3 % 18.2 % 3 ppts.

Operating margin 21.7 % 21.0 % 18.3 % 1 ppt.

Income from operations $ 301 $ 273 $ 192 10% 42%

Gross margin increased 1 percentage point in 2022 when compared to 2021.

Gross margin increased due to higher sales volume offsetting the higher wages and logistics costs.

Gross margin increased 1 percentage point in 2021 when compared to 2020.

Gross margin increased due to higher sales volume more than offsetting higher wages, variable pay, inventory charges and logistics expenses.

Gross margin decreased 3 percentage points in 2020 when compared to 2019.

Gross margin was impacted by unfavorable product mix and higher fixed costs related to the new manufacturing facility in Frederick, Colorado, partially offset by lower period and travel costs.

Research and development expenses increased 8 percent in 2022 when compared to 2021.

Research and development expenses included higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines, wages and variable pay, and additional expenses related to our recent acquisition which were partially offset by the shutdown of the sequencer development program in 2020.

Research and development expenses decreased 9 percent in 2020 when compared to 2019.

Research and development expenses decreased due to the shutdown of our sequencer development program and a reduction in discretionary expenditures including travel costs.

Research and development expenses increased primarily due to higher wages and additional expenses related to the Resolution Bioscience acquisition and higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines.

Research and development expenses increased 12 percent in 2021 when compared to 2020.

Research and development expenses included higher program investments related to satisfying regulatory requirements such as the EU IVDR guidelines, wages and variable pay, and additional expenses related to our acquisition which were partially offset by the shutdown of the sequencer development program in 2020.

Selling, general and administrative expenses increased 7 percent in 2022 when compared to 2021.

Selling general and administrative expenses increased due to higher wages and additional expenses related to the Resolution Bioscience acquisition and inflationary pressures partially offset by lower commissions and favorable currency movements.

Selling, general and administrative expenses increased 19 percent in 2021 when compared to 2020.

Selling, general and administrative expenses increased due to higher commissions, share based compensation expenses, higher wages and variable pay.

Selling, general and administrative expenses decreased 4 percent in 2020 when compared to 2019.

Selling, general and administrative expenses decreased due to a reduction in discretionary expenditures including travel costs partially offset by an increase in wages.

Operating margin increased 1 percentage point in 2022 when compared to 2021.

The increase in operating margin resulted from higher revenue growth and gross margins, which offset the increase in wages, inflationary pressures, logistics costs and program investments.

Operating margin increased 3 percentage points in 2021 when compared to 2020.

Operating margin improved as revenue growth more than offset the increase in commissions, wages and variable pay.

Operating margin was flat in 2020 when compared to 2019.

Operating margin was aided by savings in operating expenses which were offset by gross margin decline.

Income from Operations

Income from operations in 2022 increased by $28 million or 10 percent when compared to 2021 on a revenue increase of $93 million.

Income from operations increased due to strong sales performance.

Income from operations increased due to higher revenue and gross margin improvement partially offset by higher wages, logistics costs and program investments.

Income from operations in 2021 increased by $81 million or 42 percent when compared to 2020 on a revenue increase of $249 million.

The increase was driven by gains from higher volume and lower operating expenses more than offsetting the gross margin percentage decline.

Income from operations increased due to strong sales performance.

Agilent CrossLab

The Agilent CrossLab business spans the entire lab with its extensive consumables and services portfolio, which 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 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.

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.

Years Ended October 31, 2022 over 2021

4 unchanged sentences

Agilent CrossLab business revenue increased 7 percent in 2022 when compared to 2021.

Foreign currency movements for 2021 had an overall favorable impact on revenue growth of 4 percentage points when compared to 2020.

Geographically, revenue increased 13 percent in the Americas with no currency impact, increased 15 percent in Europe with a 6 percentage point favorable currency impact and increased 18 percent in Asia Pacific with a 5 percentage point favorable currency impact.

During the year ended October 31, 2021, the solid growth across the regions reflected consistently high demand for products and services across the entire product portfolio and end markets.

Revenue growth also reflected last year's weakened sales when many of our customers closed their sites or reduced their operating capacity in response to the COVID-19 pandemic.

Foreign currency movements for 2022 had an overall unfavorable impact on revenue growth of 4 percentage points when compared to 2021.

Geographically, revenue increased 11 percent in the Americas with no currency impact, increased 1 percent in Europe with a 9 percentage point unfavorable currency impact and increased 7 percent in Asia Pacific with a 5 percentage point unfavorable currency impact.

During the year ended October 31, 2022, revenue growth in all three regions was driven by contract repair services, compliance services, installation services and consultative services.

Agilent CrossLab business revenue increased 16 percent in 2021 when compared to 2020.

Foreign currency movements had an overall unfavorable impact on revenue growth of 1 percentage point in 2020 when compared to 2019.

Geographically, revenue was flat in the Americas with a 1 percentage point unfavorable currency impact, increased 2 percent in Europe with a 1 percentage point favorable currency impact and increased 7 percent in Asia Pacific with a 1 percentage point unfavorable currency impact.

As a consequence of the COVID-19 related impact on global commerce in 2020, consumable sales growth has been low single digits in comparison to 2019 in most countries excluding China.

In addition, the COVID-19 related customer site closures have brought a temporary lull in our delivery of on-demand services and installation services, which has been recovering in the latter half of the year as customer labs reopen.

Consumable sales in China and the contracted service business across most regions have seen solid gains throughout 2020.

Among our major end markets, the pharmaceutical market and the food market generated the strongest revenue growth when compared to 2019.

Looking forward, the Agilent CrossLab products and services are well positioned to continue their success in our key end markets and with a growing installed base of instruments to support.

We have been taking advantage of digital and remote capabilities to offer services and consumables to customers and will continue to do so.

Foreign currency movements had an overall favorable impact on revenue growth of 4 percentage points in 2021 when compared to 2020.

Geographically, revenue increased 14 percent in the Americas with no currency impact, increased 16 percent in Europe with a 6 percentage point favorable currency impact and increased 17 percent in Asia Pacific with a 4 percentage point favorable currency impact.

The strong growth across the regions reflected consistently high demand for services across the entire product portfolio and end markets.

Revenue growth also reflected weakened sales in 2020 when many of our customers closed their sites or reduced their operating capacity in response to the COVID-19 pandemic.

Looking forward, Agilent CrossLab services are well positioned to continue their success in our key end markets by supporting a growing installed base of instruments.

Digital and remote capabilities will continue to be a key factor in improving the service quality and the experience to customers.

Geographically, the business is well diversified across all regions to take advantage of local market opportunities and to hedge against weakness in any one region.

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(in millions, except margin data)

Total gross margin 52.3 % 52.2 % 51.8 % — —

Total gross margin 47.6 % 46.8 % 46.9 % 1 ppt.

Research and development $ 32 $ 34 $ 33 (5)% 4%

Selling, general and administrative $ 288 $ 279 $ 247 3% 13%

Operating margin 28.1 % 27.2 % 25.8 % 1 ppt 1 ppt

Operating margin 25.5 % 23.8 % 23.1 % 2 ppts.

Income from operations $ 370 $ 323 $ 272 15% 19%

Gross margin for products and services was flat in 2021 when compared to 2020.

Higher volumes and targeted price increases did help elevate margins, but those benefits were offset by higher service delivery costs, higher variable pay and higher hedging losses.

Gross margin for products and services was relatively flat in 2020 when compared to 2019.

Gross margin benefited from lower service delivery costs which included travel, parts and labor as well as improved productivity in manufacturing in the consumables business.

Those operational gains were offset by a net unfavorable impact from currency movements.

Gross margin increased 1 percentage point in 2022 when compared to 2021.

Gross margin was impacted by higher sales volume and targeted price increases that improved margins, which were partially offset by higher wages and service delivery costs for logistics and parts.

Gross margin was relatively flat in 2021 when compared to 2020.

Higher volumes and targeted price increases did help elevate margins, but those benefits were offset by higher service delivery costs, higher variable pay and higher cash flow hedging losses.

Research and development expenses decreased 5 percent in 2022 when compared to 2021.

Research and development expenses decreased mainly due to cost efficiencies in certain research and development projects which led to lower expenditures.

Research and development expenses increased 4 percent in 2021 when compared to 2020.

Research and development investment within the Agilent CrossLab business increased due to higher wages and a continued focus on digital service offerings.

Research and development expenses were relatively flat in 2020 when compared to 2019.

The higher wages and

variable pay in research and development expenses were offset by lower travel costs and the reduction of other discretionary expenditures.

development investment within the Agilent CrossLab business increased due to higher wages and a continued focus on digital service offerings.

Selling, general and administrative expenses increased 3 percent in 2022 when compared to 2021.The increase was due to higher wages, share-based compensation expense and inflationary pressures mostly offset by lower commissions, variable pay, and favorable currency movements.

Selling, general and administrative expenses increased 13 percent in 2021 when compared to 2020.

Selling, general and administrative expenses increased due to higher wages and variable pay, sales commissions and share-based compensation expense.

Selling, general and administrative expenses decreased 1 percent in 2020 when compared to 2019.

Selling, general and administrative expenses decreased due to favorable currency movements, reduced travel and training by the sales organization, lower sales commissions, and a reduction in discretionary expenditures which were partially offset by higher wages.

Operating margin increased 1 percentage point in 2021 when compared to 2020.

Operating margin grew slightly in 2021 due to higher sales volume offset by higher wages and variable pay, higher service delivery costs and hedging losses.

Operating margin increased 2 percentage points in 2022 when compared to 2021.

Operating margin increased mostly driven by higher sales volume with improved gross margins and higher cash flow hedging gains.

Operating margin increased 1 percentage point in 2021 when compared to 2020.

The increase was primarily due to the growth in revenue while lowering service delivery and selling costs and the reduction of discretionary expenditures, partially offset by higher wages.

Operating margin grew slightly in 2021 due to higher sales volume offset by higher wages and variable pay, higher service delivery costs and cash flow hedging losses.

Income from Operations

Income from operations in 2022 increased by $47 million or 15 percent when compared to 2021 on a revenue increase of $92 million.

Income from operations increased primarily due to higher sales.

Income from operations increased primarily due to higher sales volume.

Income from operations in 2021 increased by $51 million or 19 percent when compared to 2020 on a revenue increase of $183 million.

The increase was primarily due to the growth in revenue while lowering service delivery and selling costs and the reduction of discretionary expenditures, partially offset by higher wages.

Income from operations increased primarily due to higher sales offset by higher spending.

Financial Condition

Liquidity and Capital Resources

We believe our cash and cash equivalents, cash generated from operations, and ability to access capital markets and credit lines will satisfy, for at least the next twelve months, our liquidity requirements, both globally and domestically, including the following:

We believe our cash and cash equivalents, cash generated from operations, and ability to access capital markets and credit lines will satisfy, for at least the next twelve months and beyond, our liquidity requirements, both globally and domestically, including the following:

working capital needs, capital expenditures, business acquisitions, stock repurchases, cash dividends, contractual obligations, commitments, principal and interest payments on debt, and other liquidity requirements associated with our operations.

Our sources and uses of cash were not materially impacted by COVID-19 to date.

We have not identified any material liquidity concerns as a result of the COVID-19 pandemic.

We will continue to monitor and assess the impact COVID-19 may have on our business and financial results.

Economic stimulus legislation was passed in many countries in response to COVID-19.

In March 2020 in the U.S., the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted to provide for tax relief and government loans, subsidies and other relief for entities in affected industries.

In March 2021 in the U.S., the American Rescue Plan Act ("ARP Act") was enacted.

The ARP Act strengthens and extends certain federal programs enacted through the CARES Act and other COVID-19 relief measures and establishes new federal programs.

As of October 31, 2021, the CARES Act, the ARP Act and other government benefits outside the U.S.

did not have a material impact on our consolidated financial statements and related disclosures.

Our financial position as of October 31, 2022 consisted of cash and cash equivalents of $1,053 million as compared to $1,484 million as of October 31, 2021.

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Net cash provided by operating activities was $1,312 million in 2022 as compared to $1,485 million provided in 2021 and $921 million provided in 2020.

Net cash paid for income taxes was approximately $211 million in 2021 compared to income taxes paid of $361 million, which included a one-time payment of $231 million related to the transfer of intellectual property, in 2020 and $159 million in 2019.

Net cash paid for income taxes was approximately $279 million in 2022 compared to income taxes paid of $211 million in 2021 and $361 million, which included a one-time payment of $231 million related to the transfer of intellectual property, in 2020.

For the years ended October 31, 2022, 2021 and 2020, other assets and liabilities used cash of $8 million, $14 million and $182 million, respectively.

The cash outflow for the year ended October 31, 2021 in other assets and liabilities was primarily due to tax payments and changes in deferred revenue.

The cash outflow in the year ended October 31, 2020 was largely the result of increased income tax payments, interest payments on senior notes and changes in deferred revenue.

Cash outflow for the year ended October 31, 2019 in other assets and liabilities is primarily due to tax payments and interest on senior notes.

In 2021, the change in accounts receivable used cash of $128 million, $107 million in 2020, and $106 million in 2019.

In 2022, accounts receivable used cash of $321 million, compared to $128 million in 2021, and $107 million in 2020.

Days' sales outstanding as of October 31, were 68 days in 2022, 64 days in 2021 and 63 days in 2020.

The increase in accounts receivable related to the transitory impacts of shutdowns in China.

In addition, we had a change in the mix of unbilled receivables primarily due to our nucleic acid solutions business, which has a longer cash conversion cycle.

The change in accounts payable provided cash of $121 million in 2022, $64 million in 2021 and $2 million in 2020.

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Inventory days on-hand increased to 112 days in 2022 compared to 98 days in 2021 and increased compared to 93 days in 2020.

In the year ended October 31, 2021, we increased our inventory levels to meet our customer needs in response to the COVID-19 pandemic and to compensate for long lead time in ordering from our suppliers.

The change in the employee compensation and benefits liability was $112 million for year ended October 31, 2021 compared to cash provided of $29 million in 2020 and $23 million in 2019.

This was largely due to an increase in the vacation liability and variable and incentive pay liability.

In the years ended October 31, 2022 and 2021, we increased our inventory levels to meet our customer needs and to compensate for long lead time in ordering from our suppliers.

The employee compensation and benefits liability used cash of $22 million for the year ended October 31, 2022, compared to cash provided of $112 million in 2021 and $29 million in 2020.

In 2022, the change was primarily due to higher variable and incentive payments and a reduction in the employee vacation liability compared to 2021.

In 2021, the change was

largely due to an increase in the vacation liability and variable and incentive pay liability compared to 2020.

We paid approximately $201 million in 2022 under our variable and incentive pay programs compared to $119 million in 2021 and $79 million in 2020.

The decrease in the amount for variable and incentive pay programs paid in 2020 was primarily due to changes made for certain incentive pay programs which were paid annually versus semi-annually as was done in 2019.

We made no contributions to our U.S defined benefit plans in 2022, 2021 and 2020.

We contributed $19 million in 2021 and $31 million in 2020 and $21 million 2019 to our non-U.S.

We contributed $17 million in 2022 and $19 million in 2021 and $31 million in 2020 to our non-U.S.

defined benefit plans, respectively.

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defined benefit plans are generally funded ratably throughout the year.

The increase in 2020 mainly related to $12 million additional contribution in the Netherlands.

The higher contribution in 2020 mainly related to $12 million additional contribution in the Netherlands.

Our annual contributions are highly dependent on the relative performance of our assets versus our projected liabilities, among other factors.

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Investments in property, plant and equipment were $291 million in 2022, $188 million in 2021 and $119 million in 2020.

Our anticipated capital expenditures for fiscal year 2022 will be $300 million.

In 2021 we invested $546 million in a business and intangible assets, net of cash acquired for our acquisition of Resolution Bioscience compared to no acquisitions in 2020 and $1,408 million invested in our acquisition of two businesses in 2019.

The increase in our investments in property plant and equipment is primarily due to the planned extension of our nucleic acid solutions production facility in Frederick, Colorado.

Our anticipated capital expenditures for fiscal year 2023 will be approximately $300 million.

In 2022, we invested $52 million in a business and intangible assets, net of cash acquired for our acquisition of Polymer Standards Service and advanced artificial intelligence technology compared to $547 million primarily related to the acquisition of Resolution Bioscience in 2021 and zero in 2020.

In 2022 cash used to purchase fair value investments was $13 million compared to $22 million outlay in 2021 and $20 million in 2020.

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Treasury Stock Repurchases

The 2019 share repurchase program authorizes the purchase of up to $1.75 billion of our common stock at the company's discretion and has no fixed termination date.

The 2019 repurchase program does not require the company to acquire a specific number of shares and may be suspended, amended or discontinued at any time.

During the year ended October 31, 2019, we repurchased and retired 10.4 million shares for $723 million under this

authorization.