8-KFinancial Events

AGILENT TECHNOLOGIES, INC. 8-K Report, Exit or Disposal Costs (Mar 26, 2009)

Filed March 26, 2009For Securities:A

Summary

Agilent Technologies, Inc. filed a Form 8-K on March 26, 2009, to disclose significant additional restructuring actions (the "March 2009 Additional Actions"). These actions are a continuation of previously announced restructuring programs, undertaken in response to deteriorating economic conditions. The company announced plans to reduce its global workforce by approximately 2,700 employees, bringing the total headcount reduction under the "FY09 Restructuring Program" to about 3,800 people. This program is expected to be largely completed by October 31, 2009, with the remainder by the end of fiscal Q2 2010. The financial impact of the March 2009 Additional Actions is estimated to be approximately $140 million in pre-tax restructuring charges for employee severance and $20 million for other exit costs. When combined with prior restructuring efforts, the total estimated pre-tax charges for the FY09 Restructuring Program are now approximately $315 million, with a significant portion expected to result in cash expenditures. Investors should note that these figures are estimates and subject to risks, including potential additional costs and delays due to legal requirements, further economic deterioration, and the company's ability to realize expected savings.

Key Highlights

  • 1Agilent is implementing significant additional workforce reductions, cutting approximately 2,700 jobs, part of a larger FY09 Restructuring Program impacting around 3,800 employees.
  • 2The restructuring is a direct response to continuing deterioration of economic conditions.
  • 3The March 2009 Additional Actions are expected to incur approximately $160 million in pre-tax charges ($140M severance, $20M other exit costs).
  • 4The total estimated pre-tax charges for the entire FY09 Restructuring Program are now projected to be approximately $315 million.
  • 5A substantial portion of these restructuring charges are expected to result in cash expenditures for the company.
  • 6The majority of restructuring activities are targeted for completion by October 31, 2009, with the remainder by the end of fiscal Q2 2010.
  • 7The company acknowledges risks associated with these plans, including potential additional costs, delays, and the possibility that expected savings may not be realized.

Frequently Asked Questions

The primary reason for the March 2009 Additional Actions is the continuing deterioration of economic conditions, which has prompted Agilent to restructure its Electronic Measurement and Semiconductor Board Test segments.

The March 2009 Additional Actions will reduce Agilent's global workforce by approximately 2,700 employees. This brings the total headcount reductions under the FY09 Restructuring Program to approximately 3,800 people.

The March 2009 Additional Actions are expected to result in approximately $140 million in pre-tax charges for employee severance and $20 million for other exit costs, totaling $160 million. The entire FY09 Restructuring Program is now estimated to incur approximately $315 million in pre-tax charges.

Agilent expects to complete a majority of the activities related to the FY09 Restructuring Program by October 31, 2009, with the remainder expected to be completed by the end of the second quarter of fiscal 2010.