SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 1, 2001
AGILENT TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-15405
(Commission File Number)
77-0518772
(IRS Employer Identification No.)
395 Page Mill Road
Palo Alto, CA 94306
(Address of Principal Executive Offices) (Zip Code)
(650) 752-5000
(Registrants' Telephone Number, Including Area Code)
Item 2. Acquisition or Disposition of Assets.
On August 1, 2001, the Registrant completed the sale of its Healthcare
Solutions Group to Koninklijke Philips Electronics N.V. Total cash proceeds
from the sale are expected to be approximately $1.7 billion pursuant to the
Asset Purchase Agreement, dated as of November 17, 2000, as amended and
supplemented by the Amendment and Supplemental Agreement, dated as of August
1, 2001. Of that amount, $1.6 billion was received on August 1, 2001. The
press release announcing the completion of the sale is attached as Exhibit
99.1 to this report.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
See Annex A following signature page hereto.
(c) Exhibits
Exhibit No. Description
2.1 Asset Purchase Agreement dated as of
November 17, 2000 between Agilent
Technologies Inc. and Koninklijke
Philips Electronics N.V. (without
schedules)(incorporated by reference
to Exhibit 2.17 to the Registrant's
Quarterly Report on Form 10-Q filed
on March 19, 2001)
2.2 Amendment and Supplemental Agreement
dated as of August 1, 2001 between
Agilent Technologies, Inc. and
Koninklijke Philips Electronics N.V.
2.3 Master Service Level Agreement dated
as of August 1, 2001 between Agilent
Technologies, Inc. and Koninklijke
Philips Electronics N.V.
99.1 Press Release, dated August 1, 2001,
announcing completion of the sale of
the Healthcare Solutions Group.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AGILENT TECHNOLOGIES, INC.
By: /s/ Marie Oh Huber
-------------------------------------------
Name: Marie Oh Huber
Title: Vice President, Assistant Secretary
and Assistant General Counsel
Date: August 15, 2001
ANNEX A
Disposition of Agilent's Healthcare Solutions Business
------------------------------------------------------
On August 1, 2001, Agilent Technologies, Inc. ("Agilent") completed the sale
of its healthcare solutions business to Koninklijke Philips Electronics, N.V.
("Philips") pursuant to an Asset Purchase Agreement for a total purchase price
of $1.7 billion. Philips paid initial proceeds of $1.6 billion to Agilent on
August 1, 2001, with further payments to follow pursuant to the terms of the
Asset Purchase Agreement dated as of November 17, 2000, as amended and
supplemented by the Amendment and Supplemental Agreement, dated as of August
1, 2001. Agilent expects to receive the majority of these additional payments
within one year, subject to Agilent's performance of certain services for
Philips. In addition, the purchase price is subject to adjustment based on an
independent audit of the purchased net assets.
Agilent plans to apply some of the proceeds to pay back all of its short-term
debt. The remaining proceeds will be added to existing operating cash
reserves. Most of Agilent's healthcare solutions business' operational
facilities and certain of its associated assets and liabilities were
transferred to Philips. Agilent is restricted from competing in the
development, manufacturing, selling or servicing of certain medical products
for five years. For an incremental fee, Agilent will provide certain support
services to Philips for at least twelve months.
For the purposes of this document, the unaudited pro forma condensed
consolidated financial statements of Agilent set forth below are used to show
the effects of the sale of Agilent's healthcare solutions business as if it
occurred on April 30, 2001 for balance sheet purposes, based on certain
estimates and assumptions. Agilent used April 30, 2001 because it marks the
end of the latest fiscal period for which financial information is publicly
available. These unaudited pro forma condensed consolidated financial
statements may not be indicative of Agilent's financial position at any future
date.
The unaudited pro forma condensed consolidated financial statements of Agilent
set forth below consist of an unaudited pro forma condensed consolidated
balance sheet and the associated footnotes as of April 30, 2001. Agilent's
unaudited pro forma condensed consolidated statements of earnings for the six
months ended April 30, 2001 and for the twelve months ended October 31, 2000
are not presented because there were no material pro forma adjustments for
these periods. If unaudited pro forma condensed consolidated statements of
earnings for the six months ended April 30, 2001 and for the twelve months
ended October 31, 2000 had been presented, interest expense of approximately
$16 million and $2 million, respectively, would have been removed from these
periods. Because of its non-recurring nature, the net gain resulting from the
sale would not be reflected in the unaudited pro forma condensed consolidated
statements of earnings had they been presented.
The unaudited pro forma condensed consolidated balance sheet gives effect to
Agilent's receipt of the initial proceeds of $1.6 billion from Philips as if
such transaction had occurred on April 30, 2001. Certain adjustments expected
to occur as a result of the sale have been reflected in the unaudited pro
forma condensed consolidated balance sheet. Determination of the actual net
assets sold to Philips, the total purchase price and the gain on sale is
subject to various post-closing adjustments and the performance of certain
services.
The unaudited pro forma condensed consolidated balance sheet should be read in
conjunction with Agilent's annual report on Form 10-K for the fiscal year
ended October 31, 2000, the quarterly report on Form 10-Q for the period
ended April 30, 2001 and the current report on Form 8-K filed on June 29,
2001.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of April 30, 2001
($ in millions, except par value and share amounts)
As Pro Forma Pro Forma
Reported Adjustments as Adjusted
-------- ----------- -----------
Assets
Cash and cash equivalents...........$ 809 $1,600 (A)
(773)(B) $1,636
Accounts receivable, net............ 1,573 1,573
Inventory........................... 1,791 1,791
Other current assets................ 825 825
-------- -------
Total current assets............. 4,998 5,825
Property, plant and equipment, net.... 1,848 1,848
Goodwill and other intangible assets,
net............................... . 1,238 1,238
Other assets ......................... 383 (90)(C) 293
Net investment in discontinued
operations ........................... 613 (613)(D) --
-------- -------- -------
Total assets....................$ 9,080 $ 124 $9,204
======== ======== =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable...................$ 653 $ 653
Notes payable and short-term
borrowings....................... 773 (773)(B) --
Employee compensation and benefits. 657 657
Deferred revenue................... 377 377
Accrued taxes and other accrued
liabilities...................... 638 340 (E) 978
-------- --------- -------
Total current liabilities....... 3,098 (433) 2,665
-------- --------- -------
Other liabilities.................... 366 (8)(F) 358
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.01 par value;
125,000,000 shares authorized; none
issued and outstanding............... -- --
Common stock; $.01 par value;
2,000,000,000 shares authorized;
457,073,000 shares at April 30, 2001
outstanding.......................... 5 5
Additional paid-in capital........... 4,589 33(C) 4,622
Retained earnings.................... 1,007 532(C) 1,539
Accumulated comprehensive income..... 15 15
-------- ---------- -------
Total stockholders' equity...... 5,616 565 6,181
-------- ---------- -------
Total liabilities and
stockholders' equity..........$ 9,080 $124 $9,204
======== ========== =======
The accompanying notes are an integral part of this unaudited pro forma
condensed consolidated balance sheet.
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(A) Reflects initial proceeds of $1.6 billion received by Agilent from
Philips of the total purchase price of $1.7 billion. The Asset Purchase
Agreement, dated as of November 17, 2000, as amended and supplemented by
the Amendment and Supplemental Agreement, dated as of August 1, 2001,
details additional payments by Philips which are contingent upon
Agilent's performance of certain services for Philips. In addition, the
purchase price is subject to adjustment based on an independent audit of
the purchased net assets.
(B) Reflects repayment of notes payable and short-term borrowings. Agilent
intends to use the proceeds to repay borrowings. For the purposes of this
unaudited pro forma condensed consolidated balance sheet, it has been
assumed that all short-term debt is repaid on April 30, 2001.
(C) Reflects estimated gain resulting from the sale of the healthcare
solutions business to Philips and other assets and liabilities incurred
or relieved as a result of the sale. The net estimated gain on sale as of
April 30, 2001 is recorded as an increase to retained earnings in the
unaudited pro forma condensed consolidated balance sheet. The final
pre-tax gain amount will be determined based on the excess of proceeds
received over the actual carrying value of the healthcare solutions
business' net assets as of August 1, 2001 less direct costs associated
with the sale. The pro forma gain does not give effect to any contingent
payments which may be received in the future, as discussed in Note (A)
above.
The following represents a summary of the components of the estimated gain
on sale as of April 30, 2001:
(in millions)
Initial proceeds from sale $1,600 (A)
Net investment in discontinued operations (613) (D)
Divestiture costs (29) (1)
Pension gain 37 (2)
Stock-related compensation charges (33) (3)
Deferred taxes (90) (4)
------------
Estimated gain before tax 872
Provision for taxes 340 (5)
------------
Net estimated gain before purchase price $532
adjustments
============
(1) Estimated divestiture costs such as legal fees, consultants' fees and
other third-party incremental expenses directly related to the sale of
the healthcare solutions business.
(2) Estimated curtailment and settlement gain for Agilent's U.S. and
international pension plans. This estimate was based on a
plan-by-plan analysis of Agilent's defined benefit, defined
contribution, excess benefit and post-retirement benefit plans for
U.S. and international locations.
(3) Estimated non-cash charges related to stock option and purchase plan
modifications in connection with the sale of the healthcare solutions
business.
(4) Estimated charge for net deferred tax assets related to the
healthcare solutions business.
(5) Estimated income tax provision at a rate of 39% for the gain on
sale of the healthcare solutions business.
(D) Reflects Agilent's net investment in its healthcare solutions business as
of April 30, 2001, which includes certain assets (such as goodwill) and
liabilities (such as restructuring liabilities) that will not be
transferred to Philips. This amount is not indicative of Agilent's net
investment at the close date.
April 30, 2001
--------------
(in millions)
Current assets $593
Property, plant and equipment, net 51
Goodwill and other intangible assets, net 98
Other assets 12
Current liabilities (136)
Other liabilities (5)
-------------
Total $613
=============
(E) Reflects accrued tax liabilities associated with the gain. (See Note C)
(F) Reflects other liabilities (including pension) transferred to Philips.
(See Note C)
EXHIBIT INDEX
Exhibit No. Description
2.1 Asset Purchase Agreement dated as of
November 17, 2000 between Agilent
Technologies, Inc. and Koninklijke
Philips Electronics N.V. (without
schedules) (incorporated by reference
to Exhibit 2.17 to the Registrant's
Quarterly Report on Form 10-Q filed on
March 19, 2001)
2.2 Amendment and Supplemental Agreement
dated as of August 1, 2001 between
Agilent Technologies, Inc. and
Koninklijke Philips Electronics N.V.
2.3 Master Service Level Agreement dated
as of August 1, 2001, between Agilent
Technologies, Inc. and Koninklijke
Philips Electronics N.V.
99.1 Press Release, dated August 1, 2001,
announcing completion of the sale of
the Healthcare Solutions Group