1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934. FOR THE YEAR ENDED DECEMBER 31, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ___________ TO ____________
COMMISSION FILE NUMBER: 001-15405
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF
THE ISSUER NAMED BELOW:
AGILENT TECHNOLOGIES, INC. SAVINGS ACCUMULATION PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF
ITS PRINCIPAL EXECUTIVE OFFICE:
AGILENT TECHNOLOGIES, INC.
395 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94306
2
AGILENT TECHNOLOGIES, INC. SAVINGS ACCUMULATION PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Page
----
Report of Independent Accountants.............................................. F-1
Financial Statements:
Statement of Net Assets Available for Benefits at December 31, 2000............ F-2
Statement of Changes in Net Assets Available for Benefits
for the period from June 2, 2000 (date of inception) to December 31, 2000...... F-3
Notes to Financial Statements.................................................. F-4
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes at December 31, 2000........... F-8
Note: Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted
because they are not applicable.
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of Agilent Technologies, Inc. Savings Accumulation Plan
In our opinion, the accompanying statement of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of Agilent Technologies, Inc. Savings Accumulation Plan (the "Plan") at
December 31, 2000, and the changes in net assets available for benefits for the
period from June 2, 2000 (date of inception) to December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of Assets
Held For Investment Purposes is presented for the purpose of additional analysis
and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
---------------------------------
PricewaterhouseCoopers LLP
San Jose, California
May 4, 2001
F-1
4
AGILENT TECHNOLOGIES, INC.
SAVINGS ACCUMULATION PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS)
DECEMBER 31,
2000
------------
ASSETS
Investments $ 2,293,548
Receivables:
Participant contribution 5,576
Employer contribution 9,130
Receivable from broker for securities sold 1,228
Interest and dividend income receivable 970
------------
Total receivables 16,904
------------
Total assets 2,310,452
------------
LIABILITIES
Payable to broker for securities purchased 571
------------
Total liabilities 571
------------
Net assets available for benefits $ 2,309,881
============
The accompanying notes are an integral part of these financial statements.
F-2
5
AGILENT TECHNOLOGIES, INC.
SAVINGS ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(IN THOUSANDS)
FOR THE
PERIOD FROM
JUNE 2, 2000
(DATE OF
INCEPTION)TO
DECEMBER 31,
2000
-----------
Additions:
Additions to net assets attributed to:
Transfer from Hewlett-Packard, Inc. 401(k) Plan $ 2,243,612
-----------
Investment income:
Net appreciation (depreciation) in fair value of investments (56,043)
Interest and dividend income 86,401
-----------
Total investment income 30,358
-----------
Contributions:
Participant 76,911
Employer 37,416
Rollover 14,837
-----------
Total contributions 129,164
-----------
Total additions 2,403,134
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 93,246
Administrative expenses 7
-----------
Total deductions 93,253
-----------
Net increase 2,309,881
Net assets available for benefits:
Beginning of period -
-----------
Ending of period $ 2,309,881
===========
The accompanying notes are an integral part of these financial statements.
F-3
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NOTE 1 - PLAN DESCRIPTION:
On March 2, 1999, Hewlett-Packard Company ("Hewlett-Packard") announced
its intention to launch a new company, subsequently named Agilent Technologies,
Inc. (the "Company") through a distribution of the Company's common stock to
Hewlett-Packard's shareholders in the form of a tax-free spin-off.
Hewlett-Packard distributed its interest in the Company to Hewlett-Packard's
shareholders on June 2, 2000.
In conjunction with this transaction, the Company established the
Agilent Technologies, Inc. Savings Accumulation Plan (the "Plan") and the
Savings Accumulation Plan Trust (the "Trust") to hold the assets of the Plan
that the Company intends to be qualified pursuant to Section 401(a) and 401(k)
of the Internal Revenue Code. The Company's employees continued to participate
in the Hewlett-Packard Company Tax Saving Capital Accumulation Plan through June
1, 2000. On June 2, 2000, the Company's eligible participants began to
participate in the Plan and a portion of the Hewlett-Packard Company Tax Saving
Capital Accumulation Plan's assets, $2,243,612,000, were transferred to the
Trust in accordance with the Employee Matters Agreement, effective August 12,
1999.
PURPOSE AND PLAN BENEFITS
The purpose of the Plan is to provide eligible employees an opportunity
for regular savings of tax-deferred dollars for their retirement to supplement
benefits provided under the Company's Retirement Program and the Federal Social
Security Act. The following brief description of the Plan is provided for
general information purposes only. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
The Plan is designed to qualify as a stock bonus plan under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and to
meet the requirements set forth in Section 401(k) of the Code. The Plan is also
intended to qualify as an individual account plan which permits each participant
to exercise control over certain assets of the Plan pursuant to Section 404(c)
of the Employee Retirement Income Security Act of 1974 (ERISA).
Fidelity Investments provides record-keeping and investment management
services for the Plan. Fidelity Management Trust Company provides trustee
services for the Plan. The Company determines eligibility for participation,
interprets the Plan, communicates with participants and their beneficiaries and
is otherwise generally responsible for Plan operations.
ELIGIBILITY
Employees who are eligible to participate in the Plan include those
employees of the Company and its designated domestic subsidiaries who are on the
U.S. payroll and who are employed as regular full-time or regular part-time
employees of the Company. There is no waiting period for eligibility.
EMPLOYEE CONTRIBUTIONS
All employees are deemed to have elected a three percent (3%) deferral
effective on the first day of their employment, unless the employee makes a
change to that election in the manner prescribed by the Plan.
Participating employees may contribute between 1% and 20% of their
pretax annual compensation through payroll deductions, as defined in the Plan.
These contributions are deposited into the Trust account after the end of each
semi-monthly pay period. Such contributions are excluded from the participant's
taxable income for federal income tax purposes until received as a withdrawal or
distribution from the Plan. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined
contribution plans.
Total individual participant contributions in any calendar year are
limited to the applicable limit under the Internal Revenue Code. Such limit is
$10,500 for calendar year 2000.
F-4
7
COMPANY CONTRIBUTIONS
The Company contributes matching contributions to the employee's Plan
account. The Company matching contributions are in an amount equal to the
employee's deferral for the first 3% of salary deferred and an amount equal to
half of the employee's deferral for the next 2% of salary deferred. The Company
matching contribution is deposited into the individual employee's Plan account
after the end of each of the Company's fiscal quarters, which are January 31,
April 30, July 31 and October 31. To receive the Company match, the participant
must be an employee with Agilent Technologies, Inc. at these dates, consistent
with terms of the Plan.
Both employee and Company contributions are made in cash for all funds.
Per the terms of the Plan, the Company may guarantee a minimum amount of
employee and Company contributions that will be made to the Plan in a Plan year.
The amount, if any, that this minimum exceeds the actual employee and Company
contributions as determined above will be allocated to non-highly compensated
employees (as defined in the Code) in the manner prescribed by the Plan
document. No minimum contributions were guaranteed for the 2000 Plan year.
VESTING
Participants are one hundred percent vested immediately in their
contributions plus actual earnings thereon in the Plan at all times.
Participants are fully vested in the Company match transferred to their accounts
at the end of each corresponding fiscal quarter, subject to terms of the Plan.
PARTICIPANT ACCOUNTS
Participants can invest their account balance and/or future
contributions into any combination among sixteen of the seventeen investment
options. Participating employees may not direct future contributions nor
transfer monies into the Hewlett-Packard Stock Fund. Participants can transfer
their invested funds among the available investment options and/or change the
investment of their future contributions as often as desired. These transfers
and changes must be made in whole percent increments. New hires will have their
initial contributions invested in the fund designated as the Plan default fund
until the participant makes a change to that investment election. The default
fund is the Institutional Money Market Fund.
All contributions made under the Plan are paid to and invested by the
trustee in one or more of the available investment options. Fifteen of the
seventeen investment options are mutual funds of registered investment
companies. The Agilent Technologies, Inc. Stock Fund is an investment option
consisting primarily of the Company's stock. The Hewlett-Packard Company Stock
Fund is an investment option consisting primarily of Hewlett-Packard Company
common stock.
PARTICIPANT LOANS
Participants are permitted to borrow portions of their account balance.
The loan amounts and terms are limited by the Code and ERISA. Funds for the
loans are obtained by liquidating the selected fund(s) and recognizing a loan
receivable from the participant. Principal and interest payments, representing
repayments of loans taken by participants, are typically made through payroll
deductions and are paid directly into the participant's account after the end of
each semi-monthly payroll period. Loans are subject to certain limitations as
defined in the Plan document.
Loans may be repaid in full at any time following the issuance of the
loan. Loans outstanding at December 31, 2000 carried interest rates which ranged
from 7.5% to 10%.
PAYMENT OF BENEFITS
Amounts contributed to the Plan may be withdrawn by or distributed to a
participant upon (1) termination of employment or (2) attaining age 59 1/2.
Withdrawals prior to attaining age 59 1/2 are not permitted except in the event
of retirement, disability or as a hardship distribution. Certain income tax
penalties may apply to withdrawals or distributions prior to age 59 1/2.
F-5
8
On termination of service due to death, disability or retirement, a
participant may elect to receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account. For a termination of
service for other reasons, a participant may receive the value of the vested
interest in his or her account as a lump-sum distribution.
Certain participants from particular companies acquired by the Company
may elect to take their benefits as an annuity or in installments. Effective
September 1, 2001, these optional forms of benefit will be eliminated.
PLAN TERMINATION
Although the Company has no present intention to terminate the Plan, the
Plan provides that in the event of Plan termination, participants' interests
accrued to the date of termination will be nonforfeitable. Benefits will
continue to be distributed in accordance with the Plan and the trustee will
continue in its capacity until all assets of the Plan have been distributed to
the participants.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The financial statements are prepared on the accrual basis of accounting
with investments being carried at current fair value, as quoted on the active
market. Sales and purchases are recorded on the trade date. Loans to
participants are valued at their outstanding principal amount, which
approximates fair value. Benefits are recorded when paid.
Dividends are recorded on the ex-dividend date.
All direct administrative expenses, except recordkeeping and investment
management services provided by certain Fidelity Funds, are absorbed by the
Company.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
net assets available for benefits and changes therein. Actual results may differ
from those estimates.
NOTE 3 -- INVESTMENTS:
The number of shares of Agilent Technologies, Inc. common stock in the
Agilent Technologies Stock Fund (the "Fund") was 7,367,394 as of December 31,
2000. The Fund assigns units of participation to those participants with account
balances in the Fund. The total number of units in the Fund at December 31, 2000
was 10,166,062 and the net unit value was $40.01 at this date. The Fund is
comprised primarily of Agilent Technologies, Inc. common stock purchased on the
open market. The fund also includes a minor investment in the Institutional
Money Market Fund.
The number of shares of Hewlett-Packard Company common stock in the
Hewlett-Packard Stock Fund was 11,364,571 as of December 31, 2000. The
Hewlett-Packard Stock Fund assigns units of participation to those participants
with account balances in the Hewlett-Packard Stock Fund. The total number of
units in the Hewlett-Packard Stock Fund at December 31, 2000 was 7,865,155 and
the net unit value was $47.03 at this date. The Hewlett-Packard Stock Fund is
comprised primarily of Hewlett-Packard Company common stock purchased on the
open market. The participants were invested in the Hewlett-Packard Stock Fund at
the time the Company legally separated from Hewlett-Packard Company. The
Hewlett-Packard Stock Fund also includes a minor investment in the Institutional
Money Market Fund. Contributions or account balance transfers into the
Hewlett-Packard Stock Fund are prohibited
F-6
9
The following investments represent 5% or more of the Plan's net assets:
DECEMBER 31,
2000
(IN THOUSANDS)
------------
Fidelity Magellan Fund $ 507,695
Agilent Technologies, Inc. Common Stock Fund 403,365
Hewlett-Packard Company Stock Fund 358,694
Institutional Money Market Fund 187,067
Fidelity Contrafund 183,864
Fidelity Growth and Income Portfolio 124,747
Spartan U.S. Equity Index Fund 122,540
------------
$ 1,887,972
============
From June 2, 2000 (date of inception) to December 31, 2000 the Plan's
investments (including gains and losses on investments bought and sold, as well
as held during the year) depreciated in value as follows:
(IN THOUSANDS)
------------
Mutual Funds $ (212,562)
Hewlett-Packard Co. Stock Fund 85,057
Agilent Technologies, Inc. Common Stock 71,462
------------
$ (56,043)
============
NOTE 4 - TAX STATUS:
The Plan was adopted effective as of June 2, 2000. The Plan is intended
to be an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA and is intended to be qualified under Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended. The Plan sponsor is currently in the
process of applying for a IRS favorable determination letter. The Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the Internal Revenue Code. Management anticipates receiving a favorable tax
determination letter stating that the Plan qualifies as tax-exempt.
Deferrals made on behalf of the employee and the Company's matching
contribution are not subject to federal income taxes until such time as the
employee's funds are withdrawn from the Plan. At withdrawal, the employee's
funds may qualify for special tax treatment. Pursuant to the Unemployment
Compensation Amendments of 1992, all "eligible rollover distributions" which are
not paid out in the form of a direct rollover are subject to a mandatory 20%
federal income tax withholding. Loans taken by employees against their 401(k)
account are not subject to deferred income taxes if they are repaid within five
years.
NOTE 5 - RELATED PARTY TRANSACTIONS:
Certain Plan investments are shares of mutual funds managed by an
affiliate of Fidelity Management Trust Company, the Plan Trustee, and therefore,
these transactions qualify as party-in-interest. Any purchases and sales of
these funds are open market transactions at fair value. Consequently, such
transactions are permitted under the provisions of the Plan and are exempt from
the prohibition of party-in-interest transactions under ERISA.
F-7
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Supplemental Schedule
(a) (b) IDENTITY OF ISSUE, BORROWER, LESSOR OR
SIMILAR PARTY (c) DESCRIPTION OF INVESTMENT (d) CURRENT VALUE
(*) Fidelity Institutional Money Market Fund Money Market Fund, $1.00 par value $ 187,067
(*) Fidelity Intermediate Bond Fund Mutual Fund 48,122
PIMCO Total Return Fund Mutual Fund 20,528
Domini Social Equity Fund Mutual Fund 11,913
(*) Fidelity Contrafund Mutual Fund 183,864
(*) Fidelity Growth and Income Fund Mutual Fund 124,747
(*) Fidelity Magellan Fund Mutual Fund 507,695
Harbor Capital Appreciation Fund Mutual Fund 70,706
ICAP Equity Portfolio Mutual Fund 5,565
(*) Spartan U.S. Equity Index Fund Mutual Fund 122,540
(*) Fidelity Low-Priced Stock Fund Mutual Fund 14,625
Mas Mid Cap Growth Portfolio Mutual Fund 88,990
(*) Spartan Extended Market Index Mutual Fund 10,288
Janus Aspen Series Worldwide Growth Portfolio Mutual Fund 74,296
Templeton Foreign Fund Index Mutual Fund 28,358
(*) Hewlett-Packard Company Stock Common Stock, $0.01 par value 358,694
(*) Agilent Common Stock Common Stock, $0.01 par value 403,365
(*) Loans to Participants (1) 32,185
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Total investments $2,293,548
==========
(*) Parties-in-interest as defined by ERISA
(1) Interest rates on the loans range from 7.5% to 10.0%. Loans are to be
repaid over a period of 1 to 4 years; principal and interest payments
received bi-weekly
F-8
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SIGNATURE
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 thereunto duly authorized.
Dated: June 29, 2001 By: /s/ ROBERT R. WALKER
----------------------------------------------------
Robert R. Walker
Executive Vice President and Chief Financial Officer
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-38080) of Agilent Technologies, Inc. of our
report dated May 4, 2001 relating to the financial statements of Agilent
Technologies Inc. Savings Accumulation Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
San Jose, California
June 27, 2001