Alicia Rodriguez – Vice President of Investor Relations. William P. Sullivan – Chief Executive Officer Didier Hirsch – Chief Financial Officer, Senior Vice President Guy Sene – Senior Vice President and President Electronic Measurement Group : : Lars Holmkvist – Senior Vice President, Agilent, President, Diagnostics and Genomics Group Michael R. McMullen – Senior Vice President, Agilent, and President, Chemical Analysis Group

Tony Butler – Barclays Capital, Inc. Mark Douglass – Longbow Research LLC Jon P. Groberg – Macquarie Capital Daniel Brennan – Morgan Stanley & Co. LLC S. Brandon Couillard – Jefferies LLC Patrick M. Newton – Stifel, Nicolaus & Co., Inc. Isaac Ro – Goldman Sachs & Co. Amit Bhalla – Citigroup Inc Dan Anthony Arias – UBS Securities LLC Bryan Kipp – CLSA Dan Leonard – Leerink Swann LLC Tycho W. Peterson – JPMorgan Securities LLC Richard Eastman – Robert W Baird Ross J. Muken – ISI Shaun K. Rodriguez – Cowen & Co. LLC Tim C. Evans – Wells Fargo Securities LLC

Good day, ladies and gentlemen, and welcome to the Quarter Two 2013 Agilent Technologies Inc. Earnings Conference Call. My name is Patrick, and I'll be your facilitator for today. (Operator Instructions) As a reminder, to all participants this conference is being recorded for replay purposes. I would now like to turn the conference over to Ms. Alicia Rodriguez, Vice President of Investor Relations. Please proceed.

Thank you Patrick and welcome, everyone, to Agilent's second quarter conference call for fiscal year 2013. With me are Agilent's CEO, Bill Sullivan; as well as Senior Vice President and CFO, Didier Hirsch. Joining in the Q&A after Didier's comments will be Agilent's President and Chief Operating Officer, Ron Nersesian. Also joining are the Presidents of our Electronic Measurement, Chemical Analysis, Life Sciences and Diagnostics and Genomics groups, Guy Séné, Mike McMullen, Nick Roelofs and Lars Holmkvist. You can find the press release and information to supplement today's discussion on our website at www.investor.agilent.com. While there, please click on the link for financial results, where you will find revenue breakouts, business segment results, and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call. Bill and Didier's comments today will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. We will make forward-looking statements about the financial performance of the Company. These statements are subject to risks and uncertainties and are only valid as of today. The Company assumes no obligation to update them. Please look at the Company's recent SEC filings for a more complete picture of our risks and other factors. And now I would like to turn the call over to Bill.

Thanks, Alicia, and hello, everyone. Today, Agilent reported revenues of $1.73 billion for the second quarter of fiscal 2013, inclusive of the Dako acquisition. Adjusted net income was $269 million or $0.77 per share. We exceeded EPS guidance despite continued industry headwinds and macroeconomic challenges. Strong Q2 earnings were driven by our ability to generate higher manufacturing margins while sequentially reducing operating expenses. These improvements demonstrated the strength of Agilent’s business model, which has enabled us to streamline our operations while supporting future growth. We expect the macroeconomic environment to remain challenging through the second half of 2013. We are taking additional actions to ensure that Agilent is solidly positioned for the future success and value creation. Today, we announced that $50 million restructuring program to further streamline our operations and reduce our cost structure. In addition, Agilent’s Board has authorized the doubling of our stock repurchase authorization from $500 million to $1 billion. The repurchase program will be executed by the end of calendar year 2013. Despite current challenges, Agilent is well positioned in our target markets. The integration and leverage of our worldwide manufacturing operation, will continue to drive higher gross margins. We have a deep pipeline of new product introductions and our commitment to customer satisfaction is second to none. Here is some of the business highlights. Agilent’s Q2 orders of $1.69 billion were down 8% over last year including Dako. Revenues of $1.73 billion were flat year-over-year. Operating margins were 19%. With the acquisition of Dako, we will no longer refer to our life science and chemical businesses as Bio Analytical measurement or BAM. Instead, we’ll use LDA for life science diagnostics and applied chemical markets. Please note this is not an organizational change, we will continue to report life science, diagnostics and genomics, and chemical…

Thank you Bill and hello everyone. As we have stated the low end of our revenue guidance assumed that the sequester would take effect on March 1. Our Q2 revenues were $8 million below the low end of our guidance, a difference that was entirely due to the $12 million negative impact from currency exchanges. Q2 EPS on the other hand were $0.07 above the high end of our guidance as we executed on our commitment to significantly curtail discretionary expenses as long as the economic environment remains highly uncertain. To recap the quarter, co-orders which exclude the impact of currency and acquisitions were down 12% year-over-year while core revenues decreased 4%. However our operating margin at 19.3% was on par with last year's 19.5%. By segment, EMG core revenues 12% year-over-year, CAG was up 5%, LSG was up, and DDG was flat year-over-year. By region, core revenues were down in the Americas by 7%, Europe by 2% and Japan by 7% and flat for the rest of Asia Pacific. Our strong 19.3% overall operating margin, 20.5% for EMG and 18.3% for LDA, demonstrates that we have come a long way since 2009 when we also experienced tough economic conditions that severely impacted EMG and to a lesser extent LDA. Back then, our overall operating margin was about 7% even after the temporary 10% pay cut. Clearly the actions we have taken to reduce our fixed cost structure, leverage the scale and integration of Agilent order fulfillment and global and infrastructural organizations, as well as our acquisition strategy have paid off nicely. We did not eliminate EMG's sensitivity to the macroeconomic environment, nor the lumpiness of some markets, but we did reduce significantly the bottom line volatility. Regarding cash, we generated $315 million in operating cash flow for the quarter.…

Thank you, Didier. Patrick, will you please give the instructions for the Q&A.

(Operator Instructions) Your first question comes from the line of Tony Butler with Barclays Capital. Please proceed. Tony Butler – Barclays Capital, Inc.: Thanks very much. Bill, on the wireless manufacturing customer, again, is it single customer? I assume it’s a contract and did the contract come to fruition only recently or after the Analyst Meeting? And I guess, thirdly, can you give us any additional details around or is there any additional negotiations that could occur, are you assuming that this is just totally lost effectively throughout at the end of the year, and if you decide to do this again next year, you are not even banking on that? And I’m trying to understand what happens with other customers that know that this occurred with this single customer? Thanks very much.

First of all, when we used to say negotiation has been going on for long period of time, Agilent’s not at liberty to share specific terms of the agreement, but I can say that the terms exposed to Agilent to significant penalties under certain conditions that we were not confident we could prevent without jeopardizing our ability on our commitments to other customers. Effectively, committing to one customer at the expense of other customers is not consistent with our policies and practices. And so, it’s very clear, very specific opportunity and right now, assuming that it will not come back. Tony Butler – Barclays Capital, Inc.: Thank you, Bill.

...the line of Mark Douglass with Longbow Research. Please proceed. Mark Douglass – Longbow Research LLC: Hi, good afternoon.

Hi. Mark Douglass – Longbow Research LLC: So, I bet obviously this is large [and loom]. So this is $215 million a year, isn’t my calculating that about right, as far as the size of this?

We, of course, don’t talk specifically related to individual customers at all, but it can be assumed that our one-box-tester related to wireless manufacturing test will be down $230 million year-over-year. The quarterly impact in Q3 to EMG is 75% of its decline in Q4, 72% of its decline is related to the drop of one-box-tester business for wireless manufacturing. Mark Douglass – Longbow Research LLC: Okay. I’m kind of curious. It’s hard to see how they could put you in box, but this is a pretty big order. I’m not sure there are many other people who could deliver something like that. So, can you help us understand a little bit more how you lost leverage here? Was another competitor that just really swooped in and really brought it to a hit?

As I said, we could not accept the significant penalties under certain conditions. Typically, these are always around guarantee of supply. If in fact there’s a supply interruption and Agilent, as I said, is not consistent with its policies or practices to commit to one customer at the expense of others. Mark Douglass – Longbow Research LLC: Okay. So, in the second quarter then, April quarter, you guided impact through 3Q. How much is there impact in 2Q and a little more discussion about what’s happening in, say, the industrial spaces or any signs of life here in May?

So, I will answer the question regarding our one-box tester business was affected EMG’s year-over-year revenue impact by 31% of the decline. I'll have Guy answer your questions regarding the industrial computer and semiconductor.

Yeah, this is Guy. So, clearly, as you probably have seen in our report, our industrial computer and semiconductor business declined 13% in Q2. On the computer and semiconductor we declined 18%, clear on the continuing weakness of the semiconductor business saw capacity slow, and there is also a pause in the technology that we have been benefited from in the past. On the other side, also as Bill said in his remarks, the computer business is in a transition between PC and tablets and this has slowed down quite some investments in test and measurement. So, for now I would say ICS segment is probably still going to be in a low for the rest of the fiscal year and this is what we had planned for. Mark Douglass – Longbow Research LLC: So, right now what you say that a lot of the PC manufacturing are just swapping the test and instruments over to the tablet manufacturing without forecasting anything?

Well, it's not as clear. Our tablets require different type of products for test and in fact require less products for test. So there is a transition not only on the manufacturing side but also between the different companies that do them.

And as you remember we also provide a lot of test equipment for the PC board manufacturers, the board stuffing verification or as we call it board test, which of course is always dominated by these big consumer products. Mark Douglass – Longbow Research LLC: Okay, thank you.

The question comes from the line of Jon Groberg with Macquarie. Please proceed. Jon P. Groberg – Macquarie Capital: Okay thanks for the question of. So Bill looks like obviously, a tough environment you’re now finally making decision to restructure the business a little bit more aggressively and stepping in on the buyback which I think are encouraging steps, but can you maybe give a little bit more detail around where the restructuring is taking place, any specific businesses or geographies?

So in regards to the restructuring, we are going to take the opportunity to look for opportunities to streamline our organization around the world, but needless to say the biggest impact of the restructuring will be in our Electronic Measurement Group given the drop in revenue and the likelihood of it not recurring. Jon P. Groberg – Macquarie Capital: Okay. And just, is that, so worldwide is not focused in one any particular geography more than another?

We have not made any statements at all in terms of where the restructuring is happening around the world, but… Jon P. Groberg – Macquarie Capital: Okay.

Based on past performance, you typically see the restructuring in the western countries. Jon P. Groberg – Macquarie Capital: Okay. And then, Bill if I think now for the last couple of quarters, obviously you’ve maintained a phenomenal margin, given the tough top line, it looks like is that model out, kind of your guidance for the rest of the year, that you’re expecting a fairly substantial decline in the operating margin despite some of these initiatives that you highlighted, so would you mind just kind of breaking out, I guess your revenue and margin expectations for the different business units for the back half of the year?

Yeah, I can talk about for the full year. At the midpoint of the guidance, on the call basis, we would have EMG at about 11% year-over-year decline, core revenue declined year-over-year at the midpoint of the guidance for the full year, CAG at about 3% to 4% revenue increase, LSG 3% to 4% revenue increase, DGG about 10% revenue increase for the full year, if I take LSG together it’s about 4% to 5% and that would correspond to Agilent at minus 3%. Jon P. Groberg – Macquarie Capital: Operating margin?

And regarding the operating margin, at midpoints we’re getting to an operating margin of slightly over 18%. So it is no, I’m looking at, it is versus in Q2 and in Q1 we had 17.2%, in Q2 19.3%. So it’s about staying at around the same levels for the rest of the year at midpoint. The impact of being in Q3 and then our typical recovery into Q4, and to the point, the average will be actually roughly what it is in the first half. Jon P. Groberg – Macquarie Capital: That’s helpful guys. It looks like Q3, it’s a significant step down. Q4, it comes back up as it does historically, but maybe just as a group given the initiatives on the gross margin side on the LGA side, just any insight in terms of what you expect for EMG margins in the second half versus the LGA margins.

Yeah, I mean, for the full year EMG margin would still be north of 18% at midpoint and then all the other one, I mean, again CHG north of close to 22% and LSG over 15% and DGG close to 14%. Jon P. Groberg – Macquarie Capital: Okay, that’s helpful.

The same situation for Q3 and CHG for the short-term is going to be impacted but again very, very respectable and then we will have a strong recovery in Q4 and EXT-C wireless manufacturing business, EMG effectively is going to be flat sequentially from Q2 as they move into a lot easier comparison so there is any consolation to our situation Guy and the team have easier comparison moving forward. Jon P. Groberg – Macquarie Capital: Okay, that’s all. I’d like to speak one last, and Bill on Dako you both are the two major competitors that I’ve talked about actually some pretty tough business on the advanced training side. I think partly driven by the fact that the guidelines are no longer requiring negative controls there. So I don’t know just any, can you just let us know how Dako did relative to expectation. Thanks.

Sure, Lars, why don’t you go ahead and talk about the organic growth rate from Dako and again, I mentioned one tough year-over-year comparison now being a US company.

Sure, it’s true that in the last two quarters we’ve seen the overall market growth rate being slight to nearly 10%, I would probably say that the last two quarters have been around 6% to 7% growth rate overall. So indeed the market has come down and that's mainly driven from the fact that you have some changes call it in the legislation or the recommendation in the US. We do think that that is going to pan out, so we probably will have to bleed through another two quarters until we are into an annualized impact of that where the market again is going to kick up, so also it’s true that the market has been somewhat slower in the last two quarters. Now back to the question around Dako, how is Dako doing well. Look at the performance currency adjusted Dako grew this quarter at 4%. If we in all fairness look at the real compared to prior year and we exclude some of the sale that Dako made to [involve] those countries that didn’t recur as we pick this year, Dako was actually up to 6%. So fact we actually tell you that Dako is improving in its performance and the market seems to be at least temporarily and now taking down. So, if I compare to the two companies that was out reporting as before us, it’s probably fair to say that our coproduce time was pretty respective. Jon P. Groberg – Macquarie Capital: Thanks a lot.

Your next question comes from the line of Daniel Brennan with Morgan Stanley. Please proceed. Daniel Brennan – Morgan Stanley & Co. LLC: Thanks for taking the call. Bill and Didier, so maybe you can comment on the buyback, the additional $500 million. I think it should be well received just, is this cash on-shore or just something that you had to do it kind of get it on-shore to access, and secondarily, what kind of elected the decision now to kind of step up the buyback, given, I think you have been kind of reluctant to do so given the inability there excess of cash? Thanks.

So, I’ll take the first question. So, it will be a mix of cash on our balance sheet and some debt, the funding of the incremental $500 million.

And as many of you know, we have to go back to the market this quarter to refinance $250 million tranche of coming debt. We will do that. We will take debt to pay for the restructuring and we will bring on additional debt along with repatriation of cash during the course of the year to meet this commitment of additional $500 million of stock repurchase. Daniel Brennan – Morgan Stanley & Co. LLC: And then, was this anything that relates to your view of kind of the world now, in terms of where the stock price is today and the expectation of what the outlook is, or is it just a decision that, because I thought in the past you weren’t willing to kind of take on debt to buy back stock. So I’m just wondering what was kind of the trigger to see you guys step up and implement this more aggressive stock buyback plan?

Well, first of all, I think that the management team with the Board’s support, having bought back $9.5 billion of the stock since 2005 as well as instituting a dividend, in fact has been very aggressive of returning cash to the shareholder. The issue is always about what the right balance is in terms of our debt load, cash generation and the macro environment. We are still quite confident. Even though we’re disappointed that the second half is not going to recover as strongly as we expected, we’re still looking for continued growth into 2014. As Didier said, our cash generation continues to be very, very robust. We have an opportunity to refinance anyway, and so to be able to easily afford without having any major impact on what the future of the Company or overall credit rating, the announcement of the additional $500 million seems quite prudent. Daniel Brennan – Morgan Stanley & Co. LLC: Great. And then maybe you kind of touched upon just now in that answer Bill, but, I know probably last call, you had indicated that despite the end of quarter shortfall that you were pretty constructive about the opportunity in 2013 and hence you didn’t want to cut too deeply. So, just maybe as an update like how you’re viewing the world today, and maybe you can just give kind of an updated view of what you’re seeing from kind of the global economy and how you’re positioned for the remainder of the year.

As you know, I’ve been one of the more negative CEOs in terms of growth prospects in the U.S. and Europe. I must admit I had a moment, particularly on the Analyst Day that I actually thought there was some likelihood of a recovery in the second half of the year and it’s just the hard reality. It’s not happening. The continued issues in the U.S. and Europe, Japan stimulus hasn’t kicked in. China is going to grow at 7.5% to 8%. We are not going to get the type of revenue growth that is going to be able to maintain our margins. I was very clear on the Analyst Day is that we know what it takes to do to be able to drive increasing margins and given that the likelihood of our business, not growing into our operating model. Again, the 4% organic growth rate, as a company, we are taking the appropriate actions moving forward and we will execute that as efficiently and quickly as we can. Daniel Brennan – Morgan Stanley & Co. LLC: Great. Thank you very much.

Your next question comes from the line of Brandon Couillard with Jefferies. Please proceed. S. Brandon Couillard – Jefferies LLC: Hi, good afternoon.

Hello. S. Brandon Couillard – Jefferies LLC: Bill, in terms of the formal guidance reduction, I’m curious if there was anything that really changed in the macro environment beyond the one discrete customer loss and then how would you characterize your ability to do more on the cost front and restructuring side if the second half doesn’t pan out as expected?

So, on first question, as Didier said, in terms of the guidance, half of it is strictly currency. Again, as you know, for example, have a large amount business inside of Japan. The other part of the business is tied to our Electronic Measurement that Guy talked about. Industrial is not coming back and we have continued pressure on the computer and semiconductor. And particularly, in some of our semiconductor cap lines we’re the only supplier. So, this has nothing to do with market share or anything. It’s just a tough environment moving forward. We try to balance the long-term growth prospects of the Company versus the short-term operating needs and we’ll continue to evaluate that. I believe as difficult it is as to lay off 450 people, we are highly confident that that will not have an impact on our long-term growth opportunities, have a major impact at all to our new product introduction, our ability to expand in emerging markets. We, at this point in time, do not see a scenario where you’re going to have to see a additional dramatic decrease of revenue unless there was some sort of new economic crisis.

And let me just add one clarification regarding the loss of this wireless business, the wireless manufacturing business. I mean, that was already taken out from our guidance in February or in March at the Analyst Meeting. This is not a new element. The reason why we are talking about it now it’s on a year-over-year basis, it does explain both, especially for Q2 and Q3 and a little bit for Q4 some of the significant reported or projected reduction in revenue for EMG. S. Brandon Couillard – Jefferies LLC: All right. Thanks. And then Didier, any update on the operating cash flow outlook for the year?

Versus what I had communicated, I think sometime in November in fact where I had said that our operating cash flow would be about $1.25 million and about $220 million in CapEx. We’re now down more to $1.1 billion in operating cash flow, little bit over that between $1.1 billion and $1.15 billion and still the same level of CapEx. So basically the reduction is both the restructuring program and the reduced profits versus what we have said in November. So it’s about a reduction of about $100 million, still over $1.1 billion in operating cash flow. S. Brandon Couillard – Jefferies LLC: Great. Thank you.

Sure.

Your next question comes from the line of Patrick Newton with Stifel. Please proceed. Patrick M. Newton – Stifel, Nicolaus & Co., Inc.: Yeah. Thank you for taking my question. Good afternoon. I guess a multi-part question for I guess Guy or Bill, is, within this lost wireless manufacturing business and outside of kind of the guarantee supply issue that you previously discussed, Bill, was pricing a major impact to the contract negotiation with this large customer? Was this business won by traditional competitor or one of the newer entrants into wireless test, and was this business margin dilutive relative to the EMG average?

Yeah, we're not going to go into the details of specific deal, other than the fact that we are very, very competitive in this space. We have some of the highest gross margins in the industry as the business unit is moving forward. And we have said very, very clearly, the issue is related to terms. Patrick M. Newton – Stifel, Nicolaus & Co., Inc.: Okay. And then I guess, Guy, on the communications front, are you still seeing better infrastructure trends relative to your, obviously, the handset manufacturing but to the R&D test? And then can you comment on some of the geographic trends within infrastructure, and then thoughts, perhaps, any thoughts you might have on timing of China Mobile investments?

Yeah, on the infrastructure side, especially the base station, we have not seen major shift and changes happening yet in Q2. We won a couple of deals in China around TD-LTE that could be a premise of what's happening going forward. But it's really very early and everybody is waiting for China Mobile to do really the request for proposal for the base station suppliers. So we don't know yet who is going to get this business and when, so it's very difficult to predict frankly as we are waiting on this one for a number of quarters now. Patrick M. Newton – Stifel, Nicolaus & Co., Inc.: Okay. And then I guess Bill, I am sorry if I missed this, you might have already commented on this but I think within guidance you'd previously said that, from a revenue perspective you are anticipating a 10% impact to your defense business because of sequestration and in worst case of 20%. Is that still how we are looking at it? Any update there post some details you guys picked up on March 1st?

Yeah, again I think the guideline is fine. I will let Guy make a comment because the U.S. defense business was not great, but we had no outstanding performance in Europe and Japan. So Guy, why don’t you give us the latest update on the overall defense business…

Yeah, the overall defense business in fact we finished flat versus last year in terms of revenue and mostly driven by the business outside of the U.S. So clearly places in Europe like Russia are very strong in satellite and other defense investments and this is helping. As I said, I think I commented at our (inaudible) surveillance is another business that is going very well and we won large deals in Japan for instance that helped. On the other side in the U.S. it is clearly as we were expecting, even a little bit lower. The DoD orders were 50% even more than 50% down compared to what we had last year. I would also comment that the sequestration to the U.S. has a broader effect on the wider, smaller companies that we probably have classified more into industrial as everybody is waiting a little bit to understand what's happening in the defense business. Patrick M. Newton – Stifel, Nicolaus & Co., Inc.: So it sounds like that down 20% year-over-year is more realistic at this point.

Yeah. Patrick M. Newton – Stifel, Nicolaus & Co., Inc.: Perfect. Thank you. Good luck.

Your next question comes from the line of Isaac Ro with Goldman Sachs. Please proceed. Isaac Ro – Goldman Sachs & Co.: : :

Our position on the use of cash has not changed at all. Our first priority is to continue to look for acquisitions that help drive our overall growth instituted to the Company. The bulk of the $4.5 billion of investment we have made in acquisitions since 2005 have been in the healthcare area. And as you know, in Life Sciences and Chemical and Diagnostics and in 2005 our Life Sciences and Chemical Analysis business was $1.5 billion and this year we’re on the verge of getting to $4 billion, and $1.5 billion of that revenue is through acquisition. So, we will continue to look for opportunities to accelerate our growth in this part of our business, the LDA part of our business. Secondly, is our obligation to return excess cash to the shareholders. We have clearly demonstrated that over the last eight and a half years, both through stock repurchase and this year a 20% increase in dividend, and we will continue to look at ways to tax effectively bring cash back into the U.S. We’ll continue to be able to look at our debt capacity and ensure that we make the trade-offs not only for the short-term opportunity, but for the long-term health of the Company. Isaac Ro – Goldman Sachs & Co.: That’s very helpful. And then maybe just on the first time you mentioned regarding M&A in Diagnostics, you obviously have a start there with Dako, but seems to me that most of the competitors you have in that space have a broader range of offerings there, and my thought is that the asset prices there tend to be pretty rich relative to your ROIC hurdles. So I guess, the question is, have you guys seen any abatement in the price tags for the assets you’d want to bold on to Dako?

No. Well, we haven’t. Again, we’re a conservative company. We feel very fortunate that we were able to acquire Dako and not have the deal jumped. It’s a very competitive environment and we have chosen not to participate in these competitive decisions moving forward. I do believe that the culmination of our Genomics business and our Pathology business is the right fit and we need to continue to look for holes in our portfolio in this space that we have. And maybe Lars, maybe you could talk a little bit, now that you’re managing both parts of the business for the last few quarters, your thoughts of the synergy between the Genomics business and your Pathology business and how you look at the environment for potential acquisitions.

Sure Bill. So, obviously a little rough to come out and take a shot at potential acquisition and targets here, but somewhat around the thinking here, I mean, two things are coming to play here. Clearly technologies from our Genomics Solutions Division is going to find its way into the Clinical Lab channel, covered by the Dako folks. So, basically we’ll see kind of more of a validated regulated play from the organization for the array business. We hope that we will be plugging some of the holes in our sequencing offering. I mean, we have a great basically HaloPlex offerings or select offering. We are looking at how we can complement that with let’s say other tools at this point in time and we are deeply diving into the opportunities in that market that we see here. And clearly, the Dako channel is going to be able to leverage what comes out of the GST organization and we’re going to play that partially into cyto labs, but obviously into the core channel that we have in the core pathology area. That’s going to happen. We have a fairly, call it, exhausted list of opportunities that we are looking into. A path will be passed at this point in time on the key areas and potential targets that we are looking at. But I would expect that in the next couple of months, maybe even the next year or so that you’ll see the organization DGG being fairly active in a few areas, let's put it this way at this stage. Isaac Ro – Goldman Sachs & Co.: Got it thanks.

Your next question comes from the line of Amit Bhalla with Citi. Please proceed. Amit Bhalla – Citigroup Inc: Thanks. Didier, can you just help me bridge the midpoint of your earnings guidance change. You had about $0.08 difference between your current and your previous guidance. Can you just help breakdown the parts there?

Yeah, let me take a shot at it. So at midpoint, there's $200 million reduction in the top line and that would translate to about $140 million reduction in gross margin. And then we have various cuts in discretionary expenses. We have the restructuring savings. All in all, as Bill and I mentioned, I mean, those savings offset a big chunk, most of the impact of the lower revenue. So, on an operating profit basis, it's about $40 million reduction instead of starting from $140 million to about $40 million, and that would about translate into $0.10 of EPS deterioration and then the impact of the buyback is about $0.03. So a $0.02 to $0.03, so you get to the $0.08 that you mentioned. Amit Bhalla – Citigroup Inc: And then the second part, I want to make sure I heard this right, you said the $200 million in revenue reduction, none of that is due to this, the manufacturing customer loss, you said you already included that in the previous guidance.

Yeah, absolutely, very little, there was some, I always hope that the upside, that perhaps we will get something. But most of the reduction doesn't come from February to the May guidance doesn't come from that lost business. Again this lost business has a bigger, has big explanation of the year-over-year variance but not in the change in the guidance. Amit Bhalla – Citigroup Inc: I just need to sneak one more in. Can you just talk about pharma, biotech and academic government performance in April and kind of just the cadence through the quarter of those two segments? Thanks.

Yeah, Nick wants to take that for you.

Yeah, so we're seeing some continued strength in pharma. In fact there's been an upward momentum across the quarter. So it was really strong. In fact, in the U.S., it was fairly strong with a lot of investment going into new sites for biotech R&D in the pharma sector. Academic government, it is very weak and a lot of that weakness is the U.S. sequestration and the offshore impact. As you know, there is connected grant giving between U.S. government and other governments. So the academic government as we told you, was down about 5%. If you looked at the macro for LSG, that represented about a half a point drag on us in the quarter. So that's kind of our view. Amit Bhalla – Citigroup Inc: Thanks.

Your next question comes from the line of Dan Arias with UBS. Please proceed. Dan Anthony Arias – UBS Securities LLC: Bill, obviously, last quarter you were a bit frustrated by the lack of visibility that you were being afforded. Would you say that visibility has gotten worse at this point or in light of the way that the quarter has unfolded, it is pretty much the same as it was in February?

Excellent question, and I’m going to have Ron answer the question because that has been one of the more frustrating areas in trying to predict where our ultimate earnings are going, and even in this quarter, as you know, our earnings were well above the midpoint of our guidance through heroic efforts of Ron and the team. So, Ron, why don't you share some of your findings on causes of unpredictability and what we're trying to do to manage through it?

The biggest challenge that leads to the unpredictability is the last $20 million to $40 million worth of revenue that we're trying to ship and get through and have customers accepts before the end of the quarter. So what we've seen is a continual delay or people dragging their feet by making the final purchases and actually getting the approvals through. Then we have to go ahead and ship the product, get it installed and make sure that it gets signed off. And the last week or two of the quarter is where the whole ballgame has been won or lost. We saw this in Q3, and in Q1 it was also pretty tough. But again, it's very hard to predict, it all depends on when the customers need the orders at the end of the quarter, and that has tended to move revenue over the quarter boundary. But we're working very hard at trying to understand what the customer needs are, trying to be a little bit more conservative in what we project and as you saw in the last quarter we pulled all the stops out on expenses and that caused us to be at $0.77 over the top. Our guidance methodology has not changed. The high end of our guidance is our best view of what will happen. The lower end of the guidance is our guess forecast of what is the likely volatility due to the issues that Ron just described. Dan Anthony Arias – UBS Securities LLC: Okay. And then maybe just to go back to 1Q, you were able to recognize all the revenues that that got pushed off in the last week of the quarter?

Yeah. Dan Anthony Arias – UBS Securities LLC: Okay. And then maybe on the CAG side, growth in petrochem was a little bit better than I would have thought just given the industrials commentary from some of your peers. Is that really a function of the new GC introductions? I guess what is your outlook for the market growth in those areas for the next couple of quarters?

Mike why don’t you go ahead and take that?

Sure, Bill. I think the slight recovery you saw in the chemical end of the space is really driven by the emerging markets in Asia. I don’t think it points to an overall fundamental strong recovery yet in the global market space. Although the new product that Bill referred to earlier launched in Q2 or shipped in Q2 did have an impact, but I think I would really point to the geographic strength in China and other emerging economies. Dan Anthony Arias – UBS Securities LLC: Thanks very much.

Your next question comes from the line of Paul Knight with CLSA. Please proceed. Bryan Kipp – CLSA: Hi, this is actually Brian Kipp on behalf of Paul. Can you guys discuss, I guess you saw some strength in Japan on the aerospace side, but with the bad currency translation, I just wanted to kind of hear you what you guys were thinking, what you saw in the quarter coming out of Japan and what kind of impact it had. And then just for your 2013 guidance what the spot rate you guys have on the FX translation for the…

Didier, why don’t you give the overview on Japan and Holland, and Bryan if you have any follow-up questions by product line?

Yeah so, in terms of how we guide in regards to currency, there has been no change in our process, in our methodology. We take the spot rate as of the last day of the previous quarter and we assume that will be the rate for the rest of the remainder of the year. We are hedged as you know overall on the 100% for the first quarter and then on a declining basis over three to four quarters. We are also have in general well pretty structurally hedged also having a huge footprint in the most of the regions. However, clearly in Japan we have less cost than we have revenues in yen and therefore like other companies we will, our operating margin will be impacted by the weakening of the yen. But because of our hedge that impact is not felt yet completely in the present quarters and will be felt over time. And then regarding Japan, let me give you the numbers, so overall, we saw Japan down on a GAAP basis about 14%, but then when you take into account, that is on the reported basis, but on the core basis it's down 7%. Bryan Kipp – CLSA: Okay, thank you. And I guess just a quick follow-up, you guys did a great job on pulling through some of these cost controls in the quarter, and just kind of wanted to get a more color on there. I remember during the Analyst Day, you said there was about seven sites that continue or continue to be in process of consolidation, have those been consolidated for your guidance for the $50 million in incremental cost savings? Are those all in there or are those more outer years in 2014 and 2015, and if so if you guys can, can you pull some of those forward to recognize some additional cost savings in '13?

All right, I will have Ron answer the questions regarding the $50 million of manufacturing cost savings. Again that was previously announced moving forward for the status update. The $50 million that we announced today are all out of our expense structure and are in addition to the $50 million that were related to manufacturing and the sites that you referred to. So, Ron, why don't you give an update again on our manufacturing and consolidation?

Our manufacturing and restructuring program is right on track. We have a multiyear program that we've talked about at Analyst Day that adds up to, close to $200 million and we're about one-third of the way through that and we are on track to deliver according the schedule that we outlined before, and as Bill mentioned, this additional $50 million is that of OpEx in addition to that program. Bryan Kipp – CLSA: Thank you very much.

Your next question comes from the line of Dan Leonard with Leerink Swann. Please proceed. Dan? Dan Leonard – Leerink Swann LLC: I’m sorry I had my mute on. Can you hear me now?

Yeah.

Yeah. Dan Leonard – Leerink Swann LLC: I was hoping to get more color on the pacing of sequester's impact in your non-EMG businesses. So, sequester hit March 1, but were there differences in behavior through the month of March as reported to the month of April, was there any benefit from folks having certainty or did you see that 5% hit across Academic and Government in a pretty linear fashion across the months and the quarter.

Nick, why don’t you take that please?

Yeah, the sequestration wasn't linear. People seem to think that they were going to be able to spend in March and so there was a little bit of noise and still some spending in March and then I think the reality that it might be a protracted discussion started hitting towards the end of March. So, we saw stronger breaking, remember that we had already being breaking from the beginning of the calendar year. But we saw stronger breaking as we got towards the end of March and April. So, really that's kind of non-linear. Going forward it's probably at the full the full breaking mode, which on the global basis you're talking about 1.5% roughly of the life science market and we are not fully exposed. So we're going to do less than a percent, but it's a drag on everybody until it's clear or resolved in a positive way. Dan Leonard – Leerink Swann LLC: Okay. Thank you. Then for my follow-up question, Didier, the EPS build you're looking for from Q3 to hit the midpoint of your full year guidance, Q3 to Q4. Is it bit larger than usual? So, do we think about that? Is it the timing of the benefits from the share repurchase and the restructuring, is that what's using the extra quarterly boost or is there something else we should we thinking about as we roll into Q4.

No, I mean, in Q4 if you do the math we’re taking the midpoint of our revenue guidance for Q3 and the midpoint guidance for Q4. You can see that we're expecting revenue to be up about $100 million between Q3 and Q4 and that translates obviously into our higher EPS. Then you do have the impact of the buybacks, the overall $0.02, $0.03. There is more of an impact obviously in Q4 than Q3. And then the restructuring, the $50 million also Q3 will see just very, smaller amount of benefits yet of savings and we'll start seeing some significant savings in Q4 going into Q1 of next year. Dan Leonard – Leerink Swann LLC: Okay. Thank you.

Sure.

Your next question comes from the line of Tycho Peterson with JPMorgan. Please proceed. Tycho W. Peterson – JPMorgan Securities LLC: Hey, thanks. I'm wondering with the restructuring actions you've discussed here, is the portfolio review on the table? I'm just thinking are their particular product lines or areas that you would maybe want to revisit, and if not, can you just talk about why commit to spending the same level of R&D for the communications business given how problematic it's been?

So, first of all So, first of all, we have a long history of evaluating product lines and businesses that fit in Agilent's long-term strategy, and we've made the corresponding adjustments. At this point in time, we are very happy with our overall product portfolio and so we have no short-term plans to divest, for example, particular product line moving forward. If you look at our research and development spending, it has actually come down two points over the last year from 12% of revenue to roughly coming down to 10%. If you do a weighted average of the Electronic Measurement business and our LDA business, while we have a slight highly bias on R&D on the LDA, slightly lower on Electronic Measurement, we are right at the weighted average of the market moving forward. And so, Guy has taken the adjustments in EMG accordingly. We're focusing on the opportunity, particularly focusing on module instrumentation and handhelds as well as being a leader in the very high-end feature-rich instruments. So I feel very good in terms of the level of R&D that we're spending and particularly excited as I said about the pipeline of new products that we'll be introducing in the second half of the year. Tycho W. Peterson – JPMorgan Securities LLC: And then maybe one for Nick, I know you had a question earlier on kind of the biopharma markets, 8% growth really kind of stands out relative to the peers. Can you talk about how much of that was mass spec versus LC, and are you pulling share, and also, how much of that is coming from service?

Yeah, so mass specs continues to be a strong platform for us. I would say, relative to share of LC and mass spec we're holding our own. I wouldn't say we're outrunning the competition. You guys will see all the numbers from everybody on that. But we really saw there was a good, for lack of a better term, an easy compare in some of the geographies. So, India is coming back a bit. It was kind of flat. It's been pretty negative. China looked pretty strong. So, and I said the Americas, so, it was as much a compare on the pharma and momentum as a specific product. And the pharma guys continue to go with the technology upgrade. So there is legs in that. Tycho W. Peterson – JPMorgan Securities LLC: And then last one on environmental forensics, I know that was soft. I don't know if Mike has any comments on the outlook for that market. Was the weakness more biased toward Europe? We've heard that from some of the competitors?

Yeah, thanks for the opportunity to share some insights here. So, it's both Europe and the U.S. And the story here is continued weak government funding at both the federal and state level. So if there is one silver line, it does continue to be the emerging market; specifically, China, and you may have recently seen the announcement coming from new leadership about the Chinese dream and how they're going to be the guiding principles to improve the standard of living in China. Now, that will play in very well into the environmental market. But right now, the overall numbers are down given the weakness in both U.S. and Europe.

Next question comes from the line of Richard Eastman, R. W Baird. Richard Eastman – Robert W Baird : Yes, just a couple of questions either for Bill or Guy. But I wanted to just ask, with this lost manufacturing test customer has there been any change in the test protocol that makes your approach somewhat redundant and expensive relative to the different test protocol? For instance just physical layer test or a signal test, so when you get back to the market next year, do you come back with a different solution?

Yes. I will have Guy answer the question regarding our overall solution and the evolution of what is a consumer based product and where testing is going and again I'm very excited about the direction we are going. I want to make this explicitly clear, we did not come to terms, we did not come to an agreement on contract based on terms, nothing to do other than that. Guy?

Yeah, I would just highlight also that it’s definitely not a product issue or a product at very adequate for this marketplace and have been used in many customers across the world. So, the transformation that you’re referring to each of that’s really something that in fact we have lead to what we call non-call processing test. In the past, people for cellphone would have to test a phone in operation that the phone would have to connect to a base station to be fully tested. Now it is no longer tool for most of the phone test strategies and we have been a leader in helping progressing towards this, and we will keep doing this with the current generation and the future generation of our products. Richard Eastman – Robert W Baird : And can I also ask you, Guy, when I look at the EMG orders and the decline year-over-year could you just speak to the decline geographically, and just approximate decline in the three regions, in orders.

Well, if I normalize for the deal that we spoke about, that is obviously in terms of revenue mostly impacting our business in China, because that’s where the largest bases are. I would say the rest of the decline is pretty even across all geographies. So the order and the large customer that order was a China order in the past.

Let me just take that question in the way we report our regional orders and revenue equal to have shown as the Americas. Richard Eastman – Robert W Baird : Okay.

It is just when some times we talk about on the ship two basis that our instrument ended up in China. But on the way, we report orders and revenues which would have shown in Americas Richard Eastman – Robert W Baird : It would have been. Okay, that’s great. And then just last thought, I just had in terms of the second quarter was there, I am just referencing back to an answer that was given on sales for EMG, where there any order cancellations at the end of the second quarter because given the first quarter order level in EMG and some of the first quarter pushed business into the second. I am curious that your sales number wasn’t a little bit higher on the conversion from the first quarter orders, unless there were some cancellations?

No we did not have any major or out of the range cancelations. Richard Eastman – Robert W Baird : Okay, all right. Thank you for taking the questions.

Your next question comes from the line of Ross Muken with ISI. Please proceed. Ross J. Muken – ISI: Hey, guys. I thought maybe I’d start first on the P&L, can you talk about sort of the margin progression queue to queue. I mean in terms of the 3Q guidance. And I am just trying to look out sort of what the debt in the employee detrimental are, it looks to be more significant obviously then I would have assumed just given sort of the revenue outcomes. So, maybe talk through the components sequentially of what sort of drives that, is it the type of loss business, is it FX, is it sort of the delay on some of the cost flows throughs where you’re getting the savings. I am just trying to understand the Q2 to Q3 margin progression?

Sure, so I'll take that one. So, Q2 to Q3, midpoint of our guidance, Q3, I mean sure about $100 million reduction in revenue sequentially. So, again, $100 million in itself that's kind of $0.14 rule of thumb reduction in EPS and what we are showing is EPS going down from $0.77 to $0.62. So on average on the midpoint of the guidance. So, I think that should answer your question, I'm not going to go into the specifics of OpEx and gross margins, but we are obviously, because of the loss of $100 million of revenue, gross margin will be down slightly and then we expect OpEx to be about flattish, but normally, you would expect Q3 OpEx be much higher than Q2, because of the fact that’s just the normal seasonality and that's not happening. Ross J. Muken – ISI: Maybe just to follow-up Bill, on Tycho's question in terms of the portfolio, I mean, yeah at some businesses, that last two quarters have performed exceptionally well. Most of the assets are kind of doing what you would expect in this environment or the type of company are but the bits and pieces, whether it's handset where it seems like you have forgone some business and that's going to be down substantial. Then you've got the semi piece et cetera, they are a bit more volatile than the rest. I mean as you are thinking about sort of the profile of this business continuing to have these kind of hyper-cyclical pieces, I mean, do you feel like that's something that's going to be a drag on your valuation? Do you think that that's something that sort of makes sense given all the other pieces? I'm just trying to get a sense for when you have the internal debate, what are sort of the puts and takes of whether something belongs or doesn't belong?

Well, first of all, fundamentally, is the business a good business and one that over a business cycle returns at or above Agilent's operating model. And the situation, I'll use the semiconductor capital business that we kept. We essentially have a 100% market share and as a result of that has just outstanding return through the course of the cycle. And so in times like this, when parts of our Electronic Measurement are going through a tough patch, it's easy to say, hey, let's jettison this for a short-term gain and from our viewpoint, it just doesn't make sense. So, the operating model inside of EMG has been dramatically changed over time. If you had asked me eight years ago, 10 years ago that given the headwinds that they’ve reached, they would have a 20% operating quarter, I would say there is no way. We have a great franchise and with some volatility in the downside and the flipside when this turns around, and semiconductor capital equipment and our small part expands, when you get more growth in the computer side of the house, at some of the industrial growth returns, we're going to have a completely different story. In fact, if anything, we're going to drive higher on the upside in our Electronic Measurement than we've done in the past, given the decisions that we have made. So, we have a great franchise in these and we will just weather the storm. Ross J. Muken – ISI: Yeah, I understand sort of from the business concept perspective, I guess I'm trying to understand in the context of sort of what the investment community reflects relative to that volatility. I'm just trying to get a sense, when you benchmark internally versus peers, I mean are you looking at a distinct group for the whole asset when you're trying to compare your performance, whether it's on earnings growth, core growth, return on invested capital, cash flow generation, et cetera, and how you do sort of versus forecast versus your peers? Are you copying against a very distinct set of similar companies, where you feel like they have the same asset mix or are you sort of mixing and matching when you're trying to figure out overall. This is why our stock is getting reflected in this way while other peers are kind of having a different view in terms of valuation?

The valuation of Agilent in some of the parts is very straightforward process. Almost everybody has MBA, know how to do the calculation. We often time use third parties to validate our own assumptions moving forward. Our pay system is tied to total shareholder return as you know, since 2005. We have consistently beat all three indexes that we compete in industrial, IT, and healthcare. Clearly, our situation has changed since we have been reclassified into the healthcare sector. The analysts that cover us and the analyst inside of big funds clearly have changed moving forward. We also of course do that evaluation in terms of what our peers are within the healthcare. As it stands today, based on our evaluation, Agilent and again which has been confirmed from outside help is that we are trading roughly at 12% discount. If you look at the efforts in the short-term to be able to divest to go through the overhead absorption related to that and the distraction for very short-term outlook, we think just doesn’t make sense at all. Historically, these assets perform well. We will in fact when other handset manufacturing test business, electronic measurement is a great franchise for the company moving forward and to be able to be distracted on I think quite honestly some plastic short-term view. I think just aren’t accurate. If in fact that we were trading at a substantial discount to our peer group or to now they are part of the S&P 500 that we are in. Yeah, that’s a different issue and again we have a long history of addressing that. We made the decision in 2005 to divest semiconductor related businesses and semiconductor component business because it wasn't tied to our strategy of being a leader in measurement science. So, we…

So we have a every detailed process that we go with the board of directors every year in September where we make a forecast of our three year growth outlook, why we believe we can outpace the market over the period of time, what our P&L looks like in our corresponding balance sheet. Given the operating model that Agilent has developed over the years, so we know we will generate substantial amount of cash. As I said with the previous question, our number one focus is to invest in the businesses going forward. The second one is return cash back to our shareholders tax effectively as we can. So this is an ongoing process that will review with the board officially in September with updates as we move forward balancing what is the short-term outlook for uses of cash for investment in the business, where is the available cash, what is the prudent amount of debt level, ensuring that we remain high caliber credit worthy company. And based on those and ongoing analysis we make the corresponding recommendation to the board on returning additional cash to the shareholder either through a dividend or a stock repurchase. Ross J. Muken – ISI: Thanks, guys.

Your next question comes from the line of Doug Schenkel with Cowen and Company. Please proceed. Shaun K. Rodriguez – Cowen & Co. LLC: :

Mike?

Sure. I think what you saw in the recently completed second quarter is what you’re going continue to see in the coming quarters, what you’re seeing from past several quarters, the strong overall global growth environment being driven by the globalization of food supply, increasing demands by growth population have, save food to eat and then high-quality food. And what we’re seeing now is real investment line up behind that. So I pointed to China in my earlier comments and as we talked in our previous call, the market looked like was some of the pause because there is a leadership transition under way than you get, little being ministries reorganize and that’s happening and now we’re starting to see or that has happened, we’re starting to see flows of vessels coming in the food market. I really do think this is a global play being driven out of the emerging markets, but not only constrained to those marketplaces. Then you got a great growth environment on the one end on a global basis and you have to have the right products and solutions coming into that space. And as Bill mentioned earlier, we've had a number of very exciting new offerings coming into the space, whether it be spectrometry products or mass spec, they're all hitting the market and that's really driving the overall market growth that you are seeing from Agilent in a very healthy, while continuing to be a very healthy food market.. Shaun K. Rodriguez – Cowen & Co. LLC: Okay, great. Thanks. And then on Dako, can you provide on update where you are with this sales force expansion in Asia, when you will be fully ramped there, what kind of trends you’re seeing in response and also in Dako an update on the formal partnerships you discussed the last couple of quarters and here really put a I am asking about it, are there any specific development or commercial milestones and associated timelines that we should be thinking about? Thank you

Lars, why don't you take those two questions, please?

Sure, Bill. Well, we got the sales force expansion in APAC. I'm happy to report that we are pretty much ahead of schedule there and we have completed the hirings as per planned for the full fiscal year. So, the majority of the hirings are going into China. We are probably adding another 25 to 30 customer facing resources. They're now ongoing training and we believe they're going to be, starting to deliver and become operational from the third quarter. If I look at our development in China right now, Dako year-to-date is growing at around 60%, the base is low, but we are actually placing a great number of instruments, we'd see substantially up compared to prior years. So, I think we're making very robust progress and APAC as a region is obviously the fastest growing region for Dako at this point in time. We will continue to drive our business model towards a direct customer access. We have recently completed acquisition of a local distributor in Korea and we will be looking at other opportunities to get closer to the customer and also to capture the value stream of such a transaction going forward. So, Asia, we continue to invest in more footprint in front of the customer. In terms of the pharmDx or Companion Diagnostics as we call it right now, pleased to say that we got a major customer contract where we agreed with Pfizer on a long-term developmental agreement that obviously also comprises some type of advisory services from a regulatory point of view and also marketing point of view and this is subject to support one of the new developments in the pipeline, which is not disclosed by name at this point in time. We also got two important news, [we got to our drag], so basically our HercepTest and the HER2 FISH is the only companion diagnostic today approved to support the use of Kadcyla from Genentech. So we are in a privileged position and we see now an uptick of our business in that regard. In terms of other milestones here, probably fair to say that we will continue to announce more partnerships with Tier 1 pharma companies in this particular field and from fiscal year 2014 and onwards, we do expect to see a steady stream of new companion diagnostic test that will be marketed through the Dako sales organization. Shaun K. Rodriguez – Cowen & Co. LLC: Thank you.

Your next question comes from the line of Tim Evans with Wells Fargo Securities. Please proceed. Tim C. Evans – Wells Fargo Securities LLC: Hi, thanks. Didier, I just have one quick question. Can you give us a sense for how we should think about your incremental and decremental margins in an environment where the growth rate is essentially below the bottom end of your business model?

Yeah, I mean we covered that a little bit at the Analyst Meeting. I mean, clearly, in order to get the [stick] at the operating model in a very low growth environment, we had to implement cuts and discretionary expenses, and also a very, very surgical kind of restructuring in addition to benefitting from the reduction in the AOF, that the AOF organization has committed to about $50 million per annum for four years in a row. So, that’s how we make it happen. If we were not able to do that, you would normally expect significant decremental when revenue growth has slowed down to such an extent. Tim C. Evans – Wells Fargo Securities LLC: Okay. Got it. Thank you.

Thank you.

There are no remaining audio questions at this time. I’d now like to turn the call back over to Ms. Alicia Rodriguez for closing comments.

Thank you, Patrick. Just wanted to say good day to everybody, and thank you for joining us on the call. If you have any questions, please let Elaine or myself know. Thank you.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.