A Company Profile

• electronic measurement;

• bio-analytical measurement; and

• semiconductor test solutions.

Our electronic measurement and semiconductor test solutions businesses focus on growth opportunities in the communications and electronics industries, while our bio-analytical measurement business focuses on core business and growth opportunities in the life sciences industry and in the environmental, chemical, food and petrochemical industries.

Electronic Measurement Customers

Agilent's electronic measurement customers include contract manufactures, handset manufacturers, NEMs who design, develop, manufacture and install network equipment, and service providers who implement, maintain and manage communication networks and services. We also engage in collaborative relationships with contract manufacturers. Many of our customers purchase solutions across several of our major product lines for their different business units. As of the end of fiscal 2005, no single customer represented greater than 10 percent of the net revenue of the business.

The orders and revenues in many of the electronic measurement businesses are seasonal, with our fourth quarter traditionally bringing larger volumes of business and our first quarter generally showing reduced volumes. This is especially true of products that we sell in the aerospace and defense industry as well as those that are linked to consumer spending, including some of our communications test equipment. However, the seasonal impact is tempered by the diversity of the electronic measurement business's products and customers, which span multiple industries.

Bio-Analytical Measurement Customers

Our top 25 customers account for approximately 24 percent of revenue within our bio-analytical measurement businesses. We have roughly 21,000 customers.

The bio-analytical measurement business is susceptible to seasonality in its orders and revenues primarily based on U.S. government and large pharmaceutical company budgets. The result is that our first and fourth fiscal quarters tend to deliver the strongest profits for this group. However, general economic trends, new product introductions and competition might overshadow this trend in any given year.

Semiconductor Test Solutions Customers

Agilent's semiconductor test solutions customers include many of the world's leading high-technology firms. Our semiconductor test solutions enable our customers to speed their time to market and achieve volume production and high-quality precision manufacturing. More than half of the business' net revenue is generated from outside the U.S.

Many of our customers purchase solutions across our major product lines for their different business units. Generally, our customers are involved in producing digital consumer and wireless products, computation, personal computers and related peripherals, wireline communications, or enterprise networking and storage.

We also engage in collaborative, co-development relationships with electronics industry leaders and sub-contract manufacturers.

The back-to-school and holiday seasons affect our semiconductor test business to the extent that we are subject to the cycles of consumer electronics manufacturing. Our customers include manufacturers who produce a wide range of consumer electronics equipment requiring the test of semiconductors.

Electronic Measurement Competition

The market for electronic measurement equipment is highly competitive. Our electronic measurement business competes with a number of significant competitors in all our major product categories and across our targeted industries. In the general purpose test market, we compete against companies such as Fluke Corporation (a subsidiary of Danaher Corporation), Keithley Instruments, Inc., LeCroy Corporation, National Instruments Corporation and Tektronix, Inc. In the electronics manufacturing test market, we compete primarily against Teradyne, Inc. In the FPD test market, we compete against Photon Dynamics, Inc., Applied Komatsu Technologies and Shimadzu Corporation for large-panel test customers, and primarily with Wintest Corp. in emerging FPD technologies. In the communications test market our primary competitors are Acterna Corporation, Aeroflex Incorporated, Anritsu Corporation, EXFO Electro-Optical Engineering, Inc., Ixia, Marconi Corporation plc, Rohde & Schwartz GmbH & Co. KG, Spirent plc and Tektronix, Inc. In addition, we compete with Telcordia Technologies, Inc. and Hewlett-Packard Company ("HP") in the communications test market. In the communications management and monitoring market our primary competitors are Spirent plc, Tektronix, Inc. and Micromuse, Inc. Our EDA business also has several software competitors, including Ansoft Corporation, APLAC Solutions Corporation, Applied Wave Research, Inc. and Xpedion Design Systems, Inc.

Our electronic measurement business offers a wide range of products, and these products compete primarily on the basis of product quality and functionality, as well as performance and reliability.

Bio-Analytical Measurement Competition

The markets for analytical instruments in which we compete are characterized by evolving industry standards and intense competition. Our principal competitors in the life sciences arena include: Affymetrix, Inc., Applied Biosystems Inc., GE Healthcare, Invitrogen Corp., Thermo Electron Corp. and Waters Corp. Our principal competitors in the chemical analysis arena include: Applied Biosystems Inc., Perkin Elmer Corp., Shimadzu Corporation, Thermo Electron Corp. and Varian, Inc. Agilent competes on the basis of price, product performance, reliability, support quality, applications expertise and global channel coverage.

Semiconductor Test Solutions Competition

The market for semiconductor test solutions is highly competitive. In the semiconductor test solutions market, we compete mostly against Advantest Corp., Teradyne, Inc., Credence Systems Corp. and LTX Corp.

Most of our equipment competes primarily on performance or differentiated capabilities. Other contributing factors include cost of test, sensitivity, speed, reliability and yield.