Welcome to the first quarter 2009 Agilent Technologies, Incorporated Earnings Conference Call. (Operator Instructions) I would now like to turn your presentation over to Mr. Rodney Gonsalves, Vice President of Investor Relations.

Welcome to Agilent's first quarter conference call for FY 2009. With me are Agilent's President and CEO, Bill Sullivan and Executive Vice President of Finance and Administration and CFO, Adrian Dillon. After my introductory comments, Bill will give his perspective on the quarter and the business environment. Adrian will follow with his review of the financials and the performance of each of the businesses. After Adrian’s comments we will open the lines and take your questions. In case you haven’t had a chance to review our press release, you can find it on our web site at www.Investor.Agilent.com. We are also providing further information to supplement today’s discussion. After you log on to our web casting module from our web site you can click on the link for supplemental information. You will find additional information such as our end market revenue breakout and historical financial information for Agilent's continuing operations. In accordance with SEC Regulation G, if during this conference call we use any non-GAAP financial measures you will find on our web site the required reconciliation to the most directly comparable GAAP financial measure. In addition, I would like to remind you that we may make forward-looking statements about the future financial performance of the company that involves risks and uncertainties. These risks and uncertainties could cause Agilent's results to differ materially from management’s current expectations. We encourage you to look at the company’s most recent filings with the SEC to get a more complete picture of all the factors at work. The forward-looking statements, including guidance provided during today’s call are only valid as of this date and the company assumes no obligation to update such statements as we move through the current quarter. As a reminder Agilent is now including share-based compensation in both its segment and pro forma results. We have restated our historical results to reflect the change and those restatements are available on our web site. Now, I'd like to turn the call over to Bill for his comments.

Thanks Rodney and hello everyone. In a few moments Adrian will provide you with a detailed analysis of our first quarter results by business and geography. Let me start by acknowledging that in the first quarter Agilent has felt the full brunt of the severe worldwide economic downturn. Revenues were down $109 million and earnings per share down $0.10 for the mid-point of our December guidance. Due to continuing weakness in electronic measurement and semiconductor board tests as well as slowing in the analytical measurement markets, revenues were down 16% from last year, orders were down 20% a clear indication of the strong headwinds we continue to face. The fundamental cause of our earnings miss was the very weak orders and revenue in January. We saw weakness across all segments and business units in the company. As a result of January’s order decline it is difficult to give guidance. However, we believe that Agilent’s second quarter revenues and earnings will be flat on a sequential basis. There are several reasons for this. Number one, Q2 is seasonally stronger than Q1. There are more days and fewer holidays in the second quarter. In Q1 we have both the Christmas and lunar New Year. Number two; there are some bright spots in the market. For example we see strength in two analytical markets, Life Science, Academic and Government Research as well as Food Safety. Likewise, we continue to be excited about the success of our LTE Test solutions as well as new opportunities in China due to the release of 3G licenses. Number three, aerospace and defense is typically stronger in the second quarter. The Agilent PNA-X network analyzer continues to be very well received by aerospace defense customers. Four, from a product standpoint we continue to do well in areas such…

Thank you Bill. Good afternoon everyone. I am going to offer a few overall perspectives on the quarter for Agilent review the performance of our three business segments and conclude with some thoughts about the outlook to the second quarter and the remainder of fiscal 2009. Then we will turn it back to Rodney for Q&A. As we indicated in our press release, Agilent felt the full brunt of the severe economic downturn in this year’s first quarter. Revenues of $1.16 billion were down $227 million or 16% from last year. We moved quickly to minimize the impact of this unexpected weakness by taking aggressive actions to reduce operating costs across all operations and functions. As a result, operating profits were down only $69 million and operating profit decremental of 30%. But operating earnings per share of $0.20 were well below our earlier expectations due to the lower activity levels. Revenues were down across the globe with the Americas off 10%, Europe off 21% and Asia down 18% from one year ago. By segment, semiconductor and board test was hardest hit off 49% from last year while electronic measurement was down 23% and bio-analytical measurement revenues were off 1%. Operating cash generation was seasonally weak during the first quarter and this year was no exception but we did generate $17 million of positive cash flow from operations despite the very weak economy. While inventories were higher than we would like, working capital remained under generally good control and was reduced by $68 million from last year’s fourth quarter. Return on invested capital fell to 11% this quarter compared to 19% one year ago because of lower earnings. During the quarter we repurchased $125 million of stock and we ended the quarter with net cash and short-term investments of $852 million.…

Thanks Adrian. Eric please go ahead and give instructions for the Q&A.

(Operator Instructions) The first question comes from the line of Mark Moskowitz – JP Morgan. Mark Moskowitz – JP Morgan : Bill, can you talk a little about the dynamics in your profile in terms of R&D tests versus manufacturing tests? I’m just trying to get a sense if there is another shoe to drop or are you seeing pretty much broad weakness across both R&D and manufacturing tests?

As Adrian indicated as well as myself, we have seen a drop across all the segments in electronic measurement moving forward. How much of this is just delays as people sort out the new year needs to be determined. From an activity standpoint you would expect the manufacturing tests to drop and it did. The slow down in wireless R&D in particular we would like to think of as a pause since there is no evidence that people are re-trenching in LTE and WiMax or the roll out of G3 inside of China or the aerospace and defense but obviously the drop in Q1 we would want to ask your question. Mark Moskowitz – JP Morgan : As far as the LC/MS drivers could you talk about how sustainable we should think of the up tick there relative to the overall market?

We are in a very, very strong competitive position in this market and we have done a very good job of sorting out opportunities moving forward. If the overall analytical market decreases into 2009 it is hard to believe this product line won’t be impacted. We are focusing this team and all the rest of the teams to make sure we have the best measurement solution for the customers that have the funding to fund their projects.

Just to elaborate on that a little bit, one of the things we discovered is that the application of the LC/MS to food testing has been much stronger than we anticipated where we are actually creating new applications through the unique sensitivity of this instrument. Part of the reason for its strength and part of the reason we think it will be enduring is because it is applying right into the most strong need for these types of instruments on a worldwide basis which is food safety and testing. Mark Moskowitz – JP Morgan : Given the environment and how you do have so many different moving parts to Agilent, you have been very proactive in addressing and cutting costs, how should investors think about one the rebound in some of your R&D and sales and marketing focus going forward in terms of as you just mentioned food safety doing better? Are there going to be certain areas where you kind of table some R&D development or are you going to continue to be very focused on providing a very broad based, leading edge test and measurement portfolio?

Right now given all the changes that we have made, all of the focus on reducing expenses consistent with our operating model we have not had a major impact to our R&D investment at all. If you look at each of our major business units and segments we have very strong instrument platforms that we need to continue to invest. That doesn’t mean some spectrum analyzers to scopes to Oscilloscopes to LC/MS we are still fully funding the development to make sure we have leading edge technology on each of our major instrument platforms as well as a leading position in each of our segments. Mark Moskowitz – JP Morgan : Can you quantify, I may have missed this and I apologize, did you quantify the board businesses you are exiting? How much that is of the overall board segment in terms of revenues?

No we did not. Honestly it is very little at the moment because there is a literal fire strike among all contract manufacturers for virtually any equipment so it is [diminuous] at this point.

The next question comes from John Wood - Banc of America.

Adrian, if total revenues end up down 20% like is in your plan in FY09 what free cash flow would you envision for this year?

I would envision order of magnitude $400 million.

How should we think about the buy back over the next three quarters?

You should assume a continued reduced rate of $125 million per quarter until we announce otherwise.

On the bio-analytical side I guess the plan is now for down 5% on revenue there versus flat. What incrementally has deteriorated if anything? It looked like the orders were only down 2 so holding on pretty well. What has changed from the December Analyst period on the bio-analytical side?

The fundamental problem is, and again hopefully it is an anomaly, is that January orders for our analytical business is a lot less than what the quarter would suggest. As Adrian had outlined we are seeing a slow down in almost every applied market except for food and other than academic and research where we have a very small market share we are seeing decreased orders in the pharmaceutical industry. So again we have this anomaly in the last month of our quarter which typically is our strongest was not. In fact it was weaker than the previous two months and so that really clouds the outlook moving in. Outside of the government and academic research and life science and food industry we are assuming that the rest of the various segments will decrease as we progress into 2009.

Bill are you willing to go into any more detail of “a lot less” quantifying that in January in the bio-analytical side?

Orders were down 12% year-over-year.

The next question comes from William Stein – Credit Suisse. William Stein – Credit Suisse: Given this new view on the revenue for the year, are you able to talk about what an earnings target would be for the full year?

You want to model it consistent with Agilent’s operating model which is basically a 40% decremental on operating profits and I think you will get very close to our planning assumptions. William Stein – Credit Suisse: A question on the inventory, I was kind of surprised to see it up in dollar terms. I don’t think there was ever an expectation of increasing revenue in the quarter. Can you help us understand what happened there? Was there something unusual that might have happened to trigger an inventory build?

Actually from my perspective it seemed an incredible job of only having inventory slightly increase from the previous quarter given the dramatic decrease in revenue and of course below the mid range of our expectations. All of the worldwide manufacturing teams all have aggressive plans to reduce inventory as quickly as possible. You just can’t react given the $100 million revenue mix in the quarter.

Let me reassure you that is our area of focus. We intend to get those days on hand back down to the low 90’s as we have characteristically had. That will be a source of cash throughout the rest of this year. William Stein – Credit Suisse: Around how long are we talking? One quarter? Two quarters? To get to the 90’s.

Let’s say two or three.

I have a comment, our whole demo inventory and our demo’s for customers are included in that number and you just have the mathematical problem of having a higher percent of inventory versus revenue but in terms of the operational inventory that Adrian outlined we will aggressively reduce that over the next few quarters.

The next question comes from John Harmon - Needham & Company. John Harmon - Needham & Company: How did your Oscilloscope products do, maybe better or worse than the general purpose category? Where do you stand in terms of refreshing the products in the product cycle?

Overall, our Oscilloscope business did equally as good and equally as bad as the rest of our general purpose. I think the other guy had a pretty good quarter. They had a rebate program to my understanding as well as a product launch, as well as one would expect after decades of our competition we will be also introducing new products as we move forward. John Harmon - Needham & Company: In a period of weaker demand did you see a shift towards low cost instrument platforms or did they perform about as well as everything else?

Everything was down across the board for first order.

In fact, as I tried to emphasize, if anything the quality of the sales was improved. We had a better mix as we had more software and more higher end instruments. It was the manufacturing oriented instruments that got pounded the most. John Harmon - Needham & Company: Finally, your decision to exit x-ray tests, you gave three criteria for businesses that you keep. Was it primarily due to the buyer strike as you called it or was the business kind of just barely above the threshold before and then the recent downturn really pushed it permanently below in your opinion?

First of all, it has been a business where the team has struggled to get to the Agilent operating model. We have had major restructuring, moved the responsibility of the product line into our overseas facility in Panang, Malaysia, but you couple that with an environment where for the second year in a row business has been down and the reality is the customer, again the customer just does what their customers say…that the idea of spending money for inspection particularly x-ray inspection versus the risk of warranty or failure people are opting to do less inspection in this environment. So you couple a tough market with our belief and environment of excess capacity and a reluctance to spend more capital money today for inspection it just seemed the right decision to exit the business and focus on our testing.

The next question comes from Ajit Pai – Thomas Weisel. Ajit Pai – Thomas Weisel : Just looking at the pricing environment I think you talked a little bit about promoting, etc. from competitors but is there anything you are seeing from some of your larger competitors both on the electronic measurement side as well as the bio-analytical side behaving irrationally in terms of pricing or increased promotional activity?

I won’t say anything disparaging about our competition in terms of pricing but just to say that the big deals that are publicly bid are very aggressive competition to land those deals. Ajit Pai – Thomas Weisel : Given the conditions and lack of visibility and your talking about the second quarter and guiding it sort of flat in a seasonally strong quarter with the January quarter if things begin to deteriorate further is the current approach of the management team to just wait it out? Even if profitability falls further? Because the portfolio would be valuable in the long run or do you think you will make additional cost cutting steps to ensure the company stays profitable?

Our [inaudible] criteria is very clear and again one of the biggest learning from the 2001 crash is we cannot get into a negative cash flow position and we will make all the appropriate decisions to ensure we are operating free cash flow under any conditions. So we will in fact take additional actions if we believe we cannot be substantially cash flow positive going forward. Ajit Pai – Thomas Weisel : My last question would be just looking at the two businesses you are trying to shut down, the two product lines the optical inspection and x-ray inspection, will these businesses or the customers per say of these businesses but much more potential acquirers or competitors of these businesses, were these businesses ever shopped or did you try to sell these businesses in the past 6-9 months? Not very recently but prior to that?

There are no buyers for this business.

The next question comes from Richard Eastman – Robert Baird. Richard Eastman – Robert Baird: Could you just elaborate for a second or two on the operating profit within BAN? Excellent performance and was that mix or was that trailing cost reductions that generated that?

It was a series of things. One, the profitability of the new platform and new instruments that we have is superior to that which is being replaced. Some of the product lines that are strongest have the highest profit margins. Third, a number of the across the board actions that Bill has detailed in the past apply equally to bio-analytical and the electronic measurements side so those three combined to generate the excellent profitability. Richard Eastman – Robert Baird: As we go forward the $150 million of annualized savings you have laid out should we think of that as impacting the segments essentially with a weighting that would generate the 40% decremental? I don’t know if that was a real clear question but basically, SBT and EM?

In aggregate obviously it does generate the 40%. You should think that it will be disproportionately to the electronic measurements side to something like 2/3 or 65% EMG, 30% bio-analytical and the remainder on semiconductor and board tests. Do remember that we have a previous announcement of restructuring the board tests already so that is also benefiting. Richard Eastman – Robert Baird: Bill you had mentioned January orders for BAN were down about 12%. Presumably EM then much…can you give us an EM number?

Over 30. Richard Eastman – Robert Baird: Was there any geographic difference? When you look at orders in the quarter we can just back up to January was there anything that you can sense that perhaps the Europe downturn is behind us by 6 months or anything from a gauging standpoint that would suggest geographically things will get worse in Europe and maybe better in America first or anything like that?

That is going to be pure speculation. Honestly the U.S. goes into these things first and ordinarily Europe lags. Given the nature of this downturn being a simultaneous global financial meltdown everything has gone down simultaneously. That is part of the unique character of this downturn and further and ironically the Americas has held up the best by a wide margin. Europe has been the weakest by a wide margin although Japan has come fairly close. So this is really pretty uncharacteristic. I think that the U.S. will come out of it first but that is pure speculation.

The next question comes from William Stein – Credit Suisse. William Stein – Credit Suisse: I’m just trying to make sure I understand the guidance. I understand it is kind of a best shot at this point but sequentially you are looking for flattish on both revenue and earnings but I would imagine there are some fixed costs that are going to be taken out. Would I be right to think if you hit the same revenue number that profitability would be a bit better sequentially?

Given the band of air I would like to agree with you but I would also remind you that seasonally our expenses go up a bunch between Q1 and Q2 with things like [pit con] as one example of shows and new product introductions like our new GC/MS that require higher seasonal spending. So it is not necessarily so.

We are trying to take a very conservative position. We will get the full quarter’s impact of the salary cuts but we have a very deep product launch set across the company for Q2 as Adrian indicated one of them but we have quite a few others that just cost seasonally more money to launch these products.

This is typical. William Stein – Credit Suisse: The two businesses you are exiting, can you give us an idea as to how big these were a year ago?

Probably $100-150 million range roughly. They have been dropping for two years. At one time I know they were over $200 million but the drop has been swift and deep. William Stein – Credit Suisse: Priority of uses for cash in this environment? Have you considered that maybe instead of buying back stock that the positions could be potentially more useful for preventing the revenue slide?

I’m sorry? William Stein – Credit Suisse: Use of cash at this point? Maybe you could just highlight your priorities?

Number one is to continue to invest in the business. We continue to look for acquisition opportunities. The reality of the situation is that coming to an agreement with a potential acquirer person the valuation is a real issue. People still have very vivid memories of the 52-week high and so the whole issue of valuation much less financing has put the merger and acquisition market I think on hold. So that is task number one. Task number two right now is to ensure that we are cash flow positive and have sufficient cash to manage the company and make sure we can fund our ongoing investments. The third one is returning to the shareholder and as Adrian said we are doing that at half rate in Q1 and you should expect that in Q2.

I may have misheard you but just in case I understood your question one thing we will not do is dive bomb prices because we are in an advantage cash position. These are inelastic markets and the only thing you do by dive bombing prices is lower the profit pool for the entire industry. That is not something we are going to do even though we are in a very envious net cash position. William Stein – Credit Suisse: It wasn’t what I asked but I appreciate the color.

The next question comes from Ajit Pai – Thomas Weisel. Ajit Pai – Thomas Weisel : Can you give us some color on what you see happening in the emerging markets like China in particular and also eastern Europe and India both on the bio-analytical as well as the electronic measurement side? Any trends? Especially late in the quarter trends?

China the good news is that we continue to do well in the analytical space particularly focused around the food industry. China on the manufacturing side I think is in free fall. So you combine the two of that it is a very difficult environment. India is quite interesting. The full impact of the world’s slow down has not really shown up as much as one would think because they have very little exposure to manufacturing. I was just there a few weeks or a few months ago and you saw the signs of impact moving forward but I think it is too early to tell. I don’t have a very good view on Eastern Europe other than our business in Russia has been surprisingly good at this point in time. Ajit Pai – Thomas Weisel : When you talk about strength in petrochemical or relative strength there, what is driving that just given what has happened with oil prices and given the massive factory shut downs all over? When you look at Dow Chemical, BSF, all your big customers are shutting plants. What is still delivering those orders?

That is the issue that we have. Again, you go into January and it gives you a different picture and so let’s wait to see what the petrochemical market looks like in Q2.

We have no more questions in queue at this time. I would like to turn the call back over to Mr. Rodney Gonsalves for closing remarks.

To everyone on the line we would like to thank you for joining us today. Again, thank you very much.

Thank you for your participation in today’s conference. This concludes the conference. You may now disconnect.