
	Three Months Ended
(In millions)	January 1, 2021		January 3, 2020
Accrued product warranty, at beginning of period	$	38.9	$	43.2
Charged to cost of revenues	16.7		20.8
Actual product warranty expenditures	(16.8)		(17.8)
Accrued product warranty, at end of period	$	38.8	$	46.2


	Three Months Ended
(In millions)	January 1, 2021		January 3, 2020

Operating lease cost	$	8.6	$	7.8
Finance lease cost:
Amortization of right-of-use assets	0.2		0.1
Interest on lease liabilities	0.1		0.1

Variable lease cost	3.7		4.5
Total lease cost	$	12.6	$	12.5


	January 1,		October 2,
(In millions)	2021		2020
Operating leases:
Operating right-of-use assets	$	119.5	$	121.0

Accrued liabilities	$	27.2	$	27.2
Long-term lease liabilities	101.7		101.1
Total lease liabilities	$	128.9	$	128.3

Finance leases:
Property, plant, and equipment, net	$	10.6	$	11.5

Accrued liabilities	$	3.1	$	3.4
Other long-term liabilities	8.5		8.7
Total lease liabilities	$	11.6	$	12.1


(In millions)	Operating Leases		Finance leases
Remainder of 2021	$	25.3	$	2.9
2022	28.3		3.3
2023	22.4		3.3
2024	16.3		1.3
2025	12.9		0.8
Thereafter	56.8		0.9
Total minimum lease payments	$	162.0	$	12.5
Less: imputed interest	33.1		0.9
Total lease liability	$	128.9	$	11.6

The Company leases some of its equipment to certain customers through operating leases, which generally have a term of 10 to 17 years. As of January 1, 2021, the Company had $27.1 million and $10.0 million included in property, plant and equipment and accumulated depreciation, respectively, related to equipment leased to customers. As of October 2, 2020, the Company had $26.5 million and $9.1 million included in property, plant and equipment and accumulated depreciation, respectively, related to equipment leased to customers. The Company recorded income of $2.6 million and $2.5 million during the three months ended January 1, 2021 and January 3, 2020 on these equipment leases.

The Company’s operations and facilities, past and present, are subject to environmental laws, including laws that regulate the handling, storage, transport and disposal of hazardous substances. Certain of those laws impose cleanup liabilities on the Company in connection with its past and present operations. Those include facilities sold as part of the Company’s electron devices business in 1995 and thin film systems business in 1997. As a result, the Company oversees various environmental cleanup projects and receives reimbursements from third parties for a portion of the costs of its cleanup activities.

As of January 1, 2021, and October 2, 2020, the Company had accrued $3.9 million and $4.0 million, respectively, net of third parties' indemnification obligations, for environmental remediation liabilities. The Company believes its reserve is adequate; however, as the scope of the Company’s obligations becomes more clearly defined, the Company may modify the reserve, and charge or credit future earnings accordingly. Based on information currently known to management, management believes the costs of these environmental-related matters are not reasonably likely to have a material adverse effect on the consolidated financial statements of the Company in any one fiscal year.

The Company also reimburses certain third parties for cleanup activities. The amount the Company spent on environmental cleanup costs, third-party claim costs, project management costs and legal costs in the three months ended January 1, 2021, and January 3, 2020, was not material.

In connection with the proposed acquisition by Siemens Healthineers in August 2020, the Company expects to incur approximately $110 million in advisory fees that are contingent upon closing the pending acquisition by Siemens Healthineers. The Merger is expected to close in the first half of calendar year 2021, subject to receipt of specified regulatory approvals and other customary closing conditions. On October 15, 2020, VMS' stockholders approved and adopted the Merger Agreement. Under the terms of the Merger Agreement, if the Merger Agreement is terminated by VMS or Siemens Healthineers under certain specified circumstances, a termination fee of $450.0 million in cash may be payable by VMS to Siemens Healthineers. The Merger Agreement also provides that a reverse termination fee of $450.0 million or $925.0 million in cash may be payable by Siemens Healthineers to VMS if the Merger Agreement is terminated by VMS or Siemens Healthineers under certain specified circumstances.

On October 16, 2018, Best Medical International, Inc. sued the Company in U.S. District Court in the District of Delaware, alleging infringement of four patents related to treatment planning. The Company intends to defend the suit vigorously. The suit is in the discovery stage, the parties have completed mediation, and a trial date is currently scheduled for April 2022. At January 1, 2021, the Company has accrued $8.5 million representing its best estimate of the loss that may result from this action. The ultimate outcome of this matter is uncertain and may result in a materially different outcome.

From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations and other legal matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. The Company accrues amounts, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision.

In addition to the above, the Company is involved in other legal matters. However, such matters are subject to many uncertainties, and outcomes are not predictable with assurance. The Company is unable to estimate a loss or a range of reasonably possible losses with respect to such matters. There can be no assurances as to whether the Company will become

subject to significant additional claims and liabilities with respect to ongoing or future proceedings. If actual liabilities significantly exceed the estimates made, the Company’s consolidated financial position, results of operations or cash flows could be materially adversely affected. Legal expenses relating to legal matters are expensed as incurred.

In the third quarter of fiscal year 2020, the Company implemented a global workforce reduction ("2020 Restructuring plan"), as part of the Company's plan to enhance operational performance through productivity initiatives in response to the impact of the COVID-19 pandemic.

The remaining balance of $4.4 million is expected to be paid in fiscal year 2021. The Company does not expect to incur additional restructuring charges under this plan. The restructuring charges are included in selling, general and administrative in the Condensed Consolidated Statements of Earnings.