8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 25, 2017

VARIAN MEDICAL SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	1-7598	94-2359345
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer  Identification No.)

3100 Hansen Way, Palo Alto, CA	94304-1030
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code (650) 493-4000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

¨

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Item 2.02. Results of Operations and Financial Condition.

On October 25, 2017, Varian Medical Systems, Inc. (the “Company”) issued a press release announcing its results of operations for the three months and twelve months ended September 29, 2017. A copy of the press release is attached as Exhibit 99.1. The Company will also hold a conference call to discuss the financial results and management’s business outlook. The press release contains information about how to access the conference call. A slide presentation, which includes supplemental information relating to the Company, is attached as Exhibit 99.2. The exhibits will be posted on the Company’s website at www.varian.com under the “Investors” section.

 The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibits, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into the Company’s filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press Release dated October 25, 2017 entitled “Varian Medical Systems Reports Fourth Quarter Fiscal Year 2017 Results.”

99.2 Slide presentation providing supplemental information.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Varian Medical Systems, Inc.
By:	/s/ Gary E. Bischoping Jr.
Name:	Gary E. Bischoping Jr.
Title:	Senior Vice President and Chief Financial Officer

Dated: October 25, 2017

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EXHIBIT INDEX

Number	Exhibit
99.1	Press Release dated October 25, 2017 entitled “Varian Medical Systems Reports Fourth Quarter Fiscal Year 2017 Results.”
99.2	Slide presentation providing supplemental information.

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EX-99.1

Exhibit 99.1

Press Release

Varian Reports Results for Fourth Quarter of Fiscal Year 2017

Fourth Quarter 2017 Summary

– Oncology gross orders grew 7%

– Booked 23 Halcyon^TM orders, 50 orders since May launch

– GAAP net earnings per diluted share from continuing operations of $0.89 including a $13 million loan impairment charge for California Proton Therapy Center; Non-GAAP of $1.09

Fiscal Year 2017 Summary

– Oncology gross orders grew 7% driven mainly by software and service

– Linear accelerator installed base grew 4%, now greater than 7,800 units

– Launched Halcyon and HyperArc^TM

– Booked 6 Proton Therapy orders

– GAAP net earnings per diluted share from continuing operations of $2.75; Non-GAAP of $3.60

PALO ALTO, Calif., Oct. 25, 2017 /PRNewswire/ -- Varian (NYSE:VAR),  the world's leading manufacturer of medical devices and software for treating and managing cancer, today announced its fourth-quarter and full-year fiscal 2017 results.  All fourth-quarter comparisons in this announcement are year-over-year unless noted otherwise. 

Summary

($ in millions except EPS)	Q4 2017			Q4 2016			FY  2017			FY 2016
Revenues (from Continuing Operations)	$	739.0		$	747.2		$	2,668.2		$	2,621.1
Growth Reported		(1	)%					2	%
Growth Constant Currency		(2	)%					2	%
Gross Margin		42.1	%		42.6	%		43.3	%		42.5	%
GAAP Net Earnings (1)	$	82.7		$	94.3		$	257.1		$	325.3
GAAP Net Earnings per Diluted Share (1)	$	0.89		$	1.00		$	2.75		$	3.39
Net Cash Provided by Operating Activities	$	129.6		$	151.9		$	399.1		$	356.3
Non-GAAP Net Earnings (1) (2)	$	100.6		$	97.7		$	335.1		$	354.9
Non-GAAP Net Earnings per Diluted Share (1) (2)	$	1.09		$	1.03		$	3.60		$	3.70

(1) GAAP Net Earnings and Earnings Per Diluted Share and Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share refer only to continuing operations. GAAP and Non-GAAP Earnings Per Diluted Share, for the quarter and fiscal year ended September 29, 2017, were calculated based on diluted shares of 92.6 million and 93.2 million, respectively. For the quarter and fiscal year ended September 30, 2016, the number of diluted shares was 94.5 million and 96.0 million, respectively.

(2) Non-GAAP Net Earnings and Non-GAAP Earnings Per Diluted Share are defined as GAAP Net Earnings and GAAP Earnings Per Diluted Share adjusted to exclude the amortization of intangible assets, acquisition-related expenses and benefits, restructuring and impairment charges and significant litigation charges or benefits and legal costs.

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“We finished a transformative year for the company with a solid quarter highlighted by robust gross order growth,” said Dow Wilson, CEO of Varian. “During the year, we extended our industry leadership with successful launches of the Halcyon and HyperArc treatment platforms, grew our global footprint and continued to build capabilities to grow beyond our core market. We also booked two more proton orders in the quarter, bringing our total for the year to six.”

The company ended the quarter with $716 million in cash and cash equivalents and $350 million of debt. Net cash provided by operating activities was healthy at $130 million in the fiscal fourth quarter and $399 million for the fiscal year, supported by improved cash collections. During the fiscal fourth quarter, the company invested $25 million to repurchase 250,000 shares of common stock.

Gary Bischoping, Varian’s chief financial officer, added, “While the quarter’s profitability results came in short of our expectations, I’m pleased with our team’s ongoing operational and financial discipline. We have more work to do, but we made solid progress toward our long-term objectives. Our orders growth, improving gross margin rate this past year, and continued working capital efficiencies has me looking forward to our next fiscal year.”

Oncology Systems Segment
In the fiscal fourth quarter, Oncology revenues for the segment totaled $686 million, up 1 percent in dollars and in constant currency. For the full year, revenues were up 1 percent at $2.5 billion. Gross orders were $964 million, up 7 percent in dollars and in constant currency.  Gross orders in the Americas increased 1 percent in dollars and 2 percent in constant currency, with North America growing 8 percent in dollars. In EMEA, gross orders rose 32 percent in dollars and 29 percent in constant currency, to $321 million driven by robust growth in France, Germany, Poland and India; in APAC gross orders declined 10 percent in dollars and 9 percent in constant currency where strong growth across a majority of the region was offset by significant declines in Japan.

Proton Therapy Segment
Revenues in the fourth quarter were down 23 percent at $52 million. For the full year, revenues were up 12 percent at $182 million. In the quarter, the company booked orders totaling $74 million, including orders for ProBeam™ Compact projects in China and India. For the full fiscal year, proton therapy orders totaled $229 million, more than double the previous year.

Outlook for Full Fiscal Year 2018
We expect the following for fiscal year 2018:

· Revenues to grow by 2 to 4 percent

· Non-GAAP operating earnings to range between 18 and 19 percent of revenue

· Non-GAAP net earnings per diluted share from continuing operations to be in the $4.20 to $4.32 range

· Cash Flow from Operations to be between $475 million and $550 million

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We have assumed no change to share count year over year and a tax rate of 23 percent.

Please refer to “Discussion of Non-GAAP Financial Measures” below for a description of items excluded from expected non-GAAP earnings. 

Investor Conference Call

Varian Medical Systems is scheduled to conduct its fourth quarter fiscal year 2017 conference call at

2 p.m. PT today. To hear a live webcast or replay of the call, visit the investor relations page on our company’s web site at www.varian.com/investor where it will be archived for a year. To access the call via telephone, dial 1-877-869-3847 from inside the U.S. or 1-201-689-8261 from outside the U.S. The replay can be accessed by dialing 1-877-660-6853 from inside the U.S. or 1-201-612-7415 from outside the U.S. and entering confirmation code 13669524. The telephone replay will be available through 5 p.m. PT, Friday, October 27, 2017.

# # #

About Varian Medical Systems
Varian Medical Systems focuses energy on saving lives and is the world's leading manufacturer of medical devices and software for treating and managing cancer. Headquartered in Palo Alto, California, Varian employs approximately 6,600 people at sites around the world. For more information, visit http://www.varian.com and follow @VarianMedSys on Twitter.

FOR INFORMATION CONTACT:

Gary Bischoping (650) 424-5691

gary.bischoping@varian.com

J. Michael Bruff (650) 424-5163

Mike.bruff@varian.com

Forward-Looking Statements

Except for historical information, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning industry or market outlook, including growth drivers; the company’s future orders, revenues, or earnings growth or other financial results; and any statements using the terms “could,” “believe,” “expect,” “promising,” “outlook,” “should,” “will” or similar statements are forward-looking statements that involve risks and uncertainties that could cause the company’s actual results to differ materially from those anticipated. Such risks and uncertainties include global economic conditions and changes to trends for cancer treatment regionally; currency exchange rates and tax rates; the impact of the Affordable Health Care for America Act (including excise taxes on medical devices) and any further healthcare reforms (including changes to Medicare and Medicaid), and/or changes in third-party reimbursement levels; demand for and delays in delivery of the company’s products; the company’s ability to develop, commercialize and deploy new products; the company’s ability to meet Food and Drug Administration (FDA) and other regulatory requirements, regulations or procedures; changes in regulatory environments; the company’s assessment of the goodwill associated with its particle therapy business, risks associated with the company providing financing for the construction and start-up operations of particle therapy centers, challenges associated with commercializing the company’s particle therapy business; challenges to public tender awards and the loss of such awards or other orders; the effect of adverse publicity; the company’s reliance on sole or limited-source suppliers; the company’s ability to maintain or increase margins; the impact of competitive products and pricing; the company’s assessment of the goodwill associated with its particle therapy business; the potential loss of key distributors or key personnel; and the other risks listed from time to time in the company’s filings with the Securities and Exchange Commission, which by this reference are incorporated herein. The company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

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Varian Medical Systems, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(Unaudited)

(Dollars and shares in millions, except per share amounts)	Q4 2017			Q4 2016			FY 2017			FY 2016
Gross orders	$	1,038.6		$	936.2		$	3,135.0		$	2,829.2
Oncology Systems		964.3			897.9			2,905.8			2,724.5
Particle Therapy		74.3			38.3			229.2			104.7
Order Backlog		3,517.5			3,205.1			3,517.5			3,205.1
Revenues		739.0			747.2			2,668.2			2,621.1
Oncology Systems		686.5			679.0			2,485.7			2,458.0
Particle Therapy		52.5			68.2			182.5			163.1
Cost of revenues		427.7			428.4			1,512.6			1,508.2
Gross margin		311.3			318.8			1,155.6			1,112.9
As a percent of revenues		42.1	%		42.6	%		43.3	%		42.5	%
Operating expenses
Research and development		51.7			52.7			210.0			200.4
Selling, general and administrative		136.8			124.5			552.3			475.3
Impairment charges		13.1			—			51.4			2.2
Operating earnings		109.7			141.6			341.9			435.0
As a percent of revenues		14.8	%		18.9	%		12.8	%		16.6	%
Interest income, net		0.5			1.3			2.9			5.6
Earnings from continuing operations before taxes		110.2			142.9			344.8			440.6
Taxes on earnings		27.5			48.6			87.7			115.3
Net earnings from continuing operations		82.7			94.3			257.1			325.3
Net earnings (loss) from discontinued operations		—			23.5			(6.8	)		77.4
Net earnings		82.7			117.8			250.3			402.7
Less: Net earnings attributable to noncontrolling interests		—			0.3			0.7			0.4
Net earnings attributable to Varian	$	82.7		$	117.5		$	249.6		$	402.3
Net earnings (loss) per share – basic
Continuing operations	$	0.90		$	1.00		$	2.78		$	3.41
Discontinued operations		—			0.25			(0.08	)		0.81
Net earnings per share – basic	$	0.90		$	1.25		$	2.70		$	4.22
Net earnings (loss) per share – diluted
Continuing operations	$	0.89		$	1.00		$	2.75		$	3.39
Discontinued operations		—			0.24			(0.07	)		0.80
Net earnings per share – diluted	$	0.89		$	1.24		$	2.68		$	4.19
Shares used in the calculation of net earnings per share:
Weighted average shares outstanding – basic		91.7			93.7			92.5			95.4
Weighted average shares outstanding – diluted		92.6			94.5			93.2			96.0

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Varian Medical Systems, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	September 29,			September 30,
	2017			2016
(In millions)	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	716.2		$	811.4
Short-term investments		—			95.3
Accounts receivable, net		823.5			769.6
Inventories		439.7			442.4
Prepaid expenses and other current assets		199.8			141.1
Current assets of discontinued operations		11.1			355.6
Total current assets		2,190.3			2,615.4
Property, plant and equipment, net		255.3			258.6
Goodwill		222.6			220.0
Intangible assets		71.6			84.1
Deferred tax assets		138.8			136.8
Other assets		300.8			227.0
Non-current assets of discontinued operations		—			272.9
Total assets	$	3,179.4		$	3,814.8
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities:
Accounts payable	$	162.3		$	159.2
Accrued liabilities		394.7			383.6
Deferred revenues		640.6			608.6
Short-term borrowings		350.0			329.6
Current maturities of long-term debt		—			49.4
Current liabilities of discontinued operations		2.5			83.0
Total current liabilities		1,550.1			1,613.4
Long-term debt		—			286.9
Other long-term liabilities		130.0			155.8
Non-current liabilities of discontinued operations		—			4.2
Total liabilities		1,680.1			2,060.3
Redeemable noncontrolling interests of discontinued operations		—			10.3
Equity:
Varian stockholders’ equity:
Common stock		91.7			93.7
Capital in excess of par value		716.1			678.6
Retained earnings		756.0			1,069.0
Accumulated other comprehensive loss		(68.8	)		(100.8	)
Total Varian stockholders’ equity		1,495.0			1,740.5
Noncontrolling interests		4.3			3.7
Total equity		1,499.3			1,744.2
Total liabilities, redeemable noncontrolling interests and equity	$	3,179.4		$	3,814.8

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Discussion of Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures derived from our Condensed Consolidated Statements of Earnings: non-GAAP operating earnings, non-GAAP net earnings and non-GAAP net earnings per diluted share. We define non-GAAP operating earnings from continuing operations as operating earnings from continuing operations excluding amortization of intangible assets, restructuring charges, legal costs, impairment charges and acquisition-related expenses and benefits. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. We have provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. We have not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability and limited visibility of the excluded items discussed below.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Non-GAAP operating earnings and non-GAAP net earnings exclude the following items:

Amortization of intangible assets: We do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Acquisition-related expenses and benefits: We incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, changes in the fair value of contingent consideration liabilities, gain or expense on settlement of pre-existing relationships, etc. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.

Restructuring and impairment charges: We incur restructuring and impairment charges that result from events, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.

Significant litigation charges or benefits and legal costs: We may incur charges or benefits as well as legal costs from time to time related to litigation and other contingencies. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.

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We apply our GAAP consolidated effective tax rate to our non-GAAP financial measures, other than when the underlying item has a materially different tax treatment.

From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful information to investors and management. Non-GAAP items are generally included in selling, general and administrative expenses, unless otherwise specified.

The following table reconciles GAAP and non-GAAP financial measures for Varian's continuing operations:

Varian Medical Systems, Inc. and Subsidiaries 

Reconciliation between GAAP and Non-GAAP Financial Measures 

(Unaudited)

(Dollars and shares in millions, except per share amounts)	Q4 2017			Q4 2016			FY 2017			FY 2016
Non-GAAP adjustments
Amortization of intangible assets (1)	$	3.1		$	1.9		$	11.6		$	6.6
Restructuring charges		3.8			(0.2	)		12.6			3.5
Legal costs		—			3.4			16.4			24.6
Impairment charges		13.1			—			51.4			2.2
Other (2)		1.3			1.3			2.7			3.1
Total non-GAAP adjustments		21.3			6.4			94.7			40.0
Tax effects of non-GAAP adjustments		(3.4	)		(3.0	)		(16.1	)		(10.5	)
Total net earnings from continuing operations impact from non-GAAP adjustments	$	17.9		$	3.4		$	78.6		$	29.5
Operating earnings reconciliation
GAAP operating earnings from continuing operations	$	109.7		$	141.6		$	341.9		$	435.0
Total operating earnings from continuing operations impact from non-GAAP adjustments		21.3			6.4			94.7			40.0
Non-GAAP operating earnings from continuing operations	$	131.0		$	148.0		$	436.6		$	475.0
Net earnings and diluted net earnings per share reconciliation
GAAP net earnings from continuing operations attributable to Varian(3)	$	82.7		$	94.3		$	256.5		$	325.4
Total net earnings from continuing operations impact from non-GAAP adjustments		17.9			3.4			78.6			29.5
Non-GAAP net earnings from continuing operations attributable to Varian	$	100.6		$	97.7		$	335.1		$	354.9
GAAP net earnings per diluted share from continuing operations	$	0.89		$	1.00		$	2.75		$	3.39
Non-GAAP net earnings per diluted share from continuing operations	$	1.09		$	1.03		$	3.60		$	3.70
Shares used in GAAP and non-GAAP net earnings per diluted share calculation		92.6			94.5			93.2			96.0

(1) Includes $1.3 million, $1.1 million, $5.0 million and $4.6 million, respectively, in cost of revenues for the periods presented.

(2) Other includes acquisition-related expenses and benefits.

(3) Excludes immaterial net earnings (loss) from continuing operations attributable to noncontrolling interests for the periods presented.

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EX-99.2

Exhibit 99.2

Fourth Quarter Fiscal Year 2017 J. Michael Bruff Vice President Investor Relations Mike.Bruff@Varian.com October 25, 2017

FORWARD - LOOKING STATEMENTS Except for historical information, this presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . Statements concerning industry outlook, including growth drivers, future trends in cancer incidence and trends in cancer treatment needs, demand, innovation and growth opportunities ; Varian Medical System, Inc . ’s (”Varian” or the “company”) future orders, revenues, backlog or earnings growth ; future financial results ; market acceptance of or transition to new products or technology such as our Edge TM radiosurgery system, TrueBeam ̺ , HyperArc TM , 360 Oncology TM , HALCYON TM , image - guided radiation therapy, stereotactic radiosurgery and proton therapy, and any statements using the terms “could”, “believe”, “expect”, “outlook”, “anticipate”, ”vision”, “estimate”, “future”, “horizon”, “aiming”, “driving”, “target” or similar statements are forward - looking statements that involve risks and uncertainties that could cause the company’s actual results to differ materially from those anticipated . Such risks and uncertainties include global economic conditions and changes to trends for cancer treatment regionally ; the impact of changes to the Affordable Health Care for America Act (including excise taxes on medical devices) and any further healthcare reforms (including changes to Medicare and Medicaid), and/or changes to third - party reimbursement levels ; currency exchange rates and tax rates ; demand for the company’s products ; the company’s ability to develop, commercialize, and deploy new products ; the company’s ability to meet Food and Drug Administration (FDA) and other regulatory requirements for product clearances or to comply with FDA and other regulatory regulations or procedures, changes in the regulatory environment, including with respect to FDA requirements ; the company’s assessment of the goodwill associated with its particle therapy business, challenges associated with the successful commercialization of the company’s particle therapy business ; the risks associated with providing financing for the construction and start - up operations of proton therapy centers ; the effect of adverse publicity ; the company’s reliance on sole or limited - source suppliers ; the company’s ability to maintain or increase margins ; the impact of competitive products and pricing ; the potential loss of key distributors or key personnel ; challenges to public tender awards and the loss of such awards or other orders ; and the other risks listed from time to time in the company’s filings with the Securities and Exchange Commission, which by this reference are incorporated herein . The company assumes no obligation to update or revise the forward - looking statements in this presentation because of new information, future events, or otherwise . Reconciliations to GAAP financials can be found at http : //investors . varian . com/financialstatements and the appendix to this presentation . Medical Advice Disclaimer Varian as a medical device manufacturer cannot and does not recommend specific treatment approaches. Individual treatment res ult s may vary. 2 This presentation is intended exclusively for investors. It is not intended for use in Sales or Marketing.

Our fight against cancer Recognized global market leader in radiation therapy Radiation Oncology professionals ranked Varian first in eight major categories with a customer Net Promoter Score (NPS) of 75 Strengthening our leadership Launched Halcyon TM and HyperArc TM , high - quality and innovative treatment solutions 54% global share* of the radiation oncology market, gaining 1% of share over the last 4 quarters, ending in our fiscal 3 rd quarter Extending global footprint in mature and developing markets 52% international mix of Oncology orders; Proton sites in 13 different countries Committed to long - term growth and value creation Aligned internal incentives and external targets to maximize shareholder return over the long term 3 Expanding addressable markets Software orders grew double - digits Financially disciplined and flexible to invest in growth opportunities; cash flow from operations +12%, while decreasing debt across the year *Based on company estimates and reported financial results

FY 2017 Business Highlights

New branding and mission statement Our vision is a world without the fear of cancer. Our mission is to support and combine the ingenuity of people with the power of data and technology to achieve new victories against cancer. 5

FY17 Year in review Varian Named Top Healthcare Equipment and Services Company on Inaugural “Just 100” List from JUST Capital and Forbes Varian Medical Systems Board of Directors Authorizes Repurchase of Additional 8 Million Shares of Stock José Baselga and Jean - Luc Butel Appointed to Board of Directors of Varian Medical Systems Halcyon introduced First Patient Treated with Varian HyperArc High Definition Radiotherapy Varian Publishes 2017 Sustainability Report Spin off of Varex Varian Medical Systems Names New CFO Varian Eclipse Users Generate Highest Scoring Plans in International Treatment Plan Competition Varian Installs Cyclotron at Georgia Proton Treatment Cente r Varian Ranks First in Overall Manufacturer, System, and Service Performance in 2017 Survey of Radiation Oncology Professionals Varian Announces Penn Medicine Treats World’s First Patient on Halcyon System NOVEMBER 2016 JAN 2017 MAR APR MAY JUL AUG SEP OCTOBER 2017 DEC FEB JUN Varian honored as one of the top 100 most sustainable companies 6

FY 2017 Financial Overview

Varian consolidated (GAAP) Key P&L Financial Metrics VARIAN FISCAL 2017 FISCAL 2017 $M 4Q Y/Y Full Year Y/Y Gross Orders $1,039 11% $3,135 11% Revenues $739 - 1% $2,668 2% Product $442 - 7% $1,555 - 2% Svcs $297 9% $1,113 7% GM $311 - 2% $1,156 4% % of Rev 42.1% - 52 bps 43.3% 86 bps SG&A $150 20% $604 26% % of Rev 20.3% 361 bps 22.6% 441 bps R&D $52 - 2% $210 5% % of Rev 7.0% - 4 bps 7.9% 23 bps Operating Earnings $110 - 22% $342 - 21% % of Rev 14.8% - 410 bps 12.8% - 378 bps EPS ($) $0.89 - 10% $2.75 - 19% Install Base ( Linac ) 7,833 4% 8 Full Year 2017 • Revenue of $2.7 billion growing at 2%  Oncology revenue +1%  Proton revenue +12% • Gross margin rate improved, up 86 bps, despite volatility throughout the year • Maintaining commitment to innovation with 5% increase in R&D investment • Grew Linac install base 4% Note: Unless noted otherwise, all ‘Orders’ reflects Gross Orders, all growth rates are in dollars, and year on year, and all numbers reflect continuing operations.

Varian consolidated (non - GAAP) Key P&L Financial Metrics • Achieved $1B in gross orders in 4Q; double - digit orders growth for the year • Oncology orders mix: North America 48%, International 52% • 50 orders for Halcyon in the year, 40 orders for HyperArc • Grew Linac install base 4% in FY 2017 • Product revenue decline driven by EMEA Oncology business • Services growing in all geographies and businesses • Software orders growing double - digits • Gross margin expanded during the year despite quarterly volatility; increased services mix and ongoing supply chain optimization • Full year SG&A up 16%, leverage improving each quarter • Repurchased 250,000 shares in the quarter for $25M Note: Unless noted otherwise, all ‘Orders’ reflects Gross Orders, all growth rates are in dollars, and year on year, and all numbers reflect continuing operations. VARIAN FISCAL 2017 FISCAL 2017 $M 4Q Y/Y Full Year Y/Y Gross Orders $1,039 11% $3,135 11% Revenues $739 - 1% $2,668 2% Product $442 - 7% $1,555 - 2% Svcs $297 9% $1,113 7% GM $313 - 2% $1,161 4% % of Rev 42.3% - 50 bps 43.5% 87 bps SG&A $130 9% $514 16% % of Rev 17.6% 162 bps 19.3% 240 bps R&D $52 - 2% $210 5% % of Rev 7.0% - 4 bps 7.9% 23 bps Operating Earnings $131 - 11% $437 - 8% % of Rev 17.7% - 208 bps 16.4% - 176 bps EPS ($) $1.09 5% $3.60 - 3% Install Base ( Linac ) 7,833 4% 9

Varian consolidated Key Balance Sheet and Cash Flow Metrics • Accelerated cash flow from operations in the back half of fiscal 2017 • Strengthened financial flexibility by decreasing debt throughout the year VARIAN FISCAL 2017 $M 1Q 2Q 3Q 4Q Full Year Cash & Cash Equivalents 1 $815 $706 $658 $716 - Cash Flow from Operations 2 $82 $32 $155 $130 $399 Y/Y % 6.0% 1.0% 63.0% - 15.0% 12.0% Total Debt $607 $547 $364 $350 - (1) Presented on a continuing operations basis, except 1Q which includes Varex . (2) Cash Flow is shown on a Total Company basis, including Varex prior to the spinoff. 10

Oncology business unit Key Financial Metrics • Strong finish to the year with orders growth at 7% • Product revenue decline driven by EMEA business primarily due to emerging market order mix increase over last 2 years • As install base grows, TrueBeam TM and Halcyon combined unit mix increases • Gross margin expanded 159 bps in FY 2017, despite quarterly volatility; 4Q influenced by mix as country - level pricing steady • Continuing to invest in research and development to build smarter, simpler cancer care solutions VARIAN FISCAL 2017 FISCAL 2017 $M 4Q Y/Y Full Year Y/Y Gross Orders $964 7% $2,906 7% Revenues $686 1% $2,486 1% Product $393 - 4% $1,383 - 3% Svcs $293 8% $1,103 7% GM $308 0% $1,140 5% % of Rev 44.8% - 28 bps 45.8% 159 bps Operating Earnings 1 $141 - 9% $521 0% % of Rev 20.6% - 232 bps 20.9% - 15 bps Install Base (Units) 7,833 4% 11 Note: Unless noted otherwise, all ‘Orders’ reflects Gross Orders, all growth rates are in dollars, and year on year, and all numbers reflect continuing operations. 1 Business unit operating earnings includes an allocation of corporate costs based on relative revenue between the business units. The allocated corporate costs excludes certain transactions or adjustments that are considered non - operational in nature, such as restructuring and impairment charges, significant litigation matters and acquisition related items.

Oncology gross orders by geography (GAAP) AMERICAS 1% 4Q Y/Y 3% FY Y/Y APAC 10% 4Q Y/Y 7% FY Y/Y EMEA 32% 4Q Y/Y 14% FY Y/Y 12

Proton business unit Key Financial Metrics • Strong orders growth; 6 new orders across 4 countries in the year • 5 clinically operational sites with 19 rooms in 3 countries; 16 more customers in varying stages of construction across the world • Revenue and margin volatility until we get to operational scale across the business • In the fourth quarter, gross margin impacted by $2M due to an adjustment increasing estimated project costs VARIAN FISCAL 2017 FISCAL 2017 $M 4Q Y/Y Full Year Y/Y Gross Orders $74 94% $229 120% Revenues $52 - 23% $182 12% Product $49 - 25% $173 13% Svcs $3 26% $10 4% GM $4 - 71% $16 - 36% % of Rev 6.9% - 1,146 bps 8.8% - 661 bps Operating Earnings 1 - $13 - 70% - $96 - 115% % of Rev - 25.3% - 1,384 bps - 52.5% - 2,507 bps 13 Note: Unless noted otherwise, all ‘Orders’ reflects Gross Orders, all growth rates are in dollars, and year on year, and all numbers reflect continuing operations. 1 Business unit operating earnings includes an allocation of corporate costs based on relative revenue between the business units. The allocated corporate costs excludes certain transactions or adjustments that are considered non - operational in nature, such as restructuring and impairment charges, significant litigation matters and acquisition related items.

Proton orders by geography (GAAP) AMERICAS 83% 4Q Y/Y 1498% FY Y/Y APAC +75% 4Q Y/Y 12% FY Y/Y EMEA 185% 4Q Y/Y 22% FY Y/Y 14

Long - Term Strategy & FY 2018 Guidance

Global Leader Long - term growth and value creation strategy in Radiation Therapy Global Leader of multi - disciplinary, integrated cancer care solutions Radiosurgery systems Proton therapy Brachytherapy Radiotherapy Radiation oncology tracking software Medical oncology Radiation oncology Interventional oncology Surgical oncology Diagnostic imaging Precision medicine Call on all oncologists Aggregate data Disseminated insights Build AI/ML capabilities Generate insights 16 Radiation oncology information systems

Growth priorities and strategic enablers We are here Long - Term Growth and Strategic Value Creation Strategy Global Leader in Radiation Therapy Growth Priorities Strategic Enablers Global Leader of Multi - Disciplinary, Integrated Cancer Care Solutions Strengthen Leadership in Radiation Therapy Extend Global Footprint Expand Addressable Market High Quality Care Through Innovation Build Software Services & Big Data Expertise Operational Efficiency Optimize Cash Conversion & Capital Structure 17

Growth priority: Strengthen our leadership in radiation therapy 1 Source: Varian Press Release, September 2017 . Original Source: IMV, Ltd. Launched HyperArc our high - definition radiotherapy technology ⁃ 40 orders in the fourth quarter and treated its first patient in Negrar , Italy Market leader with 54% global share In the radiation oncology market, gaining 1% of share over the last 4 quarters, ending in our 3 rd quarter Grew Linac install base by 4% ; total install base over 7,800 units R&D up 5% maintaining commitment to driving high - quality innovation Radiation Oncology professionals ranked Varian first in eight major categories. The company received a customer NPS of 75 1 which is over double our nearest competitor 18 Introduced our new IMRT image guided Halcyon treatment platform ⁃ Since launch, 50 orders across greenfield and competitive takeout opportunities ⁃ First patient treated by University of Pennsylvania on September 13th

Growth priority: Extend global footprint Proton Therapy business extended global footprint with Q4 wins at HCG in India the first in that country, and at Concord Medical Proton Center in China ⁃ 5 clinically operational sites with 19 rooms in 3 countries ⁃ 16 additional customers in varying stages of construction across 9 countries, including 6 new orders during FY 2017 and our first in Thailand 19 Oncology business introduced the new Halcyon treatment platform designed to extend the availability of high - quality cancer care globally ⁃ Lower total cost of ownership, faster installation times, smaller footprint, greater ease of operation ⁃ First 50 orders of Halcyon across 15 different countries

Growth priority: Expand addressable market Software orders grew double - digits during Q4 and FY 2107; newer applications fueling enthusiasm ⁃ 360 Oncology cloud based, oncology - focused operating platform enables better, more informed decisions by the multidisciplinary teams engaged in a patient’s journey ⁃ Velocity TM , our longitudinal cancer imaging solution, has more than doubled customer installs and orders have tripled since the acquisition three years ago ⁃ RapidPlan TM has > 500 customers (~300 using clinically) ⁃ InSightive TM analytics solution has >250 customers (>100 using it clinically) Selected investments in companies as we continue to innovate and look beyond our core market ⁃ Grail, in the field of liquid biopsy ⁃ Fusion, in the field of radiotherapeutics Financial flexibility to evaluate investment opportunities including both organic and inorganic options ⁃ Cash flow from operations grew 12% ⁃ Decreased debt across the year 20

Varian consolidated FY18 Guidance • Revenue and EPS guidance transitioning to full year guidance effective FY18 • However, adding annual guidance for non - GAAP operating Earnings as percent of revenue, effective tax rate, weighted average diluted share count and cash flow from operations (1) These values are presented on a non - GAAP basis. We have not provided a reconciliation of non - GAAP guidance measures to the corre sponding GAAP measures on a forward - looking basis due to potential significant variability and limited visibility of the excluded items. (2) Cash Flow is shown on a Total Company basis, including Varex . VARIAN $M FY16 Actual FY17 Actual FY18 Guidance Revenue $2,621 $2,668 2% to 4% Operating Earnings as percent of revenue 1 18.1% 16.4% 18% to 19% EPS ($) 1 $3.70 $3.60 $4.20 to $4.32 Weighted Average Diluted Shares (M) 96 93 93 Effective Tax Rate 26.2% 23.6% 1 23% Cash Flow from Operations 2 $356 $399 $475 to $550 21

Appendix

Non - GAAP disclosure 23 Discussion of Non - GAAP Financial Measures This presentation includes the following non - GAAP financial measures derived from our Condensed Consolidated Statements of Earnings : non - GAAP operating earnings, non - GAAP net earnings and non - GAAP net earnings per diluted share . These measures are not presented in accordance with, nor are they a substitute for U . S . generally accepted accounting principles, or GAAP . In addition, these measures may be different from non - GAAP measures used by other companies, limiting their usefulness for comparison purposes . The non - GAAP financial measures should not be considered in isolation from measures of financial performance prepared in accordance with GAAP . Investors are cautioned that there are material limitations associated with the use of non - GAAP financial measures as an analytical tool . We have provided a reconciliation of each non - GAAP financial measure used here to the most directly comparable GAAP financial measure . We have not provided a reconciliation of non - GAAP guidance measures to the corresponding GAAP measures on a forward - looking basis due to the potential significant variability and limited visibility of the excluded items discussed below . We utilize a number of different financial measures, both GAAP and non - GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs . We consider the use of the non - GAAP measures to be helpful in assessing the performance of the ongoing operation of our business . We believe that disclosing non - GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance . We also believe that disclosing non - GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies . Non - GAAP operating earnings and non - GAAP net earnings exclude the following items : Amortization of intangible assets : We do not acquire businesses and assets on a predictable cycle . The amount of purchase price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase . We believe that excluding amortization of intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies . Acquisition - related expenses and benefits : We incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, changes in the fair value of contingent consideration liabilities, gain or expense on settlement of pre - existing relationships, etc . We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on - going business . Restructuring and impairment charges : We incur restructuring and impairment charges that result from events, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on - going business . Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on - going operations with prior and future periods . Significant litigation charges or benefits and legal costs : We may incur charges or benefits as well as legal costs from time to time related to litigation and other contingencies . We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on - going business and operating results . We apply our GAAP consolidated effective tax rate to our non - GAAP financial measures, other than when the underlying item has a materially different tax treatment . From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful information to investors and management . Non - GAAP items are generally included in selling, general and administrative expenses, unless otherwise specified .

GAAP to non - GAAP reconciliation 24 (1) Includes $1.3 million, $1.2 million, $1.2 million, $1.3 million and $5.0 million respectively, in cost of revenues for the pe rio ds presented. (2) Other includes acquisition - related expenses and benefits. (3) Excludes immaterial net earnings (loss) from continuing operations attributable to non - controlling interests for the periods pre sented. THE FOLLOWING TABLE RECONCILES GAAP AND NON - GAAP FINANCIAL MEASU RES FOR VARIAN’S CONTINUING OPERATIONS $M, except per share amount 1Q 2Q 3Q 4Q Full Year 2017 Non - GAAP adjustments Amortization of intangible assets (1) $2.8 $2.8 $2.9 $3.1 $11.6 Restructuring charges $3.6 $2.4 $2.8 $3.8 $12.6 Legal costs $6.2 $10.0 $0.2 $0.0 $16.4 Impairment charges $38.3 $0.0 $0.0 $13.1 $51.4 Other (2) $0.3 $0.6 $0.5 $1.3 $2.7 Total non - GAAP adjustments $51.2 $15.8 $6.4 $21.3 $94.7 Tax effects of non - GAAP adjustments ($10.0) ($2.1) ($0.6) ($3.4) ($16.1) Total net earnings from continuing operations impact from non - GAAP adjustments $41.2 $13.7 $5.8 $17.9 $78.6 Operating earnings reconciliation GAAP operating earnings from continuing operations $26.1 $89.8 $116.3 $109.7 $341.9 Total operating earnings from continuing operations impact from non - GAAP adjustments $51.2 $15.8 $6.4 $21.3 $94.7 Non - GAAP operating earnings from continuing operations $77.3 $105.6 $122.7 $131.0 $436.6 Net earnings and diluted net earnings per share reconciliation GAAP net earnings from continuing operations attributable to Varian (3) $14.1 $69.3 $90.4 $82.7 $256.5 Total net earnings from continuing operations impact from non - GAAP adjustments $41.2 $13.7 $5.8 $17.9 $78.6 Non - GAAP net earnings from continuing operations attributable to Varian $55.3 $83.0 $96.2 $100.6 $335.1 GAAP net earnings per diluted share from continuing operations $0.15 $0.74 $0.98 $0.89 $2.75 Non - GAAP net earnings per diluted share from continuing operations $0.59 $0.89 $1.04 $1.09 $3.60 Shares used in GAAP and non GAAP net earnings per diluted share calculation 94.2 93.7 92.4 92.6 93.2

Total revenues by sales classification 25 $M 1Q 2Q 3Q 4Q FY17 Product revenues $343.6 $386.1 $383.4 $442.4 $1,555.5 Y/Y - 6% 7% 1% - 7% - 2% Service revenues $268.2 $268.9 $279.0 $296.6 $1,112.7 Y/Y 8% 6% 7% 9% 7% Total revenues $611.8 $655.0 $662.4 $739.0 $2,668.2 Y/Y - 1% 6% 3% - 1% 2% Y/Y – CC - 1% 7% 4% - 2% 2% Product as a percentage of total revenues 56% 59% 58% 60% 58% Service as a percentage of total revenues 44% 41% 42% 40% 42% CC – Constant currency

Total revenues by region 26 $M 1Q 2Q 3Q 4Q FY17 Americas revenues $306.0 $328.8 $352.5 $376.5 $1,363.8 Y/Y 4% 3% 16% 3% 6% Y/Y – CC 3% 2% 16% 3% 6% EMEA revenues $189.0 $186.1 $171.9 $224.6 $771.6 Y/Y - 17% 11% - 16% 0% - 6% Y/Y – CC - 14% 15% - 13% - 2% - 5% APAC revenues $116.8 $140.1 $138.0 $137.9 $532.8 Y/Y 26% 11% 2% - 12% 4% Y/Y – CC 20% 9% 3% - 11% 3% Total revenues $611.8 $655.0 $662.4 $739.0 $2,668.2 Y/Y - 1% 6% 3% - 1% 2% Y/Y – CC - 1% 7% 4% - 2% 2% CC – Constant currency

Total Oncology revenues by sales classification 27 $M 1Q 2Q 3Q 4Q FY17 Product revenues $316.8 $356.0 $316.9 $393.3 $1,383.0 Y/Y - 8% 7% - 8% - 4% - 3% Y/Y – CC - 8% 8% - 8% - 4% - 3% Service revenues $264.7 $267.7 $277.1 $293.2 $1,102.7 Y/Y 7% 6% 7% 8% 7% Y/Y – CC 7% 7% 8% 8% 7% Total revenues $581.5 $623.7 $594.0 $686.5 $2,485.7 Y/Y - 1% 7% - 2% 1% 1% Y/Y – CC - 2% 7% - 1% 1% 1% Product as a percentage of total revenues 54% 57% 53% 57% 56% Service as a percentage of total revenues 46% 43% 47% 43% 44% Oncology Systems revenues as a percentage of total revenues 95% 95% 90% 93% 93% CC – Constant currency

Total Oncology revenues by region 28 $M 1Q 2Q 3Q 4Q FY17 Americas revenues $298.6 $319.2 $303.2 $355.0 $1,276.0 Y/Y 5% 4% 4% 2% 4% Y/Y – CC 5% 4% 3% 2% 4% EMEA revenues $174.0 $168.3 $160.0 $201.2 $703.5 Y/Y - 18% 11% - 11% 3% - 5% Y/Y – CC - 16% 15% - 8% 0% - 3% APAC revenues $108.9 $136.2 $130.8 $130.3 $506.2 Y/Y 18% 8% - 1% - 5% 4% Y/Y – CC 11% 6% 0% - 4% 3% Total revenues $581.5 $623.7 $594.0 $686.5 $2,485.7 Y/Y - 1% 7% - 2% 1% 1% Y/Y – CC - 2% 7% - 1% 1% 1% CC – Constant currency

Total Proton revenues by sales classification 29 $M 1Q 2Q 3Q 4Q FY17 Product revenues $26.8 $30.1 $66.5 $49.1 $172.5 Y/Y 10% 5% 91% - 25% 13% Service revenues $3.5 $1.2 $1.9 $3.4 $10.0 Y/Y 68% - 49% - 24% 26% 4% Total revenues $30.3 $31.3 $68.4 $52.5 $182.5 Y/Y 15% 1% 84% - 23% 12% VPT revenues as a percentage of total revenues 5% 5% 10% 7% 7%

Oncology gross orders by region 30 $M 1Q 2Q 3Q 4Q FY17 Americas orders $296.8 $342.2 $351.0 $489.0 $1,479.0 Y/Y 5% 3% 3% 1% 3% Y/Y – CC 5% 3% 3% 2% 3% EMEA orders $166.6 $184.8 $206.0 $320.8 $878.2 Y/Y 8% 6% 2% 32% 14% Y/Y – CC 10% 10% 5% 29% 14% APAC orders $122.7 $120.7 $150.7 $154.5 $548.6 Y/Y 29% 8% 13% - 10% 7% Y/Y – CC 24% 7% 13% - 9% 7% Total orders $586.1 $647.7 $707.7 $964.3 $2,905.8 Y/Y 10% 5% 5% 7% 7% Y/Y – CC 10% 6% 5% 7% 7% CC – Constant currency

Fourth Quarter Fiscal Year 2017