Segment Information

12 Months Ended

Sep. 27, 2013

Segment Information

17. SEGMENT INFORMATION

Description of Segments

The Company’s operations are grouped into two reportable operating segments: Oncology Systems and X-Ray Products. These reportable operating segments were determined based on how the Company’s Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), views and evaluates the Company’s operations. The Company’s Ginzton Technology Center (“GTC”), SIP business and VPT are reflected in the “Other” category because these operating segments do not meet the criteria of a reportable operating segment. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on operating earnings.

The Oncology Systems business segment designs, manufactures, sells and services hardware and software products for treating cancer with radiotherapy, stereotactic radiotherapy, stereotactic body radiotherapy, stereotactic radiosurgery and brachytherapy. Products include linear accelerators, brachytherapy afterloaders, treatment simulation and verification equipment and accessories; as well as information management, treatment planning and image processing software. Oncology Systems’ products enable radiation oncology departments in hospitals and clinics to perform conventional radiotherapy treatments and offer advanced treatments such as fixed field intensity-modulated radiation therapy (“IMRT”), image-guided radiation therapy (“IGRT”), volumetric modulated arc therapy and stereotactic radiotherapy, as well as to treat patients using brachytherapy techniques, which involve temporarily implanting radioactive sources. The Company’s Oncology Systems products are also used by neurosurgeons to perform stereotactic radiosurgery. Oncology Systems’ customers worldwide include university research and community hospitals, private and governmental institutions, healthcare agencies, physicians’ offices and cancer care clinics.

The X-Ray Products business segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, special procedures, computed tomography and industrial applications. The Company’s X-ray imaging components are sold to large imaging system OEM customers that incorporate them into their medical diagnostic, dental, veterinary and industrial imaging systems. The Company sells X-ray tubes and flat panel digital image detectors for filmless X-ray imaging (commonly referred to as “flat panel detectors” or “digital image detectors”) to small OEM customers, independent service companies and directly to end-users for replacement purposes.

The Company has three other businesses that are reported together under the “Other” category. SIP designs, manufactures, sells and services Linatron® X-ray accelerators, imaging processing software and image detection products (including IntellXTM) for security and inspection purposes, such as cargo screening at ports and borders and nondestructive examination in a variety of applications. The Company generally sells SIP products to OEM customers who incorporate its products into their inspection systems, which are then sold to customs and other government agencies, as well as to commercial private parties in the casting, power, aerospace, chemical, petro-chemical and automotive industries for nondestructive product examination purposes.

The VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, a form of external beam radiotherapy using proton beams for the treatment of cancer.

In the second quarter of fiscal year 2009, the Company completed the sale of Research Instruments in order to focus that business exclusively on the development of the VPT business. Research Instruments is classified as a discontinued operation for fiscal year 2011 and the Company has segregated the operating results of Research Instruments from continuing operations on the Consolidated Statements of Earnings. There were no operating results of Research Instruments beyond fiscal year 2011.Segment data does not include amounts for discontinued operations. Research Instruments was previously included in the “Other” category. See Note 18, “Discontinued Operations” for a more detailed discussion.

GTC develops technologies that enhance the Company’s current businesses or may lead to new business areas, including technology to improve radiation therapy and X-ray imaging, as well as other technology for a variety of applications, including security and cargo screening.

Accordingly, the following information is provided for purposes of achieving an understanding of operations, but may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company’s operations to similar operations of other companies may not be meaningful.

Segment Data

	Revenues									Operating Earnings
	Fiscal Years									Fiscal Years
(In millions)	2013			2012			2011				2013				2012				2011
Oncology Systems	$	2,253	$		2,189	$		2,022	$			512		$		505		$		507
X-Ray Products		546			493			469				144				131				118
Total reportable segments		2,799			2,682			2,491				656				636				625
Other		144			125			106				(25	)			(32	)			(32	)
Corporate		-			-			-				(22	)			(10	)			(5	)
Total company	$	2,943	$		2,807	$		2,597	$			609		$		594		$		588

	Depreciation&Amortization									Capital Additions
	Fiscal Years									Fiscal Years
(In millions)	2013			2012			2011				2013			2012			2011
Oncology Systems	$	21	$		23	$		19	$			25	$		17	$		17
X-Ray Products		13			10			8				8			8			7
Total reportable segments		34			33			27				33			25			24
Other		3			4			3				10			10			13
Corporate		26			24			23				35			32			34
Total company	$	63	$		61	$		53	$			78	$		67	$		71
	Total Assets									Goodwill
	Fiscal Years									Fiscal Years
(In millions)	2013			2012			2011				2013			2012			2011
Oncology Systems	$	1,217	$		1,220	$		1,093	$			132	$		132	$		130
X-Ray Products		309			265			268				17			17			6
Total reportable segments		1,526			1,485			1,361				149			149			136
Other		367			313			239				76			73			76
Corporate		1,575			1,081			899				-			-			-
Total company	$	3,468	$		2,879	$		2,499	$			225	$		222	$		212

The reconciliation of segment operating results information to the Company’s earnings from operations before taxes was as follows:

	Fiscal Years
(In millions)	2013				2012				2011
Earnings from operations before taxes:
Oncology Systems	$	512		$		505		$		507
X-Ray Products		144				131				118
Total reportable segments		656				636				625
Other		(25	)			(32	)			(32	)
Corporate		(22	)			(10	)			(5	)
Interest income (expense), net		3				2				1
Total company	$	612		$		596		$		589

Geographic Information

	Revenues									Long-Lived Assets
	Fiscal Years									Fiscal Years
(In millions)	2013			2012			2011				2013			2012			2011
United States	$	1,212	$		1,156	$		975	$			238	$		229	$		223
International		1,731			1,651			1,622				77			68			63
Total company	$	2,943	$		2,807	$		2,597	$			315	$		297	$		286

The Company operates various manufacturing and marketing operations outside the United States. Allocation between domestic and foreign revenues is based on final destination of products sold. No single foreign country represented 10% or more of the Company’s total revenues for fiscal years 2013, 2012 and 2011. Intercompany revenues between geographic areas are accounted for at cost plus prevailing markups arrived at through negotiations between profit centers. Intercompany and intracompany profits are eliminated in consolidation.