SEGMENT INFORMATION

The Company has two reportable operating segments: Oncology Systems and VPT. The 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 CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on operating earnings.

Description of Segments

The Oncology Systems segment designs, manufactures, sells and services hardware and software products for treating cancer with conventional radiation therapy, and advanced treatments such as fixed field intensity-modulated radiation therapy (“IMRT”), image-guided radiation therapy (“IGRT”), VMAT, stereotactic radiosurgery (“SRS”), stereotactic body radiotherapy (“SBRT”) 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, clinical knowledge exchange, patient care management, decision-making support and practice management software. Oncology Systems’ products enable radiation oncology departments in hospitals and clinics to perform conventional radiotherapy treatments and offer advanced treatments such as IMRT, IGRT, VMAT, SRS and SBRT, 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 VPT segment 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.

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.

The Company allocates corporate costs to its operating segments based on the relative revenues of Oncology Systems and VPT. The Company allocates these costs excluding certain corporate related costs, transactions or adjustments that the Company's CODM considers to be non-operational, such as restructuring and impairment charges, significant litigation charges or benefits and legal costs, acquisition-related expenses and benefits. Although the Company excludes these amounts from segment operating earnings and loss, they are included in the consolidated operating earnings and included in the reconciliation below.

The following table summarizes select operating results information for each reportable segment:



	Three Months Ended
(In millions)	December 29, 2017			December 30, 2016
Revenues
Oncology Systems	$	649.4		$	571.2
Varian Particle Therapy	29.1			30.3
Total Company	$	678.5		$	601.5
Operating Earnings
Oncology Systems	$	138.2		$	116.1
Varian Particle Therapy	(15.2		)	(50.3		)
Total reportable segments	123.0			65.8
Unallocated corporate	(1.6		)	(48.4		)
Total Company	$	121.4		$	17.4

Disaggregation of Revenues

The Company disaggregates its revenues from contracts by major product categories and by geographic region for each of its reportable operating segments, as the Company believes this best depicts how the nature, amount, and timing an uncertainty of revenues and cash flows are affected by economic factors. See details in the tables below.



Total Revenues by product type	Three Months Ended December 29, 2017
(In millions)	Oncology		VPT		Total
Hardware	$	293.1	$	27.3	$	320.4
Software ⁽¹⁾	115.1		—		115.1
Service	241.2		1.8		243.0
Total Revenues	$	649.4	$	29.1	$	678.5


⁽¹⁾	Includes software support agreements that are recorded in revenues from service in the Condensed Consolidated Statements of Earnings (Loss).



Total Revenues by product type	Three Months Ended December 30, 2016
(In millions)	Oncology		VPT		Total
Hardware	$	238.6	$	26.8	$	265.4
Software ⁽¹⁾	112.2		—		112.2
Service	220.4		3.5		223.9
Total Revenues	$	571.2	$	30.3	$	601.5


⁽¹⁾	Includes software support agreements that are recorded in revenues from service in the Condensed Consolidated Statements of Earnings (Loss).



Total Revenues by geographical region	Three Months Ended December 29, 2017
(In millions)	Oncology		VPT		Total
Americas	$	337.4	$	19.3	$	356.7
EMEA	183.5		9.5		193.0
APAC	128.5		0.3		128.8
Total Revenues	$	649.4	$	29.1	$	678.5

North America	$	326.3	$	19.3	$	345.6
International	323.1		9.8		332.9
Total Revenues	$	649.4	$	29.1	$	678.5



Total Revenues by geographical region	Three Months Ended December 30, 2016
(In millions)	Oncology		VPT		Total
Americas	$	290.8	$	7.4	$	298.2
EMEA	169.0		15.0		184.0
APAC	111.4		7.9		119.3
Total Revenues	$	571.2	$	30.3	$	601.5

North America	$	275.0	$	7.4	$	282.4
International	296.2		22.9		319.1
Total Revenues	$	571.2	$	30.3	$	601.5



Timing of revenue recognition	Three Months Ended December 29, 2017
(In millions)	Products transferred at a point in time		Products and Services transferred over time		Total
Oncology Systems	$	338.3	$	311.1	$	649.4
VPT	—		29.1		29.1
Total Revenues	$	338.3	$	340.2	$	678.5



Timing of revenue recognition	Three Months Ended December 30, 2016
(In millions)	Products Transferred at a Point in Time		Products and Services Transferred Over Time		Total
Oncology Systems	$	282.4	$	288.8	$	571.2
VPT	—		30.3		30.3
Total Revenues	$	282.4	$	319.1	$	601.5