DISCONTINUED OPERATIONS

On January 28, 2017, the Company completed the Distribution of Varex. In connection with the Distribution, the Company and Varex entered into a separation and distribution agreement as well as various other agreements that governs the relationships between the parties, including a transition services agreement, a tax matters agreement, an employee matters agreement, an intellectual property matters agreement, a trademark license agreement and supply/distribution agreements. The separation and distribution agreement and other agreements related to the separation were entered into on January 27, 2017. Services under the transition services agreement were for 60 days to 24 months following the Distribution Date, depending on the service provided.

On January 25, 2017, the Company entered into a term facility ("Varex Term Facility"), and on the same day drew down $203.0 million under the facility. In conjunction with the Distribution, the Company used $200.0 million of those proceeds to repay a portion of its outstanding 2013 Revolving Credit Facility. At the Distribution Date, the Company contributed $81.3 million in cash and cash equivalents to Varex as part of the distribution and transfer of certain legal entities. In fiscal year 2017, the Company received $38.7 million from Varex for excess cash and cash equivalents contributed at the Distribution Date. In fiscal 2017, the Company recorded a $334.1 million reduction to retained earnings as a result of the Distribution of Varex, which included assets and liabilities transferred to Varex on the Distribution Date, including $203.0 million of debt outstanding under the Varex Term Facility.

Following the Distribution, Varex retained a specified amount of cash that would enable Varex to pay the Company consideration for certain net assets outside of the United States that were required to be transferred to Varex, but which did not occur on the Distribution Date due to not having received regulatory approvals for such transfers. The Company transferred the remaining assets to Varex in the fourth quarter of fiscal year 2018. At September 28, 2018, the Company had $2.3 million in assets (net of liabilities) on its Consolidated Balance Sheet which represents a net receivable from Varex for the payment of the transferred assets.

The financial results of Varex are presented as net (loss) earnings from discontinued operations on the Consolidated Statements of Earnings, and primarily include the financial results of the Company's former Imaging Components operating segment and costs relating to the Distribution. Corporate costs previously allocated to the Company's Imaging Components operating segment are not included in discontinued operations. See Note 17, "Segment Information" for more information related to corporate allocated costs.

The following table summarizes the key components of net (loss) earnings from discontinued operations:



	Fiscal Years⁽¹⁾
(In millions)	2017 ⁽²⁾			2016
Revenues	$	194.0		$	596.7
Cost of revenues	117.3			348.3
Gross margin	76.7			248.4
Operating expenses ⁽³⁾	76.1			132.6
Operating earnings	0.6			115.8
Taxes on earnings	7.4			38.4
Net (loss) earnings from discontinued operations	(6.8		)	77.4
Less: Net earnings from discontinued operations attributable to noncontrolling interests	0.1			0.5
Net (loss) earnings from discontinued operations attributable to Varian	$	(6.9	)	$	76.9


⁽¹⁾	There was no activity in net loss from discontinued operations during fiscal 2018.


⁽²⁾	In fiscal year 2017, the net loss from discontinued operations represents activity through the date of the Distribution.


⁽³⁾	Operating expenses from discontinued operations included separation costs of $34.2 million and $16.9 million during fiscal years 2017 and 2016, respectively. Separation costs include expenses for transaction advisory services, consulting services, restructuring and other expenses.

The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in the Company's balance sheet:



(In millions)	September 28, 2018		September 29, 2017
Assets:
Accounts receivable, net	$	—	$	8.1
Inventories	—		2.9
Prepaid expenses and other current assets	2.3		0.1
Current assets of discontinued operations	2.3		11.1
Total assets of discontinued operations	$	2.3	$	11.1
Liabilities:
Accounts payable	$	—	$	2.0
Accrued liabilities	—		0.5
Current liabilities of discontinued operations	—		2.5
Total liabilities of discontinued operations	$	—	$	2.5

The following table presents supplemental cash flow information of discontinued operations:



	Fiscal Years⁽¹⁾
(In millions)	2017			2016
Operating activities:
Share-based compensation expense	$	2.0		$	6.1
Depreciation expense	4.8			10.5
Amortization expense	1.8			5.5
Investing activities:
Purchases of property, plant & equipment	(6.4		)	(28.9		)
Acquisition of business, net of cash acquired	—			(1.2		)
Sale of available-for-sale securities	$	—		$	8.6


⁽¹⁾	There was no significant cash flow activity from discontinued operations in fiscal year 2018.