SEGMENT INFORMATION

The Company has two reportable operating segments: Oncology Systems and Proton Solutions (formerly known as Varian Particle Therapy). 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 as well as associated quality assurance equipment. Products include linear accelerators, brachytherapy afterloaders, treatment accessories, and quality assurance software, 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 surgeons and radiation oncologists to perform stereotactic radiosurgery and by medical oncology departments to manage chemotherapy treatments. Oncology Systems’ customers worldwide include university research and community hospitals, private and governmental institutions, healthcare agencies, physicians’ offices and cancer care clinics.

The Proton Solutions 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 Proton Solutions. 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:



	Fiscal Years
(In millions)	2018			2017			2016
Revenues
Oncology Systems	$	2,770.2		$	2,436.8		$	2,430.6
Proton Solutions	148.9			182.5			162.6
Total reportable segments	2,919.1			2,619.3			2,593.2
Other	—			—			0.5
Total Company	$	2,919.1		$	2,619.3		$	2,593.7
Earnings from continuing operations before taxes
Oncology Systems	$	553.4		$	479.0		$	510.4
Proton Solutions	(51.5		)	(95.7		)	(44.6		)
Total reportable segments	501.9			383.3			465.8
Other	—			—			(5.6		)
Unallocated corporate	(60.3		)	(83.1		)	(33.4		)
Operating earnings	441.6			300.2			426.8
Interest income, net	10.5			2.9			5.6
Total Company	$	452.1		$	303.1		$	432.4

Disaggregation of Revenue

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, timing and uncertainty of revenues and cash flows are affected by economic factors. See details in the tables below.



Total revenues by product type	Fiscal Years
	2018						2017						2016
	Oncology		Proton				Oncology		Proton				Oncology		Proton
(In millions)	Systems		Solutions		Total		Systems		Solutions		Total		Systems		Solutions		Total ⁽¹⁾
Hardware	$	1,231.5	$	135.1	$	1,366.6	$	1,039.4	$	172.5	$	1,211.9	$	1,069.8	$	153.1	$	1,222.9
Software	495.4		3.8		499.2		462.9		—		462.9		476.1		—		476.1
Service	1,043.3		10.0		1,053.3		934.5		10.0		944.5		884.7		9.5		894.2
Total Revenues	$	2,770.2	$	148.9	$	2,919.1	$	2,436.8	$	182.5	$	2,619.3	$	2,430.6	$	162.6	$	2,593.2

⁽¹⁾ Fiscal year 2016 hardware revenues exclude $0.5 million related to a prior business.



Total revenues by geographical region	Fiscal Years
	2018						2017						2016
	Oncology		Proton				Oncology		Proton				Oncology		Proton
(In millions)	Systems		Solutions		Total		Systems		Solutions		Total		Systems		Solutions		Total ⁽¹⁾
Americas	$	1,351.3	$	85.6	$	1,436.9	$	1,256.8	$	87.8	$	1,344.6	$	1,233.7	$	55.0	$	1,288.7
EMEA	883.2		59.6		942.8		691.1		68.1		759.2		712.7		85.4		798.1
APAC	535.7		3.7		539.4		488.9		26.6		515.5		484.2		22.2		506.4
Total Revenues	$	2,770.2	$	148.9	$	2,919.1	$	2,436.8	$	182.5	$	2,619.3	$	2,430.6	$	162.6	$	2,593.2

North America ⁽²⁾	$	1,261.6	$	85.6	1,347.2		$	1,180.0	$	87.8	1,267.8		$	1,150.4	$	55.0	1,205.4
International	1,508.6		63.3		1,571.9		1,256.8		94.7		1,351.5		1,280.2		107.6		1,387.8
Total Revenues	$	2,770.2	$	148.9	$	2,919.1	$	2,436.8	$	182.5	$	2,619.3	$	2,430.6	$	162.6	$	2,593.2

⁽¹⁾ Fiscal year 2016 Americas revenues exclude $0.5 million related to a prior business.

⁽²⁾North America primarily includes United Statements and Canada.



Timing of revenue recognition	Fiscal Years
	2018						2017						2016
	Oncology		Proton				Oncology		Proton				Oncology		Proton
(In millions)	Systems		Solutions		Total		Systems		Solutions		Total		Systems		Solutions		Total
Products transferred at a point in time	$	1,431.0	$	3.8	$	1,434.8	$	1,221.5	$	—	$	1,221.5	$	1,282.4	$	—	$	1,282.4
Products and services transferred over time	1,339.2		145.1		1,484.3		1,215.3		182.5		1,397.8		1,148.2		162.6		1,310.8
Total Revenues	$	2,770.2	$	148.9	$	2,919.1	$	2,436.8	$	182.5	$	2,619.3	$	2,430.6	$	162.6	$	2,593.2

⁽¹⁾ Fiscal year 2016 revenues from products transferred at a point in time exclude $0.5 million related to a prior business.

Other Items



	Depreciation & Amortization						Total Assets
	Fiscal Years						Fiscal Years
(In millions)	2018		2017		2016		2018		2017
Oncology Systems	$	42.1	$	39.4	$	28.5	$	1,746.4	$	1,568.7
Proton Solutions	7.9		6.1		6.8		379.8		354.4
Total reportable segments	50.0		45.5		35.3		2,126.2		1,923.1
Other	—		—		0.2		—		—
Corporate	22.7		24.8		28.3		1,124.2		1,360.2
Discontinued operations	—		6.6		16.0		2.3		11.1
Total Company	$	72.7	$	76.9	$	79.8	$	3,252.7	$	3,294.4

Geographic Information



	Revenues						Property, plant and equipment, net
	Fiscal Years						Fiscal Years
(In millions)	2018		2017		2016		2018		2017
United States	$	1,308.3	$	1,222.0	$	1,167.2	$	159.5	$	163.8
Other countries	1,610.8		1,397.3		1,426.5		115.1		91.5
Total Company	$	2,919.1	$	2,619.3	$	2,593.7	$	274.6	$	255.3

The Company operates various manufacturing and marketing operations outside the United States. Allocation between domestic and foreign revenues is based on the final destination of products sold. No country outside the United States represented 10% or more of the Company’s total revenues and property, plant and equipment, net, in fiscal years 2018, 2017 and 2016, respectively. Intercompany and intracompany profits are eliminated in consolidation.