Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 03, 2015 | Jul. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 3, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | VAR | |
Entity Registrant Name | VARIAN MEDICAL SYSTEMS INC | |
Entity Central Index Key | 203,527 | |
Current Fiscal Year End Date | --10-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 98,716,815 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Revenues: | ||||
Product | $ 533,736 | $ 505,648 | $ 1,523,331 | $ 1,529,024 |
Service | 250,275 | 242,037 | 757,940 | 708,669 |
Total revenues | 784,011 | 747,685 | 2,281,271 | 2,237,693 |
Cost of revenues: | ||||
Product | 363,306 | 314,874 | 999,581 | 957,920 |
Service | 105,729 | 109,084 | 317,168 | 318,157 |
Total cost of revenues | 469,035 | 423,958 | 1,316,749 | 1,276,077 |
Gross margin | 314,976 | 323,727 | 964,522 | 961,616 |
Operating expenses: | ||||
Research and development | 60,010 | 56,988 | 176,398 | 175,668 |
Selling, general and administrative | 110,722 | 124,235 | 368,394 | 348,776 |
Litigation settlement | 0 | 0 | 0 | 25,130 |
Total operating expenses | 170,732 | 181,223 | 544,792 | 549,574 |
Operating earnings | 144,244 | 142,504 | 419,730 | 412,042 |
Interest income | 3,489 | 3,045 | 9,573 | 7,768 |
Interest expense | (1,881) | (1,787) | (5,927) | (5,535) |
Earnings before taxes | 145,852 | 143,762 | 423,376 | 414,275 |
Taxes on earnings | 32,210 | 36,672 | 110,451 | 116,437 |
Net earnings | 113,642 | 107,090 | 312,925 | 297,838 |
Less: Net earnings attributable to noncontrolling interests | 136 | 0 | 136 | 0 |
Net earnings attributable to Varian | $ 113,506 | $ 107,090 | $ 312,789 | $ 297,838 |
Net earnings per share attributable to Varian - basic (usd per share) | $ 1.14 | $ 1.03 | $ 3.13 | $ 2.85 |
Net earnings per share attributable to Varian - diluted (usd per share) | $ 1.13 | $ 1.02 | $ 3.10 | $ 2.81 |
Shares used in the calculation of net earnings per share: | ||||
Weighted average shares outstanding - basic | 99,721 | 103,644 | 100,090 | 104,585 |
Weighted average shares outstanding - diluted | 100,454 | 104,869 | 101,020 | 105,910 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 113,642 | $ 107,090 | $ 312,925 | $ 297,838 |
Defined benefit pension and post-retirement benefit plans: | ||||
Amortization of prior service cost included in net periodic benefit cost, net of tax (expense) benefit of $41 and $121 for the three and nine months ended July 3, 2015, respectively, and ($6) and ($18) for the corresponding periods of fiscal year 2014, respectively | (39) | 38 | (117) | 113 |
Amortization of net actuarial loss included in net periodic benefit cost, net of tax expense of ($116) and ($347) for the three and nine months ended July 3, 2015, respectively, and ($102) and ($303) for the corresponding periods of fiscal year 2014, respectively | 505 | 433 | 1,514 | 1,303 |
Other comprehensive income (loss), pension and other postretirement benefit plans, adjustment, net of tax | 466 | 471 | 1,397 | 1,416 |
Unrealized loss on available for sale securities: | ||||
Increase (decrease) in unrealized gain (loss), net of tax benefit of $102 for both the three and nine months ended July 3, 2015 | (218) | 0 | (218) | 0 |
Other comprehensive income (loss), available-for-sale securities adjustment, net of tax | (218) | 0 | (218) | 0 |
Unrealized gain (loss) on derivatives: | ||||
Increase (decrease) in unrealized gain, net of tax (expense) benefit of ($127) and ($866) for the three and nine months ended July 3, 2015, respectively, and ($37) and ($816) for the corresponding periods of fiscal year 2014, respectively | 214 | 62 | 1,452 | 1,361 |
Reclassification adjustments, net of tax (expense) benefit of $259 and $1,286 for the three and nine months ended July 3, 2015, respectively, and ($90) and $389 for the corresponding periods of fiscal year 2014, respectively | (434) | 149 | (2,155) | (649) |
Other comprehensive income (loss), derivatives qualifying as hedges, net of tax, total | (220) | 211 | (703) | 712 |
Currency translation adjustment | 2,112 | (1,742) | (28,348) | (752) |
Other comprehensive earnings (loss) | 2,140 | (1,060) | (27,872) | 1,376 |
Comprehensive earnings | 115,782 | 106,030 | 285,053 | 299,214 |
Less: Comprehensive earnings attributable to noncontrolling interests | 78 | 0 | 78 | 0 |
Comprehensive earnings attributable to Varian | $ 115,704 | $ 106,030 | $ 284,975 | $ 299,214 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Amortization of prior service cost included in net periodic benefit cost, tax effect | $ 41 | $ (6) | $ 121 | $ (18) |
Amortization of net actuarial loss included in net periodic benefit cost, tax effects | (116) | (102) | (347) | (303) |
Available-for-sale securities, Increase (decrease) in unrealized gain (loss), tax effects | 102 | 102 | ||
Derivatives, Increase (decrease) in unrealized gain (loss), tax effects | (127) | (37) | (866) | (816) |
Reclassification adjustments, tax effects | $ 259 | $ (90) | $ 1,286 | $ 389 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 03, 2015 | Sep. 26, 2014 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 951,437 | $ 849,275 | |
Short-term investment | 71,699 | 66,176 | |
Accounts receivable, net of allowance for doubtful accounts of $23,081 at July 3, 2015 and $20,317 at September 26, 2014 | 673,706 | 731,929 | |
Inventories | 640,101 | 572,261 | |
Prepaid expenses and other current assets | 187,130 | 148,562 | |
Deferred tax assets | 124,862 | 125,962 | |
Total current assets | 2,648,935 | 2,494,165 | |
Property, plant and equipment, net | 343,417 | 337,999 | |
Goodwill | 241,734 | 240,626 | |
Other assets | 297,493 | 284,500 | |
Total assets | 3,531,579 | 3,357,290 | |
Current liabilities: | |||
Accounts payable | 180,468 | 187,377 | |
Accrued expenses | 292,901 | 324,409 | |
Deferred revenues | 467,200 | 421,845 | |
Advance payments from customers | 161,677 | 170,724 | |
Product warranty | 41,949 | 47,299 | |
Short-term borrowings | 94,451 | 0 | |
Current maturities of long-term debt | 50,000 | 50,000 | |
Total current liabilities | 1,288,646 | 1,201,654 | |
Long-term debt | 350,000 | 387,500 | |
Other long-term liabilities | 149,999 | 151,716 | |
Total liabilities | $ 1,788,645 | $ 1,740,870 | |
Commitments and contingencies (Note 8) | |||
Equity: | |||
Preferred stock of $1 par value: 1,000 shares authorized; none issued and outstanding | $ 0 | $ 0 | |
Common stock of $1 par value: 189,000 shares authorized; 99,511 and 100,942 shares issued and outstanding at July 3, 2015 and at September 26, 2014, respectively | 99,511 | 100,942 | |
Capital in excess of par value | 698,991 | 642,848 | |
Retained earnings | 1,016,547 | 931,241 | |
Accumulated other comprehensive loss | (86,483) | (58,611) | |
Total Varian stockholders' equity | 1,728,566 | 1,616,420 | |
Noncontrolling interests | 14,368 | 0 | |
Total equity | 1,742,934 | 1,616,420 | |
Total liabilities and equity | $ 3,531,579 | $ 3,357,290 | |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 03, 2015 | Sep. 26, 2014 | [1] |
Statement of Financial Position [Abstract] | |||
Accounts receivable, allowance for doubtful accounts | $ 23,081 | $ 20,317 | |
Preferred stock, par value (usd per share) | $ 1 | $ 1 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value (usd per share) | $ 1 | $ 1 | |
Common stock, shares authorized | 189,000,000 | 189,000,000 | |
Common stock, shares issued | 99,511,000 | 100,942,000 | |
Common stock, shares outstanding | 99,511,000 | 100,942,000 | |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | ||
Cash flows from operating activities: | |||
Net earnings | $ 312,925 | $ 297,838 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 36,594 | 30,054 | |
Tax benefits from exercises of share-based payment awards | 12,300 | 9,882 | |
Excess tax benefits from share-based compensation | (12,303) | (9,850) | |
Depreciation | 44,893 | 42,717 | |
Amortization of intangible assets | 5,112 | 3,259 | |
Impairment of a privately-held equity investment | 0 | 7,725 | |
Deferred taxes | 15,218 | (4,689) | |
Provision for doubtful accounts receivable | 2,811 | 5,662 | |
Other, net | 1,386 | (1,750) | |
Changes in assets and liabilities, net of effects of acquisition: | |||
Accounts receivable | 14,045 | (67,947) | |
Inventories | (77,288) | (49,060) | |
Prepaid expenses and other assets | (32,702) | (22,147) | |
Accounts payable | 281 | (14,020) | |
Accrued expenses and other liabilities | (39,845) | (14,768) | |
Deferred revenues and advance payments from customers | 32,740 | 42,683 | |
Net cash provided by operating activities | 316,167 | 255,589 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (57,084) | (63,229) | |
Investment in available-for-sale corporate debt securities | (942) | (40,692) | |
Sale of a portion of investment in available-for-sale corporate debt security | 0 | 38,075 | |
Acquisitions of businesses, net of cash acquired | (11,585) | (15,500) | |
Notes receivable | (5,000) | (5,500) | |
Net amounts received from deferred compensation plan trust account | 2,507 | 0 | |
Other, net | (1,085) | 642 | |
Net cash used in investing activities | (73,189) | (86,204) | |
Cash flows from financing activities: | |||
Repurchases of common stock | (293,570) | (417,245) | |
Proceeds from issuance of common stock to employees | 86,536 | 84,107 | |
Excess tax benefits from share-based compensation | 12,303 | 9,850 | |
Employees' taxes withheld and paid for restricted stock and restricted stock units | (16,200) | (8,664) | |
Borrowings received under credit facility agreement | 125,000 | 0 | |
Repayments under credit facility agreement and other bank borrowings | (162,500) | (56,250) | |
Net borrowings received under credit facility agreements with maturities less than 90 days | 95,478 | 29,553 | |
Capital contribution from noncontrolling interest holders | 2,893 | 0 | |
Other | (3,341) | (616) | |
Net cash used in financing activities | (153,401) | (359,265) | |
Effects of exchange rate changes on cash and cash equivalents | 12,585 | (1,994) | |
Net increase/(decrease) in cash and cash equivalents | 102,162 | (191,874) | |
Cash and cash equivalents at beginning of period | 849,275 | [1] | 1,117,861 |
Cash and cash equivalents at end of period | $ 951,437 | $ 925,987 | |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jul. 03, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varian Medical Systems, Inc. (“VMS”) and its subsidiaries (collectively, the “Company”) design, manufacture, sell and service hardware and software products for treating cancer with radiotherapy, stereotactic radiosurgery, stereotactic body radiotherapy, and brachytherapy. The Company also designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, specific procedures, computed tomography, computer-aided diagnostics and industrial applications. In addition, the Company designs, manufactures, sells and services linear accelerators, image processing software and image detection products for security and inspection purposes. The Company also develops, designs, manufactures, sells and services proton therapy products and systems for cancer treatment. Basis of Presentation The condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and the accompanying notes are unaudited and should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 26, 2014 (the “2014 Annual Report”). In the opinion of management, the condensed consolidated financial statements herein include adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the Company’s financial position as of July 3, 2015 and September 26, 2014 , results of operations and statements of comprehensive earnings for the three and nine months ended July 3, 2015 and June 27, 2014 , and cash flows for the nine months ended July 3, 2015 and June 27, 2014 . The results of operations for the three and nine months ended July 3, 2015 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. Fiscal Year The fiscal years of the Company as reported are the 52- or 53- week periods ending on the Friday nearest September 30. Fiscal year 2015 is the 53-week period ending October 2, 2015 , and fiscal year 2014 was the 52-week period ended September 26, 2014 . The fiscal quarters ended July 3, 2015 and June 27, 2014 were both 13-week periods. Principles of Consolidation The condensed consolidated financial statements include those of VMS and its wholly-owned and majority-owned or controlled subsidiaries. Intercompany balances, transactions and stock holdings have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Recent Accounting Pronouncements or Updates Not Yet Effective In July 2015, the Financial Accounting Standards Board (“FASB”) issued an amendment to its accounting guidance related to inventory measurement. The amendment requires inventory measured using first-in, first-out (FIFO) or average cost to be subsequently measured at the lower of cost and net realizable value, thereby simplifying the current guidance that requires an entity to measure inventory at the lower of cost or market. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017 and is required to be adopted prospectively. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In April 2015, the FASB issued an amendment to its accounting guidance related to internal use software. The amendment clarifies that the software license element of a cloud computing arrangements should be accounted for consistent with the acquisition of other software licenses. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment can be adopted either prospectively or retrospectively. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In April 2015, the FASB issued an amendment to its accounting guidance related to retirement benefits. The amendment provides a practical expedient that permits an entity with a fiscal year-end that does not coincide with a month-end to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The amendment also provides a practical expedient that permits an entity that has a significant event in an interim period to remeasure defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017 and is required to be applied on a retrospective basis. Early adoption is permitted. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In March 2015, the FASB issued an amendment to its accounting guidance related to presentation of debt issuance costs. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is not permitted. The amendment is required to be applied on a retrospective basis. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In February 2015, the FASB issued an amendment to its accounting guidance related to consolidation. The amendment modifies the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment permits the use of either the retrospective or cumulative effect transition method. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In June 2014, the FASB issued an amendment to its accounting guidance related to stock-based compensation. The amendment requires that a performance target that could be achieved after the requisite service period be treated as a performance condition that affects vesting, rather than a condition that affects the grant-date fair value. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment can be applied on a prospective basis to all share-based payments granted or modified on or after the effective date. Entities will also be provided an option to apply the guidance on a modified retrospective basis to existing awards. The amendment is not expected to have a material impact to the Company's consolidated financial statements. In May 2014, the FASB issued an amendment to its accounting guidance related to revenue recognition. The amendment sets forth a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The amendment requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In June 2015, the FASB approved a one-year deferral of the amendment. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2019, with early adoption permitted, but not before the first quarter of fiscal year 2018. The amendment can be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of the initial application along with additional disclosures. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Jul. 03, 2015 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS: The following tables summarize the Company's available-for-sale securities (in millions): July 3, 2015 Amortized Cost Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 81.9 $ — $ 81.9 Other 8.6 (0.2 ) 8.4 Non-U.S. government security 0.7 (0.1 ) 0.6 $ 91.2 $ (0.3 ) $ 90.9 September 26, 2014 Amortized Cost Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 75.6 $ — $ 75.6 $ 75.6 $ — $ 75.6 The available-for-sale securities included loans to California Proton Treatment Center, LLC (“CPTC”). As of July 3, 2015 , of the total amount of $81.9 million of the CPTC loans, $71.7 million was included in short-term investment and $10.2 million was included in other assets on the Condensed Consolidated Balance Sheet. As of September 26, 2014 , of the total amount of $75.6 million of the CPTC loans, $66.2 million was included in short-term investment and $9.4 million was included in other assets on the Condensed Consolidated Balance Sheet. Refer to Note 15, "CPTC Loans" for additional discussion. As of July 3, 2015 , the other corporate debt securities and non-U.S. government security are included in other assets because their maturity dates are greater than one year. As of July 3, 2015 , the Company anticipates that it will recover the entire amortized cost basis of all of its available-for-sale securities and determined that no other-than-temporary impairments were required to be recognized. July 3, September 26, (In millions) 2015 2014 Inventories: Raw materials and parts $ 357.0 $ 296.1 Work-in-process 91.4 124.5 Finished goods 191.7 151.7 Total inventories $ 640.1 $ 572.3 July 3, September 26, (In millions) 2015 2014 Other long-term liabilities: Long-term income taxes payable $ 43.2 $ 55.2 Long-term deferred income taxes 45.6 31.5 Other 61.2 65.0 Total other long-term liabilities $ 150.0 $ 151.7 |
Fair Value
Fair Value | 9 Months Ended |
Jul. 03, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets/Liabilities Measured at Fair Value on a Recurring Basis In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Fair Value Measurement Using Quoted Prices in Significant Significant Total Type of Instruments (Level 1) (Level 2) (Level 3) Balance (In millions) Assets at July 3, 2015: Corporate debt securities: CPTC loans $ — $ — $ 81.9 $ 81.9 Other — 8.4 — 8.4 Non-U.S. government security — 0.6 — 0.6 Derivative assets — 1.0 — 1.0 Total assets measured at fair value $ — $ 10.0 $ 81.9 $ 91.9 Liabilities at July 3, 2015: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) Assets at September 26, 2014: Corporate debt securities: CPTC loans $ — $ — $ 75.6 $ 75.6 Derivative assets — 1.5 — 1.5 Total assets measured at fair value $ — $ 1.5 $ 75.6 $ 77.1 Liabilities at September 26, 2014: Contingent consideration $ — $ — $ (7.5 ) $ (7.5 ) Total liabilities measured at fair value $ — $ — $ (7.5 ) $ (7.5 ) The CPTC loans are included under short-term investment and other assets, other corporate debt securities and non-U.S. government securities are included under other assets, derivative assets are included under prepaid expenses and other current assets, and contingent consideration is included under accrued liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets. The fair value of the Company's Level 2 other corporate debt securities and non-U.S. government security are priced using quoted market prices for similar instruments or non-binding market prices that are corroborated by observable market data. The Company has elected to use the income approach to value its derivative instruments using standard valuation techniques and Level 2 inputs, such as currency spot rates, forward points and credit default swap spreads. The Company’s derivative instruments are short-term in nature, typically one month to thirteen months in duration. The fair value of the Company’s Level 3 CPTC loans is based on the income approach by using the discounted cash flow model with key assumptions that include discount rates corresponding to the terms and risks associated with the loans to CPTC. If the estimated discount rates used were to increase or decrease, the fair value of the debt securities would decrease or increase, respectively. However, the Company does not increase the fair value of these securities above their par values as ORIX Capital Markets, LLC (“ORIX”), the loan agent, has the option to purchase these loans from the Company under the original terms and conditions at par value. The Company measures the fair value of its Level 3 contingent consideration liabilities based on the income approach by using a discounted cash flow model with key assumptions that include estimated sales units or revenues of the acquired business or completion of certain milestone targets during the earn-out period, volatility, and estimated discount rates corresponding to the periods of expected payments. If the estimated sales units, revenues or probability of completing certain milestones were to increase or decrease during the respective earn-out period, the fair value of the contingent consideration would increase or decrease, respectively. If the estimated discount rates were to increase or decrease, the fair value of contingent consideration would decrease or increase, respectively. Changes in volatility may result in an increase or decrease in the fair value of contingent consideration. The following table presents the reconciliation for all assets and liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3): (In millions) CPTC Loans Contingent Balance at September 26, 2014 $ 75.6 $ (7.5 ) Additions (1) 6.3 — Settlements (2) — 3.3 Change in fair value recognized in earnings — 0.1 Balance at July 3, 2015 $ 81.9 $ (4.1 ) (1) Amounts reported under CPTC loans include accrued interest. (2) Amounts reported under contingent consideration represent cash payments to settle contingent consideration liabilities. There were no transfers of assets or liabilities between fair value measurement levels during either the three and nine months ended July 3, 2015 , or the three and nine months ended June 27, 2014 . Transfers between fair value measurement levels are recognized at the end of the reporting period. Fair Value of Other Financial Instruments The fair values of certain of the Company’s financial instruments, including bank deposits included in cash and cash equivalents, accounts receivable, net of allowance for doubtful accounts, notes receivable, accounts payable, and short-term borrowings approximate their carrying amounts due to their short maturities. As of both July 3, 2015 and September 26, 2014 , the fair value of current maturities of long-term debt approximated its carrying value of $50.0 million , due to its short-term maturity. The fair value of the long-term debt payable in installments through fiscal year 2018 approximated its carrying value of $350.0 million and $387.5 million , at July 3, 2015 and September 26, 2014 , respectively, because it is carried at a market observable interest rate that resets periodically and is categorized as level 2 in the fair value hierarchy. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jul. 03, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The following table reflects the activity of goodwill by reportable operating segment: Oncology Imaging (In millions) Systems Components Other Total Balance at September 26, 2014 $ 148.3 $ 36.0 $ 56.3 $ 240.6 Business acquisition — 8.2 — 8.2 Foreign currency translation adjustments — — (7.1 ) (7.1 ) Balance at July 3, 2015 $ 148.3 $ 44.2 $ 49.2 $ 241.7 The following table reflects the gross carrying amount and accumulated amortization of the Company’s intangible assets subject to amortization included in other assets in the Condensed Consolidated Balance Sheets as follows: July 3, September 26, (In millions) 2015 2014 Intangible Assets: Acquired existing technology $ 58.1 $ 54.6 Patents, licenses and other 29.1 28.8 Customer contracts and supplier relationship 14.9 12.4 Accumulated amortization (61.6 ) (56.9 ) Net carrying amount subject to amortization $ 40.5 $ 38.9 As of July 3, 2015 and September 26, 2014 , the Company also had $1.8 million and $2.0 million , respectively, of in-process research and development assets. Amortization expense for intangible assets was $1.8 million and $1.4 million in the three months ended July 3, 2015 and June 27, 2014 , respectively. Amortization expense for intangible assets was $5.1 million and $3.3 million in the nine months ended July 3, 2015 and June 27, 2014 , respectively. The Company estimates amortization expense for the remaining three months of fiscal year 2015, fiscal year 2016, fiscal year 2017, fiscal year 2018, fiscal year 2019, fiscal year 2020 and thereafter, will be as follows (in millions): $3.2 , $9.5 , $8.2 , $6.1 , $5.9 , $4.4 , and $3.2 , respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Jul. 03, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS VMS has a 40% ownership interest in dpiX Holding LLC (“dpiX Holding”), a two-member consortium which has a 100% ownership interest in dpiX LLC (“dpiX”), a supplier of amorphous silicon based thin film transistor arrays (“flat panels”) for the Company’s Imaging Components’ digital image detectors and for its Oncology Systems’ On-Board Imager ® and PortalVision TM imaging products. In accordance with the dpiX Holding agreement, net profits or losses are allocated to the members, in accordance with their ownership interests. The equity investment in dpiX Holding is accounted for under the equity method of accounting. When VMS recognizes its share of net profits or losses of dpiX Holding, profits or losses in inventory purchased from dpiX are eliminated until realized by VMS. VMS recorded an insignificant amount of income in the three months ended July 3, 2015 , and recorded income of $0.7 million in the three months ended June 27, 2014 , from the equity investment in dpiX Holding. VMS recorded income of $0.5 million and $0.1 million from the equity investment in dpiX Holding in the nine months ended July 3, 2015 and June 27, 2014 . Income and loss on the equity investment in dpiX Holding is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings. The carrying value of the equity investment in dpiX Holding, which is included in other assets in the Condensed Consolidated Balance Sheets, was $48.0 million at July 3, 2015 and $49.7 million at September 26, 2014 . The Company purchased glass transistor arrays from dpiX totaling $5.6 million and $5.7 million in the three months ended July 3, 2015 and June 27, 2014 , respectively, and $15.5 million and $14.9 million in the nine months ended July 3, 2015 and June 27, 2014 , respectively. These purchases of glass transistor arrays are included as a component of inventories in the Condensed Consolidated Balance Sheets or cost of revenues - product in the Condensed Consolidated Statements of Earnings for these fiscal periods. In October 2013, VMS entered into an amended agreement with dpiX and other parties that, among other things, provides the Company with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires the Company to pay for 50% of the fixed costs (as defined in the amended agreement), as determined at the beginning of each calendar year. As of July 3, 2015 , the Company had fixed cost commitments of $4.4 million related to this amended agreement for the remaining three months of fiscal year 2015. The fixed cost commitments for future periods will be determined and approved by the dpiX board of directors at the beginning of each calendar year. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement). The Company has determined that dpiX is a variable interest entity because at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to direct the activities of dpiX and therefore is not the primary beneficiary of dpiX. |
Borrowings
Borrowings | 9 Months Ended |
Jul. 03, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS On August 27, 2013 , VMS entered into a Credit Agreement (as amended to date) with certain lenders and Bank of America, N.A. (“BofA”) as administrative agent. The Credit Agreement provides for (i) a five -year term loan facility in an aggregate principal amount of up to $500 million (the “2013 Term Loan Facility”) and (ii) a five -year revolving credit facility in an aggregate principal amount of up to $300 million (the “2013 Revolving Credit Facility” and, collectively with the 2013 Term Loan Facility, the “2013 Credit Facility”). The 2013 Revolving Credit Facility also includes a $50 million sub-facility for the issuance of letters of credit and permits swing line loans of up to $25 million . The aggregate commitments under the 2013 Term Loan Facility may be increased by up to $100 million and the aggregate commitments under the 2013 Revolving Credit Facility may be increased by up to $200 million , subject to certain conditions being met, including lender approval. The 2013 Credit Facility contains provisions that limit the Company’s ability to pay cash dividends. The proceeds of the 2013 Credit Facility will be used for working capital, capital expenditures, permitted Company share repurchases, permitted acquisitions and other lawful corporate purposes. Borrowings under the 2013 Term Loan Facility accrue interest either (i) based on a Eurodollar Rate, as defined in the Credit Agreement (the “Eurodollar Rate”), plus a margin of 1.00% to 1.25% based on a leverage ratio involving funded indebtedness and EBITDA or (ii) based upon a base rate of (a) the federal funds rate plus 0.50% , (b) BofA’s announced prime rate, or (c) the Eurodollar Rate plus 1.00% , whichever is highest, plus a margin of 0.00% to 0.25% based on the same leverage Ratio, depending upon instructions from the Company. Borrowings under the 2013 Revolving Credit Facility accrue interest either (i) based on the Eurodollar Rate plus a margin of 1.25% to 1.50% based on a leverage ratio involving funded indebtedness and EBITDA or (ii) based upon a base rate of (a) the federal funds rate plus 0.50% , (b) BofA’s announced prime rate, or (c) the Eurodollar Rate plus 1.00% , whichever is highest, plus a margin of 0.25% to 0.50% based on the same leverage ratio, depending upon instructions from the Company. Borrowings under the 2013 Revolving Credit Facility have a maturity of approximately 30 days if based on the Eurodollar Rate and the same maturity as the 2013 Term Loan Facility if based on the base rate. At July 3, 2015 , borrowings under the 2013 Term Loan Facility totaled $400.0 million , with a weighted average interest rate of 1.31% . At September 26, 2014 , borrowings under the 2013 Term Loan Facility totaled $437.5 million with a weighted average interest rate of 1.28% . Borrowings under the 2013 Term Loan Facility are included in current maturities of long-term debt and long-term debt in the Condensed Consolidated Balance Sheets. At July 3, 2015 , there was $70.0 million outstanding on the 2013 Revolving Credit Facility with a weighted average interest rate of 1.56% . At September 26, 2014 , there were no amounts outstanding on the 2013 Revolving Credit Facility. Borrowings under the 2013 Revolving Credit Facility are included in short-term borrowings in the Condensed Consolidated Balance Sheets. Subject to certain limitations on the amount secured, a pledge of stock issued by certain present and future subsidiaries of VMS, that are deemed to be material under the terms of the 2013 Credit Facility, serve as security for the 2013 Credit Facility. These stock pledges also serve as security for all hedging or treasury management obligations entered into by the Company with a Lender. As of July 3, 2015 , VMS had pledged 65% of the voting shares that it holds in Varian Medical Systems Nederland Holdings B.V., a wholly owned subsidiary. The Credit Agreement provides that certain material domestic subsidiaries must guarantee the 2013 Credit Facility, subject to certain limitations on the amount secured. As of July 3, 2015 , the 2013 Credit Facility was not guaranteed by any VMS subsidiary. The Credit Agreement contains affirmative and negative covenants applicable to the Company and its subsidiaries that are typical for credit facilities of this type, and that are subject to materiality and other qualifications, carve-outs, baskets and exceptions. The Company has also agreed to maintain certain financial covenants including (i) a maximum consolidated leverage ratio, involving funded indebtedness and EBITDA (earnings before interest, tax and depreciation and amortization), and (ii) a minimum cash flow coverage ratio. The Company was in compliance with all covenants under the Credit Agreement for all periods within these condensed consolidated financial statements in which it was in existence. VMS’s Japanese subsidiary (“VMS KK”) has an unsecured uncommitted credit agreement with Sumitomo that enables VMS KK to borrow and have outstanding at any given time a maximum of 3 billion Japanese Yen (the “Sumitomo Credit Facility”). In February 2015, the Sumitomo Credit Facility was extended and will expire in February 2016 . Borrowings under the Sumitomo Credit Facility accrue interest based on the basic loan rate announced by the Bank of Japan plus a margin of 0.5% per annum. As of July 3, 2015 the outstanding balance under the Sumitomo Credit Facility was 3 billion Japanese Yen or $24.5 million with a weighted average interest rate of 0.63% . As of September 26, 2014 , there was no outstanding balance under the Sumitomo Credit Facility. Borrowings under the Sumitomo Credit Facility are included in short-term borrowings in the Condensed Consolidated Balance Sheets. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jul. 03, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company measures all derivatives at fair value on the Condensed Consolidated Balance Sheets. The accounting for gains or losses resulting from changes in the fair value of those derivatives depends upon the use of the derivative and whether it qualifies for hedge accounting. Changes in the fair value of derivatives that do not qualify for hedge accounting treatment must be recognized in earnings, together with elements excluded from effectiveness testing and the ineffective portion of a particular hedge. The fair values of derivative instruments reported on the Company’s Condensed Consolidated Balance Sheets were as follows: Asset Derivatives July 3, 2015 September 26, 2014 (In millions) Balance Sheet Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets $ 0.5 $ 1.5 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets 0.5 — Total derivatives $ 1.0 $ 1.5 At July 3, 2015 and September 26, 2014 , the Company did not have any outstanding liability derivatives. See Note 3, "Fair Value" regarding valuation of the Company’s derivative instruments. Also see Note 1, "Summary of Significant Accounting Policies" in the Consolidated Financial Statements in the Company’s 2014 Annual Report regarding credit risk associated with the Company’s derivative instruments. Offsetting of Derivatives The Company presents its derivative assets and derivative liabilities on a gross basis in the Condensed Consolidated Balance Sheets. However, under agreements containing provisions on netting with certain counterparties of foreign exchange contracts, subject to applicable requirements, the Company is allowed to net-settle transactions on the same date in the same currency, with a single net amount payable by one party to the other. As of July 3, 2015 and September 26, 2014 , there were no potential effects of rights of setoff associated with derivative instruments. The Company is neither required to pledge nor entitled to receive cash collateral related to these derivative transactions. Cash Flow Hedging Activities The Company has many transactions denominated in foreign currencies and addresses certain of those financial exposures through a risk management program that includes the use of derivative financial instruments. The Company sells products throughout the world, often in the currency of the customer’s country, and may hedge certain of the larger foreign currency transactions when they are either not denominated in the relevant subsidiary’s functional currency or the U.S. Dollar. These foreign currency sales transactions are hedged using foreign currency forward contracts. The Company may use other derivative instruments in the future. The Company enters into foreign currency forward contracts primarily to reduce the effects of fluctuating foreign currency exchange rates. The Company does not enter into foreign currency forward contracts for speculative or trading purposes. Foreign currency forward contracts may be entered into several times a quarter and range from one to thirteen months in maturity. The Company designates and accounts for certain of its hedges of forecasted foreign currency revenues as cash flow hedges. The Company’s designated cash flow hedges de-designate when the anticipated revenues associated with the transactions are recognized and the effective portion in accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets is reclassified to revenues in the Condensed Consolidated Statements of Earnings. Subsequent changes in fair value of the derivative instrument are recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings to offset changes in fair value of the resulting non-functional currency receivables. For derivative instruments that are designated and qualify as cash flow hedges, the Company formally documents for each derivative instrument at the hedge’s inception the relationship between the hedging instrument (foreign currency forward contract) and hedged item (forecasted foreign currency revenues), the nature of the risk being hedged, and its risk management objective and strategy for undertaking the hedge. The Company records the effective portion of the gain or loss on the derivative instrument that are designated and qualify as cash flow hedges in accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and reclassifies these amounts into revenues in the Condensed Consolidated Statements of Earnings in the period during which the hedged transaction is recognized in earnings. The Company assesses hedge effectiveness both at the onset of the hedge and on an ongoing basis using regression analysis. The Company measures hedge ineffectiveness by comparing the cumulative change in the fair value of the effective component of the hedge contract with the cumulative change in the fair value of the hedged item. The Company recognizes any over performance of the derivative as ineffectiveness in revenues, and amounts excluded from the assessment of effectiveness in cost of revenues in the Condensed Consolidated Statements of Earnings. During the three and nine months ended July 3, 2015 , the Company did not discontinue any cash flow hedges. At the inception of the hedge, the Company assesses whether the likelihood of meeting the forecasted cash flow is highly probable. As of July 3, 2015 , all forecasted cash flows were still probable to occur. As of July 3, 2015 , the net unrealized gain on derivative instruments, before tax, of $0.4 million was included in accumulated other comprehensive loss and is expected to be reclassified to earnings over the next 12 months that follows. The Company had the following outstanding foreign currency forward contracts that were entered into to hedge forecasted revenues and designated as cash flow hedges: July 3, 2015 (In millions) Notional Euro $ 20.4 Japanese Yen 0.9 Totals $ 21.3 The following table presents the amounts, before tax, recognized in accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and in the Condensed Consolidated Statements of Earnings that are related to the effective portion of the foreign currency forward contracts designated as cash flow hedges: Gain (Loss) Recognized in Other Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) Gain (Loss) Reclassified from Accumulated Other Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 2015 2014 2015 2014 Foreign currency forward contracts $ 0.3 $ 0.1 $ 2.3 $ 2.2 Revenues $ 0.7 $ (0.3 ) $ 3.4 $ 1.0 Balance Sheet Hedging Activities The Company also hedges balance sheet exposures from its various subsidiaries and business units where the U.S. Dollar is the functional currency. The Company enters into foreign currency forward contracts to minimize the short-term impact of foreign currency fluctuations on monetary assets and liabilities denominated in currencies other than the U.S. Dollar functional currency. The foreign currency forward contracts are short term in nature, typically with a maturity of approximately one month , and are based on the net forecasted balance sheet exposure. These hedging instruments do not qualify for hedge accounting treatment. For derivative instruments not designated as hedging instruments, changes in their fair values are recognized in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings. Changes in the values of these hedging instruments are offset by changes in the values of foreign-currency-denominated assets and liabilities. Variations from the forecasted foreign currency assets or liabilities, coupled with a significant currency rate movement, may result in a material gain or loss if the hedges are not effectively offsetting the change in value of the foreign currency asset or liability. Other than foreign exchange hedging activities, the Company has no other free-standing or embedded derivative instruments. The Company had the following outstanding foreign currency forward contracts that were either (i) entered into to hedge balance sheet exposures from its various foreign subsidiaries and business units or (ii) originally designated as cash flow hedge (primarily in Japanese Yen) and were subsequently de-designated when the forecasted revenues were recognized: July 3, 2015 (In millions) Notional Notional Australian Dollar $ 17.3 $ — Brazilian Real 2.8 — British Pound 19.9 — Canadian Dollar — 16.4 Danish Krone 1.7 4.5 Euro 166.4 15.6 Hungarian Forint 7.7 — Indian Rupee 9.2 — Japanese Yen 77.4 — Swiss Franc — 74.7 Totals $ 302.4 $ 111.2 The following table presents the gains (losses) recognized in the Condensed Consolidated Statements of Earnings related to the foreign currency forward exchange contracts that are not designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Net Earnings on Derivative Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 Selling, general and administrative expenses $ (1.3 ) $ (1.1 ) $ 32.7 $ 0.4 The gains (losses) on these derivative instruments were significantly offset by the gains (losses) resulting from the remeasurement of monetary assets and liabilities denominated in currencies other than the U.S. Dollar functional currency. Contingent Features Certain of the Company’s derivative instruments are subject to master agreements which contain provisions that require the Company, in the event of a default, to settle the outstanding contracts in net liability positions by making settlement payments in cash or by setting off amounts owed to the counterparty against any credit support or collateral held by the counterparty. As of July 3, 2015 and September 26, 2014 , the Company did not have significant outstanding derivative instruments with credit-risk-related contingent features that were in a net liability position. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 03, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Product Warranty The following table reflects the changes in the Company’s accrued product warranty: Nine Months Ended July 3, June 27, (In millions) 2015 2014 Accrued product warranty, at beginning of period $ 49.3 $ 53.2 Charged to cost of revenues 33.1 38.8 Actual product warranty expenditures (38.8 ) (41.5 ) Accrued product warranty, at end of period $ 43.6 $ 50.5 Long-term accrued product warranty costs of $1.7 million and $2.0 million are included under other long-term liabilities in the Condensed Consolidated Balance Sheets as of July 3, 2015 and September 26, 2014 , respectively. Other Commitments In April 2012, VMS entered into a strategic global partnership with Siemens AG (“Siemens”) through which, among other things, the Company and Siemens are working on developing interfaces to enable the Company’s ARIA ® oncology information system software to connect with Siemens linear accelerators and imaging systems. Under the agreement establishing this collaboration, the Company committed to make certain payments, including up to $10.0 million in fixed fees and $20.0 million in license fees, in the event certain product development milestones are achieved. As of July 3, 2015 , the outstanding fixed fees and license fees commitments for the Siemens agreement were $4.5 million and $12.0 million , respectively. In connection with the acquisition of businesses in prior years, the Company entered into agreements which included provisions to make additional consideration payments upon the achievement of certain milestones by the acquired businesses. As of July 3, 2015 , the fair value of potential contingent consideration liabilities under these agreements was $4.1 million . See Note 3, "Fair Value" for additional information. As of July 3, 2015 , the Company had an estimated fixed cost commitment of $4.4 million related to dpiX's amended agreement for the remaining three months of fiscal year 2015. The fixed cost commitment for future years will be determined and approved by the dpiX board of directors at the beginning of each calendar year. See Note 5, "Related Party Transactions" for additional information. In May 2015, the Company, through one of its subsidiaries, committed to loan up to $35.0 million to the Maryland Proton Therapy Center ("MPTC"). The Company had previously entered into an agreement with MPTC to supply it with a proton system. Varian's commitment is in the form of a subordinated loan that is due, with accrued interest, in three annual payments from 2020 to 2022. As of July 3, 2015, the Company's outstanding commitment under the loan to MPTC was $22.8 million , to be paid in four installments of $5.7 million each on June 30, 2016, September 30, 2016, December 30, 2016 and March 31, 2017. In July 2015, the Company, through one of its subsidiaries, committed to loan up to $91.5 million to MM Proton I, LLC in connection with a purchase agreement to supply a proton system to equip the New York Proton Center. The commitment includes a $73.0 million "Senior First Lien Loan" with a six -year term and an $18.5 million "Subordinate Loan" with a six-and-a-half-year term. The first draw down under either of these loans was $15.5 million of the "Subordinate Loan" on July 15, 2015. The Company expects the remaining draw downs to take place primarily through fiscal year 2018. Environmental Remediation Liabilities The Company’s operations and facilities, past and present, are subject to environmental laws, including laws that regulate the handling, storage, transport and disposal of hazardous substances. Certain of those laws impose cleanup liabilities under certain circumstances. In connection with those laws and certain of the Company’s past and present operations and facilities, the Company oversees various environmental cleanup projects and also reimburses certain third parties for cleanup activities. Those include facilities sold as part of the Company’s electron devices business in 1995 and thin film systems business in 1997. In addition, the U.S. Environmental Protection Agency (“EPA”) or third parties have named the Company as a potentially responsible party under the amended Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”), at sites to which the Company or the facilities of the sold businesses were alleged to have shipped waste for recycling or disposal (the “CERCLA sites”). In connection with the CERCLA sites, the Company to date has been required to pay only modest amounts as its contributions to cleanup efforts. Under the agreement that governs the spin-offs of Varian, Inc., which was acquired by Agilent Technologies Inc. (the successor entity hereinafter referred to as “VI”), and Varian Semiconductor Equipment Associates, Inc., which was acquired by Applied Materials, Inc. (the successor entity hereinafter referred to as “VSEA”), VI and VSEA are each obligated to indemnify the Company for one-third of the environmental cleanup costs associated with corporate, discontinued or sold operations prior to the spin-offs (after adjusting for any insurance proceeds or tax benefits received by the Company), as well as fully indemnify the Company for other liabilities arising from the operations of the business transferred to it as part of the spin-offs. The Company spent $0.2 million and $0.3 million (net of amounts borne by VI and VSEA) in the three months ended July 3, 2015 and June 27, 2014 , respectively, on environmental cleanup costs, third-party claim costs, project management costs and legal costs. The Company spent $1.0 million and $0.8 million (net of amounts borne by VI and VSEA) in the nine months ended July 3, 2015 and June 27, 2014 , respectively, on such costs. Inherent uncertainties make it difficult to estimate the likelihood of the cost of future cleanup, third-party claims, project management and legal services for the CERCLA sites and one of the Company’s past facilities. Nonetheless, as of July 3, 2015 , the Company estimated that, net of VI’s and VSEA’s indemnification obligations, future costs associated with the CERCLA sites and this facility would range in total from $1.6 million to $9.8 million . The time frames over which these cleanup project costs are estimated vary, ranging from one year to thirty years as of July 3, 2015 . Management believes that no amount in that range is more probable of being incurred than any other amount and therefore accrued $1.6 million for these cleanup projects as of July 3, 2015 . The accrued amount has not been discounted to present value due to the uncertainties that make it difficult to develop a single best estimate. The Company believes it has gained sufficient knowledge to better estimate the scope and cost of monitoring, cleanup and management activities for its other past and present facilities. This, in part, is based on agreements with other parties and also cleanup plans approved by or completed in accordance with the requirements of the governmental agencies having jurisdiction. As of July 3, 2015 , the Company estimated that the Company’s future exposure, net of VI’s and VSEA’s indemnification obligations, for the costs at these facilities, and reimbursements of third-party’s claims for these facilities, ranged in total from $5.0 million to $35.4 million . The time frames over which these costs are estimated to be incurred vary, ranging from one year to thirty years as of July 3, 2015 . As to each of these facilities, management determined that a particular amount within the range of estimated costs was a better estimate than any other amount within the range, and that the amount and timing of these future costs were reliably determinable. The best estimate within that range was $9.0 million at July 3, 2015 . Accordingly, the Company has accrued $7.4 million for these costs, which represents the best estimate discounted at 4% , net of inflation. This accrual is in addition to the $1.6 million described in the preceding paragraph. These amounts are only estimates of anticipated future costs. The amounts the Company will actually spend may be greater or less than these estimates, even as the Company believes the degree of uncertainty will narrow as cleanup activities progress. While the Company believes its reserve is adequate, as the scope of the Company’s obligations becomes more clearly defined, the Company may modify the reserve, and charge or credit future earnings accordingly. Nevertheless, based on information currently known to management, and assuming VI and VSEA satisfy their indemnification obligations, management believes the costs of these environmental-related matters are not reasonably likely to have a material adverse effect on the consolidated financial statements of the Company in any one fiscal year. The Company evaluates its liability for investigation and cleanup costs in light of the obligations and apparent financial strength of potentially responsible parties and insurance companies with respect to which the Company believes it has rights to indemnity or reimbursement. The Company has asserted claims for recovery of environmental investigation and cleanup costs already incurred, and to be incurred in the future against various insurance companies and other third parties. The Company receives certain cash payments in the form of settlements and judgments from defendants, insurers and other third parties from time to time. The Company has also reached an agreement with an insurance company under which that insurer has agreed to pay a portion of the Company’s past and future environmental-related expenditures. Receivables, net of VI’s and VSEA’s portion, from that insurer amounted to $2.1 million at July 3, 2015 and $2.2 million at September 26, 2014 , with the current and noncurrent receivables portion included in prepaid expenses and other current assets and other assets and the payable portion to that insurer is included in other long-term liabilities in the Condensed Consolidated Balance Sheets. The Company believes that this receivable is recoverable because it is based on a binding, written settlement agreement with what appears to be a financially viable insurance company, and the insurance company has paid the Company’s claims in the past. The availability of the indemnities of VI and VSEA will depend upon the future financial strength of VI and VSEA. Given the long-term nature of some of the liabilities, VI and VSEA may be unable to fund the indemnities in the future. It is also possible that a court would disregard this contractual allocation among the parties and require the Company to assume responsibility for obligations allocated to another party, particularly if the other party were to refuse or was unable to pay any of its allocated share. The agreement governing the spin-offs generally provides that if a court prohibits a company from satisfying its shared indemnification obligations, the indemnification obligations will be shared equally by the two other companies. Other Matters From time to time, the Company is a party to or otherwise involved in legal proceedings, claims and government inspections or investigations and other legal matters, both inside and outside the United States, arising in the ordinary course of its business or otherwise. These matters included a patent infringement lawsuit initiated on April 13, 2007 by the University of Pittsburgh of the Commonwealth System of Higher Education (the “University of Pittsburgh”) regarding the Company’s Real-time Position Management™ (“RPM”) technology. In January 2014, the Company entered into a settlement agreement with the University of Pittsburgh and in the third quarter of fiscal year 2014 paid $35.6 million in full settlement of the lawsuit. Prior to the beginning of the second quarter of fiscal year 2014, the Company had accrued in aggregate approximately $5.0 million for the low end of the range of the probable settlement value for this matter. In the second quarter of fiscal year 2014, the Company accrued an additional $25.1 million of the $35.6 million for all damages and interest related to the case and in the third quarter of fiscal year 2014 recorded the remaining amount of approximately $5.5 million for future royalties as prepaid royalties. The amount of prepaid royalties is being amortized beginning with the third quarter of fiscal year 2014, over the remaining life of the patent of approximately two and a half years. In June 2015, a foreign subsidiary of the Company was charged by the Department for Investigation and Penal Action of Lisbon with alleged improper activities relating to three tenders of medical equipment in Portugal during the period of 2003 to 2009. The Company previously undertook an internal investigation of this matter and voluntarily disclosed the results of this investigation to the U.S. Department of Justice and the U.S. Securities and Exchange Commission. At this time, the Company is unable to predict the ultimate outcome of this matter, and therefore no amounts have been accrued as of July 3, 2015. The Company accrues amounts, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss (including, among other things, probable settlement value). However, such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company is unable to estimate a range of reasonably possible losses with respect to such matters. There can be no assurances as to whether the Company will become subject to significant additional claims and liabilities with respect to ongoing or future proceedings. If actual liabilities significantly exceed the estimates made, the Company’s consolidated financial position, results of operations or cash flows could be materially adversely affected. Restructuring Charges As part of the Company’s plan to enhance operational performance through productivity initiatives, the Company offered an enhanced retirement program to its qualifying employees across all reporting segments during the fourth quarter of fiscal year 2014. The program required the participating employees to submit their applications by October 10, 2014, and as a result, the restructuring charges relating to this program were primarily incurred in the first quarter of fiscal year 2015. The Company incurred additional restructuring charges across all reporting segments for workforce reductions during the first nine months of fiscal year 2015. In connection with the above mentioned restructuring programs, during the nine months ended July 3, 2015 , the Company incurred restructuring charges of $13.4 million , of which $10.9 million was paid in cash during the nine months ended July 3, 2015 . The restructuring charges are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings. The Company expects to complete the above mentioned restructuring programs by the end of fiscal year 2015 and any remaining restructuring charges are not expected to be significant. No restructuring charges were incurred during the three and nine months ended June 27, 2014 in relation to this or any restructuring programs. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Jul. 03, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | RETIREMENT PLANS The Company’s net defined benefit costs were composed of the following: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands) 2015 2014 2015 2014 Defined Benefit Plans Service cost $ 1,180 $ 1,028 $ 3,551 $ 3,077 Interest cost 1,278 1,545 3,843 4,591 Expected return on plan assets (1,791 ) (1,977 ) (5,385 ) (5,869 ) Amortization of prior service cost 45 43 138 128 Recognized actuarial loss 614 539 1,841 1,616 Net periodic benefit cost $ 1,326 $ 1,178 $ 3,988 $ 3,543 The Company made contributions to the defined benefit plans of $5.4 million during the nine months ended July 3, 2015 . The Company currently expects total contributions to the defined benefit plans for fiscal year 2015 will be approximately $6.9 million . The Company's post-retirement benefit costs and contributions were not significant during both the three and nine months ended July 3, 2015 and June 27, 2014 , and are not included in the table above. |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 03, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company’s effective tax rate was 22.1% and 26.1% for the three and nine months ended July 3, 2015 , compared to 25.5% and 28.1% for the respective year-ago periods of fiscal year 2014 . The decrease in the Company’s effective tax rate during the three and nine months ended July 3, 2015 compared to the respective year ago periods, was primarily due to the geographic mix of earnings, including significant Particle Therapy earnings in Germany, a jurisdiction for which the Company has a full valuation allowance, in the third quarter of fiscal year 2015. The Company’s effective income tax rate differs from the U.S. federal statutory rate primarily because the Company’s foreign earnings are taxed at rates that are, on average, lower than the U.S. federal rate, and because the Company’s domestic earnings are subject to state income taxes. The total amount of unrecognized tax benefits did not materially change during the nine months ended July 3, 2015 ; however, the amount of unrecognized tax benefits has increased as a result of positions taken during the current and prior years, and has decreased as the result of the expiration of the statutes of limitation and audit settlements in various jurisdictions. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jul. 03, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Program In August 2012, the VMS Board of Directors authorized the repurchase of 8,000,000 shares of VMS common stock from September 29, 2012 through December 31, 2013 . The Company repurchased a total of 2,000,000 shares of VMS common stock during the three months ended December 27, 2013 and thereafter no shares of VMS common stock remained available for repurchase under this repurchase authorization. In November 2013, the VMS Board of Directors authorized the repurchase of an additional 6,000,000 shares of VMS common stock from December 30, 2013 through December 31, 2014 . The Company repurchased a total of 3,250,000 shares of VMS common stock during the nine months ended June 27, 2014. The Company repurchased a total of 250,000 shares of VMS common stock during the three months ended January 2, 2015 under this program and thereafter no shares of VMS common stock remained available for repurchase under this repurchase authorization. In August 2014, the VMS Board of Directors authorized the repurchase of an additional 6,000,000 shares of VMS common stock from August 15, 2014 through December 31, 2015. The Company repurchased a total of 1,000,000 and 3,074,849 shares of VMS common stock during the three and nine months ended July 3, 2015 under this program. The repurchased shares include shares of VMS common stock repurchased under the accelerated share repurchase agreements mentioned below. As of July 3, 2015 , 2,925,151 shares of VMS common stock remained available for repurchase under the August 2014 authorization. Stock repurchases may be made in the open market, in privately negotiated transactions (including accelerated share repurchase programs), or under Rule 10b5-1 share repurchase plans, and also may be made from time to time or in one or more larger blocks. All shares that were repurchased under the Company's stock repurchase programs have been retired. On November 7, 2014, the Company signed an accelerated share repurchase agreement (the "January 2015 Repurchase Agreement") with J.P.Morgan Chase Bank, N.A. (“J.P. Morgan”). On January 6, 2015, the Company paid $45.0 million and J.P Morgan delivered 419,874 shares of VMS common stock. The repurchase period ended on March 27, 2015, and the Company received an additional 74,975 shares of VMS common stock from J.P. Morgan upon settlement of the January 2015 Repurchase Agreement. On February 3, 2015, the Company signed an accelerated share repurchase agreement (the "April 2015 Repurchase Agreement") with BofA. On April 7, 2015, the Company paid $70.0 million and BofA delivered 592,280 shares of VMS common stock. The repurchase period ended on April 29, 2015, and the Company received an additional 151,604 shares of VMS common stock from BofA upon settlement of the April 2015 Repurchase Agreement. On February 4, 2015, the Company signed an accelerated share repurchase agreement ("July 2015 Repurchase Agreement") with J.P. Morgan. Pursuant to the agreement, on July 8, 2015, the Company paid $45.0 million to J.P. Morgan and J.P. Morgan delivered 418,167 shares of VMS common stock, representing approximately 80% of the shares expected to be repurchased. The repurchase period will end on September 29, 2015, and J.P. Morgan has the right to accelerate the repurchase beginning July 16, 2015. On May 19, 2015, the Company entered into an accelerated share repurchase agreement with J.P. Morgan. Pursuant to the agreement, on July 23, 2015, the Company paid $43.9 million and received 400,000 shares of VMS common stock, representing approximately 80% of the shares expected to be repurchased. The repurchase period will end on August 26, 2015, and J.P. Morgan has the right to accelerate the the repurchase period beginning August 3, 2015. Other Comprehensive Earnings The changes in accumulated other comprehensive earnings (loss) by component and related tax effects are summarized as follows: (in thousands) Net Unrealized Gain Net Net Cumulative Accumulated Balance at September 26, 2014 $ (44,060 ) $ — $ 965 $ (15,516 ) $ (58,611 ) Other comprehensive earnings before reclassifications — (320 ) 2,318 (28,348 ) (26,350 ) Amounts reclassified out of other comprehensive earnings 1,623 (3,441 ) — (1,818 ) Tax benefit (expense) (226 ) 102 420 — 296 Balance at July 3, 2015 $ (42,663 ) $ (218 ) $ 262 $ (43,864 ) $ (86,483 ) (in thousands) Net Unrealized Gain Net Cumulative Accumulated Balance at September 27, 2013 $ (40,081 ) $ (691 ) $ 701 $ (40,071 ) Other comprehensive earnings before reclassifications — 2,177 (752 ) 1,425 Amounts reclassified out of other comprehensive earnings 1,737 (1,038 ) — 699 Tax expense (321 ) (427 ) — (748 ) Balance at June 27, 2014 $ (38,665 ) $ 21 $ (51 ) $ (38,695 ) The amounts reclassified out of other comprehensive earnings into the Condensed Consolidated Statements of Earnings, with line item location, during each period were as follows: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (in thousands) 2015 2014 2015 2014 Comprehensive Earnings Components Income (Loss) Before Taxes Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (541 ) $ (579 ) $ (1,623 ) $ (1,737 ) Cost of revenues & Operating expenses Unrealized gain (loss) on cash flow hedging instruments 693 (239 ) 3,441 1,038 Revenues Total amounts reclassified out of other comprehensive earnings $ 152 $ (818 ) $ 1,818 $ (699 ) |
Employee Stock Plans
Employee Stock Plans | 9 Months Ended |
Jul. 03, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock Plans | EMPLOYEE STOCK PLANS The table below summarizes the net share-based compensation expense recognized for employee stock awards and for the option component of the employee stock purchase plan shares: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands) 2015 2014 2015 2014 Cost of revenues - Product $ 1,263 $ 950 $ 3,578 $ 2,374 Cost of revenues - Service 1,066 1,330 3,004 3,392 Research and development 1,717 1,771 5,109 4,392 Selling, general and administrative 7,310 7,363 24,903 19,896 Total share-based compensation expense $ 11,356 $ 11,414 $ 36,594 $ 30,054 Income tax benefit for share-based compensation $ (3,455 ) $ (3,564 ) $ (11,371 ) $ (9,301 ) During the nine months ended July 3, 2015 and June 27, 2014 , the Company granted performance units to certain employees under the Third Amended 2005 Plan. The number of shares of VMS common stock ultimately issued under the performance units at vesting depend on the Company’s business performance during the performance period, against specified performance targets, both of which are set by the Compensation and Management Development Committee of the Board of Directors. The performance units vest at the end of a three -year service period with one three -year performance period for both the Company's and total shareholder return performance grants prior to fiscal year 2015 and a one year Company's performance period and a three year total shareholder return performance period for grants made in fiscal year 2015. Subject to certain exceptions, any unvested performance unit awards are forfeited at the time of termination. The fair value of options granted was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, 2015 2014 2015 2014 Employee Stock Option Plans Expected term (in years) 4.13 — 4.15 4.13 Risk-free interest rate 1.3 % — 1.3 % 1.2 % Expected volatility 21.6 % — 22.1 % 24.6 % Expected dividend 0.0 % — 0.0 % 0.0 % Weighted average fair value at grant date $ 17.16 — $ 18.52 $ 18.23 The option component of employee stock purchase plan shares was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, 2015 2014 2015 2014 Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 0.50 0.50 Risk-free interest rate 0.1 % 0.1 % 0.1 % 0.1 % Expected volatility 17.2 % 11.1 % 12.7 % 12.8 % Expected dividend 0.0 % 0.0 % 0.0 % 0.0 % Weighted average fair value at grant date $ 17.56 $ 14.42 $ 15.87 $ 14.20 A summary of share-based awards available for grant is as follows: (In thousands) Shares Available for Grant Balance at September 26, 2014 8,168 Granted (1,829 ) Cancelled or expired 300 Balance at July 3, 2015 6,639 Awards other than stock options set forth in the table were counted against the shares available for grant limit of the Third Amended 2005 Plan as 2.5 shares for every one share awarded before February 9, 2012 and were counted against the shares available for grant limit as 2.6 shares for every one share awarded on or after February 9, 2012. Activity under the Company’s employee stock plans is presented below: Options Outstanding (In thousands, except per share amounts) Number of Weighted Weighted Aggregate Balance at September 26, 2014 3,343 $ 60.53 Granted 634 92.29 Cancelled or expired (11 ) 87.01 Exercised (1,358 ) 52.88 Balance at July 3, 2015 2,608 $ 72.12 4.3 $ 39,963 Exercisable at July 3, 2015 1,567 $ 61.74 3.0 $ 37,892 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value of options, which is computed based on the difference between the exercise price and VMS’s closing common stock price of $85.91 as of July 2, 2015, the last trading date of the third quarter of fiscal year 2015, and which would have been received by the option holders had all option holders exercised and sold their options as of that date. As of July 3, 2015 , there was $13.6 million of total unrecognized compensation expense related to outstanding stock options. This unrecognized compensation expense is expected to be recognized over a weighted average period of 1.7 years. The activity for restricted stock, restricted stock units, deferred stock units and performance units is summarized as follows: (In thousands, except per share amounts) Number of Weighted Average Balance at September 26, 2014 1,126 $ 72.08 Granted 407 93.09 Vested (496 ) 67.71 Cancelled or expired (81 ) 67.38 Balance at July 3, 2015 956 $ 84.10 As of July 3, 2015 , unrecognized compensation expense totaling $44.3 million was related to awards of restricted stock, restricted stock units, deferred stock units and performance units. This unrecognized compensation expense is expected to be recognized over a weighted average period of 1.8 years. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jul. 03, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic net earnings per share is computed by dividing net earnings attributable to Varian by the weighted average number of shares of VMS common stock outstanding for the period. Diluted net earnings per share is computed by dividing net earnings attributable to Varian by the sum of the weighted average number of common shares outstanding and dilutive common shares under the treasury stock method. The following table sets forth the computation of net basic and diluted earnings per share: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands, except per share amounts) 2015 2014 2015 2014 Net earnings attributable to Varian $ 113,506 $ 107,090 $ 312,789 $ 297,838 Weighted average shares outstanding - basic 99,721 103,644 100,090 104,585 Dilutive effect of potential common shares 733 1,225 930 1,325 Weighted average shares outstanding - diluted 100,454 104,869 101,020 105,910 Net earnings per share attributable to Varian - basic $ 1.14 $ 1.03 $ 3.13 $ 2.85 Net earnings per share attributable to Varian - diluted $ 1.13 $ 1.02 $ 3.10 $ 2.81 Anti-dilutive employee shared based awards, excluded 948 657 994 720 The Company excludes potentially dilutive common shares (consisting of shares underlying stock options and the employee stock purchase plan) from the computation of diluted weighted average shares outstanding if the per share value, either the exercise price of the awards or the sum of (a) the exercise price of the awards and (b) the amount of the compensation cost attributed to future services and not yet recognized and (c) the amount of tax benefit or shortfall that would be recorded in additional paid-in capital when the award becomes deductible, is greater than the average market price of the shares, because the inclusion of the shares underlying these stock awards would be anti-dilutive to earnings per share. |
Business Combination
Business Combination | 9 Months Ended |
Jul. 03, 2015 | |
Business Combinations [Abstract] | |
Business Combination | BUSINESS COMBINATION In January 2015, one of the Company's German subsidiaries formally launched a voluntary public tender offer to acquire MeVis Medical Solutions AG ("MeVis"), a company based in Bremen, Germany that provides image processing software and services for cancer screening. At the end of the second quarter of fiscal year 2015, the Company segregated restricted cash totaling $34.7 million , which represented the expected total payment to acquire non-par value registered shares of MeVis at a price of €17.50 per share if all outstanding shares were tendered. On April 21, 2015, the Company completed the acquisition of 73.5% of the then outstanding shares of MeVis using approximately $25.5 million of the restricted cash, with the remainder then becoming unrestricted. The acquisition was accounted for as a business combination. The following table summarizes the preliminary recording of the fair value of the assets acquired and liabilities assumed as of the acquisition date. (In millions) Fair Value Net tangible assets (1) $ 21.7 Intangible assets with a weighted average useful life of 5.4 years 5.8 Goodwill (2) 8.2 Fair value of net assets 35.7 Less: Noncontrolling interests 10.2 Net assets acquired $ 25.5 (1) Net tangible assets included $13.9 million cash and cash equivalents. (2) Goodwill was primarily attributable to expected synergies resulting from the acquisition. It will not be deductible for income tax purposes in this case. As of July 3, 2015, the fair value assignments were preliminary and they may change upon finalization. The Company intends to acquire additional shares of MeVis as permitted under current agreements and through the framework of German laws. The acquisition of MeVis was integrated into the Company's X-ray tubes and flat panel products reporting unit. Financial results for MeVis are included within the Company's Imaging Components segment since the date of acquisition. The impact of this acquisition was not material to the Consolidated Financial Statements and therefore proforma disclosures have not been presented. |
CPTC Loans
CPTC Loans | 9 Months Ended |
Jul. 03, 2015 | |
Accounting Policies [Abstract] | |
CPTC Loans | CPTC LOANS In September 2011, ORIX and the Company, through its Swiss subsidiary, committed to loan up to $165.3 million (“Tranche A loan”) to CPTC to fund the development, construction and initial operations of the Scripps Proton Therapy Center. ORIX is the loan agent for this facility and, along with CPTC and Scripps, has budgetary approval authority for the Scripps Proton Therapy Center. The Company’s maximum loan commitment under the Tranche A loan was $115.3 million , reflecting the Company’s pro rata share of 69.75% of the obligation to fund the initial distribution and subsequent advances. In June 2014, the Company, through its Swiss subsidiary, entered into a series of agreements, including amending certain terms of the original loan agreement, pursuant to which J.P. Morgan assumed $45.0 million of the Company’s original maximum commitment of $115.3 million , reducing the Company’s maximum commitment under the Tranche A loan to $70.3 million . Pursuant to these agreements, J.P. Morgan purchased $38.1 million of the Company’s outstanding Tranche A loan at par value and was obligated to fund up to an additional $6.9 million of the remaining Tranche A loan commitment. Through these agreements, the Company’s Swiss subsidiary also increased its individual loan commitment by $10.0 million (“Tranche B loan”) and as a result, the Company’s maximum loan commitment under the Tranche A and Tranche B loans (collectively, referred to as the “CPTC Loans”) is $80.3 million reflecting the Company’s pro rata share of 45.8% of the total obligation to fund CPTC of $175.3 million . As of July 3, 2015 , the Company had loaned $71.7 million under the Tranche A loan and had loaned $10.2 million under the Tranche B loan. The amounts loaned under the Tranche A and Tranche B loans include accrued interest. As of July 3, 2015, the Company had no outstanding commitment for further draw downs on the CPTC loans. The Company intends to sell all or a portion of its participation in its Tranche A loan before the maturity date. The CPTC loans are accounted for as available-for-sale securities and recorded at fair value. The Tranche A loan is classified as a short-term investment and included in current assets and the Tranche B loan is included in other assets on the Company’s Condensed Consolidated Balance Sheets. The Tranche B loan is subordinated to the Tranche A loan in the event of default, but otherwise has the same terms as the Tranche A loan. The CPTC Loans are collateralized by all of the assets of the Scripps Proton Therapy Center. Pursuant to the loan agreement, as amended in June 2014, the CPTC Loans mature in September 2017 and bear interest at the London Interbank Offer Rate (“LIBOR”) plus 7.00% per annum with a minimum interest rate of 9.00% per annum. Interest only payments on the CPTC Loans were due monthly in arrears until January 1, 2015, at which time monthly payments based on amortization of the principal balance over a 15 -year period at the above mentioned interest rate became due and payable. To date no amortizing principal payments have been made. ORIX, J.P. Morgan and the Company (collectively the "Lenders") and CPTC continue to operate under the original terms of the loan while CPTC continues to ramp up patient volumes and works with other investors and the Lenders on an additional equity raise and/or modification to the loan terms. During the second and third quarter of fiscal year 2015, CPTC did not draw down on the CPTC Loans and has been operating using the cash generated from the center's operations. The Company has determined that CPTC is a variable interest entity and that the Company holds a significant variable interest of CPTC through its subsidiary’s participation in the loan facility and its agreements to supply and service the proton therapy equipment. The Company has concluded that it is not the primary beneficiary of CPTC. The Company has no voting rights, has no approval authority or veto rights for CPTC’s budget, and does not have the power to direct patient recruitment, clinical operations and management of the Scripps Proton Therapy Center, which the Company believes are the matters that most significantly affect CPTC’s economic performance. As of July 3, 2015 , the Company had recorded $22.5 million in accounts receivable from CPTC, compared to $20.1 million as of September 26, 2014 . As of September 26, 2014 , the outstanding Tranche A loan balance to CPTC was $66.2 million and the outstanding Tranche B loan balance was $9.4 million . The Company’s exposure to loss as a result of its involvement with CPTC is limited to the carrying amounts of these assets on its Condensed Consolidated Balance Sheets. |
Segment Information
Segment Information | 9 Months Ended |
Jul. 03, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company’s operations are grouped into two reportable operating segments: Oncology Systems and Imaging Components. The Imaging Components segment includes the Company’s X-ray imaging tubes and flat panel products, as well as our security and inspection products. The Company’s Ginzton Technology Center ("GTC") and Varian Particle Therapy ("VPT") business are reflected in the “Other” category because these operating segments do not meet the criteria of a reportable operating segment. 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 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 Imaging Components 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, computer-aided diagnostics 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 Imaging Components segment also designs, manufactures, sells and services Linatron ® X-ray accelerators, imaging processing software and image detection products 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 security and inspection 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 Company has two other businesses, VPT and GTC, which are reported together under the “Other” category. 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. 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. The following table summarizes selected operating results information for each reportable segment: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 Revenues Oncology Systems $ 558.7 $ 578.2 $ 1,711.4 $ 1,722.7 Imaging Components 134.7 161.8 456.2 492.0 Total reportable segments 693.4 740.0 2,167.6 2,214.7 Other 90.6 7.7 113.7 23.0 Total company $ 784.0 $ 747.7 $ 2,281.3 $ 2,237.7 Operating Earnings (Loss) Oncology Systems $ 110.6 $ 123.5 $ 362.6 $ 369.3 Imaging Components 23.2 41.7 104.4 124.6 Total reportable segments 133.8 165.2 467.0 493.9 Other 9.8 (12.2 ) (16.5 ) (40.9 ) Corporate 0.6 (10.5 ) (30.8 ) (41.0 ) Total company $ 144.2 $ 142.5 $ 419.7 $ 412.0 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Jul. 03, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT On July 29, 2015, the Company, through one of its subsidiaries , entered into an agreement to acquire Claymount Investments B.V., a Netherlands-based supplier of X-ray imaging components, for approximately $59.0 million in cash. The acquisition closed on August 3, 2015 and will be accounted for as a business combination in the fourth quarter of fiscal year 2015. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 03, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and the accompanying notes are unaudited and should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 26, 2014 (the “2014 Annual Report”). In the opinion of management, the condensed consolidated financial statements herein include adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the Company’s financial position as of July 3, 2015 and September 26, 2014 , results of operations and statements of comprehensive earnings for the three and nine months ended July 3, 2015 and June 27, 2014 , and cash flows for the nine months ended July 3, 2015 and June 27, 2014 . The results of operations for the three and nine months ended July 3, 2015 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. |
Fiscal Year | Fiscal Year The fiscal years of the Company as reported are the 52- or 53- week periods ending on the Friday nearest September 30. Fiscal year 2015 is the 53-week period ending October 2, 2015 , and fiscal year 2014 was the 52-week period ended September 26, 2014 . The fiscal quarters ended July 3, 2015 and June 27, 2014 were both 13-week periods. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include those of VMS and its wholly-owned and majority-owned or controlled subsidiaries. Intercompany balances, transactions and stock holdings have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Recent Accounting Pronouncements or Updates Not Yet Effective | Recent Accounting Pronouncements or Updates Not Yet Effective In July 2015, the Financial Accounting Standards Board (“FASB”) issued an amendment to its accounting guidance related to inventory measurement. The amendment requires inventory measured using first-in, first-out (FIFO) or average cost to be subsequently measured at the lower of cost and net realizable value, thereby simplifying the current guidance that requires an entity to measure inventory at the lower of cost or market. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017 and is required to be adopted prospectively. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In April 2015, the FASB issued an amendment to its accounting guidance related to internal use software. The amendment clarifies that the software license element of a cloud computing arrangements should be accounted for consistent with the acquisition of other software licenses. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment can be adopted either prospectively or retrospectively. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In April 2015, the FASB issued an amendment to its accounting guidance related to retirement benefits. The amendment provides a practical expedient that permits an entity with a fiscal year-end that does not coincide with a month-end to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The amendment also provides a practical expedient that permits an entity that has a significant event in an interim period to remeasure defined benefit plan assets and obligations using the month-end that is closest to the date of the significant event. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017 and is required to be applied on a retrospective basis. Early adoption is permitted. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In March 2015, the FASB issued an amendment to its accounting guidance related to presentation of debt issuance costs. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is not permitted. The amendment is required to be applied on a retrospective basis. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In February 2015, the FASB issued an amendment to its accounting guidance related to consolidation. The amendment modifies the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment permits the use of either the retrospective or cumulative effect transition method. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In June 2014, the FASB issued an amendment to its accounting guidance related to stock-based compensation. The amendment requires that a performance target that could be achieved after the requisite service period be treated as a performance condition that affects vesting, rather than a condition that affects the grant-date fair value. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2017. Early adoption is permitted. The amendment can be applied on a prospective basis to all share-based payments granted or modified on or after the effective date. Entities will also be provided an option to apply the guidance on a modified retrospective basis to existing awards. The amendment is not expected to have a material impact to the Company's consolidated financial statements. In May 2014, the FASB issued an amendment to its accounting guidance related to revenue recognition. The amendment sets forth a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The amendment requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In June 2015, the FASB approved a one-year deferral of the amendment. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2019, with early adoption permitted, but not before the first quarter of fiscal year 2018. The amendment can be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of the initial application along with additional disclosures. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Balance Sheet Components [Abstract] | |
Available-for-sale Securities: | The following tables summarize the Company's available-for-sale securities (in millions): July 3, 2015 Amortized Cost Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 81.9 $ — $ 81.9 Other 8.6 (0.2 ) 8.4 Non-U.S. government security 0.7 (0.1 ) 0.6 $ 91.2 $ (0.3 ) $ 90.9 September 26, 2014 Amortized Cost Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 75.6 $ — $ 75.6 $ 75.6 $ — $ 75.6 |
Inventories: | July 3, September 26, (In millions) 2015 2014 Inventories: Raw materials and parts $ 357.0 $ 296.1 Work-in-process 91.4 124.5 Finished goods 191.7 151.7 Total inventories $ 640.1 $ 572.3 |
Other long-term liabilities: | July 3, September 26, (In millions) 2015 2014 Other long-term liabilities: Long-term income taxes payable $ 43.2 $ 55.2 Long-term deferred income taxes 45.6 31.5 Other 61.2 65.0 Total other long-term liabilities $ 150.0 $ 151.7 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | In the tables below, the Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. Fair Value Measurement Using Quoted Prices in Significant Significant Total Type of Instruments (Level 1) (Level 2) (Level 3) Balance (In millions) Assets at July 3, 2015: Corporate debt securities: CPTC loans $ — $ — $ 81.9 $ 81.9 Other — 8.4 — 8.4 Non-U.S. government security — 0.6 — 0.6 Derivative assets — 1.0 — 1.0 Total assets measured at fair value $ — $ 10.0 $ 81.9 $ 91.9 Liabilities at July 3, 2015: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) Assets at September 26, 2014: Corporate debt securities: CPTC loans $ — $ — $ 75.6 $ 75.6 Derivative assets — 1.5 — 1.5 Total assets measured at fair value $ — $ 1.5 $ 75.6 $ 77.1 Liabilities at September 26, 2014: Contingent consideration $ — $ — $ (7.5 ) $ (7.5 ) Total liabilities measured at fair value $ — $ — $ (7.5 ) $ (7.5 ) |
Reconciliation for Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis | The following table presents the reconciliation for all assets and liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3): (In millions) CPTC Loans Contingent Balance at September 26, 2014 $ 75.6 $ (7.5 ) Additions (1) 6.3 — Settlements (2) — 3.3 Change in fair value recognized in earnings — 0.1 Balance at July 3, 2015 $ 81.9 $ (4.1 ) (1) Amounts reported under CPTC loans include accrued interest. (2) Amounts reported under contingent consideration represent cash payments to settle contingent consideration liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Activity of Goodwill by Reportable Operating Segment | The following table reflects the activity of goodwill by reportable operating segment: Oncology Imaging (In millions) Systems Components Other Total Balance at September 26, 2014 $ 148.3 $ 36.0 $ 56.3 $ 240.6 Business acquisition — 8.2 — 8.2 Foreign currency translation adjustments — — (7.1 ) (7.1 ) Balance at July 3, 2015 $ 148.3 $ 44.2 $ 49.2 $ 241.7 |
Gross Carrying Amount and Accumulated Amortization of Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s intangible assets subject to amortization included in other assets in the Condensed Consolidated Balance Sheets as follows: July 3, September 26, (In millions) 2015 2014 Intangible Assets: Acquired existing technology $ 58.1 $ 54.6 Patents, licenses and other 29.1 28.8 Customer contracts and supplier relationship 14.9 12.4 Accumulated amortization (61.6 ) (56.9 ) Net carrying amount subject to amortization $ 40.5 $ 38.9 |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Fair Value of Derivative Instruments Reported in Condensed Consolidated Balance Sheets | The fair values of derivative instruments reported on the Company’s Condensed Consolidated Balance Sheets were as follows: Asset Derivatives July 3, 2015 September 26, 2014 (In millions) Balance Sheet Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets $ 0.5 $ 1.5 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets 0.5 — Total derivatives $ 1.0 $ 1.5 |
Outstanding Foreign Currency Forward Contracts | The Company had the following outstanding foreign currency forward contracts that were either (i) entered into to hedge balance sheet exposures from its various foreign subsidiaries and business units or (ii) originally designated as cash flow hedge (primarily in Japanese Yen) and were subsequently de-designated when the forecasted revenues were recognized: July 3, 2015 (In millions) Notional Notional Australian Dollar $ 17.3 $ — Brazilian Real 2.8 — British Pound 19.9 — Canadian Dollar — 16.4 Danish Krone 1.7 4.5 Euro 166.4 15.6 Hungarian Forint 7.7 — Indian Rupee 9.2 — Japanese Yen 77.4 — Swiss Franc — 74.7 Totals $ 302.4 $ 111.2 |
Effective Portion of Foreign Currency Forward Contracts Designated as Cash Flow Hedges | The following table presents the amounts, before tax, recognized in accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and in the Condensed Consolidated Statements of Earnings that are related to the effective portion of the foreign currency forward contracts designated as cash flow hedges: Gain (Loss) Recognized in Other Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) Gain (Loss) Reclassified from Accumulated Other Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 2015 2014 2015 2014 Foreign currency forward contracts $ 0.3 $ 0.1 $ 2.3 $ 2.2 Revenues $ 0.7 $ (0.3 ) $ 3.4 $ 1.0 |
Gains (Losses) Related to Foreign Currency Forward Exchange Contracts that are Not Designated as Hedging Instruments | The following table presents the gains (losses) recognized in the Condensed Consolidated Statements of Earnings related to the foreign currency forward exchange contracts that are not designated as hedging instruments: Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Net Earnings on Derivative Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 Selling, general and administrative expenses $ (1.3 ) $ (1.1 ) $ 32.7 $ 0.4 |
Cash Flow Hedging | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Outstanding Foreign Currency Forward Contracts | The Company had the following outstanding foreign currency forward contracts that were entered into to hedge forecasted revenues and designated as cash flow hedges: July 3, 2015 (In millions) Notional Euro $ 20.4 Japanese Yen 0.9 Totals $ 21.3 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued Product Warranty | The following table reflects the changes in the Company’s accrued product warranty: Nine Months Ended July 3, June 27, (In millions) 2015 2014 Accrued product warranty, at beginning of period $ 49.3 $ 53.2 Charged to cost of revenues 33.1 38.8 Actual product warranty expenditures (38.8 ) (41.5 ) Accrued product warranty, at end of period $ 43.6 $ 50.5 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Benefit Costs | The Company’s net defined benefit costs were composed of the following: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands) 2015 2014 2015 2014 Defined Benefit Plans Service cost $ 1,180 $ 1,028 $ 3,551 $ 3,077 Interest cost 1,278 1,545 3,843 4,591 Expected return on plan assets (1,791 ) (1,977 ) (5,385 ) (5,869 ) Amortization of prior service cost 45 43 138 128 Recognized actuarial loss 614 539 1,841 1,616 Net periodic benefit cost $ 1,326 $ 1,178 $ 3,988 $ 3,543 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Earnings (Loss) and Related Tax Effects | The changes in accumulated other comprehensive earnings (loss) by component and related tax effects are summarized as follows: (in thousands) Net Unrealized Gain Net Net Cumulative Accumulated Balance at September 26, 2014 $ (44,060 ) $ — $ 965 $ (15,516 ) $ (58,611 ) Other comprehensive earnings before reclassifications — (320 ) 2,318 (28,348 ) (26,350 ) Amounts reclassified out of other comprehensive earnings 1,623 (3,441 ) — (1,818 ) Tax benefit (expense) (226 ) 102 420 — 296 Balance at July 3, 2015 $ (42,663 ) $ (218 ) $ 262 $ (43,864 ) $ (86,483 ) (in thousands) Net Unrealized Gain Net Cumulative Accumulated Balance at September 27, 2013 $ (40,081 ) $ (691 ) $ 701 $ (40,071 ) Other comprehensive earnings before reclassifications — 2,177 (752 ) 1,425 Amounts reclassified out of other comprehensive earnings 1,737 (1,038 ) — 699 Tax expense (321 ) (427 ) — (748 ) Balance at June 27, 2014 $ (38,665 ) $ 21 $ (51 ) $ (38,695 ) |
Schedule of Amounts Reclassified Out of Other Comprehensive Earnings | The amounts reclassified out of other comprehensive earnings into the Condensed Consolidated Statements of Earnings, with line item location, during each period were as follows: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (in thousands) 2015 2014 2015 2014 Comprehensive Earnings Components Income (Loss) Before Taxes Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (541 ) $ (579 ) $ (1,623 ) $ (1,737 ) Cost of revenues & Operating expenses Unrealized gain (loss) on cash flow hedging instruments 693 (239 ) 3,441 1,038 Revenues Total amounts reclassified out of other comprehensive earnings $ 152 $ (818 ) $ 1,818 $ (699 ) |
Employee Stock Plans (Tables)
Employee Stock Plans (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Net Share-Based Compensation Expense | The table below summarizes the net share-based compensation expense recognized for employee stock awards and for the option component of the employee stock purchase plan shares: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands) 2015 2014 2015 2014 Cost of revenues - Product $ 1,263 $ 950 $ 3,578 $ 2,374 Cost of revenues - Service 1,066 1,330 3,004 3,392 Research and development 1,717 1,771 5,109 4,392 Selling, general and administrative 7,310 7,363 24,903 19,896 Total share-based compensation expense $ 11,356 $ 11,414 $ 36,594 $ 30,054 Income tax benefit for share-based compensation $ (3,455 ) $ (3,564 ) $ (11,371 ) $ (9,301 ) |
Fair Value of Employee Stock Option Plans With Weighted Average Assumptions | The fair value of options granted was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, 2015 2014 2015 2014 Employee Stock Option Plans Expected term (in years) 4.13 — 4.15 4.13 Risk-free interest rate 1.3 % — 1.3 % 1.2 % Expected volatility 21.6 % — 22.1 % 24.6 % Expected dividend 0.0 % — 0.0 % 0.0 % Weighted average fair value at grant date $ 17.16 — $ 18.52 $ 18.23 |
Fair Value of Employee Stock Purchase Plan With Weighted Average Assumptions | The option component of employee stock purchase plan shares was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, 2015 2014 2015 2014 Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 0.50 0.50 Risk-free interest rate 0.1 % 0.1 % 0.1 % 0.1 % Expected volatility 17.2 % 11.1 % 12.7 % 12.8 % Expected dividend 0.0 % 0.0 % 0.0 % 0.0 % Weighted average fair value at grant date $ 17.56 $ 14.42 $ 15.87 $ 14.20 |
Summary of Share-Based Awards Available for Grant | A summary of share-based awards available for grant is as follows: (In thousands) Shares Available for Grant Balance at September 26, 2014 8,168 Granted (1,829 ) Cancelled or expired 300 Balance at July 3, 2015 6,639 |
Activity Under Employee Stock Plans | Activity under the Company’s employee stock plans is presented below: Options Outstanding (In thousands, except per share amounts) Number of Weighted Weighted Aggregate Balance at September 26, 2014 3,343 $ 60.53 Granted 634 92.29 Cancelled or expired (11 ) 87.01 Exercised (1,358 ) 52.88 Balance at July 3, 2015 2,608 $ 72.12 4.3 $ 39,963 Exercisable at July 3, 2015 1,567 $ 61.74 3.0 $ 37,892 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value of options, which is computed based on the difference between the exercise price and VMS’s closing common stock price of $85.91 as of July 2, 2015, the last trading date of the third quarter of fiscal year 2015, and which would have been received by the option holders had all option holders exercised and sold their options as of that date. |
Activity for Restricted Stock, Restricted Stock Units, Deferred Stock Units and Performance Units | The activity for restricted stock, restricted stock units, deferred stock units and performance units is summarized as follows: (In thousands, except per share amounts) Number of Weighted Average Balance at September 26, 2014 1,126 $ 72.08 Granted 407 93.09 Vested (496 ) 67.71 Cancelled or expired (81 ) 67.38 Balance at July 3, 2015 956 $ 84.10 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Net Basic and Diluted Earnings Per Share | The following table sets forth the computation of net basic and diluted earnings per share: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In thousands, except per share amounts) 2015 2014 2015 2014 Net earnings attributable to Varian $ 113,506 $ 107,090 $ 312,789 $ 297,838 Weighted average shares outstanding - basic 99,721 103,644 100,090 104,585 Dilutive effect of potential common shares 733 1,225 930 1,325 Weighted average shares outstanding - diluted 100,454 104,869 101,020 105,910 Net earnings per share attributable to Varian - basic $ 1.14 $ 1.03 $ 3.13 $ 2.85 Net earnings per share attributable to Varian - diluted $ 1.13 $ 1.02 $ 3.10 $ 2.81 Anti-dilutive employee shared based awards, excluded 948 657 994 720 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary recording of the fair value of the assets acquired and liabilities assumed as of the acquisition date. (In millions) Fair Value Net tangible assets (1) $ 21.7 Intangible assets with a weighted average useful life of 5.4 years 5.8 Goodwill (2) 8.2 Fair value of net assets 35.7 Less: Noncontrolling interests 10.2 Net assets acquired $ 25.5 (1) Net tangible assets included $13.9 million cash and cash equivalents. (2) Goodwill was primarily attributable to expected synergies resulting from the acquisition. It will not be deductible for income tax purposes in this case. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jul. 03, 2015 | |
Segment Reporting [Abstract] | |
Operating Results Information for Each Business Segment | The following table summarizes selected operating results information for each reportable segment: Three Months Ended Nine Months Ended July 3, June 27, July 3, June 27, (In millions) 2015 2014 2015 2014 Revenues Oncology Systems $ 558.7 $ 578.2 $ 1,711.4 $ 1,722.7 Imaging Components 134.7 161.8 456.2 492.0 Total reportable segments 693.4 740.0 2,167.6 2,214.7 Other 90.6 7.7 113.7 23.0 Total company $ 784.0 $ 747.7 $ 2,281.3 $ 2,237.7 Operating Earnings (Loss) Oncology Systems $ 110.6 $ 123.5 $ 362.6 $ 369.3 Imaging Components 23.2 41.7 104.4 124.6 Total reportable segments 133.8 165.2 467.0 493.9 Other 9.8 (12.2 ) (16.5 ) (40.9 ) Corporate 0.6 (10.5 ) (30.8 ) (41.0 ) Total company $ 144.2 $ 142.5 $ 419.7 $ 412.0 |
Balance Sheet Components - Avai
Balance Sheet Components - Available-for-Sale Securities (Detail) - USD ($) $ in Millions | Jul. 03, 2015 | Sep. 26, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 91.2 | $ 75.6 |
Gross Unrealized Losses | (0.3) | 0 |
Fair value | 90.9 | 75.6 |
Corporate debt securities: CPTC loans | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 81.9 | 75.6 |
Gross Unrealized Losses | 0 | 0 |
Fair value | 81.9 | $ 75.6 |
Corporate debt securities: Other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8.6 | |
Gross Unrealized Losses | (0.2) | |
Fair value | 8.4 | |
Non-U.S. government security | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 0.7 | |
Gross Unrealized Losses | (0.1) | |
Fair value | $ 0.6 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Jul. 03, 2015 | Sep. 26, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities | $ 90,900,000 | $ 75,600,000 |
Available-for-sale securities, maturity term, greater than | 1 year | |
Other-than-temporary impairment losses, investments, available-for-sale securities | $ 0 | |
Corporate debt securities: CPTC loans | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities | 81,900,000 | 75,600,000 |
Tranche A loan | Short-term Investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities | 71,700,000 | 66,200,000 |
Tranche B loan | Other Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities | $ 10,200,000 | $ 9,400,000 |
Balance Sheet Components - Comp
Balance Sheet Components - Components of Inventories (Detail) - USD ($) $ in Thousands | Jul. 03, 2015 | Sep. 26, 2014 | |
Balance Sheet Components [Abstract] | |||
Raw materials and parts | $ 357,000 | $ 296,100 | |
Work-in-process | 91,400 | 124,500 | |
Finished goods | 191,700 | 151,700 | |
Total inventories | $ 640,101 | $ 572,261 | [1] |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Balance Sheet Components - Co40
Balance Sheet Components - Components of Other Long-Term Liabilities (Detail) - USD ($) $ in Thousands | Jul. 03, 2015 | Sep. 26, 2014 | |
Balance Sheet Components [Abstract] | |||
Long-term income taxes payable | $ 43,200 | $ 55,200 | |
Long-term deferred income taxes | 45,600 | 31,500 | |
Other | 61,200 | 65,000 | |
Total other long-term liabilities | $ 149,999 | $ 151,716 | [1] |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Jul. 03, 2015 | Sep. 26, 2014 |
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | $ 90.9 | $ 75.6 |
Derivative assets | 1 | 1.5 |
Corporate debt securities: CPTC loans | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 81.9 | 75.6 |
Corporate debt securities: Other | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 8.4 | |
Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0.6 | |
Fair Value, Measurements, Recurring | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 1 | 1.5 |
Total assets measured at fair value | 91.9 | 77.1 |
Contingent consideration | (4.1) | (7.5) |
Total liabilities measured at fair value | (4.1) | (7.5) |
Fair Value, Measurements, Recurring | Corporate debt securities: CPTC loans | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 81.9 | 75.6 |
Fair Value, Measurements, Recurring | Corporate debt securities: Other | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 8.4 | |
Fair Value, Measurements, Recurring | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0.6 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities: CPTC loans | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities: Other | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0 | |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 1 | 1.5 |
Total assets measured at fair value | 10 | 1.5 |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities: CPTC loans | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities: Other | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 8.4 | |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0.6 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 0 | 0 |
Total assets measured at fair value | 81.9 | 75.6 |
Contingent consideration | (4.1) | (7.5) |
Total liabilities measured at fair value | (4.1) | (7.5) |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities: CPTC loans | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 81.9 | $ 75.6 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities: Other | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | 0 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities | $ 0 |
Fair Value - Reconciliation for
Fair Value - Reconciliation for Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring $ in Millions | 9 Months Ended |
Jul. 03, 2015USD ($) | |
CPTC Loans | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 75.6 |
Additions | 6.3 |
Settlements | 0 |
Change in fair value recognized in earnings | 0 |
Ending balance | 81.9 |
Contingent Consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | (7.5) |
Additions | 0 |
Settlements | 3.3 |
Change in fair value recognized in earnings | 0.1 |
Ending balance | $ (4.1) |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | Sep. 26, 2014 | [1] | |
Fair Value Disclosures [Abstract] | ||||||
Minimum remaining maturity of derivatives | 1 month | |||||
Maximum remaining maturity of derivatives | 13 months | |||||
Transfers of assets or liabilities between fair value measurement levels | $ 0 | $ 0 | $ 0 | $ 0 | ||
Fair value of current maturities of long-term debt | 50,000,000 | 50,000,000 | $ 50,000,000 | |||
Long-term debt | $ 350,000,000 | $ 350,000,000 | $ 387,500,000 | |||
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Activity of Goodwill by Reportable Operating Segment (Detail) $ in Thousands | 9 Months Ended | |
Jul. 03, 2015USD ($) | ||
Goodwill [Roll Forward] | ||
Balance, beginning | [1] | $ 240,626 |
Business acquisition | 8,200 | |
Foreign currency translation adjustments | (7,100) | |
Balance, ending | 241,734 | |
Oncology Systems | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 148,300 | |
Business acquisition | 0 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 148,300 | |
Imaging Components | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 36,000 | |
Business acquisition | 8,200 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 44,200 | |
Other | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 56,300 | |
Business acquisition | 0 | |
Foreign currency translation adjustments | (7,100) | |
Balance, ending | $ 49,200 | |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Millions | Jul. 03, 2015 | Sep. 26, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (61.6) | $ (56.9) |
Net carrying amount subject to amortization | 40.5 | 38.9 |
Acquired existing technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | 58.1 | 54.6 |
Patents, licenses and other | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | 29.1 | 28.8 |
Customer contracts and supplier relationship | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | $ 14.9 | $ 12.4 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | Sep. 26, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | |||||
Amortization expense for intangible assets | $ 1,800 | $ 1,400 | $ 5,112 | $ 3,259 | |
Future amortization expense, remaining fiscal year 2015 | 3,200 | 3,200 | |||
Future amortization expense, fiscal year 2016 | 9,500 | 9,500 | |||
Future amortization expense, fiscal year 2017 | 8,200 | 8,200 | |||
Future amortization expense, fiscal year 2018 | 6,100 | 6,100 | |||
Future amortization expense, fiscal year 2019 | 5,900 | 5,900 | |||
Future amortization expense, fiscal year 2020 | 4,400 | 4,400 | |||
Future amortization expense, thereafter | 3,200 | 3,200 | |||
In Process Research and Development | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Research and development asset acquired fair value | $ 1,800 | $ 1,800 | $ 2,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2013 | Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | Sep. 26, 2014 | |
dpiX Holding LLC | dpiX Holding LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest in dpiX Holding LLC | 40.00% | 40.00% | ||||
Income (loss) on equity investment in affiliate | $ 0.7 | $ 0.5 | $ 0.1 | |||
Carrying value of the equity investment in dpiX Holding | $ 48 | 48 | $ 49.7 | |||
dpiX LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases of glass transistor arrays from dpiX | 5.6 | $ 5.7 | $ 15.5 | $ 14.9 | ||
Percentage of manufacturing capacity | 50.00% | |||||
Percentage of fixed costs | 50.00% | |||||
Fixed cost commitments | $ 4.4 | $ 4.4 | ||||
dpiX Holding LLC | dpiX LLC | ||||||
Related Party Transaction [Line Items] | ||||||
dpiX Holding LLC's ownership interest in dpiX LLC | 100.00% | 100.00% |
Borrowings - Additional Informa
Borrowings - Additional Information (Detail) | 9 Months Ended | ||||
Jul. 03, 2015JPY (¥) | Jul. 03, 2015USD ($) | Apr. 06, 2015JPY (¥) | Sep. 26, 2014USD ($) | ||
Line Of Credit Facility [Line Items] | |||||
Short-term borrowings | $ 94,451,000 | $ 0 | [1] | ||
Sumitomo Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Loan facility, maximum borrowing capacity | ¥ | ¥ 3,000,000,000 | ||||
Sumitomo credit facility expiration date | Feb. 29, 2016 | ||||
Credit facility accrued interest rate per annum | 0.50% | ||||
Short-term borrowings | ¥ 3,000,000,000 | $ 24,500,000 | 0 | ||
Debt, weighted average interest rate | 0.63% | 0.63% | |||
2013 Credit Agreement | |||||
Line Of Credit Facility [Line Items] | |||||
Date of credit agreement | Aug. 27, 2013 | ||||
Percentage of voting rights pledged | 65.00% | ||||
2013 Credit Agreement | 2013 Term Loan Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Credit facility term | 5 years | ||||
Loan facility, maximum borrowing capacity | $ 500,000,000 | ||||
Loan facility maximum commitment amount | $ 100,000,000 | ||||
Margin added if base rate is based on federal funds rate | 0.50% | 0.50% | |||
Percentage added to Eurodollar base rate before margin | 1.00% | ||||
Debt, long-term and short-term, combined amount | $ 400,000,000 | $ 437,500,000 | |||
Debt, weighted average interest rate | 1.31% | 1.31% | 1.28% | ||
2013 Credit Agreement | 2013 Term Loan Facility | Minimum | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit, interest rate | 1.00% | ||||
Line of credit, interest rate calculation (base rate margin) | 0.00% | ||||
2013 Credit Agreement | 2013 Term Loan Facility | Maximum | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit, interest rate | 1.25% | ||||
Line of credit, interest rate calculation (base rate margin) | 0.25% | ||||
2013 Credit Agreement | Revolving Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Credit facility term | 5 years | ||||
Loan facility, maximum borrowing capacity | $ 300,000,000 | ||||
Loan facility maximum commitment amount | $ 200,000,000 | ||||
Margin added if base rate is based on federal funds rate | 0.50% | 0.50% | |||
Percentage added to Eurodollar base rate before margin | 1.00% | ||||
2013 Credit Agreement | Revolving Credit Facility | Minimum | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit, interest rate | 1.25% | ||||
Line of credit, interest rate calculation (base rate margin) | 0.25% | ||||
2013 Credit Agreement | Revolving Credit Facility | Maximum | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit, interest rate | 1.50% | ||||
Line of credit, interest rate calculation (base rate margin) | 0.50% | ||||
2013 Credit Agreement | Revolving Credit Facility | Letter of Credit | |||||
Line Of Credit Facility [Line Items] | |||||
Loan facility, maximum borrowing capacity | $ 50,000,000 | ||||
2013 Credit Agreement | Revolving Credit Facility | Swing Line Loans | |||||
Line Of Credit Facility [Line Items] | |||||
Loan facility, maximum borrowing capacity | 25,000,000 | ||||
2013 Revolving Credit Facility | Revolving Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Short-term borrowings | $ 70,000,000 | $ 0 | |||
Debt, weighted average interest rate | 1.56% | 1.56% | |||
2013 Revolving Credit Facility | Eurodollar | Revolving Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Credit facility term | 30 days | ||||
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Derivative Instruments and He49
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments Reported in Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Jul. 03, 2015 | Sep. 26, 2014 |
Derivatives Fair Value [Line Items] | ||
Derivative assets | $ 1 | $ 1.5 |
Foreign exchange forward contracts | Derivatives Designated as Hedging Instruments | Prepaid expenses and other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative assets | 0.5 | 1.5 |
Foreign exchange forward contracts | Derivatives Not Designated as Hedging Instrument | Prepaid expenses and other current assets | ||
Derivatives Fair Value [Line Items] | ||
Derivative assets | $ 0.5 | $ 0 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities - Additional Information (Detail) - 9 months ended Jul. 03, 2015 - USD ($) $ in Millions | Total |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Minimum remaining maturity of foreign currency derivatives | 1 month |
Maximum remaining maturity of foreign currency derivatives | 13 months |
Net unrealized gain on derivative instruments, before tax | $ 0.4 |
Derivative, term of contract | 1 month |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Outstanding Foreign Currency Forward Contracts (Detail) - Foreign exchange forward contracts - Cash Flow Hedging $ in Millions | Jul. 03, 2015USD ($) |
Notional Amount of Derivatives [Abstract] | |
Foreign currency, notional values | $ 21.3 |
Euro | |
Notional Amount of Derivatives [Abstract] | |
Foreign currency, notional values | 20.4 |
Japanese Yen | |
Notional Amount of Derivatives [Abstract] | |
Foreign currency, notional values | $ 0.9 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities - Effective Portion of Foreign Currency Forward Contracts Designated as Cash Flow Hedges (Detail) - Foreign currency forward contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | $ 0.3 | $ 0.1 | $ 2.3 | $ 2.2 |
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) | $ 0.7 | $ (0.3) | $ 3.4 | $ 1 |
Derivative Instruments and He53
Derivative Instruments and Hedging Activities - Outstanding Foreign Currency Forward Contracts that Were Entered into to Hedge Balance Sheet Exposures (Detail) $ in Millions | Jul. 03, 2015USD ($) |
Notional Value Sold | |
Derivative [Line Items] | |
Notional Value | $ 302.4 |
Notional Value Sold | Australian Dollar | |
Derivative [Line Items] | |
Notional Value | 17.3 |
Notional Value Sold | Brazilian Real | |
Derivative [Line Items] | |
Notional Value | 2.8 |
Notional Value Sold | British Pound | |
Derivative [Line Items] | |
Notional Value | 19.9 |
Notional Value Sold | Canadian Dollar | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 1.7 |
Notional Value Sold | Euro | |
Derivative [Line Items] | |
Notional Value | 166.4 |
Notional Value Sold | Hungarian Forint | |
Derivative [Line Items] | |
Notional Value | 7.7 |
Notional Value Sold | Indian Rupee | |
Derivative [Line Items] | |
Notional Value | 9.2 |
Notional Value Sold | Japanese Yen | |
Derivative [Line Items] | |
Notional Value | 77.4 |
Notional Value Sold | Swiss Franc | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | |
Derivative [Line Items] | |
Notional Value | 111.2 |
Notional Value Purchased | Australian Dollar | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Brazilian Real | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | British Pound | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Canadian Dollar | |
Derivative [Line Items] | |
Notional Value | 16.4 |
Notional Value Purchased | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 4.5 |
Notional Value Purchased | Euro | |
Derivative [Line Items] | |
Notional Value | 15.6 |
Notional Value Purchased | Hungarian Forint | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Indian Rupee | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Japanese Yen | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Swiss Franc | |
Derivative [Line Items] | |
Notional Value | $ 74.7 |
Derivative Instruments and He54
Derivative Instruments and Hedging Activities - Gains (Losses) Related to Foreign Currency Forward Exchange Contracts that are Not Designated as Hedging Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Derivatives Not Designated as Hedging Instrument | Foreign exchange forward contracts | Selling, general and administrative expenses | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Net Earnings on Derivative not designated as hedging instrument | $ (1.3) | $ (1.1) | $ 32.7 | $ 0.4 |
Commitments and Contingencies -
Commitments and Contingencies - Accrued Product Warranty (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 03, 2015 | Jun. 27, 2014 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 49.3 | $ 53.2 |
Charged to cost of revenues | 33.1 | 38.8 |
Actual product warranty expenditures | (38.8) | (41.5) |
Accrued product warranty, at end of period | $ 43.6 | $ 50.5 |
Commitments and Contingencies56
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jul. 31, 2015USD ($) | Jul. 03, 2015USD ($)installment | Jun. 27, 2014USD ($) | Mar. 28, 2014USD ($) | Jul. 03, 2015USD ($)installment | Jun. 27, 2014USD ($) | Jul. 15, 2015USD ($) | May. 31, 2015USD ($)payment | Sep. 26, 2014USD ($) | Dec. 27, 2013USD ($) | Apr. 30, 2012USD ($) | |
Commitments And Contingencies [Line Items] | |||||||||||
Long term accrued product warranty costs | $ 1,700,000 | $ 1,700,000 | $ 2,000,000 | ||||||||
Environmental cleanup costs, third-party claim costs, project management costs and legal costs | 200,000 | $ 300,000 | 1,000,000 | $ 800,000 | |||||||
Receivables of past and future environmental-related expenditures | 2,100,000 | 2,100,000 | 2,200,000 | ||||||||
Full settlement of the lawsuit to the University of Pittsburgh | 35,600,000 | $ 35,600,000 | |||||||||
Litigation settlement | $ 25,100,000 | ||||||||||
Prepaid royalties | 5,500,000 | 5,500,000 | |||||||||
Loss contingency accrual | $ 5,000,000 | ||||||||||
Enhanced Retirement Program and Workforce Reduction | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Restructuring charges | $ 0 | 13,400,000 | $ 0 | ||||||||
Payments for restructuring charges | 10,900,000 | ||||||||||
Unfavorable Regulatory Action | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 0 | $ 0 | |||||||||
Patents | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Finite-lived intangible asset, useful life | 2 years 6 months | ||||||||||
Cercla sites and one past facility | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated environmental remediation costs, minimum | 1,600,000 | $ 1,600,000 | |||||||||
Estimated environmental remediation costs, maximum | 9,800,000 | 9,800,000 | |||||||||
Amount accrued for environmental remediation expense | 1,600,000 | $ 1,600,000 | |||||||||
Cercla sites and one past facility | Minimum | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 1 year | ||||||||||
Cercla sites and one past facility | Maximum | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 30 years | ||||||||||
Other sites | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated environmental remediation costs, minimum | 5,000,000 | $ 5,000,000 | |||||||||
Estimated environmental remediation costs, maximum | 35,400,000 | 35,400,000 | |||||||||
Amount accrued for environmental remediation expense | $ 7,400,000 | 7,400,000 | |||||||||
Estimated environmental remediation costs, best estimate, undiscounted | $ 9,000,000 | ||||||||||
Discount rate for environmental remediation costs, net of inflation | 4.00% | 4.00% | |||||||||
Other sites | Minimum | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 1 year | ||||||||||
Other sites | Maximum | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 30 years | ||||||||||
dpiX LLC | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Fixed cost commitments | $ 4,400,000 | $ 4,400,000 | |||||||||
Maryland Proton Therapy Center (MPTC) | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Financing receivable, maximum lending commitment | $ 35,000,000 | ||||||||||
Financing receivable, number of annual payments | payment | 3 | ||||||||||
Financing receivable, gross | $ 22,800,000 | $ 22,800,000 | |||||||||
Financing receivable, outstanding commitment, number of installment payments | installment | 4 | 4 | |||||||||
Financing receivable, outstanding commitment, installment payment, amount | $ 5,700,000 | $ 5,700,000 | |||||||||
MM Proton I, LLC | Subsequent Event | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Financing receivable, maximum lending commitment | $ 91,500,000 | ||||||||||
MM Proton I, LLC | Subsequent Event | Financing Receivable, Senior Loan | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Financing receivable, maximum lending commitment | $ 73,000,000 | ||||||||||
Financing receivable, term | 6 years | ||||||||||
MM Proton I, LLC | Subsequent Event | Financing Receivable, Subordinate Loan | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Financing receivable, maximum lending commitment | $ 18,500,000 | ||||||||||
Financing receivable, gross | $ 15,500,000 | ||||||||||
Financing receivable, term | 6 years 6 months | ||||||||||
Fair Value, Measurements, Recurring | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Contingent consideration | 4,100,000 | 4,100,000 | $ 7,500,000 | ||||||||
Siemens AG | Strategic Global Partnership | |||||||||||
Commitments And Contingencies [Line Items] | |||||||||||
Fixed fee committed | 4,500,000 | 4,500,000 | $ 10,000,000 | ||||||||
License fee committed | $ 12,000,000 | $ 12,000,000 | $ 20,000,000 |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Net Periodic Benefit Costs (Detail) - Defined Benefit Plans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1,180 | $ 1,028 | $ 3,551 | $ 3,077 |
Interest cost | 1,278 | 1,545 | 3,843 | 4,591 |
Expected return on plan assets | (1,791) | (1,977) | (5,385) | (5,869) |
Amortization of prior service cost | 45 | 43 | 138 | 128 |
Recognized actuarial loss | 614 | 539 | 1,841 | 1,616 |
Net periodic benefit cost | $ 1,326 | $ 1,178 | $ 3,988 | $ 3,543 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - Defined Benefit Plans $ in Millions | 9 Months Ended |
Jul. 03, 2015USD ($) | |
Retirement Plans [Line Items] | |
Contributions by employer | $ 5.4 |
Expected total contribution to the defined benefit plans for the fiscal year | $ 6.9 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 22.10% | 25.50% | 26.10% | 28.10% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | Jul. 23, 2015 | Jul. 08, 2015 | Apr. 29, 2015 | Apr. 07, 2015 | Mar. 27, 2015 | Jan. 06, 2015 | Nov. 30, 2013 | Aug. 31, 2012 | Jul. 03, 2015 | Jan. 02, 2015 | Dec. 27, 2013 | Jul. 03, 2015 | Jun. 27, 2014 | Aug. 31, 2014 |
January 6, 2015 | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Common stock repurchased and retired, shares | 74,975 | 419,874 | ||||||||||||
Payment for accelerated share repurchase | $ 45 | |||||||||||||
April 7, 2015 | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Common stock repurchased and retired, shares | 151,604 | 592,280 | ||||||||||||
Payment for accelerated share repurchase | $ 70 | |||||||||||||
August 2012 Repurchase Program | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Number of shares authorized to be repurchased by VMS Board of Directors | 8,000,000 | |||||||||||||
Common stock repurchase period | September 29, 2012 through December 31, 2013 | |||||||||||||
Common stock repurchased and retired, shares | 2,000,000 | |||||||||||||
Number of shares remain available for repurchase | 0 | 0 | ||||||||||||
November 2013 Repurchase Program | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Number of shares authorized to be repurchased by VMS Board of Directors | 6,000,000 | |||||||||||||
Common stock repurchase period | December 30, 2013 through December 31, 2014 | |||||||||||||
Common stock repurchased and retired, shares | 250,000 | 3,250,000 | ||||||||||||
Number of shares remain available for repurchase | 0 | 0 | ||||||||||||
August 2014 Repurchase Program | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Number of shares authorized to be repurchased by VMS Board of Directors | 6,000,000 | |||||||||||||
Common stock repurchased and retired, shares | 1,000,000 | 3,074,849 | ||||||||||||
Number of shares remain available for repurchase | 2,925,151 | 2,925,151 | ||||||||||||
Subsequent Event | July 8, 2015 | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Common stock repurchased and retired, shares | 418,167 | |||||||||||||
Payment for accelerated share repurchase | $ 45 | |||||||||||||
Percent of shares expected to be repurchased that have been repurchased | 80.00% | |||||||||||||
Subsequent Event | July 23, 2015 | ||||||||||||||
Shareholders Equity [Line Items] | ||||||||||||||
Common stock repurchased and retired, shares | 400,000 | |||||||||||||
Payment for accelerated share repurchase | $ 43.9 | |||||||||||||
Percent of shares expected to be repurchased that have been repurchased | 80.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Accumulated Other Comprehensive Earnings (Loss) and Related Tax Effects (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ (58,611) | [1] | $ (40,071) |
Other comprehensive earnings before reclassifications | (26,350) | 1,425 | |
Amounts reclassified out of other comprehensive earnings | (1,818) | 699 | |
Tax benefit (expense) | 296 | (748) | |
Ending balance | (86,483) | (38,695) | |
Net Unrealized Gain (Loss) Defined Benefit Pension and Post-Retirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (44,060) | (40,081) | |
Other comprehensive earnings before reclassifications | 0 | 0 | |
Amounts reclassified out of other comprehensive earnings | 1,623 | 1,737 | |
Tax benefit (expense) | (226) | (321) | |
Ending balance | (42,663) | (38,665) | |
Net Unrealized Gain (Loss) Available for Sale Investments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 0 | ||
Other comprehensive earnings before reclassifications | (320) | ||
Tax benefit (expense) | 102 | ||
Ending balance | (218) | ||
Net Unrealized Gains (Losses) Cash Flow Hedging Instruments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 965 | (691) | |
Other comprehensive earnings before reclassifications | 2,318 | 2,177 | |
Amounts reclassified out of other comprehensive earnings | (3,441) | (1,038) | |
Tax benefit (expense) | 420 | (427) | |
Ending balance | 262 | 21 | |
Cumulative Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (15,516) | 701 | |
Other comprehensive earnings before reclassifications | (28,348) | (752) | |
Amounts reclassified out of other comprehensive earnings | 0 | 0 | |
Tax benefit (expense) | 0 | 0 | |
Ending balance | $ (43,864) | $ (51) | |
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Stockholders' Equity - Schedu62
Stockholders' Equity - Schedule of Amounts Reclassified Out of Other Comprehensive Earnings (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Revenues | $ 784,011 | $ 747,685 | $ 2,281,271 | $ 2,237,693 |
Reclassification Out of Other Comprehensive Earnings | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Total amounts reclassified out of other comprehensive earnings | 152 | (818) | 1,818 | (699) |
Reclassification Out of Other Comprehensive Earnings | Unrealized loss on defined benefit pension and post-retirement benefit plans | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Cost of revenues & Operating expenses | (541) | (579) | (1,623) | (1,737) |
Reclassification Out of Other Comprehensive Earnings | Unrealized gain (loss) on cash flow hedging instruments | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Revenues | $ 693 | $ (239) | $ 3,441 | $ 1,038 |
Employee Stock Plans - Net Shar
Employee Stock Plans - Net Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 11,356 | $ 11,414 | $ 36,594 | $ 30,054 |
Income tax benefit for share-based compensation | (3,455) | (3,564) | (11,371) | (9,301) |
Cost of revenues - Product | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 1,263 | 950 | 3,578 | 2,374 |
Cost of revenues - Service | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 1,066 | 1,330 | 3,004 | 3,392 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | 1,717 | 1,771 | 5,109 | 4,392 |
Selling, general and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense | $ 7,310 | $ 7,363 | $ 24,903 | $ 19,896 |
Employee Stock Plans - Fair Val
Employee Stock Plans - Fair Value with Weighted Average Assumptions (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (in years) | 6 months | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.10% | 0.10% | 0.10% | 0.10% |
Expected volatility | 17.20% | 11.10% | 12.70% | 12.80% |
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average fair value at grant date (usd per share) | $ 17.56 | $ 14.42 | $ 15.87 | $ 14.20 |
Employee Stock Option Plans | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected term (in years) | 4 years 1 month 17 days | 4 years 1 month 24 days | 4 years 1 month 17 days | |
Risk-free interest rate | 1.30% | 1.30% | 1.20% | |
Expected volatility | 21.60% | 22.10% | 24.60% | |
Expected dividend | 0.00% | 0.00% | 0.00% | |
Weighted average fair value at grant date (usd per share) | $ 17.16 | $ 18.52 | $ 18.23 |
Employee Stock Plans - Summary
Employee Stock Plans - Summary of Share-Based Awards Available for Grant (Detail) shares in Thousands | 9 Months Ended |
Jul. 03, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | |
Shares Available for Grant, Beginning Balance | 8,168 |
Shares Available for Grant, Granted | (1,829) |
Shares Available for Grant, Cancelled or expired | 300 |
Shares Available for Grant, Ending Balance | 6,639 |
Employee Stock Plans - Addition
Employee Stock Plans - Additional Information (Detail) $ in Millions | 9 Months Ended | |
Jul. 03, 2015USD ($)performance_periodshares | Feb. 08, 2012shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares counted against the available for grant | 2.5 | |
Stock options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation expense related to outstanding stock awards | $ | $ 13.6 | |
Weighted average period unrecognized compensation expense is expected to be recognized, years | 1 year 8 months 16 days | |
Restricted stocks, restricted stock units, deferred stock units and performance units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation expense related to outstanding stock awards | $ | $ 44.3 | |
Weighted average period unrecognized compensation expense is expected to be recognized, years | 1 year 9 months 26 days | |
Third Amended and Restated 2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares counted against the available for grant | 2.6 | |
Third Amended and Restated 2005 Plan | Performance units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award service period | 3 years | |
Number of performance periods | performance_period | 1 | |
Performance period term | 3 years | |
Third Amended and Restated 2005 Plan | Performance units, company performance | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance period term | 1 year | |
Third Amended and Restated 2005 Plan | Performance units, total shareholder return performance | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Performance period term | 3 years |
Employee Stock Plans - Activity
Employee Stock Plans - Activity Under Employee Stock Plans (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Jul. 03, 2015 | Jul. 02, 2015 | |
Number of Shares | ||
Number of Shares, Options Outstanding | 3,343 | |
Number of Shares, Granted | 634 | |
Number of Shares, Cancelled or expired | (11) | |
Number of Shares, Exercised | (1,358) | |
Number of Shares, Options Outstanding | 2,608 | |
Number of Shares, Options Exercisable | 1,567 | |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price, Options Outstanding | $ 60.53 | |
Weighted Average Exercise Price, Granted | 92.29 | |
Weighted Average Exercise Price, Cancelled or expired | 87.01 | |
Weighted Average Exercise Price, Exercised | 52.88 | |
Weighted Average Exercise Price, Options Outstanding | 72.12 | |
Weighted Average Exercise Price, Options Exercisable | $ 61.74 | |
Weighted Average Remaining Contractual Term | ||
Weighted Average Remaining Contractual Term, Option Outstanding | 4 years 3 months 4 days | |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 15 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value, Option Outstanding | $ 39,963 | |
Aggregate Intrinsic Value, Exercisable | $ 37,892 | |
Closing price of VMS common stock | $ 85.91 |
Employee Stock Plans - Activi68
Employee Stock Plans - Activity for Restricted Stock, Restricted Stock Units, Deferred Stock Units and Performance Units (Detail) - 9 months ended Jul. 03, 2015 - $ / shares shares in Thousands | Total |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested Shares, Beginning Balance | 1,126 |
Granted | 407 |
Vested | (496) |
Cancelled or expired | (81) |
Nonvested Shares, Ending Balance | 956 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted Average Grant-Date Fair Value, Beginning Balance | $ 72.08 |
Weighted Average Grant-Date Fair Value, Granted | 93.09 |
Weighted Average Grant-Date Fair Value, Vested | 67.71 |
Weighted Average Grant-Date Fair Value, Cancelled or expired | 67.38 |
Weighted Average Grant-Date Fair Value, Ending Balance | $ 84.10 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Net Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to Varian | $ 113,506 | $ 107,090 | $ 312,789 | $ 297,838 |
Weighted average shares outstanding - basic | 99,721 | 103,644 | 100,090 | 104,585 |
Dilutive effect of potential common shares | 733 | 1,225 | 930 | 1,325 |
Weighted average shares outstanding - diluted | 100,454 | 104,869 | 101,020 | 105,910 |
Net earnings per share attributable to Varian - basic (usd per share) | $ 1.14 | $ 1.03 | $ 3.13 | $ 2.85 |
Net earnings per share attributable to Varian - diluted (usd per share) | $ 1.13 | $ 1.02 | $ 3.10 | $ 2.81 |
Anti-dilutive employee shared based awards, excluded | 948 | 657 | 994 | 720 |
Business Combination - Addition
Business Combination - Additional Information (Detail) - MeVis Medical Solutions AG (MeVis) $ in Millions | Apr. 21, 2015USD ($) | Apr. 21, 2015€ / shares | Apr. 03, 2015USD ($) |
Business Acquisition [Line Items] | |||
Voluntary tender offer, share price | € / shares | € 17.50 | ||
Percent of outstanding shares acquired | 73.50% | ||
Payments to acquire businesses, gross | $ 25.5 | ||
Other Assets | |||
Business Acquisition [Line Items] | |||
Restricted cash to fund the tender offer | $ 34.7 |
Business Combination - Fair Val
Business Combination - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Apr. 21, 2015 | Jul. 03, 2015 | Sep. 26, 2014 | [1] |
Business Acquisition [Line Items] | ||||
Goodwill | $ 241,734 | $ 240,626 | ||
MeVis Medical Solutions AG (MeVis) | ||||
Business Acquisition [Line Items] | ||||
Net tangible assets | $ 21,700 | |||
Intangible assets with a weighted average useful life of 5.4 years | 5,800 | |||
Goodwill | 8,200 | |||
Fair value of net assets | 35,700 | |||
Less: Noncontrolling interests | 10,200 | |||
Net assets acquired | 25,500 | |||
Cash and cash equivalents | $ 13,900 | |||
Finite-lived intangible asset, useful life | 5 years 4 months 24 days | |||
[1] | The condensed consolidated balance sheet as of September 26, 2014 was derived from audited financial statements as of that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
CPTC Loans - Additional Informa
CPTC Loans - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | |||
Jun. 27, 2014 | Sep. 30, 2011 | Jul. 03, 2015 | Sep. 26, 2014 | |
Variable Interest Entity [Line Items] | ||||
Loan facility to CPTC | $ 165.3 | |||
CPTC loan facility, Varian's maximum loan commitment | $ 80.3 | |||
Pro rata share of the Company's obligation to fund the initial distribution and subsequent advances | 45.80% | |||
Available-for-sale securities | $ 90.9 | $ 75.6 | ||
CPTC loan facility, minimum interest rate | 9.00% | |||
CPTC loan facility, amortization period over which monthly payments are calculated after January 1, 2015 | 15 years | |||
Accounts receivable from CPTC, includes unbilled accounts receivable | 22.5 | 20.1 | ||
Tranche A loan | ||||
Variable Interest Entity [Line Items] | ||||
CPTC loan facility, Varian's maximum loan commitment | $ 70.3 | $ 115.3 | ||
Pro rata share of the Company's obligation to fund the initial distribution and subsequent advances | 69.75% | |||
Tranche B loan | ||||
Variable Interest Entity [Line Items] | ||||
CPTC loan facility, Varian's maximum loan commitment | 10 | |||
CPTC | ||||
Variable Interest Entity [Line Items] | ||||
Loan facility to CPTC | 175.3 | |||
J.P. Morgan | Tranche A loan | ||||
Variable Interest Entity [Line Items] | ||||
Sale Of Portion Of Tranche A Loan Commitment | 45 | |||
Sale of a portion of the outstanding Tranche A loan to JP Morgan chase Bank | 38.1 | |||
Remaining obligation to fund Tranche A loan | $ 6.9 | |||
Short-term Investments | Tranche A loan | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities | 71.7 | 66.2 | ||
Other Assets | Tranche B loan | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities | $ 10.2 | $ 9.4 | ||
London Interbank Offered Rate (LIBOR) | ||||
Variable Interest Entity [Line Items] | ||||
CPTC loan facility, interest rate margin | 7.00% |
Segment Information - Additiona
Segment Information - Additional Information (Detail) - 9 months ended Jul. 03, 2015 | businesssegment |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Number Of Businesses Under Other Category | business | 2 |
Segment Information - Operating
Segment Information - Operating Results Information for Each Reportable Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2015 | Jun. 27, 2014 | Jul. 03, 2015 | Jun. 27, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 784,011 | $ 747,685 | $ 2,281,271 | $ 2,237,693 |
Operating Earnings (Loss) | 144,244 | 142,504 | 419,730 | 412,042 |
Operating Segments | Oncology Systems | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 558,700 | 578,200 | 1,711,400 | 1,722,700 |
Operating Earnings (Loss) | 110,600 | 123,500 | 362,600 | 369,300 |
Operating Segments | Imaging Components | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 134,700 | 161,800 | 456,200 | 492,000 |
Operating Earnings (Loss) | 23,200 | 41,700 | 104,400 | 124,600 |
Operating Segments | Total reportable segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 693,400 | 740,000 | 2,167,600 | 2,214,700 |
Operating Earnings (Loss) | 133,800 | 165,200 | 467,000 | 493,900 |
Operating Segments | Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 90,600 | 7,700 | 113,700 | 23,000 |
Operating Earnings (Loss) | 9,800 | (12,200) | (16,500) | (40,900) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating Earnings (Loss) | $ 600 | $ (10,500) | $ (30,800) | $ (41,000) |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ in Millions | Aug. 03, 2015USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Payments to acquire businesses, gross | $ 59 |