Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 01, 2016 | Jan. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 1, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VAR | |
Entity Registrant Name | VARIAN MEDICAL SYSTEMS INC | |
Entity Central Index Key | 203,527 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 95,502,553 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Revenues: | ||
Product | $ 500,526 | $ 475,830 |
Service | 256,607 | 262,024 |
Total revenues | 757,133 | 737,854 |
Cost of revenues: | ||
Product | 343,456 | 305,817 |
Service | 103,985 | 105,029 |
Total cost of revenues | 447,441 | 410,846 |
Gross margin | 309,692 | 327,008 |
Operating expenses: | ||
Research and development | 59,981 | 57,076 |
Selling, general and administrative | 133,061 | 140,482 |
Total operating expenses | 193,042 | 197,558 |
Operating earnings | 116,650 | 129,450 |
Interest income | 3,949 | 3,040 |
Interest expense | (2,230) | (2,045) |
Earnings before taxes | 118,369 | 130,445 |
Taxes on earnings | 29,327 | 37,131 |
Net earnings | 89,042 | 93,314 |
Less: Net earnings attributable to noncontrolling interests | 15 | 0 |
Net earnings attributable to Varian | $ 89,027 | $ 93,314 |
Net earnings per share - basic (in dollars per share) | $ 0.92 | $ 0.93 |
Net earnings per share - diluted (in dollars per share) | $ 0.91 | $ 0.92 |
Shares used in the calculation of net earnings per share: | ||
Weighted average shares outstanding - basic (in shares) | 97,156 | 100,468 |
Weighted average shares outstanding - diluted (in shares) | 97,843 | 101,642 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 89,042 | $ 93,314 |
Defined benefit pension and post-retirement plans: | ||
Amortization of prior service cost included in net periodic benefit cost, net of tax benefit of $45 and $41 | (72) | (38) |
Amortization of net actuarial loss included in net periodic benefit cost, net of tax expense of ($132) and ($116) | 601 | 504 |
Defined benefit pension and post-retirement plans: | 529 | 466 |
Derivative instruments: | ||
Change in unrealized gain (loss), net of tax expense of ($54) and ($284) | 91 | 475 |
Reclassification adjustments, net of tax benefit of $0 and $326 | 0 | (545) |
Derivative instruments: | 91 | (70) |
Available-for-sale securities: | ||
Change in unrealized gain (loss), net of tax benefit of $141 | (299) | 0 |
Reclassification adjustments, net of tax expense of ($193) | 411 | 0 |
Available-for-sale securities: | 112 | 0 |
Currency translation adjustment | (4,653) | (12,290) |
Other comprehensive loss | (3,921) | (11,894) |
Comprehensive earnings | 85,121 | 81,420 |
Less: Comprehensive earnings attributable to noncontrolling interests | 15 | 0 |
Comprehensive earnings attributable to Varian | $ 85,106 | $ 81,420 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Tax on amortization of prior service cost included in net periodic benefit cost | $ 45 | $ 41 |
Tax on amortization of net actuarial loss included in net periodic benefit cost | (132) | (116) |
Tax on increase (decrease) in unrealized gain on derivative instruments | (54) | (284) |
Tax on reclassification adjustment on derivative instruments | 0 | 326 |
Tax on increase (decrease) in unrealized gain (loss) on available for sale securities | 141 | 0 |
Tax on reclassification adjustments on available for sale securities | $ (193) | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 01, 2016 | Oct. 02, 2015 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 953,377 | $ 845,468 | |
Accounts receivable, net of allowance for doubtful accounts of $25,029 at January 1, 2016 and $21,218 at October 2, 2015 | 768,548 | 770,920 | |
Inventories | 613,069 | 612,607 | |
Prepaid expenses and other current assets | 174,693 | 163,984 | |
Deferred tax assets | 130,529 | 132,066 | |
Total current assets | 2,640,216 | 2,525,045 | |
Property, plant and equipment, net | 372,858 | 379,215 | |
Goodwill | 281,773 | 283,452 | |
Other assets | 431,815 | 413,036 | |
Total assets | 3,726,662 | 3,600,748 | |
Current liabilities: | |||
Accounts payable | 173,996 | 202,918 | |
Accrued liabilities | 352,711 | 353,500 | |
Deferred revenues | 502,871 | 489,775 | |
Advance payments from customers | 176,228 | 178,265 | |
Short-term borrowings | 333,249 | 108,446 | |
Current maturities of long-term debt | 50,000 | 50,000 | |
Total current liabilities | 1,589,055 | 1,382,904 | |
Long-term debt and other borrowings | 345,000 | 337,500 | |
Other long-term liabilities | 150,543 | 154,000 | |
Total liabilities | $ 2,084,598 | $ 1,874,404 | |
Commitments and contingencies (Note 9) | |||
Redeemable noncontrolling interests | $ 10,382 | $ 0 | |
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; 95,999 and 98,070 shares issued and outstanding at January 1, 2016 and at October 2, 2015, respectively | 95,999 | 98,070 | |
Capital in excess of par value | 659,865 | 682,167 | |
Retained earnings | 962,324 | 1,017,826 | |
Accumulated other comprehensive loss | (90,384) | (86,463) | |
Total Varian stockholders' equity | 1,627,804 | 1,711,600 | |
Noncontrolling interests | 3,878 | 14,744 | |
Total equity | 1,631,682 | 1,726,344 | |
Total liabilities, redeemable noncontrolling interests and equity | $ 3,726,662 | $ 3,600,748 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 | Jan. 01, 2016 | Oct. 02, 2015 | [1] |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 25,029 | $ 21,218 | |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 | |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred stock, issued (in shares) | 0 | 0 | |
Preferred stock, outstanding (in shares) | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | |
Common stock, shares authorized (in shares) | 189,000,000 | 189,000,000 | |
Common stock, shares issued (in shares) | 95,999,000 | 98,070,000 | |
Common stock, shares outstanding (in shares) | 95,999,000 | 98,070,000 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 | 3 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | ||
Cash flows from operating activities: | |||
Net earnings | $ 89,042 | $ 93,314 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 11,255 | 12,737 | |
Tax benefits from exercises of share-based payment awards | 1,044 | 6,264 | |
Excess tax benefits from share-based compensation | (1,101) | (6,239) | |
Depreciation | 15,483 | 15,424 | |
Amortization of intangible assets | 2,987 | 1,647 | |
Deferred taxes | (3,223) | 14,110 | |
Provision for doubtful accounts receivable | 3,997 | 7,901 | |
Other, net | 1,051 | 217 | |
Changes in assets and liabilities: | |||
Accounts receivable | (29,461) | 43,720 | |
Inventories | (3,989) | (62,149) | |
Prepaid expenses and other assets | (11,956) | (8,035) | |
Accounts payable | (14,177) | (37,012) | |
Accrued liabilities and other long-term liabilities | 5,288 | (25,572) | |
Deferred revenues and advance payments from customers | 10,982 | 22,625 | |
Net cash provided by operating activities | 77,222 | 78,952 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (27,308) | (21,723) | |
Investment in available-for-sale securities | (880) | (942) | |
Sale of available-for-sale securities | 8,638 | 0 | |
Notes receivable | (2,069) | (3,000) | |
Amounts paid to deferred compensation plan trust account | (2,725) | 0 | |
Other | 84 | 87 | |
Net cash used in investing activities | (24,260) | (25,578) | |
Cash flows from financing activities: | |||
Repurchases of common stock | (192,077) | (125,535) | |
Proceeds from issuance of common stock to employees | 15,329 | 34,795 | |
Excess tax benefits from share-based compensation | 1,101 | 6,239 | |
Employees' taxes withheld and paid for restricted stock and restricted stock units | (4,477) | (11,362) | |
Borrowings under credit facility agreement | 75,000 | 0 | |
Repayments under credit facility agreement | (67,500) | (12,500) | |
Net borrowings under credit facility agreements with maturities less than 90 days | 225,000 | 100,000 | |
Contingent consideration and hold back | (2,550) | (734) | |
Other | 0 | 1,774 | |
Net cash provided by (used in) financing activities | 49,826 | (7,323) | |
Effects of exchange rate changes on cash and cash equivalents | 5,121 | 9,033 | |
Net increase in cash and cash equivalents | 107,909 | 55,084 | |
Cash and cash equivalents at beginning of period | 845,468 | [1] | 849,275 |
Cash and cash equivalents at end of period | $ 953,377 | $ 904,359 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 | 3 Months Ended |
Jan. 01, 2016 | |
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”) designs, manufactures, sells and services 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, special 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 October 2, 2015 (the “ 2015 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 January 1, 2016 and October 2, 2015 , results of operations and statements of comprehensive earnings for the three months ended January 1, 2016 and January 2, 2015 , and cash flows for the three months ended January 1, 2016 and January 2, 2015 . The results of operations for the three months ended January 1, 2016 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 2016 is the 52-week period ending September 30, 2016 , and fiscal year 2015 was the 53-week period ended October 2, 2015 . The fiscal quarter ended January 1, 2016 was a 13-week period and the fiscal quarter ended January 2, 2015 was a 14-week period. 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 January 2016, the Financial Accounting Standards Board ("FASB") issued an amendment to its accounting guidance related to recognition and measurement of financial assets and financial liabilities. The amendment addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In November 2015, the FASB issued an amendment to its accounting guidance related to balance sheet classification of deferred taxes. The amendment requires that deferred tax liabilities and assets be classified as noncurrent in the statement of financial position. The amendment affects presentation only and will be effective for the Company beginning in its first quarter of fiscal year 2018. 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 September 2015, the FASB issued a new accounting standard that eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2017. The new guidance is not expected to have a material impact to the Company’s consolidated financial statements. In July 2015, the 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 2018. The new guidance is not expected to have a material impact to the Company’s 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. 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. 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. 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. In August 2015, the FASB further clarified that entities are permitted to defer and present debt issuance costs related to line-of-credit arrangements as assets. These amendments are 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. 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. 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 (i.e., full retrospective adoption) or with the cumulative effect of initially applying the update recognized at the date of the initial application (i.e., modified retrospective adoption) 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 | 3 Months Ended |
Jan. 01, 2016 | |
Balance Sheet Components [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS The following tables summarize the Company's available-for-sale securities (in millions): January 1, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 86.7 $ — $ — $ 86.7 $ 86.7 $ — $ — $ 86.7 October 2, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 83.9 $ — $ — $ 83.9 Other 8.6 0.1 (0.3 ) 8.4 Non-U.S. government security 0.7 — — 0.7 $ 93.2 $ 0.1 $ (0.3 ) $ 93.0 See Note 15, "VPT Loans" for more information on California Proton Treatment Center, LLC (“CPTC”) loans. Available-for-sale securities are included in other assets because their maturity dates are greater than one year, and the Company did not intend to sell all or a portion of its loans in the next twelve months. As of January 1, 2016 , 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. January 1, October 2, (In millions) 2016 2015 Inventories: Raw materials and parts $ 375.9 $ 348.3 Work-in-process 88.4 98.2 Finished goods 148.8 166.1 Total inventories $ 613.1 $ 612.6 January 1, October 2, (In millions) 2016 2015 Other long-term liabilities: Long-term income taxes payable $ 44.8 $ 44.5 Long-term deferred income taxes 42.8 47.5 Other 62.9 62.0 Total other long-term liabilities $ 150.5 $ 154.0 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Jan. 01, 2016 | |
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 January 1, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 86.7 $ 86.7 Derivative assets — 0.2 — 0.2 Total assets measured at fair value $ — $ 0.2 $ 86.7 $ 86.9 Liabilities at January 1, 2016: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) Assets at October 2, 2015: Available-for-sale securities: Corporate debt securities $ — $ 8.4 $ 83.9 $ 92.3 Non-U.S. government security — 0.7 — 0.7 Total assets measured at fair value $ — $ 9.1 $ 83.9 $ 93.0 Liabilities at October 2, 2015: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) The Company's available-for-sale securities are included in other assets, derivative assets are included in prepaid expenses and other current assets, and contingent consideration is included in 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 generally short-term in nature, typically one month to thirteen months in duration. The fair value of the Company’s Level 3 corporate debt securities, the 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 October 2, 2015 $ 83.9 $ (4.1 ) Additions (1) 2.8 — Balance at January 1, 2016 $ 86.7 $ (4.1 ) (1) Amounts reported under CPTC loans include accrued interest. There were no transfers of assets or liabilities between fair value measurement levels during either the three months ended January 1, 2016 , or the three months ended January 2, 2015 . 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, short-term notes receivable, accounts payable, and short-term borrowings approximate their carrying amounts due to their short maturities. As of both January 1, 2016 and October 2, 2015 , 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 $325.0 million and $337.5 million , at January 1, 2016 and October 2, 2015 , 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. The fair value of the outstanding long-term notes receivable approximated their carrying value of $33.0 million and $30.9 million at January 1, 2016 and October 2, 2015 , respectively, because it is based on terms of recent comparable transactions and is categorized as Level 3 in the fair value hierarchy. |
RECEIVABLES
RECEIVABLES | 3 Months Ended |
Jan. 01, 2016 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES The following table summarizes the Company's accounts receivable and notes receivable as of January 1, 2016 and October 2, 2015 : (In millions) January 1, 2016 October 2, 2015 Accounts receivable, gross $ 857.8 $ 838.2 Allowance for doubtful accounts (25.0 ) $ (21.2 ) Accounts receivable, net $ 832.8 $ 817.0 Short-term $ 768.5 $ 770.9 Long-term $ 64.3 $ 46.1 Notes receivable $ 43.0 $ 40.9 Short-term $ 10.0 $ 10.0 Long-term $ 33.0 $ 30.9 A financing receivable represents a financing arrangement with a contractual right to receive money, on demand or on fixed or determinable dates, and that is recognized as an asset on the Company’s Condensed Consolidated Balance Sheets. The Company’s financing receivables consist of accounts receivable with contractual maturities of more than one year and notes receivable. A small portion of the Company's financing accounts receivables were within the short-term accounts receivable. Allowance for doubtful accounts is entirely related to the short-term accounts receivable as of January 1, 2016 and October 2, 2015 . There was no material activity in the allowance for doubtful financing accounts receivable during both the three months ended January 1, 2016 and January 2, 2015 , respectively. See Note 15, "VPT Loans" for more information on the Company's long-term notes receivable balances. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jan. 01, 2016 | |
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: (In millions) Oncology Systems Imaging Components Other Total Balance at October 2, 2015 $ 158.8 $ 74.7 $ 50.0 $ 283.5 Foreign currency translation adjustments — — (1.7 ) (1.7 ) Balance at January 1, 2016 $ 158.8 $ 74.7 $ 48.3 $ 281.8 The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the Condensed Consolidated Balance Sheets: January 1, October 2, (In millions) 2016 2015 Finite-lived intangible assets: Acquired existing technology $ 71.7 $ 71.7 Patents, licenses and other 34.7 35.3 Customer contracts and supplier relationship 20.1 20.1 Accumulated amortization (68.0 ) (65.1 ) Net carrying amount $ 58.5 $ 62.0 As of January 1, 2016 and October 2, 2015 , the Company also had $10.6 million of in-process research and development assets. Amortization expense for intangible assets was $3.0 million and $1.6 million in the three months ended January 1, 2016 and January 2, 2015 , respectively. The Company estimates the amortization expense for the remaining nine months of fiscal year 2016, fiscal years 2017 through 2020, and thereafter, will be as follows (in millions): $10.0 , $13.1 , $9.6 , $9.0 , $7.7 , and $9.1 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jan. 01, 2016 | |
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, for its Oncology Systems’ On-Board Imager ® and PortalVision TM imaging products as well as the imaging system in its Varian Particle Therapy ProBeam ® system. 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 losses of $0.7 million and $0.4 million in the three months ended January 1, 2016 and January 2, 2015 , respectively, from its equity investment in dpiX Holding. 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 on the Condensed Consolidated Balance Sheets, was $47.3 million at both January 1, 2016 and at October 2, 2015 . The Company purchased glass transistor arrays from dpiX totaling $5.0 million and $4.3 million in the three months ended January 1, 2016 and January 2, 2015 , respectively. These purchases of glass transistor arrays are included as a component of inventories on 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 January 1, 2016 , the Company had fixed cost commitments of $18.0 million related to this amended agreement through December 31, 2016. 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. The Company’s exposure to loss as a result of its involvement with dpiX is limited to the carrying value of the Company’s investment and fixed cost commitments. |
BORROWINGS
BORROWINGS | 3 Months Ended |
Jan. 01, 2016 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: January 1, 2016 October 2, 2015 (In millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current maturities of 2013 Term Loan Facility $ 50.0 1.42 % $ 50.0 1.32 % 2013 Revolving Credit Facility 315.0 1.56 % 90.0 1.57 % Sumitomo Credit Facility 18.2 0.63 % 18.4 0.63 % Total short-term debt $ 383.2 $ 158.4 Long-term debt: 2013 Term Loan Facility $ 325.0 1.42 % $ 337.5 1.32 % 2013 Revolving Credit Facility 20.0 3.75 % — — % Total long-term debt $ 345.0 $ 337.5 On August 27, 2013 , VMS entered into an agreement (as amended to date) with certain lenders and Bank of America, N.A. (“BofA”) as administrative agent ("Credit Agreement"). 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 $500 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 . In November 2015, the Company amended its Credit Agreement to increase the aggregate commitments under its revolving credit facility from $300 million to $500 million , reduce commitment fees and interest rate margins applicable to borrowings and increase the maximum consolidated leverage ratio that the Company must maintain. The 2013 Credit Facility contains provisions that limit the Company’s ability to pay cash dividends. The Credit Agreement will expire in August 2018. The proceeds of the 2013 Credit Facility may be used for working capital, capital expenditures, Company share repurchases, acquisitions and other 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 0.875% to 1.125% 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 up to 0.125% 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 1.125% to 1.375% 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 0.125% to 0.375% 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. Subject to certain limitations on the amount secured, the Company has pledged 65% of the voting shares issued by Varian Medical Systems Nederland Holdings B.V., a wholly owned subsidiary, as security for the 2013 Credit Facility. This share pledge also secures all hedging or treasury management obligations entered into by the Company with a Lender. 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 January 1, 2016 , 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 2016, the Sumitomo Credit Facility was extended and will expire in February 2017 . 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. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Jan. 01, 2016 | |
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. The fair values of derivative instruments reported on the Company’s Condensed Consolidated Balance Sheets were as follows: Asset Derivatives January 1, 2016 October 2, 2015 (In millions) Balance Sheet Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets $ 0.2 $ — Total derivatives $ 0.2 $ — At January 1, 2016 and October 2, 2015 , the fair value of the Company's derivatives not designated as hedging instruments was immaterial. 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 2015 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 on 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 January 1, 2016 and October 2, 2015 , 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 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 on 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 instruments that are designated and qualify as cash flow hedges in accumulated other comprehensive loss on 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 time value amounts excluded from the assessment of effectiveness in cost of revenues in the Condensed Consolidated Statements of Earnings. During the three months ended January 1, 2016 , the Company did not discontinue any cash flow hedges. At the inception of the hedge relationship and quarterly after, the Company assesses whether the likelihood of meeting the forecasted cash flow is highly probable. As of January 1, 2016 , all forecasted cash flows were still probable to occur. As of January 1, 2016 , the net unrealized gain on derivative instruments, before tax, of $0.1 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: January 1, 2016 (In millions) Notional Euro $ 49.5 Totals $ 49.5 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 Recognized in Other Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) Gain Reclassified from Accumulated Other Three Months Ended Three Months Ended January 1, January 2, January 1, January 2, (In millions) 2016 2015 2016 2015 Foreign currency forward contracts $ 0.1 $ 0.8 Revenues $ — $ 0.9 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 entered into to hedge balance sheet exposures from its various foreign subsidiaries and business units: January 1, 2016 (In millions) Notional Notional Australian Dollar $ 18.7 $ — Brazilian Real 2.6 — British Pound 47.1 — Canadian Dollar — 5.2 Danish Krone — 0.4 Euro 237.5 1.0 Hungarian Forint 16.2 — Indian Rupee 12.0 — Japanese Yen 64.2 — Swedish Krona 7.6 — Swiss Franc — 72.4 Thai Baht 3.1 — Totals $ 409.0 $ 79.0 The following table presents the gains 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 Recognized in Income on Derivative Amount of Gain Recognized in Net Earnings on Derivative Three Months Ended January 1, January 2, (In millions) 2016 2015 Selling, general and administrative expenses $ 7.4 $ 11.5 The gains or losses on these derivative instruments were significantly offset by the gains or 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 January 1, 2016 and October 2, 2015 , 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 | 3 Months Ended |
Jan. 01, 2016 | |
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: Three Months Ended January 1, January 2, (In millions) 2016 2015 Accrued product warranty, at beginning of period $ 45.9 $ 49.3 Charged to cost of revenues 12.2 9.4 Actual product warranty expenditures (12.0 ) (13.0 ) Accrued product warranty, at end of period $ 46.1 $ 45.7 Long-term accrued product warranty costs of $1.9 million and $2.0 million are included under other long-term liabilities on the Condensed Consolidated Balance Sheets as of January 1, 2016 and October 2, 2015 , respectively. The remaining short-term accrued product warranty is included under accrued liabilities on the Condensed Consolidated Balance Sheets. Other Commitments See Note 15, "VPT Loans" for additional information about the Company's commitments for funding development and construction of various proton therapy centers . Contingencies 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 a small portion of the total amount 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 January 1, 2016 and January 2, 2015 , respectively, on environmental cleanup costs, third-party claim costs, project management costs and legal 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 January 1, 2016 , 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 $1.4 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 January 1, 2016 . Management believes that no amount in that range is more probable of being incurred than any other amount and therefore accrued $1.4 million for these cleanup projects as of January 1, 2016 . 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 January 1, 2016 , 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 $5.3 million to $25.7 million . The time frames over which these costs are estimated to be incurred vary, ranging from one year to thirty years as of January 1, 2016 . 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 $8.7 million at January 1, 2016 . Accordingly, the Company has accrued $7.2 million for these costs, which represents the best estimate discounted at 4% , net of inflation. This accrual is in addition to the $1.4 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 $1.9 million at January 1, 2016 and $2.1 million at October 2, 2015 , with the noncurrent receivables portion included in other assets and the payable portion to that insurer is included in other long-term liabilities on 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. 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). A loss or a range of loss is disclosed when it is reasonably possible that a material loss will be incurred and can be estimated or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision. In September 2015, Elekta Ltd. and William Beaumont Hospital served the Company with a complaint alleging infringement of three patents related to certain aspects of cone beam imaging in conjunction with radiotherapy. During September 2015 and October 2015, the Company filed several complaints in the U.S. and foreign courts and the U.S. International Trade Commission against Elekta AB and its subsidiaries alleging infringement of various patents relating to certain aspects of cone beam imaging, cone-beam imaging gantries, volumetric modulated arc therapy (“VMAT”), and MR-Linac. These lawsuits are in the initial stages and at this time, and the Company is unable to predict the ultimate outcome of this matter. Therefore, no amounts have been accrued as of January 1, 2016 . 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 has requested a judicial review available under Portuguese criminal procedure processes as to whether or not such changes are proper under Portuguese law. 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 January 1, 2016 . In addition to the above, the Company is involved in other legal matters. 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. Legal expenses relating to legal matters are expensed as incurred. Restructuring Charges As part of the Company's plan to enhance operational performance through productivity initiatives, the Company incurred a workforce reduction, primarily in it's Oncology Systems and Imaging Components segments, in the first quarter of fiscal year 2016. The Company incurred $4.8 million in restructuring charges in connection with the above mentioned restructuring program, of which $2.7 million was paid in cash during the three months ended January 1, 2016 . The Company expects to complete the above mentioned restructuring program by the end of fiscal year 2016, and any remaining restructuring charges are not expected to be material. The Company incurred $10.5 million in restructuring charges related to an enhanced retirement program and workforce reduction in fiscal year 2015 during the three months ended January 2, 2015 . |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Jan. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS The Company sponsors seven defined benefit pension plans for regular full time employees in Germany, Japan, Switzerland, the Philippines and the United Kingdom. The Company also sponsors a post-retirement benefit plan that provides healthcare benefits to certain eligible retirees in the United States. Two of the Company's defined benefit pension plans including one in Germany and one in the Philippines and the Company's post-retirement benefit plan are not presented in any of the following information as they are not material. The components of net defined benefit costs were as follows: Three Months Ended January 1, January 2, (In thousands) 2016 2015 Defined Benefit Plans Service cost $ 1,475 $ 1,187 Interest cost 1,040 1,295 Expected return on plan assets (1,739 ) (1,816 ) Amortization of prior service cost 9 47 Recognized actuarial loss 726 614 Net periodic benefit cost $ 1,511 $ 1,327 The Company currently expects total contributions to the defined benefit plans for fiscal year 2016 will be approximately $7.4 million . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate was 24.8% for the three months ended January 1, 2016 , compared to 28.5% for the year-ago period of fiscal year 2015 . The decrease in the Company’s effective tax rate during the three months ended January 1, 2016 compared to the year ago period, was primarily due to the geographic mix of earnings and the reinstatement of the federal research and development tax credit. 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 three months ended January 1, 2016 ; 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 in various jurisdictions. |
STOCKHOLDERS_ EQUITY AND NONCON
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS | 3 Months Ended |
Jan. 01, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS | STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS Share Repurchase Program In November 2015, the VMS Board of Directors authorized the repurchase of an additional 8,000,000 shares of VMS common stock through December 31, 2016. Share repurchases under the Company's authorizations may be made in open market purchases, in privately negotiated transactions (including accelerated share repurchase programs), or under Rule 10b5-1 share repurchase plans, and may be made from time to time in one or more blocks. All shares that were repurchased under the Company's share repurchase programs have been retired. The Company repurchased shares of VMS common stock under various authorizations during the periods presented as follows: Three Months Ended January 1, January 2, (in thousands, except per share amounts) 2016 2015 Number of shares 2,425 1,500 Average repurchase price per share $ 79.20 $ 83.69 Total cost $ 192,077 $ 125,535 As of January 1, 2016 , 7,000,000 shares of VMS common stock remained available for repurchase under the November 2015 authorization. Subsequent to January 1, 2016 , the Company paid $40.4 million and received 519,186 shares of VMS common stock as part of an accelerated share repurchase. 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 Gains Net Net Cumulative Accumulated Balance at October 2, 2015 $ (46,070 ) $ — $ (112 ) $ (40,281 ) $ (86,463 ) Other comprehensive earnings before reclassifications — 145 (440 ) (4,653 ) (4,948 ) Amounts reclassified out of other comprehensive earnings 616 — 604 — 1,220 Tax expense (87 ) (54 ) (52 ) — (193 ) Balance at January 1, 2016 $ (45,541 ) $ 91 $ — $ (44,934 ) $ (90,384 ) (in thousands) Net Unrealized Gain Net Cumulative Accumulated Balance at September 26, 2014 $ (44,060 ) $ 965 $ (15,516 ) $ (58,611 ) Other comprehensive earnings before reclassifications — 759 (12,290 ) (11,531 ) Amounts reclassified out of other comprehensive earnings 541 (871 ) — (330 ) Tax expense (benefit) (75 ) 42 — (33 ) Balance at January 2, 2015 $ (43,594 ) $ 895 $ (27,806 ) $ (70,505 ) 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 January 1, January 2, (in thousands) 2016 2015 Comprehensive Earnings Components Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (616 ) $ (541 ) Cost of revenues & Operating expenses Unrealized gain on cash flow hedging instruments — 871 Revenues Unrealized loss on available-for-sale-investments (604 ) — Operating expenses Total amounts reclassified out of other comprehensive earnings $ (1,220 ) $ 330 Noncontrolling Interests In April 2015, the Company completed the acquisition of 73.5% of the then outstanding shares of MeVis Medical Solutions AG ("MeVis"), a public company based in Bremen, Germany that provides image processing software and services for cancer screening. In August 2015, the Company, through one of its German subsidiaries, entered into a domination and profit and loss transfer agreement (the “DPLTA”) with MeVis. During the three months ended January 1, 2016 , the DPLTA became effective upon its registration at the local court of Bremen, Germany. Under the DPLTA, MeVis subordinates its management to the Company and undertakes to transfer all of its annual profits and losses to the Company. In return, the DPLTA grants the noncontrolling shareholders of MeVis: (1) an annual recurring net compensation of €0.95 per MeVis share starting from January 1, 2015 and (2) a put right for their MeVis shares at €19.77 per MeVis share. Upon effectiveness of the DPLTA, the noncontrolling interests in MeVis became redeemable as a result of the put right and were reclassified to temporary equity. As of January 1, 2016 , the redemption value of redeemable noncontrolling interests in MeVis was $10.4 million . During the three months ended January 1, 2016 , an immaterial number of MeVis' shares were purchased under the put right. As of January 1, 2016 , noncontrolling shareholders together held approximately 482,000 shares of MeVis, representing about 26.5% of the outstanding shares. Changes in noncontrolling interests and redeemable noncontrolling interests relating to MeVis and other subsidiaries of the Company were as follows: (in thousands) Noncontrolling Interests Redeemable Noncontrolling Interests Balance at October 2, 2015 $ 14,744 $ — Net income attributable to noncontrolling interests 15 — Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests (10,382 ) 10,382 Other (499 ) — Balance at January 1, 2016 $ 3,878 $ 10,382 |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 3 Months Ended |
Jan. 01, 2016 | |
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 January 1, January 2, (In thousands) 2016 2015 Cost of revenues - Product $ 991 $ 1,109 Cost of revenues - Service 989 952 Research and development 1,577 1,738 Selling, general and administrative 7,698 8,938 Total share-based compensation expense $ 11,255 $ 12,737 Income tax benefit for share-based compensation $ (3,458 ) $ (3,973 ) During the three months ended January 1, 2016 and January 2, 2015 , 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. Performance units granted prior to fiscal year 2015 have one three -year performance period for both the Company's performance and total shareholder return, performance units granted in fiscal year 2015 have a one year Company performance period and a three year total shareholder return, and performance units awarded in fiscal year 2016 have three separate one -year Company performance periods and a three year total shareholder return. 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 January 1, January 2, 2016 2015 Employee Stock Option Plans Expected term (in years) 4.13 4.52 Risk-free interest rate 1.4 % 1.5 % Expected volatility 20.5 % 22.8 % Expected dividend — % — % Weighted average fair value at grant date $ 15.44 $ 19.20 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 January 1, January 2, 2016 2015 Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 Risk-free interest rate 0.3 % 0.1 % Expected volatility 17.0 % 8.3 % Expected dividend — % — % Weighted average fair value at grant date $ 15.59 $ 14.24 A summary of share-based awards available for grant is as follows: (In thousands) Shares Available for Grant Balance at October 2, 2015 6,661 Granted (378 ) Cancelled or expired 217 Balance at January 1, 2016 6,500 Awards other than stock options set forth in the table were calculated under the Third Amended 2005 Plan as 2.6 shares for every one share awarded. The shares available for grant is further adjusted to reflect a maximum payout that could be issued for each performance unit granted. The maximum payouts that could be issued for each performance unit granted are 1.75 shares beginning in fiscal year 2016, 2.0 shares in fiscal year 2015 and 1.5 shares prior to fiscal year 2015. 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 October 2, 2015 2,537 $ 72.58 Granted 12 80.78 Cancelled or expired (9 ) 86.22 Exercised (133 ) 52.97 Balance at January 1, 2016 2,407 $ 73.65 4.0 $ 26,024 Exercisable at January 1, 2016 1,551 $ 64.75 3.0 $ 25,985 (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 $80.80 as of December 31, 2015, the last trading date of the first quarter of fiscal year 2016 , 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 January 1, 2016 , there was $8.2 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 1.6 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 October 2, 2015 950 $ 84.11 Granted 85 83.42 Vested (153 ) 71.13 Cancelled or expired (57 ) 81.08 Balance at January 1, 2016 825 $ 86.85 As of January 1, 2016 , unrecognized compensation expense totaling $26.9 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 1.7 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 01, 2016 | |
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 basic and diluted net earnings per share: Three Months Ended January 1, January 2, (In thousands, except per share amounts) 2016 2015 Net earnings attributable to Varian $ 89,027 $ 93,314 Weighted average shares outstanding - basic 97,156 100,468 Dilutive effect of potential common shares 687 1,174 Weighted average shares outstanding - diluted 97,843 101,642 Net earnings per share attributable to Varian - basic $ 0.92 $ 0.93 Net earnings per share attributable to Varian - diluted $ 0.91 $ 0.92 Anti-dilutive employee shared based awards, excluded 1,244 504 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. |
VPT LOANS
VPT LOANS | 3 Months Ended |
Jan. 01, 2016 | |
Receivables [Abstract] | |
VPT LOANS | VPT LOANS The following table lists the Company's outstanding loans and commitments for funding development and construction of various proton therapy centers: January 1, 2016 October 2, 2015 (In millions) Balance Commitment Balance Commitment Long-term notes receivable (1) : NYPC loan $ 20.8 $ 70.7 $ 18.7 $ 72.8 MPTC loan 12.2 22.8 12.2 22.8 $ 33.0 $ 93.5 $ 30.9 $ 95.6 Available-for-sale Securities (1) : CPTC loans $ 86.7 $ 3.5 $ 83.9 $ — $ 86.7 $ 3.5 $ 83.9 $ — (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. New York Proton Center ("NYPC") Loan 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 NYPC. The commitment includes a $73.0 million “Senior First Lien Loan” with a six -year term at 9% interest and an $18.5 million “Subordinate Loan” with a six-and-a-half-year term at up to 13.5% interest. The Company's entire commitment of the Subordinate Loan was drawn down in fiscal year 2015. The Company expects the remaining draw downs of the Senior First Lien Loan to take place primarily through fiscal year 2018. Other lenders participating in the NYPC loans include J.P. Morgan and an affiliate of The Goldman Sachs Group, Inc. The Senior First Lien Loan is collateralized by all of the assets of the NYPC. Maryland Proton Therapy Center ("MPTC") Loan In May 2015, the Company, through one of its subsidiaries, committed to loan up to $35.0 million to MPTC, which included rolling over an existing loan for $10.0 million plus $2.2 million of previously accrued interest. 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. The Company's outstanding commitment under the loan to MPTC is 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. The interest on the loan accrues at 12% . As of January 1, 2016 and October 2, 2015 , the Company had recorded $24.0 million and $28.6 million in accounts receivable from MPTC, respectively, which included unbilled accounts receivable. CPTC Loans As of October 2, 2015 , the Company had loaned $73.5 million under a Tranche A loan and $10.4 million under a Tranche B loan to CPTC to fund the development, construction and initial operations of the Scripps Proton Therapy Center in San Diego, California under a loan agreement with ORIX and J.P. Morgan. ORIX is the loan agent for this facility and, along with CPTC and Scripps, has budgetary approval authority for the Scripps Proton Therapy Center. In November 2015, ORIX, J.P. Morgan and the Company (collectively the “Lenders”) and CPTC entered into a forbearance agreement whereby the lenders will not enforce their rights to principal and interest payments until April 2017, subject to CPTC maintaining certain covenants and achieving certain targets, with additional extensions through September 2017 based on hitting additional targets largely around patient volume and cash flow. In connection with the forbearance agreement the Lenders agreed to make available up to an additional $9.7 million of loan proceeds (based on their pro-rata share of the existing loan) with terms similar to the Tranche A loan for additional working capital needs; the Company's proportionate share of this commitment is $4.4 million ("Tranche C loan") and is expected to be drawn down during fiscal year 2016. There were no other significant changes to the loan agreements. The Tranche A, Tranche B and Tranche C loans are collectively, referred to as the “CPTC Loans.” As of January 1, 2016 , the Company had loaned $75.1 million under the Tranche A loan, $10.7 million under the Tranche B loan and $0.9 million under the Tranche C loan and no amounts were available for draw down under the Tranche A and Tranche B loans. The amounts loaned under the CPTC Loans include accrued interest. ORIX has the option to purchase the Company's share of the CPTC loans at par. The CPTC loans meet the definition of a debt security and therefore are accounted for as available-for-sale securities and recorded at fair value as of January 1, 2016 and October 2, 2015 . The Company's CPTC loans are included in other assets on the Company's Condensed Consolidated Balance Sheets as of January 1, 2016 and October 2, 2015 because the Company did not expect to be repaid and did not intend to sell all or a portion of its CPTC loans in the next twelve months. 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. 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 become due and payable. To date no amortizing principal payments have been made. The principal and interest payments are subject to the forbearance agreement mentioned above. As of January 1, 2016 and October 2, 2015 , the Company had recorded $25.3 million and $25.2 million in accounts receivable from CPTC, respectively, which included unbilled accounts receivable. The Company has determined that MM Proton I, LLC, MPTC and CPTC are variable interest entities and that the Company holds a significant variable interest of each of the entities through its participation in the loan facilities and its agreements to supply and service the proton therapy equipment. The Company has concluded that it is not the primary beneficiary of any of these entities. The Company has no voting rights, has no approval authority or veto rights for these centers' budget, and does not have the power to direct patient recruitment, clinical operations and management of these Centers, which the Company believes are the matters that most significantly affect their economic performance. The Company’s exposure to loss as a result of its involvement with MM Proton I, LLC, MPTC and CPTC is limited to the carrying amounts of the above mentioned assets on its Condensed Consolidated Balance Sheets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jan. 01, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s operations are grouped into two reportable operating segments: Oncology Systems and Imaging Components. 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 conventional radiation therapy, and advanced treatments such as fixed field intensity-modulated radiation therapy(“IMRT”), image-guided radiation therapy (“IGRT”), volumetric modulated arc therapy (“VMAT”), stereotactic radiosurgery (“SRS”), stereotactic body radiotherapy(“SBRT”) and brachytherapy. Products include linear accelerators, brachytherapy afterloaders, treatment simulation and verification equipment and accessories; as well as information management, treatment planning and image processing software. Oncology Systems’ products enable radiation oncology departments in hospitals and clinics to perform conventional radiotherapy treatments and offer advanced treatments such as IMRT, IGRT, VMAT, SRS and SBRT, as well as to treat patients using brachytherapy techniques, which involve temporarily implanting radioactive sources. The Company’s Oncology Systems products are also used by neurosurgeons to perform stereotactic radiosurgery. Oncology Systems’ customers worldwide include university research and community hospitals, private and governmental institutions, healthcare agencies, physicians’ offices and cancer care clinics. The 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 provides a broad range of X-ray imaging components including X-ray tubes, flat panel digital image detectors, high voltage connectors, image processing software and workstations, ionization chambers and automatic exposure control systems. The Company’s X-ray imaging components are sold to imaging system OEM customers that incorporate them into their medical diagnostic, dental, veterinary and industrial imaging systems to independent service companies and directly to end-users for replacement purposes. The Imaging Components segment also designs, manufactures, sells and services security and inspection products, which include 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. The Company’s GTC and VPT business 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. The following table summarizes selected operating results information for each reportable segment: Three Months Ended January 1, January 2, (In millions) 2016 2015 Revenues Oncology Systems $ 589.3 $ 563.3 Imaging Components 141.4 166.0 Total reportable segments 730.7 729.3 Other 26.4 8.6 Total company $ 757.1 $ 737.9 Operating Earnings (Loss) Oncology Systems $ 115.2 $ 126.1 Imaging Components 25.2 41.2 Total reportable segments 140.4 167.3 Other (12.3 ) (13.6 ) Corporate (11.4 ) (24.2 ) Total company $ 116.7 $ 129.5 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 01, 2016 | |
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 October 2, 2015 (the “ 2015 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 January 1, 2016 and October 2, 2015 , results of operations and statements of comprehensive earnings for the three months ended January 1, 2016 and January 2, 2015 , and cash flows for the three months ended January 1, 2016 and January 2, 2015 . The results of operations for the three months ended January 1, 2016 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 2016 is the 52-week period ending September 30, 2016 , and fiscal year 2015 was the 53-week period ended October 2, 2015 . The fiscal quarter ended January 1, 2016 was a 13-week period and the fiscal quarter ended January 2, 2015 was a 14-week period. |
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 January 2016, the Financial Accounting Standards Board ("FASB") issued an amendment to its accounting guidance related to recognition and measurement of financial assets and financial liabilities. The amendment addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. The Company is evaluating the impact of adopting this guidance to its consolidated financial statements. In November 2015, the FASB issued an amendment to its accounting guidance related to balance sheet classification of deferred taxes. The amendment requires that deferred tax liabilities and assets be classified as noncurrent in the statement of financial position. The amendment affects presentation only and will be effective for the Company beginning in its first quarter of fiscal year 2018. 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 September 2015, the FASB issued a new accounting standard that eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance will be effective for the Company beginning in its first quarter of fiscal year 2017. The new guidance is not expected to have a material impact to the Company’s consolidated financial statements. In July 2015, the 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 2018. The new guidance is not expected to have a material impact to the Company’s 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. 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. 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. 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. In August 2015, the FASB further clarified that entities are permitted to defer and present debt issuance costs related to line-of-credit arrangements as assets. These amendments are 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. 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. 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 (i.e., full retrospective adoption) or with the cumulative effect of initially applying the update recognized at the date of the initial application (i.e., modified retrospective adoption) 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) | 3 Months Ended |
Jan. 01, 2016 | |
Balance Sheet Components [Abstract] | |
Available-for-sale Securities: | The following tables summarize the Company's available-for-sale securities (in millions): January 1, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 86.7 $ — $ — $ 86.7 $ 86.7 $ — $ — $ 86.7 October 2, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale Securities: Corporate debt securities: CPTC loans $ 83.9 $ — $ — $ 83.9 Other 8.6 0.1 (0.3 ) 8.4 Non-U.S. government security 0.7 — — 0.7 $ 93.2 $ 0.1 $ (0.3 ) $ 93.0 |
Inventories: | January 1, October 2, (In millions) 2016 2015 Inventories: Raw materials and parts $ 375.9 $ 348.3 Work-in-process 88.4 98.2 Finished goods 148.8 166.1 Total inventories $ 613.1 $ 612.6 |
Other long-term liabilities: | January 1, October 2, (In millions) 2016 2015 Other long-term liabilities: Long-term income taxes payable $ 44.8 $ 44.5 Long-term deferred income taxes 42.8 47.5 Other 62.9 62.0 Total other long-term liabilities $ 150.5 $ 154.0 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
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 January 1, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 86.7 $ 86.7 Derivative assets — 0.2 — 0.2 Total assets measured at fair value $ — $ 0.2 $ 86.7 $ 86.9 Liabilities at January 1, 2016: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) Assets at October 2, 2015: Available-for-sale securities: Corporate debt securities $ — $ 8.4 $ 83.9 $ 92.3 Non-U.S. government security — 0.7 — 0.7 Total assets measured at fair value $ — $ 9.1 $ 83.9 $ 93.0 Liabilities at October 2, 2015: Contingent consideration $ — $ — $ (4.1 ) $ (4.1 ) Total liabilities measured at fair value $ — $ — $ (4.1 ) $ (4.1 ) |
Reconciliation for Assets 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 October 2, 2015 $ 83.9 $ (4.1 ) Additions (1) 2.8 — Balance at January 1, 2016 $ 86.7 $ (4.1 ) (1) Amounts reported under CPTC loans include accrued interest. |
Reconciliation for 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 October 2, 2015 $ 83.9 $ (4.1 ) Additions (1) 2.8 — Balance at January 1, 2016 $ 86.7 $ (4.1 ) (1) Amounts reported under CPTC loans include accrued interest. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The following table summarizes the Company's accounts receivable and notes receivable as of January 1, 2016 and October 2, 2015 : (In millions) January 1, 2016 October 2, 2015 Accounts receivable, gross $ 857.8 $ 838.2 Allowance for doubtful accounts (25.0 ) $ (21.2 ) Accounts receivable, net $ 832.8 $ 817.0 Short-term $ 768.5 $ 770.9 Long-term $ 64.3 $ 46.1 Notes receivable $ 43.0 $ 40.9 Short-term $ 10.0 $ 10.0 Long-term $ 33.0 $ 30.9 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
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: (In millions) Oncology Systems Imaging Components Other Total Balance at October 2, 2015 $ 158.8 $ 74.7 $ 50.0 $ 283.5 Foreign currency translation adjustments — — (1.7 ) (1.7 ) Balance at January 1, 2016 $ 158.8 $ 74.7 $ 48.3 $ 281.8 |
Gross Carrying Amount and Accumulated Amortization of Intangible Assets | The following table reflects the gross carrying amount and accumulated amortization of the Company’s finite-lived intangible assets included in other assets in the Condensed Consolidated Balance Sheets: January 1, October 2, (In millions) 2016 2015 Finite-lived intangible assets: Acquired existing technology $ 71.7 $ 71.7 Patents, licenses and other 34.7 35.3 Customer contracts and supplier relationship 20.1 20.1 Accumulated amortization (68.0 ) (65.1 ) Net carrying amount $ 58.5 $ 62.0 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the Company's short-term and long-term debt: January 1, 2016 October 2, 2015 (In millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current maturities of 2013 Term Loan Facility $ 50.0 1.42 % $ 50.0 1.32 % 2013 Revolving Credit Facility 315.0 1.56 % 90.0 1.57 % Sumitomo Credit Facility 18.2 0.63 % 18.4 0.63 % Total short-term debt $ 383.2 $ 158.4 Long-term debt: 2013 Term Loan Facility $ 325.0 1.42 % $ 337.5 1.32 % 2013 Revolving Credit Facility 20.0 3.75 % — — % Total long-term debt $ 345.0 $ 337.5 |
Schedule of Short-term Debt | The following table summarizes the Company's short-term and long-term debt: January 1, 2016 October 2, 2015 (In millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current maturities of 2013 Term Loan Facility $ 50.0 1.42 % $ 50.0 1.32 % 2013 Revolving Credit Facility 315.0 1.56 % 90.0 1.57 % Sumitomo Credit Facility 18.2 0.63 % 18.4 0.63 % Total short-term debt $ 383.2 $ 158.4 Long-term debt: 2013 Term Loan Facility $ 325.0 1.42 % $ 337.5 1.32 % 2013 Revolving Credit Facility 20.0 3.75 % — — % Total long-term debt $ 345.0 $ 337.5 |
DERIVATIVE INSTRUMENTS AND HE30
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 January 1, 2016 October 2, 2015 (In millions) Balance Sheet Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets $ 0.2 $ — Total derivatives $ 0.2 $ — |
Outstanding Foreign Currency Forward Contracts | The Company had the following outstanding foreign currency forward contracts that were entered into to hedge balance sheet exposures from its various foreign subsidiaries and business units: January 1, 2016 (In millions) Notional Notional Australian Dollar $ 18.7 $ — Brazilian Real 2.6 — British Pound 47.1 — Canadian Dollar — 5.2 Danish Krone — 0.4 Euro 237.5 1.0 Hungarian Forint 16.2 — Indian Rupee 12.0 — Japanese Yen 64.2 — Swedish Krona 7.6 — Swiss Franc — 72.4 Thai Baht 3.1 — Totals $ 409.0 $ 79.0 The Company had the following outstanding foreign currency forward contracts that were entered into to hedge forecasted revenues and designated as cash flow hedges: January 1, 2016 (In millions) Notional Euro $ 49.5 Totals $ 49.5 |
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 Recognized in Other Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) Gain Reclassified from Accumulated Other Three Months Ended Three Months Ended January 1, January 2, January 1, January 2, (In millions) 2016 2015 2016 2015 Foreign currency forward contracts $ 0.1 $ 0.8 Revenues $ — $ 0.9 |
Gains (Losses) Related to Foreign Currency Forward Exchange Contracts that are Not Designated as Hedging Instruments | The following table presents the gains 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 Recognized in Income on Derivative Amount of Gain Recognized in Net Earnings on Derivative Three Months Ended January 1, January 2, (In millions) 2016 2015 Selling, general and administrative expenses $ 7.4 $ 11.5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued Product Warranty | The following table reflects the changes in the Company’s accrued product warranty: Three Months Ended January 1, January 2, (In millions) 2016 2015 Accrued product warranty, at beginning of period $ 45.9 $ 49.3 Charged to cost of revenues 12.2 9.4 Actual product warranty expenditures (12.0 ) (13.0 ) Accrued product warranty, at end of period $ 46.1 $ 45.7 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Benefit Costs | The components of net defined benefit costs were as follows: Three Months Ended January 1, January 2, (In thousands) 2016 2015 Defined Benefit Plans Service cost $ 1,475 $ 1,187 Interest cost 1,040 1,295 Expected return on plan assets (1,739 ) (1,816 ) Amortization of prior service cost 9 47 Recognized actuarial loss 726 614 Net periodic benefit cost $ 1,511 $ 1,327 |
STOCKHOLDERS' EQUITY AND NONCON
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Equity [Abstract] | |
Schedule of Share Repurchases | The Company repurchased shares of VMS common stock under various authorizations during the periods presented as follows: Three Months Ended January 1, January 2, (in thousands, except per share amounts) 2016 2015 Number of shares 2,425 1,500 Average repurchase price per share $ 79.20 $ 83.69 Total cost $ 192,077 $ 125,535 |
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 Gains Net Net Cumulative Accumulated Balance at October 2, 2015 $ (46,070 ) $ — $ (112 ) $ (40,281 ) $ (86,463 ) Other comprehensive earnings before reclassifications — 145 (440 ) (4,653 ) (4,948 ) Amounts reclassified out of other comprehensive earnings 616 — 604 — 1,220 Tax expense (87 ) (54 ) (52 ) — (193 ) Balance at January 1, 2016 $ (45,541 ) $ 91 $ — $ (44,934 ) $ (90,384 ) (in thousands) Net Unrealized Gain Net Cumulative Accumulated Balance at September 26, 2014 $ (44,060 ) $ 965 $ (15,516 ) $ (58,611 ) Other comprehensive earnings before reclassifications — 759 (12,290 ) (11,531 ) Amounts reclassified out of other comprehensive earnings 541 (871 ) — (330 ) Tax expense (benefit) (75 ) 42 — (33 ) Balance at January 2, 2015 $ (43,594 ) $ 895 $ (27,806 ) $ (70,505 ) |
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 January 1, January 2, (in thousands) 2016 2015 Comprehensive Earnings Components Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (616 ) $ (541 ) Cost of revenues & Operating expenses Unrealized gain on cash flow hedging instruments — 871 Revenues Unrealized loss on available-for-sale-investments (604 ) — Operating expenses Total amounts reclassified out of other comprehensive earnings $ (1,220 ) $ 330 |
Schedule of Changes In Noncontrolling Interests | Changes in noncontrolling interests and redeemable noncontrolling interests relating to MeVis and other subsidiaries of the Company were as follows: (in thousands) Noncontrolling Interests Redeemable Noncontrolling Interests Balance at October 2, 2015 $ 14,744 $ — Net income attributable to noncontrolling interests 15 — Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests (10,382 ) 10,382 Other (499 ) — Balance at January 1, 2016 $ 3,878 $ 10,382 |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
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 January 1, January 2, (In thousands) 2016 2015 Cost of revenues - Product $ 991 $ 1,109 Cost of revenues - Service 989 952 Research and development 1,577 1,738 Selling, general and administrative 7,698 8,938 Total share-based compensation expense $ 11,255 $ 12,737 Income tax benefit for share-based compensation $ (3,458 ) $ (3,973 ) |
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 January 1, January 2, 2016 2015 Employee Stock Option Plans Expected term (in years) 4.13 4.52 Risk-free interest rate 1.4 % 1.5 % Expected volatility 20.5 % 22.8 % Expected dividend — % — % Weighted average fair value at grant date $ 15.44 $ 19.20 |
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 January 1, January 2, 2016 2015 Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 Risk-free interest rate 0.3 % 0.1 % Expected volatility 17.0 % 8.3 % Expected dividend — % — % Weighted average fair value at grant date $ 15.59 $ 14.24 |
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 October 2, 2015 6,661 Granted (378 ) Cancelled or expired 217 Balance at January 1, 2016 6,500 |
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 October 2, 2015 2,537 $ 72.58 Granted 12 80.78 Cancelled or expired (9 ) 86.22 Exercised (133 ) 52.97 Balance at January 1, 2016 2,407 $ 73.65 4.0 $ 26,024 Exercisable at January 1, 2016 1,551 $ 64.75 3.0 $ 25,985 (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 $80.80 as of December 31, 2015, the last trading date of the first quarter of fiscal year 2016 , 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 October 2, 2015 950 $ 84.11 Granted 85 83.42 Vested (153 ) 71.13 Cancelled or expired (57 ) 81.08 Balance at January 1, 2016 825 $ 86.85 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Net Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted net earnings per share: Three Months Ended January 1, January 2, (In thousands, except per share amounts) 2016 2015 Net earnings attributable to Varian $ 89,027 $ 93,314 Weighted average shares outstanding - basic 97,156 100,468 Dilutive effect of potential common shares 687 1,174 Weighted average shares outstanding - diluted 97,843 101,642 Net earnings per share attributable to Varian - basic $ 0.92 $ 0.93 Net earnings per share attributable to Varian - diluted $ 0.91 $ 0.92 Anti-dilutive employee shared based awards, excluded 1,244 504 |
VPT LOANS (Tables)
VPT LOANS (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
Receivables [Abstract] | |
Schedule Of Loans and Commitments to Fund PT Centers | The following table lists the Company's outstanding loans and commitments for funding development and construction of various proton therapy centers: January 1, 2016 October 2, 2015 (In millions) Balance Commitment Balance Commitment Long-term notes receivable (1) : NYPC loan $ 20.8 $ 70.7 $ 18.7 $ 72.8 MPTC loan 12.2 22.8 12.2 22.8 $ 33.0 $ 93.5 $ 30.9 $ 95.6 Available-for-sale Securities (1) : CPTC loans $ 86.7 $ 3.5 $ 83.9 $ — $ 86.7 $ 3.5 $ 83.9 $ — (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jan. 01, 2016 | |
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 January 1, January 2, (In millions) 2016 2015 Revenues Oncology Systems $ 589.3 $ 563.3 Imaging Components 141.4 166.0 Total reportable segments 730.7 729.3 Other 26.4 8.6 Total company $ 757.1 $ 737.9 Operating Earnings (Loss) Oncology Systems $ 115.2 $ 126.1 Imaging Components 25.2 41.2 Total reportable segments 140.4 167.3 Other (12.3 ) (13.6 ) Corporate (11.4 ) (24.2 ) Total company $ 116.7 $ 129.5 |
BALANCE SHEET COMPONENTS - Avai
BALANCE SHEET COMPONENTS - Available-for-Sale Securities (Detail) - USD ($) $ in Millions | Jan. 01, 2016 | Oct. 02, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 86.7 | $ 93.2 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | 0 | (0.3) |
Fair Value | 86.7 | 93 |
CPTC loans | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 86.7 | 83.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 86.7 | 83.9 |
Other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 8.6 | |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Losses | (0.3) | |
Fair Value | 8.4 | |
Non-U.S. government security | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 0.7 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 0.7 |
BALANCE SHEET COMPONENTS - Comp
BALANCE SHEET COMPONENTS - Components of Inventories (Detail) - USD ($) $ in Thousands | Jan. 01, 2016 | Oct. 02, 2015 | |
Balance Sheet Components [Abstract] | |||
Raw materials and parts | $ 375,900 | $ 348,300 | |
Work-in-process | 88,400 | 98,200 | |
Finished goods | 148,800 | 166,100 | |
Total inventories | $ 613,069 | $ 612,607 | [1] |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 | Jan. 01, 2016 | Oct. 02, 2015 | |
Balance Sheet Components [Abstract] | |||
Long-term income taxes payable | $ 44,800 | $ 44,500 | |
Long-term deferred income taxes | 42,800 | 47,500 | |
Other | 62,900 | 62,000 | |
Total other long-term liabilities | $ 150,543 | $ 154,000 | [1] |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 | Jan. 01, 2016 | Oct. 02, 2015 |
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | $ 86.7 | $ 93 |
Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | 0.7 | |
Fair Value, Measurements, Recurring | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 0.2 | |
Total assets measured at fair value | 86.9 | 93 |
Contingent consideration | (4.1) | (4.1) |
Total liabilities measured at fair value | (4.1) | (4.1) |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | 86.7 | 92.3 |
Fair Value, Measurements, Recurring | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | 0.7 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 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 | Corporate debt securities | ||
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 | 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 | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 0.2 | |
Total assets measured at fair value | 0.2 | 9.1 |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | 0 | 8.4 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs | Non-U.S. government security | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | 0.7 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative assets | 0 | |
Total assets measured at fair value | 86.7 | 83.9 |
Contingent consideration | (4.1) | (4.1) |
Total liabilities measured at fair value | (4.1) | (4.1) |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Available-for-sale securities: | $ 86.7 | 83.9 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | 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 | 3 Months Ended |
Jan. 01, 2016USD ($) | |
CPTC Loans | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 83.9 |
Additions | 2.8 |
Ending balance | 86.7 |
Contingent Consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | (4.1) |
Additions | 0 |
Ending balance | $ (4.1) |
FAIR VALUE - Additional Informa
FAIR VALUE - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2016 | Oct. 02, 2015 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Minimum remaining maturity of derivatives (in months) | 1 month | ||
Maximum remaining maturity of derivatives (in months) | 13 months | ||
Fair value of current maturities of long-term debt | $ 50,000 | $ 50,000 | [1] |
Long-term debt and other borrowings | 345,000 | 337,500 | [1] |
Notes Receivable | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term | 33,000 | 30,900 | |
2013 Term Loan Facility | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term debt and other borrowings | 325,000 | 337,500 | |
2013 Term Loan Facility | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value of current maturities of long-term debt | $ 50,000 | $ 50,000 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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. |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Oct. 02, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | $ 857,800 | $ 838,200 | |
Allowance for doubtful accounts | (25,000) | (21,200) | |
Accounts receivable, net | 832,800 | 817,000 | |
Short-term | 768,548 | 770,920 | [1] |
Long-term | 64,300 | 46,100 | |
Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | 43,000 | 40,900 | |
Short-term | 10,000 | 10,000 | |
Long-term | $ 33,000 | $ 30,900 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 - Activity of Goodwill by Reportable Operating Segment (Detail) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016USD ($) | ||
Goodwill [Roll Forward] | ||
Balance, beginning | $ 283,452 | [1] |
Foreign currency translation adjustments | (1,700) | |
Balance, ending | 281,773 | |
Oncology Systems | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 158,800 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 158,800 | |
Imaging Components | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 74,700 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 74,700 | |
Other | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 50,000 | |
Foreign currency translation adjustments | (1,700) | |
Balance, ending | $ 48,300 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 ASSET46
GOODWILL AND INTANGIBLE ASSETS - Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Millions | Jan. 01, 2016 | Oct. 02, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (68) | $ (65.1) |
Net carrying amount | 58.5 | 62 |
Acquired existing technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | 71.7 | 71.7 |
Patents, licenses and other | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | 34.7 | 35.3 |
Customer contracts and supplier relationship | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | $ 20.1 | $ 20.1 |
GOODWILL AND INTANGIBLE ASSET47
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Oct. 02, 2015 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets | $ 2,987 | $ 1,647 | |
Future amortization expense, fiscal year 2016 | 10,000 | ||
Future amortization expense, fiscal year 2017 | 13,100 | ||
Future amortization expense, fiscal year 2018 | 9,600 | ||
Future amortization expense, fiscal year 2019 | 9,000 | ||
Future amortization expense, fiscal year 2020 | 7,700 | ||
Future amortization expense, thereafter | 9,100 | ||
In Process Research and Development | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Research and development asset acquired fair value | $ 10,600 | $ 10,600 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - dpiX Holding - Affiliated Entity $ in Millions | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2013 | Jan. 01, 2016USD ($)member | Jan. 02, 2015USD ($) | Oct. 02, 2015USD ($) | |
Related Party Transaction [Line Items] | ||||
Ownership interest in dpiX Holding LLC (as a percent) | 40.00% | |||
Number of members | member | 2 | |||
dpiX Holding LLC's ownership interest in dpiX LLC (as a percent) | 100.00% | |||
Loss on equity investment in affiliate | $ (0.7) | $ (0.4) | ||
Carrying value of the equity investment in dpiX Holding | 47.3 | $ 47.3 | ||
Purchases of glass transistor arrays from dpiX | $ 5 | $ 4.3 | ||
Percentage of manufacturing capacity | 50.00% | |||
Percentage of fixed costs | 50.00% | |||
Fixed cost commitments | $ 18 |
BORROWINGS - Schedule of Debt (
BORROWINGS - Schedule of Debt (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Oct. 02, 2015 | |
Debt Instrument [Line Items] | |||
Current maturities of long-term debt | $ 50,000 | $ 50,000 | [1] |
Short-term borrowings | 333,249 | 108,446 | [1] |
Total short-term debt | 383,200 | 158,400 | |
Long-term debt and other borrowings | $ 345,000 | $ 337,500 | [1] |
2013 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 3.75% | 0.00% | |
Long-term debt and other borrowings | $ 20,000 | $ 0 | |
2013 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 1.42% | 1.32% | |
Long-term debt and other borrowings | $ 325,000 | $ 337,500 | |
2013 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Current maturities of long-term debt | $ 50,000 | $ 50,000 | |
Weighted-Average Interest Rate (as a percent) | 1.42% | 1.32% | |
2013 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 1.56% | 1.57% | |
Short-term borrowings | $ 315,000 | $ 90,000 | |
Sumitomo Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 0.63% | 0.63% | |
Short-term borrowings | $ 18,200 | $ 18,400 | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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. |
BORROWINGS - Additional Informa
BORROWINGS - Additional Information (Detail) | 3 Months Ended | |||
Jan. 01, 2016JPY (¥) | Jan. 01, 2016USD ($) | Nov. 30, 2015USD ($) | Aug. 27, 2013USD ($) | |
Sumitomo Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Loan facility, maximum borrowing capacity | ¥ | ¥ 3,000,000,000 | |||
Line of credit, interest rate (as a percent) | 0.50% | |||
Amended 2013 Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage of voting rights pledged | 65.00% | |||
Amended 2013 Credit Facility | 2013 Revolving Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Credit facility term (in years) | 5 years | |||
Loan facility, maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | $ 300,000,000 | |
Amended 2013 Credit Facility | 2013 Revolving Credit Facility | Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Expiration period (in months) | 30 days | |||
Amended 2013 Credit Facility | 2013 Revolving Credit Facility | Letter of Credit | ||||
Line Of Credit Facility [Line Items] | ||||
Loan facility, maximum borrowing capacity | 50,000,000 | |||
Amended 2013 Credit Facility | 2013 Revolving Credit Facility | Swing Line Loans | ||||
Line Of Credit Facility [Line Items] | ||||
Loan facility, maximum borrowing capacity | 25,000,000 | |||
Amended 2013 Credit Facility | 2013 Term Loan Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Credit facility term (in years) | 5 years | |||
Loan facility, maximum borrowing capacity | $ 500,000,000 | |||
Amended 2013 Credit Facility | Eurodollar | 2013 Revolving Credit Facility | Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 1.125% | |||
Amended 2013 Credit Facility | Eurodollar | 2013 Revolving Credit Facility | Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 1.375% | |||
Amended 2013 Credit Facility | Eurodollar | 2013 Term Loan Facility | Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.875% | |||
Amended 2013 Credit Facility | Eurodollar | 2013 Term Loan Facility | Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 1.125% | |||
Amended 2013 Credit Facility | Federal Funds Effective Swap Rate | 2013 Revolving Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.50% | |||
Amended 2013 Credit Facility | Federal Funds Effective Swap Rate | 2013 Term Loan Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.50% | |||
Amended 2013 Credit Facility | Eurodollar1 | 2013 Revolving Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage added to Eurodollar base rate before margin (as a percent) | 1.00% | |||
Amended 2013 Credit Facility | Eurodollar1 | 2013 Revolving Credit Facility | Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.125% | |||
Amended 2013 Credit Facility | Eurodollar1 | 2013 Revolving Credit Facility | Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.375% | |||
Amended 2013 Credit Facility | Eurodollar1 | 2013 Term Loan Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage added to Eurodollar base rate before margin (as a percent) | 1.00% | |||
Amended 2013 Credit Facility | Eurodollar1 | 2013 Term Loan Facility | Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate (as a percent) | 0.125% |
DERIVATIVE INSTRUMENTS AND HE51
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value of Derivative Instruments Reported in Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Jan. 01, 2016 | Oct. 02, 2015 |
Derivatives Fair Value [Line Items] | ||
Total derivatives | $ 0.2 | $ 0 |
Foreign exchange forward contracts | Derivatives designated as hedging instruments: | Prepaid expenses and other current assets | ||
Derivatives Fair Value [Line Items] | ||
Total derivatives | $ 0.2 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE52
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Detail) $ in Millions | 3 Months Ended |
Jan. 01, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Net unrealized gain on derivative instruments, before tax | $ 0.1 |
Derivative, term of contract (in months) | 1 month |
DERIVATIVE INSTRUMENTS AND HE53
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Foreign Currency Forward Contracts (Detail) - Foreign exchange forward contracts - Cash Flow Hedging $ in Millions | Jan. 01, 2016USD ($) |
Notional Amount of Derivatives [Abstract] | |
Notional Value Sold | $ 49.5 |
Euro | |
Notional Amount of Derivatives [Abstract] | |
Notional Value Sold | $ 49.5 |
DERIVATIVE INSTRUMENTS AND HE54
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effective Portion of Foreign Currency Forward Contracts Designated as Cash Flow Hedges (Detail) - Derivatives designated as hedging instruments: - Foreign currency forward contracts - USD ($) $ in Millions | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Derivative [Line Items] | ||
Gain Recognized in Other Comprehensive Income (Effective Portion) | $ 0.1 | $ 0.8 |
Gain Reclassified from Accumulated Other Comprehensive Income into Net Earnings (Effective Portion) | $ 0 | $ 0.9 |
DERIVATIVE INSTRUMENTS AND HE55
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Outstanding Foreign Currency Forward Contracts that Were Entered into to Hedge Balance Sheet Exposures (Detail) - Derivatives Not Designated as Hedging Instrument - Foreign exchange forward contracts $ in Millions | Jan. 01, 2016USD ($) |
Notional Value Sold | |
Derivative [Line Items] | |
Notional Value | $ 409 |
Notional Value Sold | Australian Dollar | |
Derivative [Line Items] | |
Notional Value | 18.7 |
Notional Value Sold | Brazilian Real | |
Derivative [Line Items] | |
Notional Value | 2.6 |
Notional Value Sold | British Pound | |
Derivative [Line Items] | |
Notional Value | 47.1 |
Notional Value Sold | Canadian Dollar | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Euro | |
Derivative [Line Items] | |
Notional Value | 237.5 |
Notional Value Sold | Hungarian Forint | |
Derivative [Line Items] | |
Notional Value | 16.2 |
Notional Value Sold | Indian Rupee | |
Derivative [Line Items] | |
Notional Value | 12 |
Notional Value Sold | Japanese Yen | |
Derivative [Line Items] | |
Notional Value | 64.2 |
Notional Value Sold | Swedish Krona | |
Derivative [Line Items] | |
Notional Value | 7.6 |
Notional Value Sold | Swiss Franc | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Thai Baht | |
Derivative [Line Items] | |
Notional Value | 3.1 |
Notional Value Purchased | |
Derivative [Line Items] | |
Notional Value | 79 |
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 | 5.2 |
Notional Value Purchased | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 0.4 |
Notional Value Purchased | Euro | |
Derivative [Line Items] | |
Notional Value | 1 |
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 | Swedish Krona | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Swiss Franc | |
Derivative [Line Items] | |
Notional Value | 72.4 |
Notional Value Purchased | Thai Baht | |
Derivative [Line Items] | |
Notional Value | $ 0 |
DERIVATIVE INSTRUMENTS AND HE56
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 | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Derivatives Not Designated as Hedging Instrument | Foreign exchange forward contracts | Selling, general and administrative expenses | ||
Derivative [Line Items] | ||
Amount of Gain Recognized in Net Earnings on Derivative | $ 7.4 | $ 11.5 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Accrued Product Warranty (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 45.9 | $ 49.3 |
Charged to cost of revenues | 12.2 | 9.4 |
Actual product warranty expenditures | (12) | (13) |
Accrued product warranty, at end of period | $ 46.1 | $ 45.7 |
COMMITMENTS AND CONTINGENCIES58
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Sep. 30, 2015patent | Jun. 30, 2015tender | Jan. 01, 2016USD ($) | Jan. 02, 2015USD ($) | Oct. 02, 2015USD ($) | |
Commitments And Contingencies [Line Items] | |||||
Percentage of partner responsibility | 33.33% | ||||
Long term accrued product warranty costs | $ 1.9 | $ 2 | |||
Environmental cleanup costs, third-party claim costs, project management costs and legal costs | 0.2 | $ 0.3 | |||
Receivables of past and future environmental-related expenditures | 1.9 | $ 2.1 | |||
Restructuring charges | 4.8 | $ 10.5 | |||
Payments for Restructuring | 2.7 | ||||
Cercla sites and one past facility | |||||
Commitments And Contingencies [Line Items] | |||||
Estimated environmental remediation costs, minimum | 1.4 | ||||
Estimated environmental remediation costs, maximum | 9.8 | ||||
Amount accrued for environmental remediation expense | $ 1.4 | ||||
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 | $ 5.3 | ||||
Estimated environmental remediation costs, maximum | 25.7 | ||||
Amount accrued for environmental remediation expense | 7.2 | ||||
Estimated environmental remediation costs, best estimate, undiscounted | $ 8.7 | ||||
Discount rate for environmental remediation costs, net of inflation (as a percent) | 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 | ||||
Elekta Ltd. | |||||
Commitments And Contingencies [Line Items] | |||||
Number of patents | patent | 3 | ||||
Portugal Investigation | |||||
Commitments And Contingencies [Line Items] | |||||
Number of tenders | tender | 3 |
RETIREMENT PLANS - Schedule of
RETIREMENT PLANS - Schedule of Net Periodic Benefit Costs (Detail) - Defined Benefit Plans - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1,475 | $ 1,187 |
Interest cost | 1,040 | 1,295 |
Expected return on plan assets | (1,739) | (1,816) |
Amortization of prior service cost | 9 | 47 |
Recognized actuarial loss | 726 | 614 |
Net periodic benefit cost | $ 1,511 | $ 1,327 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Detail) $ in Millions | 3 Months Ended |
Jan. 01, 2016USD ($)plan | |
Foreign Pension Plan | |
Retirement Plans [Line Items] | |
Defined Benefit Plan, Number of Plans | 7 |
Defined Benefit Plan, Number Of Immaterial Plans | 2 |
Defined Benefit Plans | |
Retirement Plans [Line Items] | |
Expected total contribution to the defined benefit plans for the fiscal year | $ | $ 7.4 |
GERMANY | Foreign Pension Plan | |
Retirement Plans [Line Items] | |
Defined Benefit Plan, Number Of Immaterial Plans | 1 |
PHILIPPINES | Foreign Pension Plan | |
Retirement Plans [Line Items] | |
Defined Benefit Plan, Number Of Immaterial Plans | 1 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (as a percent) | 24.80% | 28.50% |
STOCKHOLDERS_ EQUITY AND NONC62
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Feb. 08, 2016USD ($)shares | Jan. 01, 2016€ / sharesshares | Jan. 01, 2016USD ($)shares | Jan. 02, 2015USD ($)shares | Nov. 30, 2015shares | Oct. 02, 2015shares | [1] | Apr. 30, 2015 | |
Shareholders Equity [Line Items] | ||||||||
Number of shares authorized to be repurchased by VMS Board of Directors | 8,000,000 | |||||||
Repurchases of common stock | $ | $ 192,077 | $ 125,535 | ||||||
Number of shares remain available for repurchase | 7,000,000 | |||||||
Common stock, shares outstanding (in shares) | 95,999,000 | 98,070,000 | ||||||
Number of shares | 2,425,000 | 1,500,000 | ||||||
Subsequent Event | January 2016 | ||||||||
Shareholders Equity [Line Items] | ||||||||
Repurchases of common stock | $ | $ 40,400 | |||||||
Number of shares | 519,186 | |||||||
Noncontrolling Interests | ||||||||
Shareholders Equity [Line Items] | ||||||||
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests | $ | $ 10,382 | |||||||
MeVis Medical Solutions AG (MeVis) | ||||||||
Shareholders Equity [Line Items] | ||||||||
Annual recurring compensation (in euro per share) | € / shares | € 0.95 | |||||||
Put right (in euro per share) | € / shares | € 19.77 | |||||||
Percentage of voting interest acquired | 73.50% | |||||||
MeVis Medical Solutions AG (MeVis) | Noncontrolling Interests | ||||||||
Shareholders Equity [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 482,000 | |||||||
Noncontrolling interest (as a percent) | 26.50% | |||||||
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 AND NONC63
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS - Shares Repurchased During Period (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Equity [Abstract] | ||
Number of shares | 2,425 | 1,500 |
Average repurchase price per share (in dollars per share) | $ 79.20 | $ 83.69 |
Total cost | $ 192,077 | $ 125,535 |
STOCKHOLDERS_ EQUITY AND NONC64
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS - Schedule of Accumulated Other Comprehensive Earnings (Loss) and Related Tax Effects (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | [1] | $ 1,726,344 | |
Balance at end of period | 1,631,682 | ||
Net Unrealized Gains (Losses) Defined Benefit Pension and Post-Retirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (46,070) | $ (44,060) | |
Other comprehensive earnings before reclassifications | 0 | 0 | |
Amounts reclassified out of other comprehensive earnings | 616 | 541 | |
Tax expense (benefit) | (87) | (75) | |
Balance at end of period | (45,541) | (43,594) | |
Net Unrealized Gains (Losses) Cash Flow Hedging Instruments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 0 | 965 | |
Other comprehensive earnings before reclassifications | 145 | 759 | |
Amounts reclassified out of other comprehensive earnings | 0 | (871) | |
Tax expense (benefit) | (54) | 42 | |
Balance at end of period | 91 | 895 | |
Net Unrealized Gains (Losses) Available for Sale Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (112) | ||
Other comprehensive earnings before reclassifications | (440) | ||
Amounts reclassified out of other comprehensive earnings | 604 | ||
Tax expense (benefit) | (52) | ||
Balance at end of period | 0 | ||
Cumulative Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (40,281) | (15,516) | |
Other comprehensive earnings before reclassifications | (4,653) | (12,290) | |
Amounts reclassified out of other comprehensive earnings | 0 | 0 | |
Tax expense (benefit) | 0 | 0 | |
Balance at end of period | (44,934) | (27,806) | |
Accumulated Other Comprehensive Earnings (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (86,463) | (58,611) | |
Other comprehensive earnings before reclassifications | (4,948) | (11,531) | |
Amounts reclassified out of other comprehensive earnings | 1,220 | (330) | |
Tax expense (benefit) | (193) | (33) | |
Balance at end of period | $ (90,384) | $ (70,505) | |
[1] | The condensed consolidated balance sheet as of October 2, 2015 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 AND NONC65
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS - Schedule of Amounts Reclassified Out of Other Comprehensive Earnings (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Unrealized loss on defined benefit pension and post-retirement benefit plans | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 616 | $ 541 |
Unrealized gain on cash flow hedging instruments | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | (871) |
Unrealized loss on available-for-sale-investments | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 604 | |
Total amounts reclassified out of other comprehensive earnings | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 1,220 | (330) |
Cost of revenues & Operating expenses | Unrealized loss on defined benefit pension and post-retirement benefit plans | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (616) | (541) |
Revenues | Unrealized gain on cash flow hedging instruments | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | (871) |
Operating expenses | Unrealized loss on available-for-sale-investments | ||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 604 | $ 0 |
STOCKHOLDERS_ EQUITY AND NONC66
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS - Noncontrolling interests (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | [1] | $ 1,726,344 | |
Net income attributable to noncontrolling interests | (15) | $ 0 | |
Balance at end of period | 1,631,682 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Net income attributable to noncontrolling interests | 0 | ||
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests | 10,382 | ||
Balance at end of period | 10,382 | ||
Noncontrolling Interests | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | 14,744 | ||
Net income attributable to noncontrolling interests | 15 | ||
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests | (10,382) | ||
Other | (499) | ||
Balance at end of period | $ 3,878 | ||
[1] | The condensed consolidated balance sheet as of October 2, 2015 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. |
EMPLOYEE STOCK PLANS - Net Shar
EMPLOYEE STOCK PLANS - Net Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 11,255 | $ 12,737 |
Income tax benefit for share-based compensation | (3,458) | (3,973) |
Cost of revenues - Product | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 991 | 1,109 |
Cost of revenues - Service | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 989 | 952 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 1,577 | 1,738 |
Selling, general and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 7,698 | $ 8,938 |
EMPLOYEE STOCK PLANS - Addition
EMPLOYEE STOCK PLANS - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jan. 01, 2016USD ($)performance_periodshares | Oct. 02, 2015 | Sep. 26, 2014performance_period | Dec. 31, 2015$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share price (in dollars per share) | $ / shares | $ 80.80 | |||
Stock options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation expense related to outstanding stock awards | $ | $ 8.2 | |||
Weighted average period unrecognized compensation expense is expected to be recognized, years | 1 year 6 months 26 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 | $ | $ 26.9 | |||
Weighted average period unrecognized compensation expense is expected to be recognized, years | 1 year 7 months 28 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 (in shares) | 2.6 | |||
Third Amended and Restated 2005 Plan | Performance units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Award service period (in years) | 3 years | |||
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] | ||||
Number of performance periods | performance_period | 3 | 1 | ||
Performance period term | 1 year | 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 | 3 years | ||
Beginning Fiscal Year 2016 | Third Amended 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Ratio of maximum payout (in shares) | 1.75 | |||
Beginning In Fiscal 2015 | Third Amended 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Ratio of maximum payout (in shares) | 2 | |||
Before Fiscal Year 2015 | Third Amended 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Ratio of maximum payout (in shares) | 1.5 |
EMPLOYEE STOCK PLANS - Fair Val
EMPLOYEE STOCK PLANS - Fair Value with Weighted Average Assumptions (Detail) - $ / shares | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | 6 months |
Risk-free interest rate (as a percent) | 0.30% | 0.10% |
Expected volatility (as a percent) | 17.00% | 8.30% |
Expected dividend (as a percent) | 0.00% | 0.00% |
Weighted average fair value at grant date (dollars per share) | $ 15.59 | $ 14.24 |
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 6 months 7 days |
Risk-free interest rate (as a percent) | 1.40% | 1.50% |
Expected volatility (as a percent) | 20.50% | 22.80% |
Expected dividend (as a percent) | 0.00% | 0.00% |
Weighted average fair value at grant date (dollars per share) | $ 15.44 | $ 19.20 |
EMPLOYEE STOCK PLANS - Summary
EMPLOYEE STOCK PLANS - Summary of Share-Based Awards Available for Grant (Detail) shares in Thousands | 3 Months Ended |
Jan. 01, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant [Roll Forward] | |
Balance at beginning of period (in shares) | 6,661 |
Granted (in shares) | (378) |
Cancelled or expired (in shares) | 217 |
Balance at end of period (in shares) | 6,500 |
EMPLOYEE STOCK PLANS - Activity
EMPLOYEE STOCK PLANS - Activity Under Employee Stock Plans (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Jan. 01, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 2,537 |
Granted (in shares) | shares | 12 |
Cancelled or expired (in shares) | shares | (9) |
Exercised (in shares) | shares | (133) |
Balance at end of period (in shares) | shares | 2,407 |
Exercisable (in shares) | shares | 1,551 |
Weighted Average Exercise Price | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 72.58 |
Granted (in dollars per share) | $ / shares | 80.78 |
Cancelled or expired (in dollars per share) | $ / shares | 86.22 |
Exercised (in dollars per share) | $ / shares | 52.97 |
Balance at end of period (in dollars per share) | $ / shares | 73.65 |
Exercisable (in dollars per share) | $ / shares | $ 64.75 |
Weighted Average Remaining Term (in years) | |
Balance at end of period (in years) | 3 years 11 months 27 days |
Exercisable (in years) | 2 years 11 months 19 days |
Aggregate Intrinsic Value (1) | |
Balance at end of period | $ | $ 26,024 |
Exercisable | $ | $ 25,985 |
EMPLOYEE STOCK PLANS - Activi72
EMPLOYEE STOCK PLANS - Activity for Restricted Stock, Restricted Stock Units, Deferred Stock Units and Performance Units (Detail) shares in Thousands | 3 Months Ended |
Jan. 01, 2016$ / sharesshares | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 950 |
Granted (in shares) | shares | 85 |
Vested (in shares) | shares | (153) |
Cancelled or expired (in shares) | shares | (57) |
Balance at end of period (in shares) | shares | 825 |
Weighted Average Grant-Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 84.11 |
Granted (in dollars per share) | $ / shares | 83.42 |
Vested (in dollars per share) | $ / shares | 71.13 |
Cancelled or expired (in dollars per share) | $ / shares | 81.08 |
Balance at end of period (in dollars per share) | $ / shares | $ 86.85 |
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 | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Earnings Per Share [Abstract] | ||
Net earnings attributable to Varian | $ 89,027 | $ 93,314 |
Weighted average shares outstanding - basic (in shares) | 97,156 | 100,468 |
Dilutive effect of potential common shares (in shares) | 687 | 1,174 |
Weighted average shares outstanding - diluted (in shares) | 97,843 | 101,642 |
Net earnings per share - basic (in dollars per share) | $ 0.92 | $ 0.93 |
Net earnings per share - diluted (in dollars per share) | $ 0.91 | $ 0.92 |
Anti-dilutive employee shared based awards, excluded | 1,244 | 504 |
VPT LOANS - Loans and Commitmen
VPT LOANS - Loans and Commitments (Details) - USD ($) $ in Millions | Jan. 01, 2016 | Oct. 02, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available-for-sale securities: | $ 86.7 | $ 93 |
Long-term notes receivable: | Loans Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance | 33 | 30.9 |
Commitment | 93.5 | 95.6 |
Long-term notes receivable: | NYPC loan | Loans Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance | 20.8 | 18.7 |
Commitment | 70.7 | 72.8 |
Long-term notes receivable: | MPTC loan | Loans Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Balance | 12.2 | 12.2 |
Commitment | 22.8 | 22.8 |
Available-for-sale Securities | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Commitment | 3.5 | 0 |
Available-for-sale securities: | 86.7 | 83.9 |
Available-for-sale Securities | CPTC loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Commitment | 3.5 | 0 |
Available-for-sale securities: | $ 86.7 | $ 83.9 |
VPT LOANS - Additional Informat
VPT LOANS - Additional Information (Detail) | Jul. 31, 2015USD ($) | Jan. 01, 2016USD ($)installment | Oct. 02, 2015USD ($) | May. 31, 2015USD ($)installment |
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | $ 86,700,000 | $ 93,000,000 | ||
Available-for-sale Securities | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | 86,700,000 | 83,900,000 | ||
CPTC loans | ||||
Variable Interest Entity [Line Items] | ||||
Accounts receivable from CPTC, includes unbilled accounts receivable | 25,300,000 | 25,200,000 | ||
CPTC loans | Other Assets | Tranche C Loans | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | 900,000 | |||
CPTC loans | Other Assets | Tranche A loan | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | 75,100,000 | 73,500,000 | ||
CPTC loans | Other Assets | Tranche B loan | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | 10,700,000 | 10,400,000 | ||
CPTC loans | Available-for-sale Securities | ||||
Variable Interest Entity [Line Items] | ||||
Available-for-sale securities: | 86,700,000 | 83,900,000 | ||
CPTC loan facility, Varian's maximum loan commitment | $ 9,700,000 | |||
CPTC loan facility, minimum interest rate (as a percent) | 9.00% | |||
CPTC loan facility, amortization period over which monthly payments are calculated after January 1, 2015 (in years) | 15 years | |||
CPTC loans | London Interbank Offered Rate (LIBOR) | Available-for-sale Securities | ||||
Variable Interest Entity [Line Items] | ||||
CPTC loan facility, interest rate margin (as a percent) | 7.00% | |||
MPTC loan | ||||
Variable Interest Entity [Line Items] | ||||
Accounts receivable from CPTC, includes unbilled accounts receivable | $ 24,000,000 | 28,600,000 | ||
Loans Receivable | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Notes receivable | 33,000,000 | 30,900,000 | ||
Loans Receivable | NYPC loan | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Maximum lending commitment | $ 91,500,000 | |||
Notes receivable | $ 20,800,000 | 18,700,000 | ||
Loans Receivable | MPTC loan | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Maximum lending commitment | $ 35,000,000 | |||
Interest rate (as a percent) | 12.00% | |||
Notes receivable | $ 12,200,000 | $ 12,200,000 | ||
Number of annual payments | installment | 3 | |||
Number of installments | installment | 4 | |||
Installment payment amount | $ 5,700,000 | |||
Roll Over Loan | MPTC loan | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Notes receivable | $ 10,000,000 | |||
Accrued interest | $ 2,200,000 | |||
Senior First Lien Loan | NYPC loan | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Maximum lending commitment | $ 73,000,000 | |||
Term (in years) | 6 years | |||
Interest rate (as a percent) | 9.00% | |||
Senior Subordinated Loans | NYPC loan | Notes Receivable | ||||
Variable Interest Entity [Line Items] | ||||
Maximum lending commitment | $ 18,500,000 | |||
Term (in years) | 6 years 6 months | |||
Interest rate (as a percent) | 13.50% | |||
Varian Medical Systems, Inc. | CPTC loans | Available-for-sale Securities | ||||
Variable Interest Entity [Line Items] | ||||
CPTC loan facility, Varian's maximum loan commitment | $ 4,400,000 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 3 Months Ended |
Jan. 01, 2016segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Results Information for Each Reportable Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 757,133 | $ 737,854 |
Operating Earnings (Loss) | 116,650 | 129,450 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating Earnings (Loss) | (11,400) | (24,200) |
Operating Segments | Oncology Systems | ||
Segment Reporting Information [Line Items] | ||
Revenues | 589,300 | 563,300 |
Operating Earnings (Loss) | 115,200 | 126,100 |
Operating Segments | Imaging Components | ||
Segment Reporting Information [Line Items] | ||
Revenues | 141,400 | 166,000 |
Operating Earnings (Loss) | 25,200 | 41,200 |
Operating Segments | Total reportable segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 730,700 | 729,300 |
Operating Earnings (Loss) | 140,400 | 167,300 |
Operating Segments | Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 26,400 | 8,600 |
Operating Earnings (Loss) | $ (12,300) | $ (13,600) |