Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 30, 2016 | Jan. 27, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
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 | --09-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 93,466,827 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Revenues: | ||
Product | $ 485.2 | $ 500.5 |
Service | 278.1 | 256.6 |
Total revenues | 763.3 | 757.1 |
Cost of revenues: | ||
Product | 313.3 | 343.4 |
Service | 115.5 | 104 |
Total cost of revenues | 428.8 | 447.4 |
Gross margin | 334.5 | 309.7 |
Operating expenses: | ||
Research and development | 63.1 | 60 |
Selling, general and administrative | 179.8 | 133 |
Impairment charges | 38.3 | 0 |
Separation costs | 14.9 | 0 |
Total operating expenses | 296.1 | 193 |
Operating earnings | 38.4 | 116.7 |
Interest income | 4.9 | 3.9 |
Interest expense | (2.9) | (2.2) |
Earnings before taxes | 40.4 | 118.4 |
Taxes on earnings | 19.4 | 29.4 |
Net earnings | 21 | 89 |
Less: Net earnings attributable to noncontrolling interests | 0.6 | 0 |
Net earnings attributable to Varian | $ 20.4 | $ 89 |
Net earnings per share - basic (in dollars per share) | $ 0.22 | $ 0.92 |
Net earnings per share - diluted (in dollars per share) | $ 0.22 | $ 0.91 |
Shares used in the calculation of net earnings per share: | ||
Weighted average shares outstanding - basic (in shares) | 93.5 | 97.2 |
Weighted average shares outstanding - diluted (in shares) | 94.2 | 97.8 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 21 | $ 89 | |
Defined benefit pension and post-retirement benefit plans: | |||
Amortization of prior service cost included in net periodic benefit cost, net of tax benefit of $0.1 and $0.0 | [1] | (0.1) | (0.1) |
Amortization of net actuarial loss included in net periodic benefit cost, net of tax expense of ($0.2) and ($0.1) | 0.9 | 0.6 | |
Defined benefit pension and post-retirement benefit plans | 0.8 | 0.5 | |
Derivative instruments: | |||
Change in unrealized gain, net of tax expense of $0.0 and $0.0 | [1] | 0 | 0.1 |
Derivative instruments | [1] | 0 | 0.1 |
Available-for-sale securities: | |||
Change in unrealized loss, net of tax benefit of $0.0 and $0.1 | 0 | (0.3) | |
Reclassification adjustments, net of tax expense of $0.0 and ($0.2) | 0 | 0.4 | |
Available-for-sale securities | 0 | 0.1 | |
Currency translation adjustment | (13.1) | (4.6) | |
Other comprehensive loss | (12.3) | (3.9) | |
Comprehensive earnings | 8.7 | 85.1 | |
Less: Comprehensive earnings attributable to noncontrolling interests | 0.6 | 0 | |
Comprehensive earnings attributable to Varian | $ 8.1 | $ 85.1 | |
[1] | Taxes related to the fiscal quarter ended January 1, 2016 were not material. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||
Tax on amortization of prior service cost included in net periodic benefit cost | [1] | $ 0.1 | $ 0 |
Tax on amortization of net actuarial loss included in net periodic benefit cost | (0.2) | (0.1) | |
Tax on increase (decrease) in unrealized gain on derivative instruments | 0 | 0 | |
Tax on increase (decrease) in unrealized gain (loss) on available for sale securities | 0 | 0.1 | |
Tax on reclassification adjustments on available for sale securities | $ 0 | $ (0.2) | |
[1] | Taxes related to the fiscal quarter ended January 1, 2016 were not material. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 814.7 | $ 843.5 | |
Short-term investments | 0 | 95.3 | |
Accounts receivable, net of allowance for doubtful accounts of $43.1 at December 30, 2016 and $24.4 at September 30, 2016 | 801.7 | 891.8 | |
Inventories | 661.6 | 639.7 | |
Prepaid expenses and other current assets | 143.3 | 145.1 | |
Total current assets | 2,421.3 | 2,615.4 | |
Property, plant and equipment, net | 375.1 | 379.2 | |
Goodwill | 291.7 | 294.7 | |
Intangible assets | 99.4 | 104.7 | |
Deferred tax assets | 150.8 | 138.9 | |
Other assets | 346.5 | 281.9 | |
Total assets | 3,684.8 | 3,814.8 | |
Current liabilities: | |||
Accounts payable | 174.8 | 201.1 | |
Accrued liabilities | 383.1 | 412.7 | |
Deferred revenues | 633.6 | 620.6 | |
Short-term borrowings | 270.7 | 329.6 | |
Current maturities of long-term debt | 61.9 | 49.4 | |
Total current liabilities | 1,524.1 | 1,613.4 | |
Long-term debt | 274.6 | 286.9 | |
Other long-term liabilities | 146.8 | 160 | |
Total liabilities | 1,945.5 | 2,060.3 | |
Commitments and contingencies (Note 9) | |||
Redeemable noncontrolling interests | 10.3 | 10.3 | |
Equity: | |||
Preferred stock of $1 par value: 1.0 shares authorized; none issued and outstanding | 0 | 0 | |
Common stock of $1 par value: 189.0 shares authorized; 93.5 and 93.7 shares issued and outstanding at December 30, 2016 and at September 30, 2016, respectively | 93.5 | 93.7 | |
Capital in excess of par value | 694.5 | 678.6 | |
Retained earnings | 1,049.9 | 1,069 | |
Accumulated other comprehensive loss | (113.1) | (100.8) | |
Total Varian stockholders' equity | 1,724.8 | 1,740.5 | |
Noncontrolling interests | 4.2 | 3.7 | |
Total equity | 1,729 | 1,744.2 | |
Total liabilities, redeemable noncontrolling interests and equity | $ 3,684.8 | $ 3,814.8 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 Millions | Dec. 30, 2016 | Sep. 30, 2016 | [1] |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 43.1 | $ 24.4 | |
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) | 93,500,000 | 93,700,000 | |
Common stock, shares outstanding (in shares) | 93,500,000 | 93,700,000 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 Millions | 3 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | ||
Cash flows from operating activities: | |||
Net earnings | $ 21 | $ 89 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Share-based compensation expense | 11.5 | 11.3 | |
Tax benefits from exercises of share-based payment awards | 0.4 | 1 | |
Excess tax benefits from share-based compensation | (0.5) | (1.1) | |
Depreciation | 17.2 | 15.5 | |
Amortization of intangible assets | 5.1 | 3 | |
Deferred taxes | (19.1) | (3.2) | |
Provision for doubtful accounts receivable | 38.1 | 4 | |
Impairment charges | 38.3 | 0 | |
Other, net | (0.5) | 1.1 | |
Changes in assets and liabilities: | |||
Accounts receivable | 31 | (29.5) | |
Inventories | (28.2) | (4) | |
Prepaid expenses and other assets | (5) | (12) | |
Accounts payable | (20.7) | (14.1) | |
Accrued liabilities and other long-term liabilities | (20.8) | 5.3 | |
Deferred revenues | 14.4 | 11 | |
Net cash provided by operating activities | 82.2 | 77.3 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (17.2) | (27.3) | |
Issuance of notes receivable | (11.4) | (2.1) | |
Sale of available-for-sale securities | 0 | 8.6 | |
Investment in available-for-sale securities | (0.6) | (0.9) | |
Amounts paid to deferred compensation plan trust account | (3.4) | (2.7) | |
Other | 0.8 | 0.1 | |
Net cash used in investing activities | (31.8) | (24.3) | |
Cash flows from financing activities: | |||
Repurchases of common stock | (49.5) | (192.1) | |
Proceeds from issuance of common stock to employees | 16.1 | 15.3 | |
Excess tax benefits from share-based compensation | 0.5 | 1.1 | |
Employees' taxes withheld and paid for restricted stock and restricted stock units | (1.2) | (4.5) | |
Borrowings under credit facility agreement | 10 | 75 | |
Repayments under credit facility agreement | (10) | (67.5) | |
Net (repayments) borrowings under the credit facility agreements with maturities less than 90 days | (55) | 225 | |
Contingent consideration and hold back | (0.5) | (2.5) | |
Net cash (used in) provided by financing activities | (89.6) | 49.8 | |
Effects of exchange rate changes on cash and cash equivalents | 10.4 | 5.1 | |
Net (decrease) increase in cash and cash equivalents | (28.8) | 107.9 | |
Cash and cash equivalents at beginning of period | 843.5 | [1] | 845.5 |
Cash and cash equivalents at end of period | $ 814.7 | $ 953.4 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 |
Dec. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Varian Medical Systems, Inc. (“VMS”) and 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. On May 23, 2016, the Company announced its intention to separate its Imaging Components business from the remainder of its businesses through a pro rata distribution of the common stock of a new entity, named Varex Imaging Corporation (“Varex”). Varex was incorporated in Delaware on July 18, 2016 for the purpose of holding the assets and liabilities associated with the Company's Imaging Components business. Each Varian stockholder received 0.4 of a share of Varex common stock for every one share of Varian common stock held on the close of business on January 20, 2017 (the "Record date"). On January 28, 2017, the Company completed the distribution of 100% of the outstanding common stock of Varex to Varian stockholders. Following the separation and distribution, Varex became an independent publicly traded company. In the three months ended December 30, 2016 , the Company incurred $14.9 million of costs relating to the separation. Separation costs include expenses for transaction advisory services, consulting services, restructuring and other expenses. See Note 17, " Subsequent Events" for additional information. Basis of Presentation The condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and the accompanying notes are unaudited and should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2016 (the “ 2016 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 December 30, 2016 and September 30, 2016 , results of operations and statements of comprehensive earnings for the three months ended December 30, 2016 and January 1, 2016 , and cash flows for the three months ended December 30, 2016 and January 1, 2016 . The results of operations for the three months ended December 30, 2016 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. Reclassifications In the first quarter of fiscal year 2017, the Company began presenting debt issuance costs as a direct deduction from the carrying amount of its debt on its Condensed Consolidated Balance Sheets and adjusted prior year amounts as discussed further in " Accounting Pronouncement Recently Adopted " below. 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 2017 is the 52-week period ending September 29, 2017 . Fiscal year 2016 was the 52-week period that ended on September 30, 2016 . The fiscal quarters ended December 30, 2016 and January 1, 2016 were both 13-week periods. Principles of Consolidation The condensed consolidated financial statements include those of VMS and its wholly-owned and majority-owned or controlled subsidiaries. Intercompany balances, transactions and stock holdings have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Accounting Standards Recently Adopted In March 2015, the Financial Accounting Standards Board ("FASB") issued an amendment to its accounting guidance related to the 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 Company has retrospectively adopted this amendment in the first quarter of fiscal year 2017, resulting in a $0.6 million change from prepaid expenses and other current assets to current maturities of long-term debt and a $0.6 million change from other assets to long-term debt as of September 30, 2016 on the Condensed Consolidated Balance Sheets. Recent Accounting Standards or Updates Not Yet Effective In January 2017, the FASB clarified its guidance to simplify the measurement of goodwill by eliminating the Step 2 impairment test. The new guidance requires companies to perform goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2021. The amendment is required to be adopted prospectively. Early adoption is permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In January 2017, the FASB clarified its guidance on the definition of a business in accounting for transactions when determining whether they represent acquisitions or disposals of assets or of a business. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. The amendment is required to be adopted prospectively. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In November 2016, the FASB amended its guidance on the classification and presentation of restricted cash in the statement of cash flow. The amendment requires entities to include restricted cash and restricted cash equivalents in its cash and cash equivalents in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019 with early adoption permitted. The amendment is required to be adopted retrospectively. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In October 2016, the FASB amended its guidance for tax accounting for intra-entity asset transfers. The amendment removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. Early adoption is permitted. The amendment is required to be adopted on a modified retrospective basis. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In August 2016, the FASB issued an amendment to its accounting guidance related to the classification of certain cash receipts and cash payments. The amendment was issued to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019 with early adoption permitted. The amendment is required to be adopted retrospectively unless it is impracticable. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In June 2016, the FASB issued an amendment to its accounting guidance related to impairment of financial instruments. The amendment adds a new impairment model that is based on expected losses rather than incurred losses. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2021 with early adoption permitted beginning in the first quarter of fiscal year 2020. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In March 2016, the FASB issued an amendment to its accounting guidance related to employee share-based payments. The amendment simplifies several aspects of the accounting for employee share-based payments including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2018 with early adoption permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In February 2016, the FASB issued a new standard on accounting for leases. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new standard will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of earnings. The new standard is required to be adopted using a modified retrospective method to each prior reporting period presented with various optional practical expedients. The new standard will be effective for the Company beginning in its first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the impact of adopting this new standard to its consolidated financial statements. In January 2016, the 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 amendment to its 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 amendment is not expected to have a material impact to the Company’s consolidated financial statements. In May 2014, the FASB issued a new revenue standard, which sets forth a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The new standard 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 March 2016, the FASB amended the principal-versus-agent implementation guidance and illustrations in the new standard. In April 2016, the FASB amended the guidance on identifying performance obligations and the implementation guidance on licensing in the new standard. In May 2016, the FASB amended the guidance on collectability, noncash consideration, presentation of sales tax and transition in the new standard. The new standard 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 new standard 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 currently anticipates adopting this standard using the full retrospective method to restate each prior period presented. The Company is evaluating the timing and the impact of adopting this standard to its consolidated financial statements. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 3 Months Ended |
Dec. 30, 2016 | |
Balance Sheet Components [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS The following tables summarize the Company's available-for-sale securities: December 30, 2016 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities: CPTC loans $ 60.0 $ — $ — $ 60.0 Total available-for-sale securities $ 60.0 $ — $ — $ 60.0 September 30, 2016 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities: CPTC loans $ 95.3 $ — $ — $ 95.3 Total available-for-sale securities $ 95.3 $ — $ — $ 95.3 See Note 15, "VPT Loans" for more information on California Proton Treatment Center, LLC (“CPTC”) loans. At December 30, 2016 , available-for-sale securities are recorded in other assets on the Condensed Consolidated Balance Sheets, because the Company does not expect to collect or sell all or a portion of its loans in the next twelve months. As of December 30, 2016 , the Company's CPTC loans with a carrying value of $98.1 million were determined to be other-than-temporarily impaired due to credit losses. As a result of this determination, the investment was written down to its estimated fair value of $60.0 million , resulting in an impairment charge of $38.3 million , which includes $0.2 million of other loan related charges. See Note 15, "VPT Loans" for further information on the CPTC impairment. At September 30, 2016 , available-for-sale securities are recorded in short-term investments on the Condensed Consolidated Balance Sheets, because the expected contractual maturity dates were less than one year. The following table summarizes the Company's inventories: (In millions) December 30, September 30, Raw materials and parts $ 435.0 $ 407.9 Work-in-process 84.6 76.7 Finished goods 142.0 155.1 Total inventories $ 661.6 $ 639.7 The following table summarizes the Company's other long-term liabilities: (In millions) December 30, September 30, Long-term income taxes payable $ 47.0 $ 46.2 Deferred income taxes 19.5 26.6 Other 80.3 87.2 Total other long-term liabilities $ 146.8 $ 160.0 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Dec. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE 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 December 30, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 60.0 $ 60.0 Other assets 1.8 — — 1.8 Total assets measured at fair value $ 1.8 $ — $ 60.0 $ 61.8 Liabilities at December 30, 2016: Contingent consideration $ — $ — $ (1.1 ) $ (1.1 ) Total liabilities measured at fair value $ — $ — $ (1.1 ) $ (1.1 ) Assets at September 30, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 95.3 $ 95.3 Total assets measured at fair value $ — $ — $ 95.3 $ 95.3 Liabilities at September 30, 2016: Contingent consideration $ — $ — $ (1.3 ) $ (1.3 ) Total liabilities measured at fair value $ — $ — $ (1.3 ) $ (1.3 ) At December 30, 2016 and September 30, 2016 , the fair value of the Company's derivative instruments were not material. The Company's Level 3 corporate debt securities, the CPTC loans, were included in other assets at December 30, 2016 and short-term investments at September 30, 2016 on the Condensed Consolidated Balance Sheets. The Company's contingent consideration was included in accrued liabilities at December 30, 2016 and September 30, 2016 on the Condensed Consolidated Balance Sheets. The fair value of the Company's other assets, which consists of money market funds in our deferred compensation plan, is based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. 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. During the first quarter of fiscal year 2017, the CPTC loans, with a carrying amount of $98.1 million , were determined to be impaired based on the discounted cash flow model using a single best estimate methodology and has been written down to its estimated fair value of $60.0 million , resulting in an impairment charge of $38.3 million , which includes $0.2 million of other loan related charges, recorded in the Condensed Consolidated Statements of Earnings. The Company measures the fair value of its Level 3 contingent consideration liabilities based on the income approach by using a discounted cash flow model with key assumptions that include estimated sales units or revenues of the acquired business or completion of certain milestone targets during the earn-out period, volatility, and estimated discount rates corresponding to the periods of expected payments. If the estimated sales units, revenues or probability of completing certain milestones were to increase or decrease during the respective earn-out period, the fair value of the contingent consideration would increase or decrease, respectively. If the estimated discount rates were to increase or decrease, the fair value of contingent consideration would decrease or increase, respectively. Changes in volatility may result in an increase or decrease in the fair value of contingent consideration. The following table presents the reconciliation for all assets and liabilities measured and recorded at fair value on a recurring basis using significant unobservable inputs (Level 3): (In millions) CPTC Loans Contingent Balance at September 30, 2016 $ 95.3 $ (1.3 ) Additions (1) 2.8 — Settlements (2) — 0.5 Change in fair value recognized in earnings (38.1 ) (0.3 ) Balance at December 30, 2016 $ 60.0 $ (1.1 ) (1) Amounts reported under CPTC loans represents draw downs and accrued interest. (2) Amounts reported under Contingent Consideration represent cash payments to settle contingent consideration liabilities. There were no transfers of assets or liabilities between fair value measurement levels during either the three months ended December 30, 2016 , or the three months ended January 1, 2016 . 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. At December 30, 2016 and September 30, 2016 , the fair value of current maturities of the long-term debt approximated its carrying value of $62.5 million and $50.0 million , respectively, 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 $275.0 million and $287.5 million , at December 30, 2016 and September 30, 2016 , 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 $70.6 million and $59.2 million at December 30, 2016 and September 30, 2016 , 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 |
Dec. 30, 2016 | |
Receivables [Abstract] | |
RECEIVABLES | RECEIVABLES The following table summarizes the Company's accounts receivable and notes receivable as of December 30, 2016 and September 30, 2016 : (In millions) December 30, September 30, Accounts receivable, gross $ 908.1 $ 970.8 Allowance for doubtful accounts (60.3 ) (24.4 ) Accounts receivable, net $ 847.8 $ 946.4 Short-term $ 801.7 $ 891.8 Long-term (1) $ 46.1 $ 54.6 Notes receivable $ 76.9 $ 65.0 Short-term (2) $ 6.3 $ 5.8 Long-term (1) $ 70.6 $ 59.2 (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. (2) Included in prepaid expenses and other current assets on the Company's Condensed Consolidated Balance Sheets. 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 are included in short-term accounts receivable. As of December 30, 2016 , allowance for doubtful accounts includes $43.1 million related to short-term accounts receivable and $17.2 million related to long-term accounts receivable. As of September 30, 2016 , allowance for doubtful accounts was entirely related to the short-term accounts receivable. 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 |
Dec. 30, 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 September 30, 2016 $ 170.2 $ 74.7 $ 49.8 $ 294.7 Foreign currency translation adjustments — — (3.0 ) (3.0 ) Balance at December 30, 2016 $ 170.2 $ 74.7 $ 46.8 $ 291.7 The following table reflects the Company's intangible assets: December 30, 2016 September 30, 2016 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Technologies and patents $ 120.9 $ (62.9 ) $ 58.0 $ 122.0 $ (60.7 ) $ 61.3 Customer contracts and supplier relationship 41.7 (14.1 ) 27.6 41.7 (13.0 ) 28.7 Other 12.3 (7.3 ) 5.0 12.7 (6.8 ) 5.9 Total intangible with finite lives 174.9 (84.3 ) 90.6 176.4 (80.5 ) 95.9 In-process research and development with indefinite lives 8.8 — 8.8 8.8 — 8.8 Total intangible assets $ 183.7 $ (84.3 ) $ 99.4 $ 185.2 $ (80.5 ) $ 104.7 Amortization for intangible assets was $5.1 million and $3.0 million in the three months ended December 30, 2016 and January 1, 2016 , respectively. As of December 30, 2016 the Company estimates its remaining amortization for intangible assets with finite lives will be as follows (in millions): Fiscal Years: Total Remainder of 2017 $ 15.7 2018 18.7 2019 14.7 2020 13.4 2021 10.1 Thereafter 18.0 Total remaining amortization for intangible assets $ 90.6 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 30, 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. 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 income of $0.3 million and a loss of $0.7 million in the three months ended December 30, 2016 and January 1, 2016 , 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 $47.6 million at December 30, 2016 and $47.2 million at September 30, 2016 . During the three months ended December 30, 2016 and January 1, 2016 , the Company purchased glass transistor arrays from dpiX totaling $8.4 million and $5.0 million , 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 December 30, 2016 , the Company estimated it has fixed cost commitments of $16.7 million related to this amended agreement through December 31, 2017. The Company's equity investment in dpiX Holding and fixed cost commitments were transferred to Varex, in conjunction with the separation and distribution of Varex in January 2017. The Company has determined that dpiX is a variable interest entity because at-risk equity holders, as a group, lack the characteristics of a controlling financial interest. Majority votes are required to direct the manufacturing activities, legal operations and other activities that most significantly affect dpiX’s economic performance. The Company does not have majority voting rights and no power to direct the activities of dpiX and therefore is not the primary beneficiary of dpiX. |
BORROWINGS
BORROWINGS | 3 Months Ended |
Dec. 30, 2016 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS The following table summarizes the Company's short-term and long-term debt: December 30, 2016 September 30, 2016 (Dollars in millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current portion of 2013 Term Loan Facility $ 62.5 1.77 % $ 50.0 1.65 % 2013 Revolving Credit Facility 245.0 1.96 % 300.0 1.91 % Sumitomo Credit Facility 25.7 0.53 % 29.6 0.53 % Debt issuance costs (0.6 ) (0.6 ) Total short-term debt $ 332.6 $ 379.0 Long-term debt: 2013 Term Loan Facility $ 275.0 1.77 % $ 287.5 1.65 % Debt issuance costs (0.4 ) (0.6 ) Total long-term debt $ 274.6 $ 286.9 On August 27, 2013 , VMS entered into an agreement (as amended to date), ("Credit Agreement") with certain lenders and Bank of America, N.A. (“BofA”) as administrative agent ("Debt Lenders"). 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 . The aggregate commitments under the 2013 Term Loan Facility may be increased by up to $100 million , and the aggregate commitments under the 2013 Revolving Credit Facility, may be increased by up to $100 million , subject to certain conditions being met, including lender approval. The Credit Agreement does not require the Company to pledge the stock of any of its subsidiaries. In fiscal year 2016, the Company amended its Credit Agreement to obtain the Debt Lenders' consent to the separation of its Imaging Components business, waive any potential default that may arise as a result of the separation, and increase the maximum consolidated leverage ratio that the Company must maintain. 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 (earnings before interest, tax and depreciation and amortization) 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. The Company must pay a commitment fee on the unused portion of the 2013 Revolving Credit Facility at a rate from 0.125% to 0.20% based on a leverage ratio. The Company may prepay, reduce or terminate the commitments without penalty. Swing line loans under the 2013 Credit Facility will bear interest at the base rate plus the then applicable margin for base rate loans. The Credit Agreement contains provisions that limit the Company's ability to, among other things, incur future indebtedness, contingent obligations or liens, guarantee indebtedness, make certain investments and capital expenditures, sell stock or assets and pay dividends, and consummate certain mergers or acquisitions. 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, and (ii) a minimum consolidated fixed charge coverage ratio. The Company was in compliance with all covenants under the Credit Agreement for all periods within these condensed consolidated financial statements. 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 3.0 billion Japanese Yen (the “Sumitomo Credit Facility”). The Sumitomo Credit Facility 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 |
Dec. 30, 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. As of December 30, 2016 and September 30, 2016 , the Company did not have any outstanding derivatives designated as hedging instruments. As of December 30, 2016 and September 30, 2016 , the fair value of the Company's derivatives not designated as hedging instruments were not material. See Note 3, "Fair Value" for the 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 2016 Annual Report for the 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 December 30, 2016 and September 30, 2016 , 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 hedges of foreign currency denominated forecasted revenues are designated and accounted for as cash flow hedges. The 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 qualified 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 qualified 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 in 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. At the inception of the hedge relationship and quarterly thereafter, the Company assesses whether the likelihood of meeting the forecasted cash flow is highly probable. During the three months ended December 30, 2016 , the Company did not discontinue any cash flow hedges. As of December 30, 2016 , the Company did not have any foreign currency forward contracts designated as cash flow hedges. During the three months ended January 1, 2016, the Company recognized an unrealized gain of $0.1 million in other comprehensive income for the effective portion of the foreign currency forward contracts designated as cash flow hedges. There were no reclassifications from accumulated other comprehensive income to revenues related to the effective portion of the foreign currency forward contracts designated as cash flow hedges in the three months ended December 30, 2016 and January 1, 2016 , respectively. 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. 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: December 30, 2016 (In millions) Notional Notional Australian Dollar $ 17.5 $ — Brazilian Real 9.0 — British Pound — 6.8 Canadian Dollar 2.6 — Danish Krone — 0.4 Euro 229.0 10.8 Hungarian Forint 2.5 — Indian Rupee 13.5 — Japanese Yen 54.1 — Polish Zloty 22.1 — Swedish Krona 4.3 — Swiss Franc — 61.8 Thai Baht 4.6 — Totals $ 359.2 $ 79.8 The following table presents the gains recognized in the Condensed Consolidated Statements of Earnings related to the foreign currency forward contracts that are not designated as hedging instruments. Location of Gain Recognized in Income on Derivative Instruments Amount of Gain Recognized in Net Earnings on Derivative Instruments Three Months Ended (In millions) December 30, January 1, Selling, general and administrative expenses $ 14.9 $ 7.4 The gains on these derivative instruments were significantly offset by losses resulting from the re-measurement 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 December 30, 2016 and September 30, 2016 , the Company did not have any 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 |
Dec. 30, 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 (In millions) December 30, January 1, Accrued product warranty, at beginning of period $ 54.8 $ 45.9 Charged to cost of revenues 11.4 12.2 Actual product warranty expenditures (14.8 ) (12.0 ) Accrued product warranty, at end of period $ 51.4 $ 46.1 Accrued product warranty was included in accrued liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheets as of December 30, 2016 and September 30, 2016 . 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 (net of amounts borne by VI and VSEA) in both the three months ended December 30, 2016 and January 1, 2016 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 December 30, 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 $1.2 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 December 30, 2016 . Management believes that no amount in that range is more probable of being incurred than any other amount and therefore accrued $1.2 million for these cleanup projects as of December 30, 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 December 30, 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 $5.2 million to $25.4 million . The time frames over which these costs are estimated to be incurred vary, ranging from one year to thirty years as of December 30, 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 $7.9 million at December 30, 2016 . Accordingly, the Company had accrued $6.8 million as of December 30, 2016 for these costs, which represented the best estimate discounted at 4% , net of inflation. This accrual is in addition to the $1.2 million described in the preceding paragraph. These amounts are only estimates of anticipated future costs. The amounts the Company will actually spend may be greater or less than these estimates, even as the Company believes the degree of uncertainty will narrow as cleanup activities progress. While the Company believes its reserve is adequate, as the scope of the Company’s obligations becomes more clearly defined, the Company may modify the reserve, and charge or credit future earnings accordingly. Nevertheless, based on information currently known to management, and assuming VI and VSEA satisfy their indemnification obligations, management believes the costs of these environmental-related matters are not reasonably likely to have a material adverse effect on the consolidated financial statements of the Company in any one fiscal year. The Company evaluates its liability for investigation and cleanup costs in light of the obligations and apparent financial strength of potentially responsible parties and insurance companies with respect to which the Company believes it has rights to indemnity or reimbursement. The Company has asserted claims for recovery of environmental investigation and cleanup costs already incurred, and to be incurred in the future against various insurance companies and other third parties. The Company receives certain cash payments in the form of settlements and judgments from defendants, insurers and other third parties from time to time. The Company has also reached an agreement with an insurance company under which that insurer has agreed to pay a portion of the Company’s past and future environmental-related expenditures. Receivables, net of VI’s and VSEA’s portion, from that insurer amounted to $2.0 million at both December 30, 2016 and September 30, 2016 , with the respective current portion included in prepaid expenses and other current assets and the respective noncurrent portion included in other assets. 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 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 United States 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 combined magnetic resonance imaging linear accelerator systems. In February 2016, Elekta Ltd. filed several complaints in the U.S. and foreign courts alleging infringement of certain patents related to linear accelerator control systems and treatment planning. In October 2016, Elekta Ltd. filed a complaint in the United Kingdom alleging infringement of a further patent related to linear accelerator control systems and treatment planning, and added a patent relating to the same subject matter to its existing U.S. suit filed in February 2016. These legal proceedings are ongoing and, although there have been interim court rulings in certain jurisdictions, there have been no definite outcomes to date. The Company is unable to predict the outcomes of these matters and therefore, no amounts have been accrued as of December 30, 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 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. After the Company requested a judicial review available under Portuguese criminal procedure processes as to whether or not such charges are proper under Portuguese law, the matter was resolved and definitively dismissed on December 9, 2016, with no adverse findings or charges against the Company or its foreign subsidiary. 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 2017 Restructuring Plan In the first quarter of fiscal year 2017, the Company offered an enhanced retirement program to its qualifying employees and a workforce reduction (collectively "the 2017 Restructuring Plan"), primarily in its Oncology Systems segment, to improve operational performance. The Company incurred $3.8 million in restructuring charges during the three months ended December 30, 2016 . As of December 30, 2016, the Company expects to incur an additional $1.8 million in restructuring charges under this plan in fiscal year 2017. 2016 Restructuring Plan In the first quarter of 2016, the Company implemented a workforce reduction, primarily in its Oncology Systems and Imaging Components segments, as part of the Company's plan to enhance operational performance through productivity initiatives. The Company incurred $4.8 million in restructuring charges during the three months ended January 1, 2016 . The Company does not expect to incur any significant future charges under this plan. The following table provides a summary of changes in the restructuring liability related to the Company's restructuring plans: (In millions) September 30, Restructuring Charges Adjustments Cash Payments December 30, 2017 Restructuring Plan $ — $ 3.8 $ — $ (0.1 ) $ 3.7 2016 Restructuring Plan and prior plans 1.6 — (0.2 ) (0.1 ) 1.3 Total $ 1.6 $ 3.8 $ (0.2 ) $ (0.2 ) $ 5.0 The Company expects to substantially complete these restructuring programs by the end of fiscal year 2017. The restructuring charges are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings. |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Dec. 30, 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. Current period disclosures include the Company's defined benefit pension plans from acquisitions completed in fiscal year 2015, including one in Germany and one in the Philippines, which were not presented in the previous year as they were not material. The components of net defined benefit costs were as follows: Three Months Ended (In millions) December 30, January 1, Defined Benefit Plans Service cost $ 1.8 $ 1.5 Interest cost 0.6 1.0 Expected return on plan assets (1.8 ) (1.7 ) Amortization of prior service cost (0.1 ) — Recognized actuarial loss 1.1 0.7 Net periodic benefit cost $ 1.6 $ 1.5 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate was 48.1% and 24.8% for the three months ended December 30, 2016 and January 1, 2016 , respectively. The increase in the Company’s effective tax rate during the three months ended December 30, 2016 , compared to the year ago period, was primarily due to the impairment of the CPTC loan, which was made by one of our Swiss subsidiaries, which has a low tax rate, and a significant portion of the expense associated with the allowance for doubtful accounts recorded in the period being attributable to one of our German subsidiaries, which has a full valuation allowance. 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 December 30, 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 |
Dec. 30, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS | STOCKHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS Share Repurchase Program In November 2016, the VMS Board of Directors authorized the repurchase of an additional 8.0 million shares of VMS common stock commencing on January 1, 2017. Share repurchases under the Company's authorizations may be made in open market purchases, in privately negotiated transactions (including accelerated share repurchase (“ASR”) 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. In November 2015, the VMS Board of Directors authorized the repurchase of 8.0 million shares of VMS common stock through December 31, 2016. As of December 30, 2016 the remaining 3.3 million shares under this authorization have expired. The Company repurchased shares of VMS common stock under various authorizations during the periods presented as follows: Three Months Ended (In millions, except per share amounts) December 30, January 1, Number of shares 0.5 2.4 Average repurchase price per share $ 98.98 $ 79.20 Total cost $ 49.5 $ 192.1 Other Comprehensive Earnings The changes in accumulated other comprehensive loss by component and related tax effects are summarized as follows: (In millions) Net Unrealized Gains Cumulative Accumulated Balance at September 30, 2016 $ (63.3 ) $ (37.5 ) $ (100.8 ) Other comprehensive loss before reclassifications — (13.1 ) (13.1 ) Amounts reclassified out of other comprehensive earnings 0.9 — 0.9 Tax expense (0.1 ) — (0.1 ) Balance at December 30, 2016 $ (62.5 ) $ (50.6 ) $ (113.1 ) (In millions) Net Unrealized Gains Net Net Cumulative Accumulated Balance at October 2, 2015 $ (46.1 ) $ — $ (0.1 ) $ (40.3 ) $ (86.5 ) Other comprehensive earnings (loss) before reclassifications — 0.1 (0.4 ) (4.6 ) (4.9 ) Amounts reclassified out of other comprehensive earnings 0.6 — 0.6 — 1.2 Tax expense (0.1 ) — (0.1 ) — (0.2 ) Balance at January 1, 2016 $ (45.6 ) $ 0.1 $ — $ (44.9 ) $ (90.4 ) The amounts reclassified out of other comprehensive loss into the Condensed Consolidated Statements of Earnings, with line item location, during each period were as follows: Three Months Ended (In millions) December 30, January 1, Comprehensive Earnings Components Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (0.9 ) $ (0.6 ) Cost of revenues & Operating expenses Unrealized loss on available-for-sale-investments — (0.6 ) Operating expenses Total amounts reclassified out of other comprehensive earnings $ (0.9 ) $ (1.2 ) 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. In October 2015, 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 December 30, 2016 , the redemption value of redeemable noncontrolling interests in MeVis was $10.3 million . During the three months ended December 30, 2016 , an immaterial number of MeVis' shares were purchased under the put right. As of December 30, 2016 , noncontrolling shareholders together held approximately 0.5 million shares of MeVis, representing 26.3% of the outstanding shares. Changes in noncontrolling interests and redeemable noncontrolling interests relating to MeVis and other subsidiaries of the Company were as follows: Three Months Ended Three Months Ended December 30, 2016 January 1, 2016 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Noncontrolling Interests Redeemable Noncontrolling Interests Balance at beginning of period $ 3.7 $ 10.3 $ 14.7 $ — Net earnings attributable to noncontrolling interests 0.5 0.1 — — Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests — — (10.4 ) 10.4 Other — (0.1 ) (0.5 ) — Balance at end of period $ 4.2 $ 10.3 $ 3.8 $ 10.4 In conjunction with the separation and distribution of Varex in January 2017, the Company's redeemable noncontrolling interests were transferred to Varex. |
EMPLOYEE STOCK PLANS
EMPLOYEE STOCK PLANS | 3 Months Ended |
Dec. 30, 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 (In millions) December 30, January 1, Cost of revenues - Product $ 1.0 $ 1.0 Cost of revenues - Service 1.0 1.0 Research and development 1.5 1.6 Selling, general and administrative 8.0 7.7 Total share-based compensation expense $ 11.5 $ 11.3 Income tax benefit for share-based compensation $ (3.5 ) $ (3.5 ) 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, Employee Stock Option Plans Expected term (in years) 4.13 Risk-free interest rate 1.4 % Expected volatility 20.5 % Expected dividend — % Weighted average fair value at grant date $ 15.44 There were no options granted in the three months ended December 30, 2016 . 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 December 30, January 1, Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 Risk-free interest rate 0.5 % 0.3 % Expected volatility 22.3 % 17.0 % Expected dividend — % — % Weighted average fair value at grant date $ 19.37 $ 15.59 A summary of share-based awards available for grant is as follows: (In millions) Shares Available for Grant Balance at September 30, 2016 4.6 Granted (0.4 ) Cancelled or expired 0.2 Balance at December 30, 2016 4.4 For purposes of the total number of shares available for grant under the Third Amended 2005 Plan, any shares subject to awards of stock options are counted against the available-for-grant limit as one share for every one share subject to the award. Awards other than stock options are counted against the available-for-grant limit as 2.6 shares for every one share awarded on or after February 9, 2012. The shares available for grant limit 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 grant 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. All awards may be subject to restrictions on transferability and continued employment as determined by the Compensation and Management Development Committee. Activity under the Company’s employee stock plans related to stock options is presented below: Options Outstanding (In millions, except per share amounts) Number of Weighted Weighted Aggregate Balance at September 30, 2016 2.6 $ 78.25 Granted — — Cancelled or expired — 75.86 Exercised (0.1 ) 62.96 Balance at December 30, 2016 2.5 $ 78.87 4.6 $ 28.4 Exercisable at December 30, 2016 1.4 $ 78.16 3.6 $ 16.8 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of VMS common stock of $89.78 as of December 30, 2016 , the last trading date of the first quarter of fiscal year 2017 , and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. As of December 30, 2016 , there was $7.8 million of total unrecognized compensation expense related to stock options granted under the Company's employee stock plans. 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 millions, except per share amounts) Number of Weighted Average Balance at September 30, 2016 1.0 $ 82.51 Granted 0.1 92.33 Vested (0.1 ) 77.40 Cancelled or expired — 78.18 Balance at December 30, 2016 1.0 $ 83.74 As of December 30, 2016 , unrecognized compensation expense totaling $37.1 million was related to awards of restricted stock, restricted stock units, deferred stock units and performance units granted under the Company's employee stock plans. This unrecognized share-based compensation expense is expected to be recognized over a weighted average period of 1.9 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Dec. 30, 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 (In millions, except per share amounts) December 30, January 1, Net earnings attributable to Varian $ 20.4 $ 89.0 Weighted average shares outstanding - basic 93.5 97.2 Dilutive effect of potential common shares 0.7 0.6 Weighted average shares outstanding - diluted 94.2 97.8 Net earnings per share attributable to Varian - basic $ 0.22 $ 0.92 Net earnings per share attributable to Varian - diluted $ 0.22 $ 0.91 Anti-dilutive employee shared based awards, excluded 0.6 1.2 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 |
Dec. 30, 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: December 30, 2016 September 30, 2016 (In millions) Balance Commitment Balance Commitment Long-term notes receivable (1) : NYPC loan $ 18.5 $ — $ 18.5 $ — MPTC loans 52.1 — 40.7 11.4 $ 70.6 $ — $ 59.2 $ 11.4 Available-for-sale Securities (2) : CPTC loans $ 60.0 $ 0.3 $ 95.3 $ 1.1 $ 60.0 $ 0.3 $ 95.3 $ 1.1 (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. (2) Included in other assets at December 30, 2016 and in short-term investments at September 30, 2016 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 ("MMI") 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. In June 2016, the Company assigned to Deutsche Bank AG ("Deutsche Bank") its entire $73.0 million Senior First Lien Loan commitment. In addition to the outstanding loan, the Company had $7.2 million and $17.4 million , as of December 30, 2016 and September 30, 2016 , respectively, in accounts receivable, which includes unbilled accounts receivable, from NYPC. Maryland Proton Therapy Center ("MPTC") Loans In May 2015, the Company, through one of its subsidiaries, committed to loan up to $35.0 million to MPTC. A total of $12.2 million (consisting of $10.0 million principal amount and $2.2 million in accrued interest) of a previously existing loan was rolled over into the loan commitment with the remaining $22.8 million funded in two equal amounts of $11.4 million each in fiscal year 2016 and the first quarter of fiscal 2017. Varian's lending is in the form of a subordinated loan that is due, with accrued interest, in three annual payments from 2020 to 2022. The interest on the loan accrues at 12% . The Company had previously entered into an agreement with MPTC to supply it with a proton system. During fiscal year 2016, the Company converted $17.1 million in deferred payment arrangements, previously recorded as long-term unbilled accounts receivable, with MPTC to long-term notes receivable due September 30, 2018. The notes receivable carry an interest rate of 15% . In addition to the outstanding loan, the Company had $8.1 million and $9.2 million , as of December 30, 2016 and September 30, 2016 , respectively, in accounts receivable, net from MPTC, which includes unbilled accounts receivable. CPTC Loans In September 2011, ORIX and the Company, through its Swiss subsidiary, committed to loan up to $165.3 million ("Tranche A loan") to CPTC to fund the development, construction and initial operations of the Scripps Proton Therapy Center in San Diego, California. ORIX is the loan agent for this facility and, along with CPTC and Scripps, has budgetary approval authority for the Scripps Proton Therapy Center. The Company’s maximum loan commitment under the Tranche A loan was $115.3 million . In June 2014, the Company, through its Swiss subsidiary, entered into a series of agreements, pursuant to which J.P. Morgan assumed $45.0 million of the Company’s original maximum commitment of $115.3 million , reducing the Company’s maximum commitment under the Tranche A loan to $70.3 million . Pursuant to these agreements, J.P. Morgan purchased $38.1 million of the Company’s outstanding Tranche A loan at par value. Through these agreements, the Company’s Swiss subsidiary also increased its individual loan commitment by $10.0 million (“Tranche B loan”). 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. In November 2015, ORIX, J.P. Morgan and the Company (collectively the “Lenders”) and CPTC entered into a forbearance agreement whereby the lenders agreed not to 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"). The Tranche A, Tranche B, and Tranche C loans are collectively, referred to as the “CPTC Loans.” As of December 30, 2016 , even though patient volumes continued to increase, CPTC was not in compliance with one of the patient volume covenants in the forbearance agreement, which would allow the Lenders to cease funding under the Tranche C loan and terminate the forbearance agreement. In January 2017, the Company was informed of actions taken by CPTC and the loan agent, including CPTC obtaining shareholder consents for voluntary bankruptcy filing and the loan agent deciding that no additional funding would be available outside of a bankruptcy process. As a result of this information and the Company’s analysis that these actions would likely lead to insolvency or bankruptcy proceedings at CPTC, the Company determined that it was appropriate to record a $38.3 million impairment to its CPTC loans on the Condensed Consolidated Statements of Earnings in the three months ended December 30, 2016. As a result of this impairment, the CPTC loans were written down to their estimated fair value of $60.0 million and reclassified from short-term investments to other assets on the Company's Condensed Consolidated Balance Sheet because the Company does not expect to collect or sell all or a portion of its loans in the next twelve months. As of December 30, 2016 , the Company had loaned $82.3 million under the Tranche A loan, $11.7 million under the Tranche B loan and $4.1 million under the Tranche C loan. No amounts were available for draw down under the Tranche A and Tranche B loans. As of December 30, 2016 , the Company's remaining commitment under the Tranche C loan is expected to be drawn down over the next 12 months, subject to approval by the lenders due to CPTC's non-compliance with one of the covenants under the forbearance agreement. As of September 30, 2016 , the Company had loaned $80.5 million under the Tranche A loan, $11.4 million under the Tranche B loan, and $3.4 million under the Tranche C loan. 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 December 30, 2016 and September 30, 2016 . 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 December 30, 2016 , the Company reserved the entire accounts receivable balance, which included unbilled accounts receivable from CPTC and recorded an allowance for doubtful accounts of $34.2 million due to the liquidity issues referred to above. The expense associated with the allowance for doubtful accounts was included in selling, general and administrative expense on the Condensed Consolidated Statements of Earnings. As of September 30, 2016 , the Company had $32.6 million in accounts receivable from CPTC, 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 |
Dec. 30, 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 Varian Particle Therapy ("VPT") business is reflected in the “Other” category because the operating segment does not meet the criteria of a reportable operating segment. In the first quarter of fiscal year 2017, the Company's Ginzton Technology Center ("GTC") business, previously reflected in the "Other" category, was dissolved and absorbed primarily into the Oncology Systems and Imaging Components businesses and is no longer a separate business. This change did not result in any restatement of prior period financial information because GTC operating results were not material. The operating segments were determined based on how the Company’s Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), views and evaluates the Company’s operations. The CODM allocates resources to and evaluates the financial performance of each operating segment primarily based on operating earnings. Description of Segments The Oncology Systems segment designs, manufactures, sells and services hardware and software products for treating cancer with conventional radiation therapy, and advanced treatments such as fixed field intensity-modulated radiation therapy (“IMRT”), image-guided radiation therapy (“IGRT”), VMAT, stereotactic radiosurgery (“SRS”), stereotactic body radiotherapy (“SBRT”) and brachytherapy. Products include linear accelerators, brachytherapy afterloaders, treatment simulation and verification equipment and accessories; as well as information management, treatment planning and image processing 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, computer-aided diagnostic software, collimators and automatic exposure control devices. 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 VPT business is reported 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. Accordingly, the following information is provided for purposes of achieving an understanding of operations, but may not be indicative of the financial results of the reported segments were they independent organizations. In addition, comparisons of the Company’s operations to similar operations of other companies may not be meaningful. The following table summarizes selected operating results information for each reportable segment: Three Months Ended (In millions) December 30, January 1, Revenues Oncology Systems $ 581.1 $ 589.3 Imaging Components 151.9 141.4 Total reportable segments 733.0 730.7 Other 30.3 26.4 Total Company $ 763.3 $ 757.1 Operating Earnings (Loss) (1) Oncology Systems $ 137.4 $ 115.2 Imaging Components 21.8 25.2 Total reportable segments 159.2 140.4 Other (48.7 ) (12.3 ) Corporate (72.1 ) (11.4 ) Total Company $ 38.4 $ 116.7 (1) Operating earnings of reportable segments and Other include an allocation of corporate expenses based on a percentage of their revenues . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 9, 2017, the Board of Directors of the Company approved the separation of Varex (consisting primarily of the Imaging Components business) through the distribution of 100% of the outstanding common stock, par value $0.01 per share, of Varex Imaging Corporation, a wholly owned subsidiary of Varian, to Varian's stockholders. To consummate the distribution, the Varian Board declared a pro rata dividend of Varex common stock to Varian's stockholders of record as of the close of business on the Record Date. Each Varian stockholder received 0.4 of a share of Varex common stock for every one share of Varian common stock held at the close of business on the Record Date. The Distribution occurred on January 28, 2017 (the "Distribution Date"). Immediately following the Distribution, Varex became an independent publicly traded company and is listed on The NASDAQ Global Select Market under the ticker “VREX.” Varian will continue to trade on the New York Stock Exchange under the ticker “VAR.” The historical financial position and results of operations of Varex will be reported as discontinued operations in the second quarter of fiscal year 2017. In connection with the Distribution, Varian and Varex have entered into a separation and distribution agreement as well as various other agreements that will govern the relationships between the parties going forward, including a transition services agreement, a tax matters agreement, an employee matters agreement, an intellectual property matters agreement, a trademark license agreement and supply/distribution agreements. The separation and distribution agreement and other agreements related to the separation were entered into on January 27, 2017. In conjunction with the separation and distribution, the Company received approximately $200 million from Varex and used those proceeds to repay a portion of its outstanding 2013 Revolving Credit Facility debt. In December 2016, Varian entered into a master purchase and sale agreement ("MPSA") to acquire the Medical Imaging business of PerkinElmer, Inc. for approximately $276 million . In connection with the separation and distribution, Varian assigned the MPSA and any rights and obligations to Varex. |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 30, 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 September 30, 2016 (the “ 2016 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 December 30, 2016 and September 30, 2016 , results of operations and statements of comprehensive earnings for the three months ended December 30, 2016 and January 1, 2016 , and cash flows for the three months ended December 30, 2016 and January 1, 2016 . The results of operations for the three months ended December 30, 2016 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future period. |
Reclassifications | Reclassifications In the first quarter of fiscal year 2017, the Company began presenting debt issuance costs as a direct deduction from the carrying amount of its debt on its Condensed Consolidated Balance Sheets and adjusted prior year amounts as discussed further in " Accounting Pronouncement Recently Adopted " below. |
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 2017 is the 52-week period ending September 29, 2017 . Fiscal year 2016 was the 52-week period that ended on September 30, 2016 . The fiscal quarters ended December 30, 2016 and January 1, 2016 were both 13-week periods. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include those of VMS and its wholly-owned and majority-owned or controlled subsidiaries. Intercompany balances, transactions and stock holdings have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Accounting Standards Recently Adopted | Accounting Standards Recently Adopted In March 2015, the Financial Accounting Standards Board ("FASB") issued an amendment to its accounting guidance related to the 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 Company has retrospectively adopted this amendment in the first quarter of fiscal year 2017, resulting in a $0.6 million change from prepaid expenses and other current assets to current maturities of long-term debt and a $0.6 million change from other assets to long-term debt as of September 30, 2016 on the Condensed Consolidated Balance Sheets. |
Recent Accounting Pronouncements or Updates Not Yet Effective | Recent Accounting Standards or Updates Not Yet Effective In January 2017, the FASB clarified its guidance to simplify the measurement of goodwill by eliminating the Step 2 impairment test. The new guidance requires companies to perform goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2021. The amendment is required to be adopted prospectively. Early adoption is permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In January 2017, the FASB clarified its guidance on the definition of a business in accounting for transactions when determining whether they represent acquisitions or disposals of assets or of a business. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. The amendment is required to be adopted prospectively. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In November 2016, the FASB amended its guidance on the classification and presentation of restricted cash in the statement of cash flow. The amendment requires entities to include restricted cash and restricted cash equivalents in its cash and cash equivalents in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019 with early adoption permitted. The amendment is required to be adopted retrospectively. The amendment is not expected to have a material impact to the Company’s consolidated financial statements. In October 2016, the FASB amended its guidance for tax accounting for intra-entity asset transfers. The amendment removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019. Early adoption is permitted. The amendment is required to be adopted on a modified retrospective basis. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In August 2016, the FASB issued an amendment to its accounting guidance related to the classification of certain cash receipts and cash payments. The amendment was issued to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2019 with early adoption permitted. The amendment is required to be adopted retrospectively unless it is impracticable. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In June 2016, the FASB issued an amendment to its accounting guidance related to impairment of financial instruments. The amendment adds a new impairment model that is based on expected losses rather than incurred losses. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2021 with early adoption permitted beginning in the first quarter of fiscal year 2020. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In March 2016, the FASB issued an amendment to its accounting guidance related to employee share-based payments. The amendment simplifies several aspects of the accounting for employee share-based payments including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The amendment will be effective for the Company beginning in its first quarter of fiscal year 2018 with early adoption permitted. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements. In February 2016, the FASB issued a new standard on accounting for leases. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new standard will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of earnings. The new standard is required to be adopted using a modified retrospective method to each prior reporting period presented with various optional practical expedients. The new standard will be effective for the Company beginning in its first quarter of fiscal year 2020 with early adoption permitted. The Company is evaluating the impact of adopting this new standard to its consolidated financial statements. In January 2016, the 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 amendment to its 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 amendment is not expected to have a material impact to the Company’s consolidated financial statements. In May 2014, the FASB issued a new revenue standard, which sets forth a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The new standard 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 March 2016, the FASB amended the principal-versus-agent implementation guidance and illustrations in the new standard. In April 2016, the FASB amended the guidance on identifying performance obligations and the implementation guidance on licensing in the new standard. In May 2016, the FASB amended the guidance on collectability, noncash consideration, presentation of sales tax and transition in the new standard. The new standard 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 new standard 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 currently anticipates adopting this standard using the full retrospective method to restate each prior period presented. The Company is evaluating the timing and the impact of adopting this standard to its consolidated financial statements. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 3 Months Ended |
Dec. 30, 2016 | |
Balance Sheet Components [Abstract] | |
Available-for-sale Securities: | The following tables summarize the Company's available-for-sale securities: December 30, 2016 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities: CPTC loans $ 60.0 $ — $ — $ 60.0 Total available-for-sale securities $ 60.0 $ — $ — $ 60.0 September 30, 2016 (In millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities: CPTC loans $ 95.3 $ — $ — $ 95.3 Total available-for-sale securities $ 95.3 $ — $ — $ 95.3 |
Inventories: | The following table summarizes the Company's inventories: (In millions) December 30, September 30, Raw materials and parts $ 435.0 $ 407.9 Work-in-process 84.6 76.7 Finished goods 142.0 155.1 Total inventories $ 661.6 $ 639.7 |
Other long-term liabilities: | The following table summarizes the Company's other long-term liabilities: (In millions) December 30, September 30, Long-term income taxes payable $ 47.0 $ 46.2 Deferred income taxes 19.5 26.6 Other 80.3 87.2 Total other long-term liabilities $ 146.8 $ 160.0 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Dec. 30, 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 December 30, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 60.0 $ 60.0 Other assets 1.8 — — 1.8 Total assets measured at fair value $ 1.8 $ — $ 60.0 $ 61.8 Liabilities at December 30, 2016: Contingent consideration $ — $ — $ (1.1 ) $ (1.1 ) Total liabilities measured at fair value $ — $ — $ (1.1 ) $ (1.1 ) Assets at September 30, 2016: Available-for-sale securities: Corporate debt securities $ — $ — $ 95.3 $ 95.3 Total assets measured at fair value $ — $ — $ 95.3 $ 95.3 Liabilities at September 30, 2016: Contingent consideration $ — $ — $ (1.3 ) $ (1.3 ) Total liabilities measured at fair value $ — $ — $ (1.3 ) $ (1.3 ) |
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 September 30, 2016 $ 95.3 $ (1.3 ) Additions (1) 2.8 — Settlements (2) — 0.5 Change in fair value recognized in earnings (38.1 ) (0.3 ) Balance at December 30, 2016 $ 60.0 $ (1.1 ) (1) Amounts reported under CPTC loans represents draw downs and accrued interest. (2) Amounts reported under Contingent Consideration represent cash payments to settle contingent consideration liabilities. |
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 September 30, 2016 $ 95.3 $ (1.3 ) Additions (1) 2.8 — Settlements (2) — 0.5 Change in fair value recognized in earnings (38.1 ) (0.3 ) Balance at December 30, 2016 $ 60.0 $ (1.1 ) (1) Amounts reported under CPTC loans represents draw downs and accrued interest. (2) Amounts reported under Contingent Consideration represent cash payments to settle contingent consideration liabilities. |
RECEIVABLES (Tables)
RECEIVABLES (Tables) | 3 Months Ended |
Dec. 30, 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 December 30, 2016 and September 30, 2016 : (In millions) December 30, September 30, Accounts receivable, gross $ 908.1 $ 970.8 Allowance for doubtful accounts (60.3 ) (24.4 ) Accounts receivable, net $ 847.8 $ 946.4 Short-term $ 801.7 $ 891.8 Long-term (1) $ 46.1 $ 54.6 Notes receivable $ 76.9 $ 65.0 Short-term (2) $ 6.3 $ 5.8 Long-term (1) $ 70.6 $ 59.2 (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. (2) Included in prepaid expenses and other current assets on the Company's Condensed Consolidated Balance Sheets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 30, 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 September 30, 2016 $ 170.2 $ 74.7 $ 49.8 $ 294.7 Foreign currency translation adjustments — — (3.0 ) (3.0 ) Balance at December 30, 2016 $ 170.2 $ 74.7 $ 46.8 $ 291.7 |
Schedule of Indefinite-Lived Intangible Assets | The following table reflects the Company's intangible assets: December 30, 2016 September 30, 2016 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Technologies and patents $ 120.9 $ (62.9 ) $ 58.0 $ 122.0 $ (60.7 ) $ 61.3 Customer contracts and supplier relationship 41.7 (14.1 ) 27.6 41.7 (13.0 ) 28.7 Other 12.3 (7.3 ) 5.0 12.7 (6.8 ) 5.9 Total intangible with finite lives 174.9 (84.3 ) 90.6 176.4 (80.5 ) 95.9 In-process research and development with indefinite lives 8.8 — 8.8 8.8 — 8.8 Total intangible assets $ 183.7 $ (84.3 ) $ 99.4 $ 185.2 $ (80.5 ) $ 104.7 |
Gross Carrying Amount and Accumulated Amortization of Intangible Assets | The following table reflects the Company's intangible assets: December 30, 2016 September 30, 2016 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Technologies and patents $ 120.9 $ (62.9 ) $ 58.0 $ 122.0 $ (60.7 ) $ 61.3 Customer contracts and supplier relationship 41.7 (14.1 ) 27.6 41.7 (13.0 ) 28.7 Other 12.3 (7.3 ) 5.0 12.7 (6.8 ) 5.9 Total intangible with finite lives 174.9 (84.3 ) 90.6 176.4 (80.5 ) 95.9 In-process research and development with indefinite lives 8.8 — 8.8 8.8 — 8.8 Total intangible assets $ 183.7 $ (84.3 ) $ 99.4 $ 185.2 $ (80.5 ) $ 104.7 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 30, 2016 the Company estimates its remaining amortization for intangible assets with finite lives will be as follows (in millions): Fiscal Years: Total Remainder of 2017 $ 15.7 2018 18.7 2019 14.7 2020 13.4 2021 10.1 Thereafter 18.0 Total remaining amortization for intangible assets $ 90.6 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Dec. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the Company's short-term and long-term debt: December 30, 2016 September 30, 2016 (Dollars in millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current portion of 2013 Term Loan Facility $ 62.5 1.77 % $ 50.0 1.65 % 2013 Revolving Credit Facility 245.0 1.96 % 300.0 1.91 % Sumitomo Credit Facility 25.7 0.53 % 29.6 0.53 % Debt issuance costs (0.6 ) (0.6 ) Total short-term debt $ 332.6 $ 379.0 Long-term debt: 2013 Term Loan Facility $ 275.0 1.77 % $ 287.5 1.65 % Debt issuance costs (0.4 ) (0.6 ) Total long-term debt $ 274.6 $ 286.9 |
Schedule of Short-term Debt | The following table summarizes the Company's short-term and long-term debt: December 30, 2016 September 30, 2016 (Dollars in millions) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Short-term debt: Current portion of 2013 Term Loan Facility $ 62.5 1.77 % $ 50.0 1.65 % 2013 Revolving Credit Facility 245.0 1.96 % 300.0 1.91 % Sumitomo Credit Facility 25.7 0.53 % 29.6 0.53 % Debt issuance costs (0.6 ) (0.6 ) Total short-term debt $ 332.6 $ 379.0 Long-term debt: 2013 Term Loan Facility $ 275.0 1.77 % $ 287.5 1.65 % Debt issuance costs (0.4 ) (0.6 ) Total long-term debt $ 274.6 $ 286.9 |
DERIVATIVE INSTRUMENTS AND HE31
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Dec. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The Company had the following outstanding foreign currency forward contracts: December 30, 2016 (In millions) Notional Notional Australian Dollar $ 17.5 $ — Brazilian Real 9.0 — British Pound — 6.8 Canadian Dollar 2.6 — Danish Krone — 0.4 Euro 229.0 10.8 Hungarian Forint 2.5 — Indian Rupee 13.5 — Japanese Yen 54.1 — Polish Zloty 22.1 — Swedish Krona 4.3 — Swiss Franc — 61.8 Thai Baht 4.6 — Totals $ 359.2 $ 79.8 |
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 contracts that are not designated as hedging instruments. Location of Gain Recognized in Income on Derivative Instruments Amount of Gain Recognized in Net Earnings on Derivative Instruments Three Months Ended (In millions) December 30, January 1, Selling, general and administrative expenses $ 14.9 $ 7.4 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions) December 30, January 1, Accrued product warranty, at beginning of period $ 54.8 $ 45.9 Charged to cost of revenues 11.4 12.2 Actual product warranty expenditures (14.8 ) (12.0 ) Accrued product warranty, at end of period $ 51.4 $ 46.1 |
Restructuring and Related Costs | The following table provides a summary of changes in the restructuring liability related to the Company's restructuring plans: (In millions) September 30, Restructuring Charges Adjustments Cash Payments December 30, 2017 Restructuring Plan $ — $ 3.8 $ — $ (0.1 ) $ 3.7 2016 Restructuring Plan and prior plans 1.6 — (0.2 ) (0.1 ) 1.3 Total $ 1.6 $ 3.8 $ (0.2 ) $ (0.2 ) $ 5.0 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions) December 30, January 1, Defined Benefit Plans Service cost $ 1.8 $ 1.5 Interest cost 0.6 1.0 Expected return on plan assets (1.8 ) (1.7 ) Amortization of prior service cost (0.1 ) — Recognized actuarial loss 1.1 0.7 Net periodic benefit cost $ 1.6 $ 1.5 |
STOCKHOLDERS' EQUITY AND NONC34
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions, except per share amounts) December 30, January 1, Number of shares 0.5 2.4 Average repurchase price per share $ 98.98 $ 79.20 Total cost $ 49.5 $ 192.1 |
Schedule of Accumulated Other Comprehensive Earnings (Loss) and Related Tax Effects | The changes in accumulated other comprehensive loss by component and related tax effects are summarized as follows: (In millions) Net Unrealized Gains Cumulative Accumulated Balance at September 30, 2016 $ (63.3 ) $ (37.5 ) $ (100.8 ) Other comprehensive loss before reclassifications — (13.1 ) (13.1 ) Amounts reclassified out of other comprehensive earnings 0.9 — 0.9 Tax expense (0.1 ) — (0.1 ) Balance at December 30, 2016 $ (62.5 ) $ (50.6 ) $ (113.1 ) (In millions) Net Unrealized Gains Net Net Cumulative Accumulated Balance at October 2, 2015 $ (46.1 ) $ — $ (0.1 ) $ (40.3 ) $ (86.5 ) Other comprehensive earnings (loss) before reclassifications — 0.1 (0.4 ) (4.6 ) (4.9 ) Amounts reclassified out of other comprehensive earnings 0.6 — 0.6 — 1.2 Tax expense (0.1 ) — (0.1 ) — (0.2 ) Balance at January 1, 2016 $ (45.6 ) $ 0.1 $ — $ (44.9 ) $ (90.4 ) |
Schedule of Amounts Reclassified Out of Other Comprehensive Earnings | The amounts reclassified out of other comprehensive loss into the Condensed Consolidated Statements of Earnings, with line item location, during each period were as follows: Three Months Ended (In millions) December 30, January 1, Comprehensive Earnings Components Income (Loss) Before Taxes Line Item in Statements of Earnings Unrealized loss on defined benefit pension and post-retirement benefit plans $ (0.9 ) $ (0.6 ) Cost of revenues & Operating expenses Unrealized loss on available-for-sale-investments — (0.6 ) Operating expenses Total amounts reclassified out of other comprehensive earnings $ (0.9 ) $ (1.2 ) |
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: Three Months Ended Three Months Ended December 30, 2016 January 1, 2016 (In millions) Noncontrolling Interests Redeemable Noncontrolling Interests Noncontrolling Interests Redeemable Noncontrolling Interests Balance at beginning of period $ 3.7 $ 10.3 $ 14.7 $ — Net earnings attributable to noncontrolling interests 0.5 0.1 — — Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests — — (10.4 ) 10.4 Other — (0.1 ) (0.5 ) — Balance at end of period $ 4.2 $ 10.3 $ 3.8 $ 10.4 In conjunction with the separation and distribution of Varex in January 2017, the Company's redeemable noncontrolling interests were transferred to Varex. |
EMPLOYEE STOCK PLANS (Tables)
EMPLOYEE STOCK PLANS (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions) December 30, January 1, Cost of revenues - Product $ 1.0 $ 1.0 Cost of revenues - Service 1.0 1.0 Research and development 1.5 1.6 Selling, general and administrative 8.0 7.7 Total share-based compensation expense $ 11.5 $ 11.3 Income tax benefit for share-based compensation $ (3.5 ) $ (3.5 ) |
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, Employee Stock Option Plans Expected term (in years) 4.13 Risk-free interest rate 1.4 % Expected volatility 20.5 % Expected dividend — % Weighted average fair value at grant date $ 15.44 |
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 December 30, January 1, Employee Stock Purchase Plan Expected term (in years) 0.50 0.50 Risk-free interest rate 0.5 % 0.3 % Expected volatility 22.3 % 17.0 % Expected dividend — % — % Weighted average fair value at grant date $ 19.37 $ 15.59 |
Summary of Share-Based Awards Available for Grant | A summary of share-based awards available for grant is as follows: (In millions) Shares Available for Grant Balance at September 30, 2016 4.6 Granted (0.4 ) Cancelled or expired 0.2 Balance at December 30, 2016 4.4 |
Activity Under Employee Stock Plans | Activity under the Company’s employee stock plans related to stock options is presented below: Options Outstanding (In millions, except per share amounts) Number of Weighted Weighted Aggregate Balance at September 30, 2016 2.6 $ 78.25 Granted — — Cancelled or expired — 75.86 Exercised (0.1 ) 62.96 Balance at December 30, 2016 2.5 $ 78.87 4.6 $ 28.4 Exercisable at December 30, 2016 1.4 $ 78.16 3.6 $ 16.8 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of VMS common stock of $89.78 as of December 30, 2016 , the last trading date of the first quarter of fiscal year 2017 , and which represents the amount that would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise 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 millions, except per share amounts) Number of Weighted Average Balance at September 30, 2016 1.0 $ 82.51 Granted 0.1 92.33 Vested (0.1 ) 77.40 Cancelled or expired — 78.18 Balance at December 30, 2016 1.0 $ 83.74 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions, except per share amounts) December 30, January 1, Net earnings attributable to Varian $ 20.4 $ 89.0 Weighted average shares outstanding - basic 93.5 97.2 Dilutive effect of potential common shares 0.7 0.6 Weighted average shares outstanding - diluted 94.2 97.8 Net earnings per share attributable to Varian - basic $ 0.22 $ 0.92 Net earnings per share attributable to Varian - diluted $ 0.22 $ 0.91 Anti-dilutive employee shared based awards, excluded 0.6 1.2 |
VPT LOANS (Tables)
VPT LOANS (Tables) | 3 Months Ended |
Dec. 30, 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: December 30, 2016 September 30, 2016 (In millions) Balance Commitment Balance Commitment Long-term notes receivable (1) : NYPC loan $ 18.5 $ — $ 18.5 $ — MPTC loans 52.1 — 40.7 11.4 $ 70.6 $ — $ 59.2 $ 11.4 Available-for-sale Securities (2) : CPTC loans $ 60.0 $ 0.3 $ 95.3 $ 1.1 $ 60.0 $ 0.3 $ 95.3 $ 1.1 (1) Included in other assets on the Company's Condensed Consolidated Balance Sheets. (2) Included in other assets at December 30, 2016 and in short-term investments at September 30, 2016 on the Company's Condensed Consolidated Balance Sheets. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Dec. 30, 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 (In millions) December 30, January 1, Revenues Oncology Systems $ 581.1 $ 589.3 Imaging Components 151.9 141.4 Total reportable segments 733.0 730.7 Other 30.3 26.4 Total Company $ 763.3 $ 757.1 Operating Earnings (Loss) (1) Oncology Systems $ 137.4 $ 115.2 Imaging Components 21.8 25.2 Total reportable segments 159.2 140.4 Other (48.7 ) (12.3 ) Corporate (72.1 ) (11.4 ) Total Company $ 38.4 $ 116.7 (1) Operating earnings of reportable segments and Other include an allocation of corporate expenses based on a percentage of their revenues . |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Narrative (Details) $ in Millions | Jan. 28, 2017 | Dec. 30, 2016USD ($) | Jan. 01, 2016USD ($) | Sep. 30, 2016USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Separation costs | $ 14.9 | $ 0 | ||
Prepaid Expenses and Other Current Assets | Accounting Standards Update 2015-03 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred finance costs | $ (0.6) | |||
Other Assets | Accounting Standards Update 2015-03 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred finance costs | (0.6) | |||
Short-term Debt | Accounting Standards Update 2015-03 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred finance costs | 0.6 | |||
Long-term Debt | Accounting Standards Update 2015-03 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred finance costs | $ 0.6 | |||
Varex Imaging | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Separation costs | $ 14.9 | |||
Varex Imaging | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Subsequent Event | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Pro rata distribution (shares) | 0.4 | |||
Percentage of voting interest acquired | 100.00% |
BALANCE SHEET COMPONENTS - Avai
BALANCE SHEET COMPONENTS - Available-for-Sale Securities (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Dec. 29, 2016 | Sep. 30, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost | $ 60 | $ 95.3 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 60 | 95.3 | |
CPTC loans | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost | 60 | 95.3 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 60 | 95.3 | |
CPTC loans | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized cost | 60 | ||
Fair Value | 60 | $ 98.1 | $ 95.3 |
Impairment charges | 38.3 | ||
Other loan related charges | $ 0.2 |
BALANCE SHEET COMPONENTS - Comp
BALANCE SHEET COMPONENTS - Components of Inventories (Detail) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | |
Balance Sheet Components [Abstract] | |||
Raw materials and parts | $ 435 | $ 407.9 | |
Work-in-process | 84.6 | 76.7 | |
Finished goods | 142 | 155.1 | |
Total inventories | $ 661.6 | $ 639.7 | [1] |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 - Co42
BALANCE SHEET COMPONENTS - Components of Other Long-Term Liabilities (Detail) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | |
Balance Sheet Components [Abstract] | |||
Long-term income taxes payable | $ 47 | $ 46.2 | |
Deferred income taxes | 19.5 | 26.6 | |
Other | 80.3 | 87.2 | |
Total other long-term liabilities | $ 146.8 | $ 160 | [1] |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 | Dec. 30, 2016 | Sep. 30, 2016 |
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Fair Value | $ 60 | $ 95.3 |
Fair Value, Measurements, Recurring | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Other assets | 1.8 | |
Total assets measured at fair value | 61.8 | 95.3 |
Contingent consideration | (1.1) | (1.3) |
Total liabilities measured at fair value | (1.1) | (1.3) |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Fair Value | 60 | 95.3 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Other assets | 1.8 | |
Total assets measured at fair value | 1.8 | 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 | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Other 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 | Significant Other Observable Inputs | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Other assets | 0 | |
Total assets measured at fair value | 60 | 95.3 |
Contingent consideration | (1.1) | (1.3) |
Total liabilities measured at fair value | (1.1) | (1.3) |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | Corporate debt securities | ||
Assets/Liabilities Measured at Fair Value on a Recurring Basis | ||
Fair Value | $ 60 | $ 95.3 |
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 |
Dec. 30, 2016USD ($) | |
CPTC Loans | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 95.3 |
Additions | 2.8 |
Settlements | 0 |
Change in fair value recognized in earnings | (38.1) |
Ending balance | 60 |
Contingent Consideration | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | (1.3) |
Additions | 0 |
Settlements | 0.5 |
Change in fair value recognized in earnings | (0.3) |
Ending balance | $ (1.1) |
FAIR VALUE - Additional Informa
FAIR VALUE - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Dec. 29, 2016 | Sep. 30, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair Value | $ 60 | $ 95.3 | |
Amortized cost | 60 | 95.3 | |
Notes Receivable | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Long-term | 70.6 | 59.2 | |
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 | 275 | 287.5 | |
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 | $ 62.5 | 50 | |
Minimum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Remaining maturity | 1 month | ||
Maximum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Remaining maturity | 13 months | ||
CPTC loans | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair Value | $ 60 | $ 98.1 | $ 95.3 |
Amortized cost | 60 | ||
Impairment charges | 38.3 | ||
Other loan related charges | $ 0.2 |
RECEIVABLES (Details)
RECEIVABLES (Details) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, gross | $ 908.1 | $ 970.8 | |
Allowance for doubtful accounts | (60.3) | (24.4) | |
Accounts receivable, net | 847.8 | 946.4 | |
Short-term | 801.7 | 891.8 | [1] |
Long-term | 46.1 | 54.6 | |
Allowance for doubtful accounts, current | 43.1 | 24.4 | [1] |
Allowance, noncurrent | 17.2 | ||
Notes Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable | 76.9 | 65 | |
Short-term | 6.3 | 5.8 | |
Long-term | $ 70.6 | $ 59.2 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 ASSET47
GOODWILL AND INTANGIBLE ASSETS - Activity of Goodwill by Reportable Operating Segment (Detail) $ in Millions | 3 Months Ended | |
Dec. 30, 2016USD ($) | ||
Goodwill [Roll Forward] | ||
Balance, beginning | $ 294.7 | [1] |
Foreign currency translation adjustments | (3) | |
Balance, ending | 291.7 | |
Oncology Systems | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 170.2 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 170.2 | |
Imaging Components | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 74.7 | |
Foreign currency translation adjustments | 0 | |
Balance, ending | 74.7 | |
Other | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 49.8 | |
Foreign currency translation adjustments | (3) | |
Balance, ending | $ 46.8 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 ASSET48
GOODWILL AND INTANGIBLE ASSETS - Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | |
Finite Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, gross | $ 174.9 | $ 176.4 | |
Accumulated Amortization | (84.3) | (80.5) | |
Total remaining amortization expense | 90.6 | 95.9 | |
Indefinite intangible assets | 8.8 | 8.8 | |
Total intangible assets | 183.7 | 185.2 | |
Total intangible assets, net | 99.4 | 104.7 | [1] |
Technologies and patents | |||
Finite Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, gross | 120.9 | 122 | |
Accumulated Amortization | (62.9) | (60.7) | |
Total remaining amortization expense | 58 | 61.3 | |
Customer contracts and supplier relationship | |||
Finite Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, gross | 41.7 | 41.7 | |
Accumulated Amortization | (14.1) | (13) | |
Total remaining amortization expense | 27.6 | 28.7 | |
Other | |||
Finite Lived Intangible Assets [Line Items] | |||
Finite lived intangible assets, gross | 12.3 | 12.7 | |
Accumulated Amortization | (7.3) | (6.8) | |
Total remaining amortization expense | $ 5 | $ 5.9 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 ASSET49
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $ 5.1 | $ 3 |
GOODWILL AND INTANGIBLE ASSET50
GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Future amortization expense, fiscal year 2017 | $ 15.7 | |
Future amortization expense, fiscal year 2018 | 18.7 | |
Future amortization expense, fiscal year 2019 | 14.7 | |
Future amortization expense, fiscal year 2020 | 13.4 | |
Future amortization expense, fiscal year 2021 | 10.1 | |
Thereafter | 18 | |
Total remaining amortization expense | $ 90.6 | $ 95.9 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - dpiX Holding - Affiliated Entity $ in Millions | 3 Months Ended | ||
Dec. 30, 2016USD ($)member | Jan. 01, 2016USD ($) | Sep. 30, 2016USD ($) | |
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% | ||
Income (Loss) on equity investment in affiliate | $ 0.3 | $ (0.7) | |
Carrying value of the equity investment in dpiX Holding | 47.6 | $ 47.2 | |
Purchases of glass transistor arrays from dpiX | $ 8.4 | $ 5 | |
Percentage of manufacturing capacity | 50.00% | ||
Percentage of fixed costs | 50.00% | ||
Fixed cost commitments | $ 16.7 |
BORROWINGS - Schedule of Debt (
BORROWINGS - Schedule of Debt (Details) - USD ($) $ in Millions | Dec. 30, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | |||
Current maturities of long-term debt | $ 61.9 | $ 49.4 | [1] |
Short-term borrowings | 270.7 | 329.6 | [1] |
Debt issuance costs | (0.6) | (0.6) | |
Total short-term debt | 332.6 | 379 | |
Debt issuance costs | (0.4) | (0.6) | |
Long-term debt | $ 274.6 | $ 286.9 | [1] |
2013 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 1.77% | 1.65% | |
Long-term debt | $ 275 | $ 287.5 | |
2013 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Current maturities of long-term debt | $ 62.5 | $ 50 | |
Weighted-Average Interest Rate (as a percent) | 1.77% | 1.65% | |
2013 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 1.96% | 1.91% | |
Short-term borrowings | $ 245 | $ 300 | |
Sumitomo Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted-Average Interest Rate (as a percent) | 0.53% | 0.53% | |
Short-term borrowings | $ 25.7 | $ 29.6 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 Dec. 30, 2016 | JPY (¥) | USD ($) |
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 | |
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% | |
2013 Credit Facility | 2013 Revolving Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Additional maximum commitment amount | 100,000,000 | |
2013 Credit Facility | 2013 Revolving Credit Facility | Minimum | ||
Line Of Credit Facility [Line Items] | ||
Commitment fee | 0.125% | |
2013 Credit Facility | 2013 Revolving Credit Facility | Maximum | ||
Line Of Credit Facility [Line Items] | ||
Commitment fee | 0.20% | |
2013 Credit Facility | 2013 Term Loan Facility | ||
Line Of Credit Facility [Line Items] | ||
Additional maximum commitment amount | $ 100,000,000 | |
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% |
DERIVATIVE INSTRUMENTS AND HE54
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Derivative [Line Items] | ||
Derivative, term of contract (in months) | 1 month | |
Derivatives designated as hedging instruments: | Foreign Exchange Contract | ||
Derivative [Line Items] | ||
Gain | $ 0 | $ 100,000 |
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 | Dec. 30, 2016USD ($) |
Notional Value Sold | |
Derivative [Line Items] | |
Notional Value | $ 359.2 |
Notional Value Sold | Australian Dollar | |
Derivative [Line Items] | |
Notional Value | 17.5 |
Notional Value Sold | Brazilian Real | |
Derivative [Line Items] | |
Notional Value | 9 |
Notional Value Sold | British Pound | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Canadian Dollar | |
Derivative [Line Items] | |
Notional Value | 2.6 |
Notional Value Sold | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Euro | |
Derivative [Line Items] | |
Notional Value | 229 |
Notional Value Sold | Hungarian Forint | |
Derivative [Line Items] | |
Notional Value | 2.5 |
Notional Value Sold | Indian Rupee | |
Derivative [Line Items] | |
Notional Value | 13.5 |
Notional Value Sold | Japanese Yen | |
Derivative [Line Items] | |
Notional Value | 54.1 |
Notional Value Sold | Polish Zloty | |
Derivative [Line Items] | |
Notional Value | 22.1 |
Notional Value Sold | Swedish Krona | |
Derivative [Line Items] | |
Notional Value | 4.3 |
Notional Value Sold | Swiss Franc | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Sold | Thai Baht | |
Derivative [Line Items] | |
Notional Value | 4.6 |
Notional Value Purchased | |
Derivative [Line Items] | |
Notional Value | 79.8 |
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 | 6.8 |
Notional Value Purchased | Canadian Dollar | |
Derivative [Line Items] | |
Notional Value | 0 |
Notional Value Purchased | Danish Krone | |
Derivative [Line Items] | |
Notional Value | 0.4 |
Notional Value Purchased | Euro | |
Derivative [Line Items] | |
Notional Value | 10.8 |
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 | Polish Zloty | |
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 | 61.8 |
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 | |
Dec. 30, 2016 | Jan. 01, 2016 | |
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 Instruments | $ 14.9 | $ 7.4 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Accrued Product Warranty (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Accrued product warranty, at beginning of period | $ 54.8 | $ 45.9 |
Charged to cost of revenues | 11.4 | 12.2 |
Actual product warranty expenditures | (14.8) | (12) |
Accrued product warranty, at end of period | $ 51.4 | $ 46.1 |
COMMITMENTS AND CONTINGENCIES58
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2015tender | Dec. 30, 2016USD ($) | Jan. 01, 2016USD ($) | Sep. 30, 2016USD ($) | |
Commitments And Contingencies [Line Items] | ||||
Percentage of partner responsibility | 33.33% | |||
Environmental cleanup costs, third-party claim costs, project management costs and legal costs | $ 0.2 | $ 0.2 | ||
Receivables of past and future environmental-related expenditures | 2 | $ 2 | ||
Restructuring Charges | 3.8 | $ 4.8 | ||
Expected cost | 1.8 | |||
Cercla sites and one past facility | ||||
Commitments And Contingencies [Line Items] | ||||
Amount accrued for environmental remediation expense | 1.2 | |||
Cercla sites and one past facility | Minimum | ||||
Commitments And Contingencies [Line Items] | ||||
Estimate of loss | $ 1.2 | |||
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] | ||||
Estimate of loss | $ 9.8 | |||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 30 years | |||
Other sites | ||||
Commitments And Contingencies [Line Items] | ||||
Amount accrued for environmental remediation expense | $ 6.8 | |||
Estimated environmental remediation costs, best estimate, undiscounted | $ 7.9 | |||
Discount rate for environmental remediation costs, net of inflation (as a percent) | 4.00% | |||
Other sites | Minimum | ||||
Commitments And Contingencies [Line Items] | ||||
Estimate of loss | $ 5.2 | |||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 1 year | |||
Other sites | Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Estimate of loss | $ 25.4 | |||
Estimated time frames to resolve contingency related to environmental remediation contingencies, years | 30 years | |||
Portugal Investigation | ||||
Commitments And Contingencies [Line Items] | ||||
Number of tenders | tender | 3 |
COMMITMENTS AND CONTINGENCIES59
COMMITMENTS AND CONTINGENCIES - Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Restructuring Reserve [Roll Forward] | ||
September 30, 2016 | $ 1.6 | |
Restructuring Charges | 3.8 | $ 4.8 |
Adjustments | (0.2) | |
Cash Payments | (0.2) | |
December 30, 2016 | 5 | |
2017 Restructuring Plan | ||
Restructuring Reserve [Roll Forward] | ||
September 30, 2016 | 0 | |
Restructuring Charges | 3.8 | |
Adjustments | 0 | |
Cash Payments | (0.1) | |
December 30, 2016 | 3.7 | |
2016 Restructuring Plan and prior plans | ||
Restructuring Reserve [Roll Forward] | ||
September 30, 2016 | 1.6 | |
Restructuring Charges | 0 | |
Adjustments | (0.2) | |
Cash Payments | (0.1) | |
December 30, 2016 | $ 1.3 |
RETIREMENT PLANS - Schedule of
RETIREMENT PLANS - Schedule of Net Periodic Benefit Costs (Detail) - Defined Benefit Plans - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1.8 | $ 1.5 |
Interest cost | 0.6 | 1 |
Expected return on plan assets | (1.8) | (1.7) |
Amortization of prior service cost | (0.1) | 0 |
Recognized actuarial loss | 1.1 | 0.7 |
Net periodic benefit cost | $ 1.6 | $ 1.5 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Detail) - Foreign Pension Plan | Dec. 30, 2016plan |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan, Number of Plans | 7 |
GERMANY | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan, Number Of Immaterial Plans | 1 |
PHILIPPINES | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan, Number Of Immaterial Plans | 1 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (as a percent) | 48.10% | 24.80% |
STOCKHOLDERS' EQUITY AND NONC63
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS - Additional Information (Detail) $ in Millions | 3 Months Ended | ||||||
Dec. 30, 2016€ / shares | Dec. 30, 2016USD ($)shares | Nov. 30, 2016shares | Sep. 30, 2016shares | [1] | Nov. 30, 2015shares | Apr. 30, 2015 | |
Stockholders’ equity and noncontrolling interests [Line Items] | |||||||
Number of shares authorized to be repurchased by VMS Board of Directors (in shares) | 8,000,000 | ||||||
Remaining authorization (shares) | 3,300,000 | ||||||
Common stock, shares outstanding (in shares) | 93,500,000 | 93,700,000 | |||||
Noncontrolling Interests | |||||||
Stockholders’ equity and noncontrolling interests [Line Items] | |||||||
Redemption value | $ | $ 10.3 | ||||||
MeVis Medical Solutions AG (MeVis) | |||||||
Stockholders’ equity and noncontrolling interests [Line Items] | |||||||
Percentage of voting interest acquired | 73.50% | ||||||
Annual recurring compensation (in euro per share) | € / shares | € 0.95 | ||||||
Put right (in euro per share) | € / shares | € 19.77 | ||||||
MeVis Medical Solutions AG (MeVis) | Noncontrolling Interests | |||||||
Stockholders’ equity and noncontrolling interests [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 500,000 | ||||||
Noncontrolling interest (as a percent) | 26.30% | ||||||
November 2,016 | |||||||
Stockholders’ equity and noncontrolling interests [Line Items] | |||||||
Number of shares authorized to be repurchased by VMS Board of Directors (in shares) | 8,000,000 | ||||||
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 NONC64
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS - Shares Repurchased During Period (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Equity [Abstract] | ||
Number of shares (in shares) | 0.5 | 2.4 |
Average repurchase price per share (in dollars per share) | $ 98.98 | $ 79.20 |
Total cost | $ 49.5 | $ 192.1 |
STOCKHOLDERS' EQUITY AND NONC65
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS - Schedule of Accumulated Other Comprehensive Earnings (Loss) and Related Tax Effects (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | [1] | $ 1,744.2 | |
Balance at end of period | 1,729 | ||
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 | (63.3) | $ (46.1) | |
Other comprehensive loss before reclassifications | 0 | 0 | |
Amounts reclassified out of other comprehensive earnings | 0.9 | 0.6 | |
Tax expense | (0.1) | (0.1) | |
Balance at end of period | (62.5) | (45.6) | |
Net Unrealized Gains (Losses) Cash Flow Hedging Instruments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Other comprehensive loss before reclassifications | 0.1 | ||
Amounts reclassified out of other comprehensive earnings | 0 | ||
Tax expense | 0 | ||
Balance at end of period | 0.1 | ||
Net Unrealized Gains (Losses) Available-for- Sale Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (0.1) | ||
Other comprehensive loss before reclassifications | (0.4) | ||
Amounts reclassified out of other comprehensive earnings | 0.6 | ||
Tax expense | (0.1) | ||
Balance at end of period | 0 | ||
Cumulative Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (37.5) | (40.3) | |
Other comprehensive loss before reclassifications | (13.1) | (4.6) | |
Amounts reclassified out of other comprehensive earnings | 0 | 0 | |
Tax expense | 0 | 0 | |
Balance at end of period | (50.6) | (44.9) | |
Accumulated Other Comprehensive Earnings (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (100.8) | (86.5) | |
Other comprehensive loss before reclassifications | (13.1) | (4.9) | |
Amounts reclassified out of other comprehensive earnings | 0.9 | 1.2 | |
Tax expense | (0.1) | (0.2) | |
Balance at end of period | $ (113.1) | $ (90.4) | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 NONC66
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS - Schedule of Amounts Reclassified Out of Other Comprehensive Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Reclassification Adjustment Out Of Accumulated Comprehensive Income [Line Items] | ||
Operating Expenses | $ (296.1) | $ (193) |
Net earnings attributable to Varian | 20.4 | 89 |
Unrealized loss on defined benefit pension and post-retirement benefit plans | ||
Reclassification Adjustment Out Of Accumulated Comprehensive Income [Line Items] | ||
Cost of revenues & Operating expenses | (0.9) | (0.6) |
Unrealized loss on available-for-sale-investments | ||
Reclassification Adjustment Out Of Accumulated Comprehensive Income [Line Items] | ||
Cost of revenues & Operating expenses | (0.6) | |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment Out Of Accumulated Comprehensive Income [Line Items] | ||
Net earnings attributable to Varian | (0.9) | (1.2) |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized loss on available-for-sale-investments | ||
Reclassification Adjustment Out Of Accumulated Comprehensive Income [Line Items] | ||
Operating Expenses | $ 0 | $ (0.6) |
STOCKHOLDERS' EQUITY AND NONC67
STOCKHOLDERS' EQUITY AND NONCONTROLLING INTERESTS - Noncontrolling interests (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 30, 2016 | Jan. 01, 2016 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | [1] | $ 1,744.2 | |
Net earnings attributable to noncontrolling interests | (0.6) | $ 0 | |
Balance at end of period | 1,729 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance at beginning of period | 10.3 | 0 | |
Net earnings attributable to noncontrolling interests | 0.1 | 0 | |
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests | 0 | 10.4 | |
Other | (0.1) | 0 | |
Balance at end of period | 10.3 | 10.4 | |
Noncontrolling Interests | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | 3.7 | 14.7 | |
Net earnings attributable to noncontrolling interests | 0.5 | 0 | |
Reclassification of noncontrolling interests in MeVis to redeemable noncontrolling interests | 0 | (10.4) | |
Other | 0 | (0.5) | |
Balance at end of period | $ 4.2 | $ 3.8 | |
[1] | The condensed consolidated balance sheet as of September 30, 2016 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 Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 11.5 | $ 11.3 |
Income tax benefit for share-based compensation | (3.5) | (3.5) |
Cost of revenues - Product | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 1 | 1 |
Cost of revenues - Service | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 1 | 1 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | 1.5 | 1.6 |
Selling, general and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total share-based compensation expense | $ 8 | $ 7.7 |
EMPLOYEE STOCK PLANS - Addition
EMPLOYEE STOCK PLANS - Additional Information (Detail) $ in Millions | 3 Months Ended |
Dec. 30, 2016USD ($)shares | |
Stock options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to outstanding stock awards | $ | $ 7.8 |
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 | $ | $ 37.1 |
Weighted average period unrecognized compensation expense is expected to be recognized, years | 1 year 10 months 10 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 | Stock options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares counted against the available for grant (in shares) | 1 |
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 | |
Dec. 30, 2016 | Jan. 01, 2016 | |
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 | 0.50% | 0.30% |
Expected volatility | 22.30% | 17.00% |
Expected dividend | 0.00% | 0.00% |
Weighted average fair value at grant date (dollars per share) | $ 19.37 | $ 15.59 |
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 | |
Risk-free interest rate | 1.40% | |
Expected volatility | 20.50% | |
Expected dividend | 0.00% | |
Weighted average fair value at grant date (dollars per share) | $ 15.44 |
EMPLOYEE STOCK PLANS - Summary
EMPLOYEE STOCK PLANS - Summary of Share-Based Awards Available for Grant (Detail) shares in Millions | 3 Months Ended |
Dec. 30, 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) | 4.6 |
Granted (in shares) | (0.4) |
Cancelled or expired (in shares) | 0.2 |
Balance at end of period (in shares) | 4.4 |
EMPLOYEE STOCK PLANS - Activity
EMPLOYEE STOCK PLANS - Activity Under Employee Stock Plans (Detail) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Dec. 30, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 2.6 |
Granted (in shares) | shares | 0 |
Cancelled or expired (in shares) | shares | 0 |
Exercised (in shares) | shares | (0.1) |
Balance at end of period (in shares) | shares | 2.5 |
Exercisable (in shares) | shares | 1.4 |
Weighted Average Exercise Price | |
Balance at beginning of period (in dollars per share) | $ 78.25 |
Granted (in dollars per share) | 0 |
Cancelled or expired (in dollars per share) | 75.86 |
Exercised (in dollars per share) | 62.96 |
Balance at end of period (in dollars per share) | 78.87 |
Exercisable (in dollars per share) | $ 78.16 |
Weighted Average Remaining Term (in years) | |
Balance at end of period (in years) | 4 years 7 months 6 days |
Exercisable (in years) | 3 years 7 months 6 days |
Aggregate Intrinsic Value | |
Balance at end of period | $ | $ 28.4 |
Exercisable | $ | $ 16.8 |
Share price (in dollars per share) | $ 89.78 |
EMPLOYEE STOCK PLANS - Activi73
EMPLOYEE STOCK PLANS - Activity for Restricted Stock, Restricted Stock Units, Deferred Stock Units and Performance Units (Detail) shares in Millions | 3 Months Ended |
Dec. 30, 2016$ / sharesshares | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 1 |
Granted (in shares) | shares | 0.1 |
Vested (in shares) | shares | (0.1) |
Cancelled or expired (in shares) | shares | 0 |
Balance at end of period (in shares) | shares | 1 |
Weighted Average Grant-Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 82.51 |
Granted (in dollars per share) | $ / shares | 92.33 |
Vested (in dollars per share) | $ / shares | 77.40 |
Cancelled or expired (in dollars per share) | $ / shares | 78.18 |
Balance at end of period (in dollars per share) | $ / shares | $ 83.74 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Net Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Earnings Per Share [Abstract] | ||
Net earnings attributable to Varian | $ 20.4 | $ 89 |
Weighted average shares outstanding - basic (in shares) | 93.5 | 97.2 |
Dilutive effect of potential common shares (in shares) | 0.7 | 0.6 |
Weighted average shares outstanding - diluted (in shares) | 94.2 | 97.8 |
Net earnings per share - basic (in dollars per share) | $ 0.22 | $ 0.92 |
Net earnings per share - diluted (in dollars per share) | $ 0.22 | $ 0.91 |
Anti-dilutive employee shared based awards, excluded (in shares) | 0.6 | 1.2 |
VPT LOANS - Loans and Commitmen
VPT LOANS - Loans and Commitments (Details) - USD ($) $ in Millions | Dec. 30, 2016 | Dec. 29, 2016 | Sep. 30, 2016 |
Long-term notes receivable and Available-for-sale Securities [Line Items] | |||
Fair Value | $ 60 | $ 95.3 | |
CPTC loans | |||
Long-term notes receivable and Available-for-sale Securities [Line Items] | |||
Fair Value | 60 | $ 98.1 | 95.3 |
Commitment | 0.3 | 1.1 | |
Loans Receivable | |||
Long-term notes receivable and Available-for-sale Securities [Line Items] | |||
Long-term | 70.6 | 59.2 | |
Commitment | 0 | 11.4 | |
NYPC loan | Loans Receivable | |||
Long-term notes receivable and Available-for-sale Securities [Line Items] | |||
Long-term | 18.5 | 18.5 | |
Commitment | 0 | 0 | |
MPTC loans | Loans Receivable | |||
Long-term notes receivable and Available-for-sale Securities [Line Items] | |||
Long-term | 52.1 | 40.7 | |
Commitment | $ 0 | $ 11.4 |
VPT LOANS - Additional Informat
VPT LOANS - Additional Information (Detail) | Jul. 31, 2015USD ($) | Dec. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Jan. 01, 2016USD ($) | Dec. 29, 2016USD ($) | May 31, 2015USD ($)installment | Jun. 30, 2014USD ($) | Sep. 30, 2011USD ($) |
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Payments to Acquire Notes Receivable | $ 11,400,000 | $ 2,100,000 | ||||||
Available-for-sale securities: | 60,000,000 | $ 95,300,000 | ||||||
Allowance | 60,300,000 | 24,400,000 | ||||||
CPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Impairment charges | 38,300,000 | |||||||
Available-for-sale securities: | 60,000,000 | 95,300,000 | $ 98,100,000 | |||||
NYPC loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Accounts receivable from CPTC, includes unbilled accounts receivable | 7,200,000 | 17,400,000 | ||||||
MPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Accounts receivable from CPTC, includes unbilled accounts receivable | $ 8,100,000 | 9,200,000 | ||||||
Commitment | $ 22,800,000 | |||||||
C P T C | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Accounts receivable from CPTC, includes unbilled accounts receivable | 32,600,000 | |||||||
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 | |||||||
Allowance | $ 34,200,000 | |||||||
C P T C | Tranche A loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Available-for-sale securities: | 82,300,000 | 80,500,000 | ||||||
C P T C | Tranche B loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Available-for-sale securities: | 11,700,000 | 11,400,000 | ||||||
C P T C | Tranche C Loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
CPTC loan facility, Varian's maximum loan commitment | 9,700,000 | |||||||
Available-for-sale securities: | $ 4,100,000 | 3,400,000 | ||||||
C P T C | London Interbank Offered Rate (LIBOR) | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
CPTC loan facility, interest rate margin (as a percent) | 7.00% | |||||||
Available-for-sale Securities | C P T C | Tranche A loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Maximum borrowing capacity | $ 165,300,000 | |||||||
Varian Medical Systems, Inc. | C P T C | Tranche C Loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
CPTC loan facility, Varian's maximum loan commitment | $ 4,400,000 | |||||||
Varian Medical Systems, Inc. | Available-for-sale Securities | C P T C | Tranche A loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
CPTC loan facility, Varian's maximum loan commitment | $ 70,300,000 | $ 115,300,000 | ||||||
Sale of portion of outstanding loan | 38,100,000 | |||||||
Varian Medical Systems, Inc. | Available-for-sale Securities | C P T C | Tranche B loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
CPTC loan facility, Varian's maximum loan commitment | 10,000,000 | |||||||
J P Morgan Chase Bank | Available-for-sale Securities | C P T C | Tranche A loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Sale of portion of loan commitment | $ 45,000,000 | |||||||
Loans Receivable | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Long-term | 70,600,000 | 59,200,000 | ||||||
Loans Receivable | NYPC loan | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Maximum lending commitment | $ 91,500,000 | |||||||
Long-term | $ 18,500,000 | 18,500,000 | ||||||
Loans Receivable | MPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Maximum lending commitment | $ 35,000,000 | |||||||
Interest rate (as a percent) | 12.00% | |||||||
Number of annual payments | installment | 3 | |||||||
Long-term | $ 52,100,000 | 40,700,000 | ||||||
Loans Receivable | Reclassification From Long-Term Notes Receivable | MPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Interest rate (as a percent) | 15.00% | |||||||
Long-term | $ 17,100,000 | |||||||
Senior First Lien Loan | NYPC loan | ||||||||
Long term notes receivable and available for sale securities [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 | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Maximum lending commitment | $ 18,500,000 | |||||||
Term (in years) | 6 years 6 months | |||||||
Interest rate (as a percent) | 13.50% | |||||||
Roll Over Loan | MPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Commitment | $ 12,200,000 | |||||||
Notes receivable | 10,000,000 | |||||||
Accrued interest | $ 2,200,000 | |||||||
Notes Receivable | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Notes receivable | 76,900,000 | 65,000,000 | ||||||
Long-term | $ 70,600,000 | 59,200,000 | ||||||
Notes Receivable | MPTC loans | ||||||||
Long term notes receivable and available for sale securities [Line Items] | ||||||||
Payments to Acquire Notes Receivable | $ 11,400,000 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 3 Months Ended |
Dec. 30, 2016segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Results Information for Each Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 30, 2016 | Jan. 01, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 763.3 | $ 757.1 |
Operating Earnings (Loss) | 38.4 | 116.7 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating Earnings (Loss) | (72.1) | (11.4) |
Operating Segments | Oncology Systems | ||
Segment Reporting Information [Line Items] | ||
Revenues | 581.1 | 589.3 |
Operating Earnings (Loss) | 137.4 | 115.2 |
Operating Segments | Imaging Components | ||
Segment Reporting Information [Line Items] | ||
Revenues | 151.9 | 141.4 |
Operating Earnings (Loss) | 21.8 | 25.2 |
Operating Segments | Total reportable segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 733 | 730.7 |
Operating Earnings (Loss) | 159.2 | 140.4 |
Operating Segments | Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 30.3 | 26.4 |
Operating Earnings (Loss) | $ (48.7) | $ (12.3) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Millions | Jan. 28, 2017$ / shares | Dec. 30, 2016USD ($)$ / shares | Feb. 07, 2017USD ($) | Sep. 30, 2016$ / shares | [1] |
Subsequent Event [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | $ 1 | |||
Varex Imaging | Varex Imaging | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Medical Imaging Business of PerkinElmer | |||||
Subsequent Event [Line Items] | |||||
Agreement price | $ | $ 276 | ||||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Varex Imaging | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Percentage of voting interest acquired | 100.00% | ||||
Pro rata distribution (shares) | 0.4 | ||||
Proceeds from disposition | $ | $ 200 | ||||
[1] | The condensed consolidated balance sheet as of September 30, 2016 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. |