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Focusing Energy on Saving Lives
Forward-Looking Statements
Except for historical information, this presentation and report on Varian Medical Systems’ financial and business
performance contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Statements concerning industry outlook; growth drivers; the company’s future orders, revenues, backlog,
earnings growth or other financial results; market acceptance of or transition to new products or technology such as
our TrueBeam and RapidArc products, image-guided radiation therapy (IGRT), stereotactic radiosurgery, filmless X-
rays, proton therapy, and security and inspection, and any statements using the terms “expect,” “could,” “believe,”
“estimate,” “outlook,” or similar statements are forward-looking statements that involve risks and uncertainties that
could cause the company’s actual results to differ materially from those anticipated. Such risks and uncertainties
include the effect of economic conditions, including the global recession, currency exchange rates and tax rates; the
impact of healthcare reform, third-party reimbursement levels and/or credit availability for capital expenditures for
cancer care; demand for the company’s products; the company’s ability to develop and commercialize new products;
the company’s ability to maintain or increase operating margins; the impact of competitive products and pricing; the the company’s ability to maintain or increase operating margins; the impact of competitive products and pricing; the
company’s ability to meet Food and Drug Administration and other regulatory requirements for product clearances or
to comply with Food and Drug Administration and other regulatory regulations or procedures; and the other risks listed
from time to time in the company’s filings with the Securities and Exchange Commission, which by this reference are
incorporated herein. The information contained in this presentation should not be construed or otherwise used as an
indication, predicator or update of our future financial results. The company assumes no obligation to update or revise
the forward-looking statements in this presentation because of new information, future events, or otherwise.
Mission: Focusing Energy on Saving Lives
X-Ray Technology for:
� Faster, easier, more precise cancer therapy
� Better imaging and medical diagnostics
� Safer borders and ports
Oncology Systems - $1.8B
X-Ray Products - $330M
Varian Medical Systems FY’09 Orders
Security and Inspection Products - $83M
Oncology Systems Growth Initiatives
� Innovating, enhancing
� Speed, patient throughput
� Precision
� Versatility
� Ease of use and adoption
� Modernizing, replacing installed base Modernizing, replacing installed base
� Equipping under-served international markets
� Expanding clinical applications
� Building, maintaining customer service
� Lowering cost per treatment
Innovation
New products introduced since 2004
� Clinac® iX, Trilogy®, Novalis Tx, UNIQUE™, TrueBeam™
� RapidArc®, Gated RapidArc
� HD 120 Multi-leaf Collimator
� On-Board Imager®
New motion management capabilities� New motion management capabilities
� Treatment planning software enhancements
� Automated contouring
� Acuros™ advanced dose calculation
� Information management
� Integrated treatment planning, oncology EMRs
� OncQT and OncoView
TrueBeam™
New system design for radiotherapy, radiosurgery
Introduced New York, April 14th 2010
Varian Radiosurgery
� Varian Strengths� Speed� Motion management� Versatility� Low cost per treatment
Surgical Platforms� Surgical Platforms� Trilogy� Novalis Tx� TrueBeam STx
� Orders >500 units*
* Since 2004
Next Targets; New Applications
Source: Global Cancer Facts & Figures 2007, p.3. American Cancer Society
2.25M patients / year 2M deaths / yearCure 4.5% of these patients
SBRT Results
PrePre--TreatmentTreatment 22 mo. Post22 mo. Post--TreatmentTreatment
Source: Robert Timmerman MD, UT Southwestern, Dallas
Oncology Systems Service
Growth Drivers
� Expanding installed base
� Richer product mix .... premium pricing
� Software Service Agreements
� Strategic Accounts focus
Professional Services
~17%
Revenues
> $500M in annual recurring revenue
� Professional Services
Productivity Drivers
� Faster installs
� Remote diagnostics
� Continuous design enhancements
� Logistics, JIT parts delivery
FY2004 FY2009
5-year average annual growth rate
Global Radiation Oncology Market ~$3.7B
� Varian ~60% share
� 5900+ Varian installations
Elekta
Elekta Siemens Accuray Other Tomotherapy Varian
Varian
Elekta
Tomotherapy
Other
Accuray
Siemens
X-Ray Products
X-ray Tubes
Flat-panel detectors
X-Ray Products Growth Initiatives
� Technology, New Products
� Improving quality, speed, cost efficiency
� Supporting fast, filmless digital imaging
� Reducing x-ray doses
� Offering high power, compact tube designs
� ServiceService
� Technical collaboration
� Worldwide distribution
� Reloading capability in U.S, Europe, Asia
� Manufacturing
� Continuous cost reduction
� Six Sigma process
200
250
300
350
Flat Panel
Tube and Panel Sales Growth by Yearm
illi
on
s
0
50
100
150
200
2005 2006 2007 2008 2009
Flat Panel
Tubes
mil
lio
ns
Annual Growth Rate 18% 17% 13% 19% 9%
Flat Panel X-Ray Tubes
�High Heat Dissipation
�Lighter Weight
�Smaller Focal Spots – Higher Power
�Continuous Heat Dissipation @ 5,000 Watts
�Greater Clarity - Less Fog in Picture
�Beam Characteristics Optimized for Flat Panel Detectors
Varian Particle Therapy Update
• ~200 patients treated at RPTC
• Resubmitted Skandion bid
• Pursuing >10 deals for new centers
• Ramping up production
Varian Particle Therapy Growth Strategy
� Standardized, cost effective solutions
� Capitalize on Varian infrastructure, technology, service
� Integration, planning, imaging, dose delivery, motion management, information management
Pencil-beam scanning� Pencil-beam scanning
� Compact, superconducting cyclotron
Security & Inspection Products Growth Initiatives
Cargo
Increasing throughput
Automating threat identification
Reducing system size, costs
Expanding services
NDTNDT
Automating inspection
Expanding benefits of CT imaging
Replacing installed base
1MeV system for Army (Rapiscan)
Third Quarter 2010 Results
VMS OS XRP Other
Net Orders 629 14% 507 10% 103 26% 20 135%
Revenues 578 13% 456 6% 102 52% 20 37%
Gross Margin 44% 45% 40% 38%
R&D 39
SG&A 85
Op Earnings 131 23% ROS (+ 28%)
Interest Expense (0.9)
EPS $0.74 (125M diluted shares)
Note: (1) Dollars in millions, except per share amounts.(2) The operating results for the Other segment and Total VMS exclude discontinued operations.
Q3 FY10 YTD Results
VMS OS XRP Other
Net Orders(1)
1,780 10% 1,419 7% 307 27% 54 (13%)
Revenues 1,705 8% 1,351 6% 296 24% 58 (6%)
Gross Margin 44% 46% 40% 27%
R&D 116
SG&A 248
Op Earnings 385 23% ROS (+ 19%)
Interest Expense (1.5)
EPS $2.10 (125M diluted shares)
Note: (1) Net Orders for the Other segment and Total VMS excludes the reversal of a $62M proton therapy order.(2) Including the proton order cancellation, net orders were $1,718M , up 6% for Total VMS and ($8M),
down (113%) for the Other segment.(3) Dollars in millions, except per share amounts.(4) The operating results for the Other segment and Total VMS exclude discontinued operations.
Net Orders and Revenues(Quarter ended 07/02/10)
300
400
500
600
700Q3 FY10
0
100
200
300
Q309 Q310
Orders Revenues
Net Orders and Revenues(FY10 YTD ended 07/02/10)
1600
1650
1700
1750
1800Q3 FY10 YTD
1450
1500
1550
1600
Q309 YTD Q310 YTD
Orders Revenues
Operating Margin and Net Earnings(Quarter ended 07/02/10)
60
80
100
120
140Q3 FY10
0
20
40
60
Q309 Q310
Op Earnings Net Earnings
Operating Margin and Net Earnings(FY10 YTD ended 07/02/10)
200
250
300
350
400
450Q3 FY10 YTD
0
50
100
150
Q309 YTD Q310 YTD
Op Earnings Net Earnings
Backlog $2,068M(As of 07/02/10)
1500
2000
2500
0
500
1000
FY 2007 FY 2008 FY 2009 FY 2010
Q1
Q2
Q3
Q4
Q3 FY10 Balance Sheet / Cash Flow
Conservative balance sheet
$588M cash and cash equivalent
$23M total debt
$1,387M stockholder equity
*DSO 80 days*DSO 80 days- down 3 days from year ago quarter- up 4 days from prior quarter
Cash Flow$68M cash flow from operationsSpent $116M to repurchase 2.3M shares in Q310
*Days Sales Outstanding
Fiscal 2010 Outlook(As of end of Third Quarter, Fiscal 2010)
� Revenues growth estimated at ~ 6% to 7% for
FY 2010
� EPS estimated at ~ $2.90 to $2.93 for FY 2010
� Tax Rate estimated at ~ 31% to 32% for FY 2010� Tax Rate estimated at ~ 31% to 32% for FY 2010
� EPS estimated at ~ $0.80 to $0.83 for Q4 FY 2010
� Tax Rate estimated at ~ 31% for Q4 FY 2010
Varian updates its outlook once per quarter when it reports financial results.
The outlook is for Continuing Operations.
Varian Medical Systems (NYSE:VAR)
Investment Summary
Market and technology leadership
Multiple platforms for global growth
Radiotherapy/Radiosurgery
Filmless X-ray imaging
Proton Therapy
Port and border protection
> $500M Annual service business> $500M Annual service business
Management focus on execution, innovation
Strong balance sheet, significant cash flow, stock buybacks
Thank you