Oncology Systems
(Dollars in Millions) 2000 1999 1998 Net Orders $ 597 $ 504 $ 414 Sales $ 534 $ 459 $ 405 Pretax Earnings-as Reported $ 93 $ 70 $ 60 Pretax Earnings-Pro Forma n/a $ 71 $ 60 Pretax Earnings as % of Sales-as Reported 17.5% 15.2% 14.8% Pretax Earnings as % of Sales-Pro Forma n/a 15.5% 14.8% Backlog $ 424 $ 361 $ 316 Capital Expenditures $ 8 $ 10 $ 7 Depreciation & Amortization $ 9 $ 9 $ 8 FY99 pro forma pretax earnings exclude reorganization and non-recurring expenses related to the spin-off of the Company's instruments and semiconductor equipment businesses, on April 2, 1999.
Varian Oncology Systems is the world's leading supplier of radiotherapy systems for treating cancer. Its integrated medical systems include linear accelerators and accessories, and a broad range of interconnected software tools for planning and delivering the most sophisticated radiation treatments available to cancer patients. Thousands of patients all over the world are treated daily on Varian systems. Oncology Systems works closely with health care professionals in community clinics, hospitals, and universities to improve cancer outcomes. The business unit also supplies linear accelerators for industrial inspection applications.

2000 Highlights
Oncology Systems again set records for annual net orders, sales, and operating earnings. It launched the Silhouette™ Edition Clinac featuring a new compact, patient friendly design for previously inaccessible small treatment rooms. It developed the Helios 6.2 inverse treatment planning software for IMRT and began volume shipments of new solid-state PortalVision imagers for treatment verification. The first installations of the fully integrated systems using Varian's Generation™ 6 architecture were completed and leading clinics began working with Varian's new Respiratory Gating System for improving treatment precision. Varian formed an alliance with GE Medical Systems, offering interfaced imaging equipment and See and Treat Cancer Care™ to North American radiation oncologists. Oncology Systems also shipped the first new Linatron M for industrial inspection.

Outlook
A record backlog and continuing growth in net orders point to the potential of another year of strong growth for Oncology Systems. Growth should be driven by demand for IMRT-ready systems, particularly in North America, Western Europe, and Japan. Initiatives to upgrade and modernize cancer care for underserved populations should lead to growth in international markets. Product initiatives will focus on integrating systems to simplify complex treatments.

Facilities

Baden, Switzerland Buc, France Chicago, Illinois Crawley, England Espoo, Finland Milpitas, California (headguarters) Tokyo, Japan Zug, Switzerland