FY 2008 Year End ReviewNovember 5, 2008

New York

Forward Looking Statements

Except for historical information, the information that follows contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include the matters described in the risk factors section of our information statement and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission.

For comparison purposes, the company makes reference to net earnings per diluted share results in the fourth quarters and full fiscal years 2006 and 2007 that are not consistent with accounting principles generally accepted in the United States (GAAP). These results are reflected and reconciled to GAAP in the table titled “GAAP to Non-GAAP Reconciliation – EPS FY 2007 & FY 2006” included in the financial section of this presentation. The company references these results to allow a better comparison between ongoing operations in the current and prior periods. The company's reference to these results should be considered in addition to results that are prepared under current accounting standards but should not be considered a substitute for results that are presented as consistent with GAAP.

Welcome

Agenda

Financials

Oncology Systems

Proton Therapy

Security and Inspection Products

X-Ray and Flat Panel Products

Summary

Financials

Elisha Finney, Sr. VP and CFO

VMS FY08 Profile

Orders: $2.3 B

Sales: $2.1 B

EPS: $2.31

Operating Earnings % 20%

Employees: 4,783

NYSE Symbol: VAR

Note:(1) FY08 Operating Earnings includes amounts for total share-based compensation expense and its related tax benefits.(2) FY08 EPS includes $0.21 net earnings per diluted share for share-based compensation expense.(3) The operating results exclude discontinued operations.

($M) VMS OS XRP Other

Net Orders 725 15% 611 17% 94 19% 21 (32%)

Revenues 593 15% 483 13% 83 25% 27 20%

Gross Margin (1) 44% 45% 41% 37%R&D (1) 39SG&A (1) 88Op Earnings (1) 136 23% ROS (+19%) Interest Income 2EPS (1) (2) $0.68 (127M diluted shares)

Note:(1) Includes amounts for total share-based compensation expense and its related tax benefits.(2) Q408 includes $0.06 net earnings per diluted share for share-based compensation expense.(3) The operating results for the Other segment and Total VMS excludes discontinued operations.

Fourth Quarter 2008 Results

FY08 Year to Date(ended 09/26/08)

Orders increased 15%OSB +14%; XRP +24%

Revenues increased 18%OSB +16%; XRP +19%

Note:The operating results for Q407 and Q408 exclude discontinued operations.

0

500

1000

1500

2000

2500

Q406YTD

Q407YTD

Q408YTD

Orders Revenues

FY08In millions

Operating margin up 1 point to 20%

Operating Earnings up 24% to $419M

Net Earnings up 22% to $295M

Notes: (1) FY08 Operating Earnings includes amounts for total share-based

compensation expense and its related tax benefits.(2) FY08 EPS includes $0.21 net earnings per diluted share for total share-based

compensation expense.(3) The operating results exclude discontinued operations for all periods

presented.

050

100150200250300350400450

Q406YTD

Q407YTD

Q408YTD

Op Earnings Net Earnings

FY08 Year to Date (ended 09/26/08)

FY08

Backlog $1,888M(as of 09/26/08)

0200400600800

100012001400160018002000

FY 2005 FY 2006 FY 2007 FY 2008

Q1Q2Q3Q4

Note: Backlog for FY08 and FY07 excludes discontinued operations.

Q4 FY08 Balance Sheet / Cash FlowConservative balance sheet:

$ 397M cash

$ 40M total debt

$1,027M shareholder equity

*DSO 74 days – down 14 days from year ago quarter

Strong cash flow:$82M cash flow from operations Spent $85M to repurchase 1.5M shares during the quarter

*Days Sales Outstanding

Fiscal 2009 Outlook(As of end of Fourth Quarter, Fiscal 2008)

Revenues growth estimated at ~ 10% to 13% for FY 2009

EPS growth from continuing operations estimated at ~ $2.58 to $2.63

Revenues growth estimated at ~ 10% to 12% for the First Quarter of FY

2009

EPS growth from continuing operations estimated at ~ $.51 to $.53 for

the First Quarter of FY 2009

Varian updates its outlook once per quarter when it reports financial results. This information is for reference purposes only and is not an affirmation of or an update to the outlook that Varian reported at the close of last quarter.

Dow Wilson, EVPPresident, Oncology Systems

Oncology Systems

What we’re going to tell you

Q4/Year Summary

2008 Key Accomplishments

Market Update

Strategy Going Forward

Oncology Business Growth

$412M

21%

$340M

7%

$319M

9%

$293M

18%

Income

% Growth

$1,672M

16%

$1,440M

8%

$1,336M

16%

$1,156M

11%

Sales

% Growth

$1,871M

14%

$1,636M

7%

$1,535M

13%

$1,355M

14%

Orders

% Growth

FY08FY07FY06FY05

*FY’06 onward included Stock Cost. FY’05 does not include any stock cost

2008 Net Orders Summary

4Q V% 2008 V%

Domestic 15% 13%

International 19% 16%

Total $611 17% $1.9B 14%

Terrific Quarter: Strong US & Int’l

Orders Growth Broad-based

Service BrachytherapySoftware

20%

20%

23%

Oncology Systems Income Statement

Q4FY08 Q4 FY08 YTDNet Orders 611 17% 1,871 14%

Revenues 483 13% 1,672 16%

Gross Margin * 45% 2 pts 43% 1 ptR&D * 27 99SG&A * 60 211Op Earnings * 132 21% 412 21% ROS * 27% 2 pts 25% 1 pt

* (Includes amounts for total share-based compensation expense.)

Cost Control Drives Margin Improvement

3% Material price reduction

12% Conversion cost productivity

Scrap down 50%

Test cell time 14% reduction

Generated free capacity of 2 new cells

Terrific Operational Year

RapidArc is Big Driver

300+ Orders

RapidArc Update

~ 30 Installs

Pricing on target

Wide variety of tumor sites under treatment

Prostate, H&N, Lung, Stereotactic

Global acceptance

Upgrade opportunity (RA + OBI)

Web siteIncreased 2,100 to 5,000 visitors to web per day722 RapidArc treatment page visitors500+ Letters to ‘Dear Cancer’

Nationwide Public Relations~ 60 media stories~ 4 million Impressions

Targeted Advertising~ 4800 ad placementsNew YorkBostonFlorida

RapidArc Promotional Successes

RapidArc TV Commercial

Major Inroads in SRS Market

VAR was #3 in SRSLaunched Novalis Tx in Sept. 2007

Fastest treatment timesMost versatileLower cost per treatmentRapidArc radiosurgery

Now Unit Share Leader in SRS Market

Great Execution in New Product Engine(besides RapidArc)

Large field IMRTGatingHD120 high res collimatorOBI advanced imaging – speed and qualityMany ARIA features – data base conversion times down almost 90%Portability of ARIA into all Txenvironments

Commitment to Continuous Improvement and Innovation

OBI Improvement – Image Quality

HD120 Performance & Reliability

Highest Industry UptimeHighest Industry Uptime

98.61%

98.80% 98.76%

98.90%

97.90%

98.00%

98.10%

98.20%

98.30%

98.40%

98.50%

98.60%

98.70%

98.80%

98.90%

99.00%

2005 2006 2007 2008 YTD

Driving Installation Productivity

WW System InstallationClinac / OBI / CBCTMLC / PV

Customer Satisfaction DriversFaster installs

On-time clinical implementation

Faster revenue generation

Process predictability

Quality improvement

25.6%

FY06 FY08

Cost Reduction

2008 Market Overview

Drivers

Cancer DemographicsNew capabilities

RapidArc + IGRT + SRSStrong International growth

JapanChinaBrazil

Very solid US Market2007 2008

$3B$3.5B

Market

11%

2008 Share Summary

+2 points of market share in ’08

DriversHigher throughput

Lower cost/treatment

Value of versatility

Marketable differentiation

Integration and breadth of product line

International Market Under-Equipped

Aging Population/Under-Equipped Market

US: 36M over 65 (4000 linacs)

EU25: 78M over 65 (2500 linacs)

China: 102M > 65 (700 linacs + 300 cobalt)

US Will Continue Growing

DriversGrowing, aging populationHealthcare cost pressures

Rising needs: 2005 to 201513→15 machines per million pop.3600 → 4700 machines- 1100 new installations - 3600 replacements

0-64 65+

0-64 65+

12%

15%

2000 – 282 Million

U.S. Population2015 – 323 Million

Sources: US Census, IMV Rad. Onc. Census Report

Treatment Improvement Opportunities5-yr Overall Cancer Survival

0

10

20

30

40

50

60

70

80

90

100

1940 1950 1960 1970 1980 1990 2000

Year

Surv

ival

Rat

e %

Prostate

Male bladder

Hodgkin's

Breast

Uterine

Cervix

Larynx

Sarcomas

Colorectal

Pharynx

Brain

Esophageal

Lung

Pancreas

Glioblastoma

Credit Issue?

Q1 Backlog – Firm – No delays to date

Financing availableOften multiple banks competing for business

Good ROI, cash flow

Lower cost/patient

More scrutiny and cautionRadiotherapy – revenue generator

Radiotherapy/Radiosurgery Market

Key Assumptions

• Cancer demographics

• Healthcare avoids credit crunchand complete spending freeze

• USA reimbursement down

• Same competitive environment

• Expanding use of radiotherapy& radiosurgery

4.0 4.44.9

5.4

Market AAGR ~10%

2012201120102009

$ Market in Billions

Oncology Strategy

Innovate with PurposeFocus on clinical outcomeDevelop and expand radiation applicationsDeliver lowest cost/treatmentHighest throughputDevelop exciting, marketable products

Continue global growth. Grow volumeDifferentiate with best software and services

Lead in service satisfactionFocus on simplicity, excitement and integration

Particle Therapy

Lester BoehVP, Emerging Businesses

Particle Therapy Overview

Successful Treatment Planning and Patient Information Management software provider to the particle therapy community for about 10 yearsWith the acquisition of Accel Instruments in January 2007, Varian is entering the treatment delivery segmentMarket interest remains high despite unrest in the credit markets

FY-08 Highlights

Proton system productization activities are on schedule and on budgetCommissioning of the Munich facility is on schedule and targeting first patient treatment in March 2009Performance of the cyclotron at the Paul Scherrer Institute (PSI) in Switzerland exceeding expectationsManufacturing facility in Germany is now open and production is ramping up

FY-09 and Beyond

Ramp-up of patient treatments at the Munich facility

Next system ready for shipment in Spring 2009

Materials for additional systems already in the pipeline

Product development roadmap includes integration to a higher level than anything else in the PT segment, cone-beam CT imaging (CBCT), patient motion management and improved clinical efficiency

Security & Inspection Products

Lester Boeh,VP, Emerging Businesses

SIP Overview

Two main markets; Cargo Inspection (Cargo) & Non-Destructive Testing (NDT)

Cargo - Key content supplier to systems integrators who then provide a complete system to an end user. Primary customers include

Smiths Detection

Rapiscan

AS&E

L3

SAIC and others

NDT – Supplier of complete inspection system in a variety of industries world-wide including industrial imaging, automotive, aerospace and foundries

Oncology Strategy Meeting-Financial 3-24

7

Oncology Strategy Meeting-Financial 3-24

9

SIP Business Growth

$92M

70%

$54M

74%

$31M

3%

$30M

3%

Sales

%

$94M

10%

$86M

110%

$41M

41%

$29M

(4%)

Orders

%

FY08FY07FY06FY05

FY-08 Highlights

Contract from US Customs and Border Protection (CBP) for several IntellX inspection facilities for use along the US borderDeployment of the Mi product family, enabling automatic detection of WMD’s, nuclear materials and materials discriminationDelivery of over 20 imaging physics packages for ports and borders in the Middle EastDelivery of the first of two high-energy inspection systems for use on the NASA Space Shuttle Reusable Solid Rocket Motor (Booster) programGrand opening of the new SIP manufacturing facility

FY-09 and Beyond

Complete deployment of the Mi product family in all segmentsRelease field upgrade package for materials discrimination capabilityExpand Cargo product offering in standard packages has enabled improved imaging capability at a more attractive system costIncreased volumes have enabled greater cost reduction opportunities and margin improvement for FY-09Substantial service growth through larger installed base and higher service contract capture rateNew imaging algorithms enabling improved image quality and more automated image analysis

X-Ray Products

X-ray Product Lines

Medical X-ray TubesDiagnostic X-rayCT Scanner TubesMammography Tubes

Industrial X-ray TubesFlat Panel Imaging Systems

Dynamic Imaging PanelsRadiographic Imaging Panels

30304030CB

2520V4030E

1313

2520E+

2020

3030+4343R 4336R

Flat Panel Detectors X-Ray Tubes

CT, Interventional Radiology, Angiography, Cardiovascular,

Mammography

High Capacity CT Tube

Key XRP Advantages

Strongest Independent Supplier of Imaging Panels and X-ray Tubes

Strong Local Support with Offices Worldwide

Best Technology of Independent Suppliers

Excellent Cost Structure

XRP Business Growth

$73M

21%

$61M

40%

$44M

11%

$39M

26%

Income

%

$305M

19%

$257M

13%

$228M

17%

$195M

18%

Sales

%

$337M

24%

$273M

13%

$242M

19%

$204M

11%

Orders

%

FY08FY07FY06FY05

FY08 Milestones

Completed Several New Products which will Increase 09 Sales

New High Tier CT TubeNew Family of Large Radiographic Panels

Signed Multiple Agreements with New Customers for Imaging PanelsAcquired our China Distributor and Established X-Ray Tube Reload and Repair Capability in China

SummaryX-ray Products is Well Positioned for Double-Digit Growth in FY09

Tim GuertinPresident and CEO

Summary

Varian’s 5-Year Growth Opportunity

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FY08 FY09 FY10 FY11 FY12 FY13

ACCEL/Proton

Security

Xray Products

Oncology

Millions USD

Stock Performance Comparison

October 29, 2008

VAR TOMO ARAY HOLX DJII SP50 COMP

-16.83%

-85.07%

-64.91%

-37.52%-36.66%-32.22%

-66.99%

-90.0%

-80.0%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%%

Cha

nge

Ticker

YTD Percentage Change

Summary

VAR is a great investment opportunity

3 great growth trendsCancer treatment

Filmless x-ray

Security

Strong balance sheet and cash flows

Ten year stock performance – Top 1%

FY 2008 Year End ReviewNovember 5, 2008

New York