VARIAN MEDICAL SYSTEMS, INC. — 2013 ANNUAL REPORT Operational Excellence LETTER CONTINUED FROM P.11 OPERATIONAL EXCELLENCE IS CRUCIAL TO ENSURING THAT VARIAN COMPETES EFFECTIVELY AND GROWS ITS bottom line earnings as well as its top-line revenue. I have charged all parts of our organization to identify and capitalize on opportunities to reduce costs while striving for significant improvements  in the quality of our work and service at customer sites as well as in our own factories and facilities. We reduced the costs of manufacturing, testing, and installing our TrueBeam product in fiscal year  2013. Installations that once required up to five weeks are now done routinely in three weeks. A full  course of testing for a linear accelerator can now be done in a fraction of the time it once required. In our X-Ray Products business, productivity efforts like these led to a 14 percent improvement in  sales per employee and a 20 percent improvement in operating earnings per employee. All parts of our organization are aiming to work smarter than ever. By doing so, Varian can do even more for our customers and the patients who receive the benefits of our technology. Our nearly 6,500 employees share a vision to help save millions of lives around the world every year.  We are united by values built around putting customers first, inspired innovation, being a partner for  life, and doing well by doing the right thing. All of us have goals aligned with executing our strategic  initiatives for profitable growth. We are building a business by helping people. This is what makes  Varian special. We look at our past 65 years with pride and to the future with excitement. You are an  important part of this story and we thank you for your support. DOW WILSON Chief Executive Officer Our Values C U S $_{$_{T}$O}$M E R S $_{ }$F $_{I}$R S T P A R T N E R F O R L I F E D O $_{I}$N G $_{ }$W E L B Y I N S P I R E D I N N O V A T I O N D O $_{I}$N G T H E $_{ }$R $_{I}$G H T H I N G P.12