ADVANCING CONNECTED CARE
November 1, 2019
Fourth Quarter 2019 Financial Results
™
This presentation contains forward-looking statements, within the meaning of the Private Securities LitigationReform Act of 1995. All statements included herein that are not historical facts are forward-lookingstatements, including without limitation statements regarding Hill-Rom’s ability to drive sustainable profitablegrowth and shareholder value, the timing and success of new product launches and portfolio expansion,the achievement of long-range financial objectives, the continuation of stable customer demand trends, astable U.S. capital environment, the timing and success of M&A and business optimization initiatives, ourability to reduce debt, implementation of our IT transformation, the impact of tariffs, any change to theone-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans,objectives, projections, expectations and intentions. Such forward-looking statements involve a number ofrisks and uncertainties and are subject to change at any time. In the event such risks or uncertaintiesmaterialize, Hill-Rom’s results could be materially adversely affected. For a more in-depth discussion offactors that could cause actual results to differ from those contained in forward-looking statements, see thediscussions under the heading “Risk Factors” in the company's previously filed most recent Annual Report onForm 10-K and subsequent Quarterly Reports on Form 10-Q. Hill-Rom assumes no obligation to update orrevise any forward-looking statements.
Certain financial figures presented herein have been presented on an adjusted basis (non-GAAP).Reconciliation between non-GAAP financial measures and reported GAAP financial measures are includedin the appendices to this slide deck.
Hill-Rom’s results contained herein reflect the new revenue recognition accounting standard, ASC 606,which Hill-Rom adopted on a modified retrospective basis beginning in the fiscal first quarter 2019. Allcomparisons contained herein will include the new standard for the current and prior year periods.
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Non-GAAP Financial Measures, Forward Looking Statements And ASC 606
2
3
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2019 Highlights
Q4 & FY 2019 Financial Summary
2020 Financial Guidance
2022 Long-Range Financial Outlook
Appendix
1
2
3
4
5
Table of Contents
4
2019 Highlights
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Patient
Support
SystemsFront
Line Care
Surgical
Solutions
$2.9BFY 2019
Transforming to drive sustainable profitable growth and shareholder value
InnovationLeadership
2019 Revenue by BusinessUS$ Billions
New Product RevenueUS$ Millions
Key Valuation MetricsAs of 9/30/2019
FY 2017 FY 2018 FY 2019
$150M+
Value
$300M+
$450M+
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Global medical technology leader with a diversified portfolio
Advancing category leadership with healthcare solutions
Market
Capitalization
Enterprise
Value
Fiscal 2019
Returned to
Shareholders*
$7.0B $8.9B
$177M+12%LTM Total
Shareholder
Return
Hillrom: Trusted Medical Technology Innovator
5
Note: Hillrom’s fiscal year end is September 30; *Includes dividends and share repurchases
Driving operational execution and strong financial performance
• Accelerating FY 2019 core revenue* growth to 7% (6% excluding acquisitions); Q4 2019 reflects sixth
consecutive quarter of mid-single digit core revenue growth
• Exceeding guidance with FY 2019 adjusted EPS of $5.08 per diluted share; generating $401M in
operating cash flow and returning $177M to shareholders
Expanding internationally and penetrating emerging markets
• Realigning international operations with new leadership, improved visibility and performance
• Reinvigorating emerging markets with targeted investments to drive accelerated top-line growth
Transforming the portfolio with select M&A and optimization initiatives
• Executing disciplined M&A strategy with the integration of Voalte and Breathe Technologies
• Redirecting resources toward higher-growth opportunities with divestiture of surgical consumables
Advancing category leadership with differentiated solutions and innovation
• Achieving more than $450M in new product revenue for FY 2019
• Launching EarlySense, WatchCare, and Welch Allyn® RetinaVue® 700 Imager
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business © 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Enhancing Shareholder Value By Executing Our Strategy
Hillrom: 2019 Highlights
6
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Concluding Successful Fiscal 2019
2019 Financial Results
Note: Axis not to scale; Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported
GAAP numbers in the appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the
company may exit, including Surgical Solutions international OEM business; **Stock based compensation (SBC) tax benefit was $0.07
per diluted share in FY 2019 and $0.24 per diluted share in FY 2018
FY 2018 FY 2019
$2.83B
$2.91B
GlobalRevenue
FY 2018 FY 2019
17.0%
17.8%
OperatingMargin
FY 2018 FY 2019
$4.65
$5.08
Adj. EarningsPer Share
FY 2018 FY 2019
$395M$401M
OperatingCash Flow
7
+80BPS
Margin Expansion
+2%GrowthCore*
Growth
+6%Core* Ex.
Acquisitions
+7% +14%Growth
Ex. SBC**
+9%Growth
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
External Recognition Validates Hillrom’s Cultural Impact
Promoting Excellence In The Workplace
8
For “Sustainable Procurement”
Dave Thomas
Foundation Award recognizes Adoption
Benefits
Great Place to Work Award2
American Heart Association Workplace
Health Achievement Award (Gold Level)
Diversity & Inclusion Award1
Silver Cradle Award recognizes Adoption
Benefits
The Corporate Board Initiative acknowledges
the advancement of women on Boards
1Awarded in Mexico; 2Awarded in France
9
Q4 & FY 2019 Financial Summary
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Fiscal Fourth Quarter
Adjusted P&L 2018 2019YOY
Change
Revenue $759M $783M
Gross Margin 49.6% 49.9% 30 bps
Operating Margin 20.6% 20.9% 30 bps
Adjusted EPS $1.64 $1.69
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2019 Financial Results
Exceeding Guidance With Strong Fiscal Q4 & FY Financial Results
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business; **Stock based compensation (SBC) tax benefit was $0.04 and $0.07 per diluted
share in Q4 2019 and FY 2019, respectively and $0.15 and $0.24 per diluted share in Q4 2018 and FY 2018, respectively
10
Fiscal Full Year
2018 2019YOY
Change
$2.8B $2.9B
48.8% 49.5% 70 bps
17.0% 17.8% 80 bps
$4.65 $5.08
8%core*
growth
4%constant currency
7%core*
growth
4%constant currency
14%growth
ex. SBC**
9%growth
11%growth
ex. SBC**
3%growth
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
6%
4%
8%
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
6%
Accelerating Core Revenue Growth Trend With 6 Consecutive Quarters Of Mid-Single Digit Growth
Core Revenue* Growth
*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions
international OEM business
11
100+
bps
150+
bps
Core Growth Impact of Acquisitions
2%
6%
2%
4%
Double-digit (DD) U.S. core growth across diverse and differentiated portfolio
Benefiting from solid U.S. bed system growth, orders and backlog
Exceeding expectations for Voalte with strong DD revenue growth and backlog
Delivering solid international growth in EMEA and Latin America
Driving strong U.S. OR tables and equipment growth
Achieving record Integrated Table Motion placements
Delivering DD core international growth
Divesting surgical consumables to refocus resources and capital
Driving growth with new products and strong international performance
Experiencing difficult comp from 2018 Monarch® Airway Clearance System launch
Launching next-gen RetinaVue® 700 Imager
Integrating recent Breathe Technologies acquisition
Patient Support Systems Surgical SolutionsFront Line Care
Q4 2019 FY 2019 Q4 2019 FY 2019 Q4 2019 FY 2019
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Q4 2019 Revenue By Business
Note: All revenue growth rates are constant currency; EMEA = combination of Europe and MEATI regions; OUS = outside the United
States; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical
Solutions international OEM business
12
+30 bpsGross Margin Expansion
Adjusted Gross Margin
Q4 2018 GM
Expansion
Opex
Leverage
Q4 2019Q4 2018 Product
Mix
Operational
Improvements*
Q4 One-Time
Items
Q4 2019
Adjusted Operating Margin
+40 bps+30 bps
+30 bpsOperating Margin Expansion
0 bps
+40 bps
*Includes tariff and related impact
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Driving Continued Margin Expansion With Positive Product Mix And Operational Improvements
Q4 2019 Margin Expansion
Note: Axis not to scale; Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported
GAAP numbers in the appendix to this presentation
49.6%49.9%
20.9%
13
20.6%(50) bps
+70 bpsGross Margin Expansion
Adjusted Gross Margin
FY 2018 GM
Expansion
Opex
Leverage
FY 2019FY 2018 Product
Mix
Operational
Improvements*
Q4 One-Time
Items
FY 2019
Adjusted Operating Margin
+50 bps +70 bps
+80 bpsOperating Margin Expansion
+10 bps+30 bps
*Includes tariff and related impact
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Delivering Strong Margin Expansion For FY 2019
FY 2019 Margin Expansion
Note: Axis not to scale; Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported
GAAP numbers in the appendix to this presentation
48.8%
49.5%
17.0%
17.8%
14
(10 bps)
FY 2018 FY 2019
FY 2019 Adjusted EPS GrowthUS$
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Exceeding Guidance In Each Quarter Throughout Fiscal 2019
2019 Adjusted Earnings Per Diluted Share
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; Axis not to scale; *Stock based compensation (SBC) tax benefit was $0.04 and $0.07 per diluted share in
Q4 2019 and FY 2019, respectively and $0.15 and $0.24 per diluted share in Q4 2018 and FY 2018, respectively
15
Q4 2018 Q4 2019
Q4 2019 Adjusted EPS GrowthUS$
$1.64
$1.69$4.65
$5.08+3%growth
+11%growth
ex. SBC*
+9%growth
+14%growth
ex. SBC*
Operating
Cash Flow
+7%Free Cash Flow
Growth
Cash Flow
Free
Cash Flow
• Improving ability to deploy capital with disciplined M&A strategy
✓ Accelerating growth with diversified revenue streams; driving attractive financial returns
✓ Strengthening clinical and economic value with customers
• Reducing debt levels in absence of M&A
• Raising quarterly dividend for the 9th
consecutive year
• Offsetting share count dilution with buybacks
FY 2018
FY 2019
~4.5x ~3.2xPeak
LeverageQ4 2019
Leverage
FY 2019 Cash Flow
$395M
$401M
$306M
$328M
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16
Generating Strong Operating And Free Cash Flow
Note: Leverage calculated as Total Debt, excluding Senior Notes redeemed on October 7, 2019 in connection with the issuance of
new Senior Notes in September, divided by EBITDA as defined in Hillrom’s compliance certificate under its existing credit facility
Balanced Capital Allocation:
17
2020 Financial Guidance
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Adjusted P&L
2019
Results
2020
Guidance
Revenue Growth
(reported) 3% 1% - 2%
Gross Margin 49.5% +100 - 150 bps
Operating Margin 17.8% ~18.5%
Adjusted EPS $5.08 $5.46 - $5.56
Operating Cash
Flow $401M ~$430M
Capital Expenditures $73M ~$100M
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2020 Financial Guidance
Entering Fiscal 2020 With Strong Momentum And A Compelling Outlook
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business
18
Core Revenue*
Growth
4% - 5%
11% - 13%Adjusted EPS Growth
Ex. Divestiture
7% - 9%Adjusted EPS
Growth
~$430MOperating Cash Flow
5% - 6%Core Revenue
Growth
Ex. Acquisitions
Core
Growth
Non-Core Reported & Constant
Growth
2020 Revenue Growth Guidance
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2020 Revenue Growth
5% - 6%
1% - 2%
2020 Revenue
Growth Guidance
Constant Core*
Patient Support Systems Mid-Single Digits
Front Line Care Mid-Single Digits
Surgical Solutions
Total Hillrom 1% - 2% 5% - 6%
~(20%)**
Mid-Single Digits
(400 bps)
Generating Balanced Core Revenue Growth Across Three Businesses
Note: All growth rates are constant currency; *Core revenue excludes foreign currency, divestitures and non-strategic assets the
company may exit, including Surgical Solutions international OEM business; **Surgical Solutions constant currency growth reflects the
impact of the 2019 surgical consumables divestiture
19
Other Non-CoreSurgical Consumables
Divestiture
Q1 2020 Financial Guidance
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
• Sustaining core business
momentum
• Benefiting from new product
momentum
• Delivering ~4% core revenue
growth, excluding acquisitions
• Investing in key strategic initiatives
to drive future growth
• Absorbing ~$0.05 dilution from
surgical consumables divestiture
Adjusted P&L
Q1 2020
Guidance
Revenue Growth Flat(reported & constant)
Core Revenue*
Growth
Adjusted EPS $1.07 - $1.09
5% - 6%including
acquisitions
~4%excluding
acquisitions
Driving Core Revenue Growth While Offsetting Recent Divestiture Dilution
*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions
international OEM business
20
Guidance Reflects:
Adjusted P&L
2017 - 2020 Original Outlook
2017 - 2020Current
Guidance
Core Revenue*CAGR 4% - 5% 5%+
2020 Gross Margin ~50% ~51%
2020 OperatingMargin 19% - 20% ~18.5%
Adjusted EPS CAGR 12% - 14%
Operating Cash Flow
~$1.2B[2018 - 2020]
$1.2B+[2018-2020]
Capital Expenditures
~$350M[2018-2020]
~$300M[2018-2020]
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Achieving 2017 - 2020 Long-Range Plan
Exceeding Core Revenue Growth, Gross Margin And Adjusted EPS Outlook
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business
21
• Accelerating core revenue with organic growth, new products and incremental M&A (~50 bps)
• Exceeding gross margin target by more than 100 bps
• Offsetting unplanned headwinds (~80 bps) with savings from efficient tax and debt structure
✓ Impact of China tariffs
✓ Investing in IT transformation
• Executing business optimization savings to fund key strategic investments
• Deploying capital with disciplined M&A strategy
Highlights:
~13%reported
~15%ex.
divestiture
22
2022 Long-Range Financial Outlook
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Our Vision
23
ADVANCING … Always innovating
Connecting caregivers and patientsCONNECTED …
Putting care at the center of everything we doCARE …
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Delivering Strong Financial Performance Thru 2022
24
Focusing On Durable Revenue Growth And Enhanced Profitability
FY 2019 FY 2022
Adj. Earnings Per Share
FY 2019 FY 2022
Global Revenue
FY 2019 2020-2022
Cumulative
OperatingCash Flow
$2.9B$5.08
$6.80+ ~$1.4B
$401M
~$3.2B
~5%Core*CAGR
CAGR
~$1.4BCumulative
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business
12%+Ex. Divestiture
10%+Reported
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Compelling Long-Range Financial Outlook
25
Differentiated solutions and
innovation
Expanding internationally and
penetrating emerging markets
Transforming the portfolio with select
M&A and optimization initiatives
Driving operational execution and strong
financial performance
• Growing focused product categories higher than WAMGR
• Focusing on connected care and digital strategy with acute-care ecosystem and care communication platforms
• Driving $300M+ of new product revenue growth, contributing ~200 bps of growth annually
• Launching 5 to 6 new products each year to enhance patient outcomes
• Accelerating reported revenue growth and delivering adjusted EPS growth of 10%+
• Improving gross margin profile with mix, operational and productivity improvements
• Making key strategic investments to drive durable top-line growth
• Returning value to shareholders with strong cash flow generation
• Reinvigorating our international commercial operations to support growth acceleration
• Driving emerging market penetration; contributing ~100 bps of top-line growth over the plan
• Executing robust China transformation with focused approach of differentiated products
• Enhancing market coverage and distributor management
• Integrating recent M&A transactions to maximize impact to Hillrom
• Executing disciplined M&A strategy with value-creating opportunities
• Winding down non-core revenue in 2020
• Additional M&A opportunities not included in the long-range outlook
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Divesting $300M+ Of Annualized Revenue Over Last 5 Years
Winding Down Non-Core Revenue* In 2020
*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions
international OEM business
26
FY 2018 FY 2019 FY 2020
Outlook
FY 2021
Outlook
FY 2022
Outlook
~$210M
~$150M
~$25M
~$0M ~$0M
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Delivering Differentiated Solutions And Innovation
27
FY 2017 FY 2019 FY 2022
$150M+
$450M+
$750M+
PSS
FLC
Surgical
New Product Revenue
$250M+
WatchCareIncontinence*
$1B+
SmartBeds
Significant Market Potential
Delivering Annual Growth Of ~200 BPS From New Products
$2B+
CareCommunications
$400M+
VisionScreening
$300M+
AutomatedVitals Market*
$1B+
Respiratory Airway Clearance & NIV*
Note: NIV = Non-Invasive Ventilation; *U.S. market potential only
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
28
2019 2022
International Revenue Penetration
• Unleashing untapped potential by
expanding penetration from ~9% of
revenue today to double digits
• Focusing investment and developing
market for targeted product
categories
• Strengthening Hillrom’s
competitiveness in primary care and
driving demand
• Reducing international volatility with
improved EM growth
• Enhancing visibility while managing
distributors and channel effectively
+LSDInt’l Developed
2019 - 2022 CAGR
+DDEmerging Markets2019 - 2022 CAGR
Int’l Developed Emerging Markets
~70%~60%
~30%~40%
Contributing ~100 BPS Of Growth From Emerging Markets
Emerging Market (EM) Drivers:
Note: LSD = Low-Single Digits
Expanding Internationally And Penetrating EM
• Advancing connected care vision with mobile offering
• Improving workflow and providing real-time actionable insights at the point of care
• Complementing future digital offerings
• $180M in cash consideration; up to $15M in commercial milestone payments
• ~$40M in annual revenue growing double-digits; immediately accretive
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Transforming The Portfolio With M&A
29
Breathe Technologies Acquisition
Voalte Acquisition
Surgical Consumables Divestiture
• Addressing large and growing market with disruptive non-invasive ventilation technology
• Shifting care closer to home and strengthening the Respiratory Care portfolio
• Leveraging Hillrom’s direct commercial model
• $130M in cash consideration
• Modestly dilutive to adjusted EPS in first year; increasingly accretive thereafter
• Completing the sale of surgical consumables products
• Underscores strategic focus on high-growth, high-margin categories with demonstrated leadership
• Divested products generated annual revenue of ~$100M
• Business contributed ~$0.20 in adjusted EPS per diluted share on a proforma basis
Expecting Future M&A To Be Incremental To The 2022 Long-Range Outlook
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2022 Financial Outlook
30
Outlook Assumes: Outlook Excludes:
• No material disruption in key markets
• Modest price pressures in select
areas of portfolio
• Stable hospital capital spending
trends and global macro-
environment
• Non-core revenue ends in 2020
• Permanent repeal of medical
device tax
• Current foreign exchange rates
• New M&A opportunities
• Unusual non-recurring items or
special charges
• New regulatory, healthcare or U.S.
tax reforms
• Incremental tariffs
Adjusted P&L
2019
Results
2022
Outlook
Revenue
(constant) 4% ~4% CAGR
Gross Margin 49.5% ~52%
Operating Margin 17.8% ~21%
Adjusted EPS $5.08 $6.80+
Operating
Cash Flow $401M~$1.4B
[2020-2022]
Capital Expenditures $73M
~$325M[2020-2022]
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2019-2022 Long-Range Financial Outlook
Driving Sustainable Durable MSD Core Revenue Growth, Margin Expansion And Double-Digit Adjusted EPS Growth
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; Due to a wide variety of factors which could materialize over the next three years, the shape of the P&L
may evolve over time; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit,
including Surgical Solutions international OEM business
31
~4%Reported
Growth CAGR
~5%Core Revenue*
Growth CAGR
12%+10%+
~$1.4BOperating Cash Flow
[2022 – 2022]
Adjusted EPS
Growth CAGR
Adjusted EPS
Growth CAGR
Ex. Divestiture
32
Appendix
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
($ in millions) Patient Support Systems Surgical Solutions Total Non-Core
U.S. OUS Total U.S. OUS Total U.S. OUS Total
Q1 2019 $2.3 $0.4 $2.7 $21.6 $16.1 $37.6 $23.8 $16.5 $40.3
Q2 2019 $2.2 $0.3 $2.5 $21.0 $15.4 $36.4 $23.2 $15.6 $38.9
Q3 2019 $8.0 $0.0 $8.0 $23.3 $14.2 $37.4 $31.3 $14.2 $45.5
Q4 2019 $0.4 $0.0 $0.4 $8.4 $14.0 $22.4 $8.7 $14.0 $22.7
Fiscal 2019 $12.9 $0.7 $13.5 $74.2 $59.6 $133.8 $87.1 $60.2 $147.3
Q1 2018 $15.0 $1.8 $16.8 $21.4 $16.5 $37.9 $36.4 $18.3 $54.7
Q2 2018 $14.7 $0.6 $15.3 $23.1 $17.3 $40.4 $37.8 $17.9 $55.7
Q3 2018 $9.7 $0.7 $10.4 $22.2 $16.8 $39.0 $31.9 $17.5 $49.4
Q4 2018 $10.0 $0.5 $10.5 $21.9 $17.1 $39.1 $31.9 $17.6 $49.5
Fiscal 2018 $49.4 $3.6 $53.0 $88.6 $67.7 $156.3 $138.0 $71.3 $209.3
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
2019 & 2018 Non-Core Revenue Including Surgical Consumables
Note: Non-core revenue includes divestitures and non-strategic assets the company may exit, including Surgical Solutions international
OEM business; Totals may not add due to rounding
33
34
Supplemental Schedules: ASC 606
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Q4 Adjusted P&L Under ASC 606
Q4 2018 Q4 2019 Growth
ASC 606 ASC 606 vs. PY
Revenue $759.2 $782.8 3.1%
Gross Profit $376.9 $390.4 3.6%% of Sales 49.6% 49.9% 30 bps
Research & Dev $35.0 $35.6 1.7%% of Sales 4.6% 4.5%
Sales, Gen & Admin $185.8 $190.9 2.7%% of Sales 24.5% 24.4%
Operating Income $156.1 $163.9 5.0%% of Sales 20.6% 20.9% 30 bps
Interest $23.4 $21.6 -7.9%
Pretax $132.7 $142.3 7.2%
Tax Expense $21.6 $27.8 28.8%Tax Rate 16.3% 19.5%
Net Income $111.1 $114.5 3.1%
Diluted Shares 67.8 67.6
EPS $1.64 $1.69 3.0%
($ in millions)
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Q4 2019 Financial Results: ASC 606
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation of non-GAAP disclosures in the
appendix to this presentation
35
2019 Revenue Tables
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.Note: Totals may not add due to rounding
36
ASC 606
Total United States International Total United States International Total United States International Total United States International Total
Patient Support Systems 248.1$ 92.9$ 341.0$ 241.8$ 90.2$ 332.0$ 2.6% 3.0% 2.7% 2.6% 6.4% 3.7%
Front Line Care 166.5 66.9 233.4 156.4 66.4 222.8 6.5% 0.8% 4.8% 6.5% 3.3% 5.5%
Surgical Solutions 53.9 55.2 109.1 50.9 59.8 110.7 5.9% -7.7% -1.4% 5.9% -5.0% 0.0%
Total Hill-Rom 468.5$ 215.0$ 683.5$ 449.1$ 216.4$ 665.5$ 4.3% -0.6% 2.7% 4.3% 2.3% 3.7%
ASC 606
Total United States International Total United States International Total United States International Total United States International Total
Patient Support Systems 267.2$ 92.4$ 359.6$ 243.6$ 106.2$ 349.8$ 9.7% -13.0% 2.8% 9.7% -7.2% 4.6%
Front Line Care 170.2 72.9 243.1 163.1 75.0 238.1 4.4% -2.8% 2.1% 4.4% 2.7% 3.8%
Surgical Solutions 55.6 55.9 111.5 54.4 63.2 117.6 2.2% -11.6% -5.2% 2.2% -5.2% -1.8%
Total Hill-Rom 493.0$ 221.2$ 714.2$ 461.1$ 244.4$ 705.5$ 6.9% -9.5% 1.2% 6.9% -3.6% 3.3%
ASC 606
Total United States International Total United States International Total United States International Total United States International Total
Patient Support Systems 290.8$ 83.7$ 374.5$ 262.1$ 91.2$ 353.3$ 11.0% -8.2% 6.0% 11.0% -4.1% 7.1%
Front Line Care 178.4 66.0 244.4 170.8 69.5 240.3 4.4% -5.0% 1.7% 4.4% -1.4% 2.7%
Surgical Solutions 60.2 47.7 107.9 55.6 54.3 109.9 8.3% -12.2% -1.8% 8.3% -8.1% 0.2%
Total Hill-Rom 529.4$ 197.4$ 726.8$ 488.5$ 215.0$ 703.5$ 8.4% -8.2% 3.3% 8.4% -4.2% 4.5%
ASC 606
Total United States International Total United States International Total United States International Total United States International Total
Patient Support Systems 328.9$ 86.5$ 415.4$ 290.0$ 86.5$ 376.5$ 13.4% 0.0% 10.3% 13.4% 3.8% 11.2%
Front Line Care 185.5 71.7 257.2 193.6 69.0 262.6 -4.2% 3.9% -2.1% -4.2% 6.5% -1.4%
Surgical Solutions 51.5 58.7 110.2 60.6 59.5 120.1 -15.0% -1.3% -8.2% -15.0% 2.7% -6.2%
Total Hill-Rom 565.9$ 216.9$ 782.8$ 544.2$ 215.0$ 759.2$ 4.0% 0.9% 3.1% 4.0% 4.4% 4.1%
ASC 606
Total United States International Total United States International Total United States International Total United States International Total
Patient Support Systems 1,135.0$ 355.5$ 1,490.5$ 1,037.6$ 374.1$ 1,411.7$ 9.4% -5.0% 5.6% 9.4% -0.6% 6.7%
Front Line Care 700.6 277.5 978.1 683.8 279.9 963.7 2.5% -0.9% 1.5% 2.5% 2.8% 2.5%
Surgical Solutions 221.2 217.5 438.7 221.5 236.8 458.3 -0.1% -8.2% -4.3% -0.1% -3.8% -2.0%
Total Hill-Rom 2,056.8$ 850.5$ 2,907.3$ 1,942.9$ 890.8$ 2,833.7$ 5.9% -4.5% 2.6% 5.9% -0.4% 3.9%
Q1 2019 Q1 2018 % Growth @ Actual Rates % Growth @ Constant Rates
FY 2019 FY 2018 % Growth @ Actual Rates % Growth @ Constant Rates
Q2 2019 Q2 2018 % Growth @ Actual Rates % Growth @ Constant Rates
Q3 2019 Q3 2018 % Growth @ Actual Rates % Growth @ Constant Rates
Q4 2019 Q4 2018 % Growth @ Actual Rates % Growth @ Constant Rates
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
17 Act 17 Act 17 Act 17 Act 17 Act 18 Act 18 Act 18 Act 18 Act 18 Act
Revenue $635.8 $682.7 $686.8 $731.0 $2,736.3 $665.5 $705.5 $703.5 $759.2 $2,833.7
Gross Profit $302.0 $328.6 $330.3 $357.7 $1,318.7 $316.6 $346.9 $343.7 $376.9 $1,384.2% of Sales 47.5% 48.1% 48.1% 48.9% 48.2% 47.6% 49.2% 48.9% 49.6% 48.8%
Research & Dev $32.0 $35.3 $34.9 $31.5 $133.7 $32.3 $34.7 $33.6 $35.0 $135.6% of Sales 5.0% 5.2% 5.1% 4.3% 4.9% 4.9% 4.9% 4.8% 4.6% 4.8%
Sales, Gen & Admin $214.7 $225.6 $255.9 $218.3 $914.4 $235.3 $269.4 $235.8 $228.9 $969.4% of Sales 33.8% 33.0% 37.3% 29.9% 33.4% 35.4% 38.2% 33.5% 30.2% 34.2%
Operating Income $55.3 $67.8 $39.6 $107.9 $270.6 $49.0 $42.9 $74.3 $113.0 $279.2% of Sales 8.7% 9.9% 5.8% 14.8% 9.9% 7.4% 6.1% 10.6% 14.9% 9.9%
Interest $20.7 $22.3 $24.3 $23.1 $90.4 $21.3 $24.6 $23.1 $23.3 $92.3
Pretax $34.6 $45.5 $15.3 $84.8 $180.2 $27.7 $18.3 $51.3 $89.7 $186.9
Tax Expense $11.4 $8.0 $9.9 $19.4 $48.7 ($57.9) ($7.9) $9.2 ($1.6) ($58.2)Tax Rate 32.9% 17.5% 64.9% 22.9% 27.0% 208.9% 43.3% 17.9% 1.8% 31.1%
Net Income $23.2 $37.5 $5.4 $65.4 $131.5 $85.6 $26.2 $42.1 $91.3 $245.1
Non-Controlling Interests ($0.3) ($0.4) ($0.3) ($0.3) ($1.3) $0.0 $0.0 $0.0 $0.0 $0.0
Net Income - Attributed to HRC $23.5 $37.9 $5.7 $65.7 $132.8 $85.6 $26.2 $42.1 $91.3 $245.1
Diluted Shares 66.9 67.1 67.7 67.4 67.2 67.4 67.6 67.6 67.8 67.6
EPS $0.35 $0.56 $0.08 $0.98 $1.98 $1.27 $0.39 $0.62 $1.35 $3.63
2017 & 2018: ASC 606 GAAP Quarterly P&L
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
($ in millions)
Note: Totals may not add due to rounding
37
Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY
17 Act 17 Act 17 Act 17 Act 17 Act 18 Act 18 Act 18 Act 18 Act 18 Act
Revenue $635.8 $682.7 $686.8 $731.0 $2,736.3 $665.5 $705.5 $703.5 $759.2 $2,833.7
Gross Profit $302.2 $330.0 $332.1 $359.3 $1,323.5 $316.6 $346.9 $343.7 $376.9 $1,384.2% of Sales 47.5% 48.3% 48.3% 49.1% 48.4% 47.6% 49.2% 48.9% 49.6% 48.8%
Research & Dev $32.0 $35.3 $34.9 $31.5 $133.7 $32.3 $34.7 $33.6 $35.0 $135.6% of Sales 5.0% 5.2% 5.1% 4.3% 4.9% 4.9% 4.9% 4.8% 4.6% 4.8%
Sales, Gen & Admin $177.5 $188.7 $187.2 $190.9 $744.4 $188.7 $200.3 $191.7 $185.8 $766.5% of Sales 27.9% 27.6% 27.3% 26.1% 27.2% 28.4% 28.4% 27.3% 24.5% 27.0%
Operating Income $92.7 $106.0 $109.9 $136.9 $445.5 $95.6 $112.0 $118.4 $156.1 $482.1% of Sales 14.6% 15.5% 16.0% 18.7% 16.3% 14.4% 15.9% 16.8% 20.6% 17.0%
Interest $21.7 $22.3 $24.3 $23.1 $91.4 $22.3 $24.6 $23.1 $23.4 $93.3
Pretax $71.0 $83.7 $85.6 $113.8 $354.0 $73.3 $87.4 $95.4 $132.7 $388.9
Tax Expense $21.2 $21.4 $25.1 $29.0 $96.7 $14.2 $18.5 $20.5 $21.6 $74.8Tax Rate 29.8% 25.6% 29.3% 25.4% 27.3% 19.3% 21.1% 21.5% 16.3% 19.2%
Net Income $49.8 $62.2 $60.6 $84.9 $257.3 $59.2 $68.9 $74.9 $111.1 $314.1
Non-Controlling Interests ($0.3) ($0.4) ($0.3) ($0.3) ($1.3) $0.0 $0.0 $0.0 $0.0 $0.0
Net Income - Attributed to HRC $50.1 $62.6 $60.9 $85.1 $258.6 $59.2 $68.9 $74.9 $111.1 $314.1
Diluted Shares 66.9 67.1 67.7 67.4 67.2 67.4 67.6 67.6 67.8 67.6
EPS $0.75 $0.93 $0.90 $1.26 $3.85 $0.88 $1.02 $1.11 $1.64 $4.65
2017 & 2018: ASC 606 Adjusted Quarterly P&L
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
($ in millions)
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation of non-GAAP disclosures in the
appendix to this presentation; Totals may not add due to rounding
38
39
2018 Reconciliation: ASC 605 to ASC 606
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Q1 2018 Adjusted P&L - Reconciliation Q1 2019 Adjusted P&L - Reconciliation
Q1 2018 ASC 606 Q1 2018
ASC 605 Impact ASC 606
Revenue $669.7 ($4.2) $665.5
Gross Profit $319.6 ($3.0) $316.6% of Sales 47.7% 47.6%
Research & Dev $32.3 $0.0 $32.3% of Sales 4.8% 4.9%
Sales, Gen & Admin $188.6 $0.1 $188.7% of Sales 28.2% 28.4%
Operating Income $98.7 ($3.1) $95.6% of Sales 14.7% 14.4%
Interest $22.3 $0.0 $22.3
Pretax $76.4 ($3.1) $73.3
Tax Expense $14.6 ($0.4) $14.2Tax Rate 19.1% 19.3%
Net Income $61.8 ($2.7) $59.2
Diluted Shares 67.4 67.4
EPS $0.92 ($0.04) $0.88
Q2 2018 Adjusted P&L - Reconciliation Q2 2019 Adjusted P&L - Reconciliation
Q2 2018 ASC 606 Q2 2018
ASC 605 Impact ASC 606
Revenue $710.5 ($5.0) $705.5
Gross Profit $350.4 ($3.5) $346.9% of Sales 49.3% 49.2%
Research & Dev $34.7 $0.0 $34.7% of Sales 4.9% 4.9%
Sales, Gen & Admin $200.5 ($0.2) $200.3% of Sales 28.2% 28.4%
Operating Income $115.2 ($3.2) $112.0% of Sales 16.2% 15.9%
Interest $24.6 $0.0 $24.6
Pretax $90.6 ($3.2) $87.4
Tax Expense $19.4 ($0.9) $18.5Tax Rate 21.4% 21.1%
Net Income $71.2 ($2.3) $68.9
Diluted Shares 67.6 67.6
EPS $1.05 ($0.03) $1.02
Q1 & Q2 2018 Reconciliation: ASC 605 To ASC 606
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
($ in millions) ($ in millions)
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation of non-GAAP disclosures in the
appendix to this presentation
40
Q4 2018 Adjusted P&L - Reconciliation Q4 2019 Adjusted P&L - Reconciliation
Q4 2018 ASC 606 Q4 2018
ASC 605 Impact ASC 606
Revenue $759.2 $0.0 $759.2
Gross Profit $376.2 $0.7 $376.9% of Sales 49.6% 49.6%
Research & Dev $35.0 $0.0 $35.0% of Sales 4.6% 4.6%
Sales, Gen & Admin $185.3 $0.5 $185.8% of Sales 24.4% 24.5%
Operating Income $155.9 $0.2 $156.1% of Sales 20.5% 20.6%
Interest $23.4 $0.0 $23.4
Pretax $132.5 $0.2 $132.7
Tax Expense $22.2 ($0.6) $21.6Tax Rate 16.7% 16.3%
Net Income $110.3 $0.8 $111.1
Diluted Shares 67.8 67.8
EPS $1.63 $0.01 $1.64
Q3 2018 Adjusted P&L - Reconciliation Q3 2019 Adjusted P&L - Reconciliation
Q3 2018 ASC 606 Q3 2018
ASC 605 Impact ASC 606
Revenue $708.6 ($5.1) $703.5
Gross Profit $348.0 ($4.3) $343.7% of Sales 49.1% 48.9%
Research & Dev $33.6 $0.0 $33.6% of Sales 4.7% 4.8%
Sales, Gen & Admin $191.8 ($0.1) $191.7% of Sales 27.1% 27.3%
Operating Income $122.6 ($4.2) $118.4% of Sales 17.3% 16.8%
Interest $23.1 $0.0 $23.1
Pretax $99.6 ($4.2) $95.4
Tax Expense $21.6 ($1.1) $20.5Tax Rate 21.7% 21.5%
Net Income $78.0 ($3.1) $74.9
Diluted Shares 67.6 67.6
EPS $1.15 ($0.04) $1.11
($ in millions) ($ in millions)
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Q3 & Q4 2018 Reconciliation: ASC 605 To ASC 606
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation of non-GAAP disclosures in the
appendix to this presentation
41
FY 2018 Adjusted P&L - Reconciliation FY 2019 Adjusted P&L - Reconciliation
FY 2018 ASC 606 FY 2018
ASC 605 Impact ASC 606
Revenue $2,848.0 ($14.3) $2,833.7
Gross Profit $1,394.2 ($10.0) $1,384.2% of Sales 49.0% 48.8%
Research & Dev $135.6 $0.0 $135.6% of Sales 4.8% 4.8%
Sales, Gen & Admin $766.1 $0.3 $766.4% of Sales 26.9% 27.0%
Operating Income $492.5 ($10.3) $482.1% of Sales 17.3% 17.0%
Interest $93.3 $0.0 $93.3
Pretax $399.2 ($10.3) $388.9
Tax Expense $77.8 ($3.0) $74.8Tax Rate 19.5% 19.2%
Net Income $321.4 ($7.3) $314.1
Diluted Shares 67.6 67.6
EPS $4.75 ($0.10) $4.65
FY 2018 Reconciliation: ASC 605 To ASC 606
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
($ in millions)
Note: Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation of non-GAAP disclosures in the
appendix to this presentation
42
43
Reconciliations Of Non-GAAP Disclosures
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
44
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
GAAP Basis 49.3% 12.0% 52.6$ 24.7$ 0.41$ 49.6% 14.8% 89.4$ (1.0)$ 1.33
Adjustments:
Acquisition and integration costs and related fair value
adjustments 0.6% 1.6% 12.4 2.1 0.15 - 0.1% 0.9 0.3 0.01
Acquisition-related intangible asset amortization - 5.1% 40.1 8.9 0.46 - 3.5% 26.4 7.3 0.27
Regulatory compliance costs - 0.6% 4.6 0.9 0.05 - 0.3% 2.6 0.7 0.03
Litigation expenses - 0.2% 2.0 0.5 0.02 - 0.0% - - -
Special charges - 1.4% 10.7 2.6 0.12 - 1.7% 13.2 3.8 0.14
Tax law and method changes 0.0% 0.0% - (0.4) 0.01 - 0.0% - 11.1 (0.16)
Debt financing costs 0.0% 0.0% 4.0 0.9 0.05 - 0.0% - - -
(Gain) loss on disposition - 0.0% 15.9 (12.4) 0.42 - - - - -
Adjusted Basis 49.9% 20.9% 142.3$ 27.8$ 1.69$ 49.6% 20.5% 132.5$ 22.2$ 1.63$
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
GAAP Basis 49.0% 10.9% 208.6$ 56.4$ 2.25$ 49.0% 10.2% 197.2$ (55.2)$ 3.73
Adjustments: -
Acquisition and integration costs and related fair value
adjustments 0.3% 0.9% 28.1 5.3 0.34$ - 0.3% 8.1 2.2 0.09
Acquisition-related intangible asset amortization - 4.2% 122.4 28.6 1.38$ - 3.8% 106.9 28.2 1.16
Field corrective actions 0.2% 0.2% 5.6 1.4 0.06$ - - - - -
Regulatory compliance costs - 0.5% 15.3 3.6 0.17$ - 0.1% 4.5 1.2 0.04
Litigation expenses - 0.1% 2.0 0.5 0.02$ - 0.2% 5.8 1.5 0.06
Special charges - 1.0% 28.4 6.9 0.32$ - 2.7% 77.6 21.1 0.84
Tax law and method changes 0.0% 0.0% - (4.8) 0.07$ - 0.0% 0.1 78.8 (1.16)
Debt financing costs 0.0% 0.0% 4.0 0.9 0.05$
(Gain) loss on disposition - 0.0% 15.9 (12.4) 0.42$ - - (1.0) - (0.01)
Adjusted Basis 49.5% 17.8% 430.3$ 86.4$ 5.08$ 49.0% 17.3% 399.2$ 77.8$ 4.75
Quarter Ended September 30, 2018
Year to Date Ended September 30, 2018
Quarter Ended September 30, 2019
Year to Date Ended September 30, 2019
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes¹
Income
Tax
Expense Diluted EPS
GAAP Basis 49.3% 6.5% 21.5$ (7.0)$ 0.42$ 47.8% 9.4% 41.3$ 7.3$ 0.51$
Adjustments:
Acquisition and integration costs - 0.4% 2.6 0.7 0.03 0.1% 1.1% 7.2 3.4 0.06
Acquisition-related intangible asset amortization - 3.8% 27.0 6.9 0.30 - 3.9% 26.6 9.0 0.26
Field corrective actions - - - - - 0.1% 0.1% 0.5 (0.1) 0.01
Litigation expenses - 0.3% 1.8 0.4 0.02 0.0% 0.1% 0.9 0.3 0.01
Special charges - 5.2% 36.9 9.7 0.40 - 0.5% 3.1 0.9 0.03
Tax method and law changes and related costs - 0.8 8.7 (0.12) 0.0% - - - -
Adjusted Basis 49.3% 16.2% 90.6$ 19.4$ 1.05$ 48.0% 15.0% 79.6$ 20.8$ 0.88$ 3.4$ 69.9$ (66.5)$
Impacts of ASC 606 Adoption 2 -0.1% -0.3% (3.2)$ (0.9)$ (0.03)$ 0.3% 0.5% 4.0$ 0.6$ 0.05$
Adjusted Basis - ASC 606 49.2% 15.9% 87.4$ 18.5$ 1.02$ 48.3% 15.5% 83.7$ 21.4$ 0.93$
1 Total does not add due to rounding.
2 The Company adopted ASC 606 as of October 1, 2018. This adjustment is to present our adjusted diluted EPS in earlier periods on the same basis as the new Accounting Standard, ASC 606.
Quarter Ended March 31, 2018 Quarter Ended March 31, 2017
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes
Income
Tax
Expense
Diluted
EPS1
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes¹
Income
Tax
Expense
Diluted
EPS1
GAAP Basis 47.7% 7.9% 30.8$ (57.5)$ 1.31$ 47.5% 8.8% 35.3$ 11.8$ 0.36$
Adjustments:
Acquisition and integration costs - 0.4% 2.4 0.6 0.03 - 0.9% 6.0 2.2 0.06
Acquisition-related intangible asset amortization - 4.0% 26.7 6.6 0.30 - 4.0% 25.5 8.3 0.26
Litigation settlements and expenses - 0.6% 4.0 1.1 0.04 - - - - -
Special charges - 2.0% 13.5 3.5 0.15 - 0.9% 5.8 1.9 0.06
Tax law changes - - - 60.3 (0.89) - - - (2.2) 0.03
Gain on disposition - - (1.0) - (0.01) - - (1.0) (0.4) (0.01)
Adjusted Basis 47.7% 14.7% 76.4$ 14.6$ 0.92$ 47.5% 14.6% 71.6$ 21.6$ 0.75$ -$ 60.3$ (60.3)$
Impacts of ASC 606 Adoption 2 -0.1% -0.3% (3.1)$ (0.4)$ (0.04)$ - - (0.7)$ (0.4)$ -$
Adjusted Basis - ASC 606 47.6% 14.4% 73.3$ 14.2$ 0.88$ 47.5% 14.6% 71.0$ 21.2$ 0.75$
1 Total does not add due to rounding.
2 The Company adopted ASC 606 as of October 1, 2018. This adjustment is to present our adjusted diluted EPS in earlier periods on the same basis as the new Accounting Standard, ASC 606.
Quarter Ended December 31, 2017 Quarter Ended December 31, 2016
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share (ASC 606)
45
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
GAAP Basis 49.1% 11.1% 55.5$ 10.3$ 0.67$ 48.0% 5.9% 16.1$ 10.4$ 0.09$
Adjustments:
Acquisition and integration costs - 0.4% 3.1 0.8 0.03 0.3% 0.9% 5.9 2.4 0.05
Acquisition-related intangible asset amortization - 3.8% 26.8 7.4 0.28 - 4.1% 28.1 9.4 0.28
Field corrective actions - - - - - 0.0% 0.0% - - -
Litigation expenses - 0.0% - - - 0.0% 0.2% 1.6 0.6 0.02
Special charges - 2.0% 14.0 4.1 0.15 - 5.1% 34.8 2.7 0.47
Tax method and law changes and related costs - 0.3 (1.0) 0.02 0.0% - - - -
Gain on disposition - - - - - - - - - -
Adjusted Basis 49.1% 17.3% 99.7$ 21.6$ 1.15$ 48.3% 16.1% 86.5$ 25.5$ 0.91$ 44.2$ 11.3$ 32.9$
Impacts of ASC 606 Adoption 2 -0.2% -0.5% (4.3)$ (1.1)$ (0.04)$ - -0.1% (0.9)$ (0.4)$ (0.01)$
Adjusted Basis - ASC 606 48.9% 16.8% 95.4$ 20.5$ 1.11$ 48.3% 16.0% 85.6$ 25.1$ 0.90$
1 Total does not add due to rounding.
2 The Company adopted ASC 606 as of October 1, 2018. This adjustment is to present our adjusted diluted EPS in earlier periods on the same basis as the new Accounting Standard, ASC 606.
Quarter Ended June 30, 2018 Quarter Ended June 30, 2017
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes
Income
Tax
Expense Diluted EPS
GAAP Basis 49.6% 14.8% 89.4$ (1.0)$ 1.33$ 49.1% 15.4% 90.3$ 21.2$ 1.03$
Adjustments:
Acquisition and integration costs - 0.4% 3.0 0.9 0.03 0.3% 0.6% 4.4 1.7 0.04
Acquisition-related intangible asset amortization - 3.5% 26.4 7.3 0.28 - 3.8% 28.2 7.5 0.31
Field corrective actions - - - - - -0.1% -0.1% (0.5) (0.1) (0.01)
Litigation expenses - 0.0% - - - 0.0% -1.6% 3.2 1.2 0.03
Special charges - 1.7% 13.2 3.8 0.14 - 1.2% (6.3) (0.7) (0.08)
Supplemental stock compensation charge - - - 0.14 - - - - -
Tax method and law changes and related costs - 0.5 11.2 (0.15) 0.0% - - - -
Adjusted Basis 49.6% 20.5% 132.5$ 22.2$ 1.63$ 49.3% 19.3% 119.3$ 30.8$ 1.32$ 43.1$ 23.2$ 19.9$
Impacts of ASC 606 Adoption 2 - 0.1% 0.2$ (0.6)$ 0.01$ -0.2% -0.6% (5.5)$ (1.8)$ (0.06)$
Adjusted Basis - ASC 606 49.6% 20.6% 132.7$ 21.6$ 1.64$ 49.1% 18.7% 113.8$ 29.0$ 1.26$
1 Total does not add due to rounding.
2 The Company adopted ASC 606 as of October 1, 2018. This adjustment is to present our adjusted diluted EPS in earlier periods on the same basis as the new Accounting Standard, ASC 606.
Quarter Ended September 30, 2018 Quarter Ended September 30, 2017
© 2019 Hill-Rom Services, Inc. ALL RIGHTS RESERVED.
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share (ASC 606)
46
Gross
Margin
Operating
Margin
Income
Before
Income
Taxes¹
Income
Tax
Expense Diluted EPS
Gross
Margin
Operating
Margin1
Income
Before
Income
Taxes¹
Income
Tax
Expense Diluted EPS
GAAP Basis 49.0% 10.2% 197.2$ (55.2)$ 3.73$ 48.1% 10.0% 183.0$ 50.7$ 1.99$
Adjustments:
Acquisition and integration costs - 0.4% 11.1 3.0 0.12 0.2% 0.9% 23.5 9.7 0.21
Acquisition-related intangible asset amortization - 3.8% 106.9 28.2 1.16 - 4.0% 108.4 34.2 1.10
Field corrective actions - - - - - - - - (0.2) -
Litigation expenses - 0.2% 5.8 1.5 0.06 - -0.3% 5.7 2.1 0.05
Special charges - 2.7% 77.6 21.1 0.84 - 1.9% 37.4 4.8 0.49
Tax method and law changes and related costs - 1.6 79.2 (1.15) - - - (2.2) 0.03
Gain on disposition - - (1.0) - (0.01) - - (1.0) (0.4) (0.01)
Adjusted Basis 49.0% 17.3% 399.2$ 77.8$ 4.75$ 48.3% 16.3% 357.0$ 98.7$ 3.86$
Impacts of ASC 606 Adoption 2 -0.2% -0.3% (10.4)$ (3.0)$ (0.10)$ 0.1% - (2.9)$ (2.0)$ (0.01)$
Adjusted Basis - ASC 606 48.8% 17.0% 388.9$ 74.8$ 4.65$ 48.4% 16.3% 354.0$ 96.7$ 3.85$
1 Total does not add due to rounding.
2 The Company adopted ASC 606 as of October 1, 2018. This adjustment is to present our adjusted diluted EPS in earlier periods on the same basis as the new Accounting Standard, ASC 606.
Year Ended September 30, 2018 Year Ended September 30, 2017
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share (ASC 606)
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