First Quarter 2017 Financial Results · revenue 4.6% of revenue 5.0% of revenue $3.7B $5.6B +21% $44M Fiscal Year 2016 Total Shareholder Return Enterprise Value Returned to Shareholders

First Quarter 2017 Financial Results

January 27, 2017

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© 2017 Hill-Rom Services, Inc. ALL RIGHTS RESERVED

This presentation contains forward-looking statements, within the meaning of the Private

Securities Litigation Reform Act of 1995. All statements included herein that are not historical

facts are forward-looking statements, including without limitation statements regarding Hill-

Rom’s ability to drive sustainable profitable growth and shareholder value, the timing and

success of new product launches, the ability to achieve the anticipated benefits of the Mortara

acquisition, the achievement of long-range financial objectives, the continuation of stable

customer demand trends and the subsidence of international headwinds, a stable U.S. capital

environment, the timing and success of the divestiture of non-core assets, and all other

statements concerning future strategy, plans, objectives, projections, expectations and

intentions. Such forward-looking statements involve a number of risks and uncertainties and

are subject to change at any time. In the event such risks or uncertainties materialize, Hill-

Rom’s results could be materially adversely affected. For a more in depth discussion of factors

that could cause actual results to differ from those contained in forward-looking statements,

see the discussions under the heading “Risk Factors” in the company's previously filed most

recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Hill-Rom

assumes no obligation to update or revise any forward-looking statements.

Forward Looking Statements

Page 3


Table of Contents

Q1 2017 Highlights

Page 5


Hill-Rom: Trusted Medical Technology Innovator

InnovationLeveraging global scale andbrand equity whileenhancing outcomes

Leadership$2.7B global medical technology leader with market-leading positions

2016 Revenue By BusinessUS$ Billions

Increased Investment in R&DUS$ Millions

Key Valuation MetricsAs of 12/31/2016

Market Capitalization

$72

$92

$134

2014 2015 2016

4.3% of revenue

4.6% of revenue

5.0% of revenue $3.7B

$5.6B

+21%

$44M

Fiscal Year 2016 Total Shareholder Return

Enterprise Value

Returned to Shareholders in Dividends in Fiscal Year 2016

Note: Hill-Rom fiscal year end is September 30

ValueTransforming to drive sustainable profitable growth and shareholder value

$2.7B+3% cc*

*Pro-forma growth including Welch Allyn in both 2015 and 2016

Patient Support Systems

Front Line Care

Surgical Solutions

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Q1 2017 Highlights

Creating shareholder value by executing our strategy

Innovating to enhance outcomes for patients and their caregivers• Launching Welch Allyn® Home Hypertension Program

• Capitalizing on recent introductions including Integrated Table Motion, RetinaVueTM, SpotTM Vision

Screener and others

Leveraging strong brands and geographic footprint across diversified portfolio• Capturing value with One Hill-Rom approach

• Demonstrating commercial and operational execution to drive sustainable performance

Transforming the portfolio with disciplined M&A and business development • Expanding capabilities in diagnostic cardiology with accretive acquisition of Mortara Instrument

• Optimizing product portfolio by divesting non-core assets

Enhancing shareholder value with disciplined financial management• Growing Q1 2017 adjusted EPS by 10%

• Reaffirming full-year adjusted EPS guidance of $3.74 to $3.82 per diluted share

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Driving accelerated growth in stable and recurring revenue segments

2016 Revenue By Product LineUS$ Billions

$2.7B+3% cc*

Transforming Our Portfolio With Diversified Revenue Stream

2016 Revenue By TypeUS$ Billions

$2.7B+3% cc*

*Pro-forma constant currency growth including Welch Allyn in both 2015 and 2016


60% +

<10%

<30%

Service & Rental

Specialty Frames & Surfaces

MedSurgBeds

CWS &

Patient Handling

Other PSS

Front Line Care

Surgical

Solutions

Non-Capital

MedSurgBeds

Other Capital

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Advancing Patient Care With Innovative Solutions

Capitalizing on recent introductions• Connex® Spot Monitor

• SpotTM Vision Screener

• RetinaVueTM Network

• VisiVestTM System

• Integrated Table Motion

• CompellaTM Bariatric Frame

• EnvellaTM Wound Therapy System

Launching new products in 2017• Welch Allyn® Home Hypertension Program

• WatchCareTM Incontinence Management

• Next-generation Med-Surg Bed

• Mobile Vest Clearance System

Increased R&D InvestmentUS$ Millions

4.3% of revenue

4.6% of revenue

5.0% of revenue

Clinical Focus Areas

Advancing Mobility

Wound Care & Prevention

Patient Diagnostics &

Monitoring

Surgical Safety & Efficiency

Respiratory Health

$72

$92

$134

2014 2015 2016

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Acquiring Mortara Instrument

Strengthening diagnostic and monitoring capabilitieswith accretive acquisition

Provides broad, high quality products to existing diagnostic cardiology portfolio

Accelerates new growth platform in cardiology-focused patient monitoring

Complements and enhances Hill-Rom’s presence in vital signs monitoring

Deepens connectivity relationships

Leverages Hill-Rom’s global scale and commercial channel

Creates significant value with enhanced scale, commercial and R&D capabilities, and operational efficiencies

Strategic Rationale Mortara Instrument Overview

Diagnostic Cardiology

Service & Supplies

Clinical Research Services

Patient Monitoring

~$115M4%+ CAGR

2014-2016

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Accelerating growth with highly attractive and immediately accretive acquisition

Transaction Summary

• $330 million cash consideration

• ~$290 million including net present value of tax benefit

• Financed with borrowings under existing credit facilities and new debt

• Expect to close transaction during fiscal Q2 2017 subject to customary closing conditions

• Expect to update fiscal 2017 financial guidance once transaction closes

Consideration and Timing Financial Benefits

• Accelerates revenue growth

• Accretive to gross and operating margins

• Modestly accretive to fiscal 2017 Adjusted EPS

• Annual operational cost synergies of at least $10 million drive greater accretion beyond 2017

• Double-digit ROIC by Year 3

Historical Revenue Growth

Adjusted Gross Margin %

+4% 55%

Total Revenue

~$115M

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Well-Positioned To Deliver On Long-Range Financial Objectives

* Refer to the appendix for reconciliations of GAAP to adjusted metrics

1 Includes Welch Allyn financial results since September 8, 2015 transaction completion, including interest associated with new borrowings, but excludes one-time costs associated with the transaction and the impact of a non-cash stock compensation charge. Operating cash flow includes one time Welch Allyn related transaction costs of $21M.

2 2016 Operating Cash Flow includes $30M funding to U.S. pension plan and $4M incurred to refinance credit facility. Adjusting for these outflows, Operating Cash Flow was $315M

3 Revenue CAGR relative to full-year 2015 pro-forma revenue of ~$2.6B. All other metrics are relative to 2015 results, which includes contribution from Welch Allyn only during the period since the transaction completion.

4 Assumes no capital deployment for M&A transactions.

Key Metric20151

Results2016

Results2015-20183

Long-Range Plan

Revenue $2B $2.7B CAGR 3% - 5%

Adjusted GM %* 45.3% 48.1% +350-450 bps

Adj. Operating Margin %*

11.8% 15.3% +450-550 bps

Adjusted EPS* $2.64 $3.38 Mid-to-high teens CAGR

Operating Cash Flow

$214M $281M2 $1B+ cumulative (FY 16-18)

Leverage 4.5x 3.9x Below 3.0x4

Enhancing shareholder value through sustainable growth

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Hill-Rom: A Compelling Investment Opportunity

We are successfully transforming to drive sustainable profitable growth

We are expanding our leading market positions through our innovative solutions, leveraging our brand equity

We are driving solid operational execution and significant operating margin expansion

1

2

3

Financial Summary

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Managing short-term revenue headwindswhile delivering double-digit earnings growth

Financial Performance: Q1 2017

Adjusted P&L Q1 2016 Q1 2017 YOY Change

Revenue $661M $637M (3%)*

Gross Margin 47.1% 47.5% +40 bps

Operating Margin 13.2% 14.6% +140 bps

Diluted EPS $0.68 $0.75 +10%

Cash Flow From Operations $46M $71M +$25M

* Revenue growth rates are constant currency

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Revenue Overview: Q1 2017

Q1 2017 Revenue Impacted By:

Current Business Trends

• Difficult comparison to prior year

• Timing of certain international and U.S. distributor orders

• Performance of completed and potential divestitures

• Stable U.S. customer demand

• Continued growth of higher-margin products

• International headwinds expected to subside with growth comparisons easing beginning in Q2

US$ Millions

Q1 2016

Q1 2017

YOY Change*

Patient Support

Systems$341.7 $335.2 (1%)

Front Line

Care$220.2 $201.8 (8%)

SurgicalSolutions

$99.3 $100.4 +3%

Total Revenue

$661.2 $637.4 (3%)

* Revenue growth rates are constant currency

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Revenue By Business: Q1 2017

Continued stability in U.S. capital environment

U.S. orders +4% and Backlog +7% in Q1 2017*

Strong growth in high-margin and less capital intensive product segments

OUS headwinds driven by timing of orders and non-core revenue

Continued adoption of Integrated Table Motion

Double-digit growth in core geographies (US, Europe)

Accelerating momentum in surgical positioning equipment

Investing in innovation to drive future growth

Difficult comparison with change in Welch Allyn fiscal year

Leveraging HRC brand and relationships to drive significant Vital Signs order

Diagnostic screening launches (RetinaVueTM, SpotTM Vision Screener)

Launched Welch Allyn HomeTM Hypertension Program

Patient Support Systems Surgical SolutionsFront Line Care

*Excludes recently divested businesses

Note: All revenue growth rates are constant currency

Global U.S. O.U.S. Global U.S. O.U.S. Global U.S. O.U.S.

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13.2%

14.6%

Q1 2016 GMExpansion

OpexLeverage

Q1 2017

47.1%

47.5%

Q1 2016 Supply ChainImprovements

Product Mix Business Mix Q1 2017

Improved product mix and cost discipline leading to significant operating leverage

Adjusted Gross Margin Adjusted Operating Margin

40 bpsQ1 2017 Gross Margin Expansion

140 bpsQ1 2017 Operating Margin Expansion

+40 bps+40 bps

+100 bps

Driving Continued Margin Expansion

Note: Axis not to scale

(20) bps

+20 bps

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Growing Adjusted Earnings per Share

Q1 2017 Adjusted EPS

• Driving diversified revenue growth

• Expanding gross margin through improved mix and supply chain initiatives

• Creating operating leverage with disciplined cost management while investing in R&D

• Driving adjusted EPS growth of +10%

Consistent track record of double-digit earnings growth

$0.75Q1 2017 Adjusted EPS

Q1 2017 Adjusted EPSUS$

$0.68$0.75

Q1 2016 Q1 2017

+10% growth

Business Review

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• Leveraging relationships and broad, differentiated portfolio across installed base

• Placing commercial focus on higher growth and margin opportunities (CWS, patient handling, ICU, Service)

• Diversifying revenue while creating operational flexibility to address capital volatility

• Innovating to provide caregivers predictive insights that result in lower costs and efficiencies

Growth Drivers

Diversified portfolio drives stable long-term growth and reduces volatility

US$MQ1 2016Revenue

Q1 2017Revenue

Reported Growth

CC Growth

Total $341.7 $335.2 (1.9%) (1.1%)

Frames & Surfaces Clinical Workflow Solutions Patient Handling

$1.4B2016

Revenue

Frames & Surfaces Clinical Workflow Solutions Patient Handling

Rental &

Service

Specialty

Frames & Surfaces

MedSurg Frames & Surfaces

CWS & Patient

Handling

Other PSS

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Improving Outcomes With Innovative Patient Support Systems

Elevating patient experience while improving outcomes

Key Product Introductions Patient Support SystemsInnovation Priorities

Enhancing safety and outcomes in the MedSurg and ICU environment

- Capturing share with innovative Progressa® frame in the ICU

- Launching next-generation MedSurgbed in 2017

Balancing economic and clinical value with patient satisfaction

Incorporating technology to improve hospital efficiency and information flow

Enhanced Nurse Call Platform

Progressa® ICU Frame

EnvellaTM

Wound Therapy System

Safe Patient Handling

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Front Line Care

• Providing solutions that improve clinical outcomes and patient safety

• Leveraging HRC global reach, brand and commercial capabilities

• Combining Welch Allyn technological leadership to further advance sensing and connectivity solutions

• Expanding portfolio leadership in ambulatory care with new diagnostic screening products (RetinaVueTM, SpotTM Vision Screener)

Growth Drivers

Significant opportunity to drive commercial value and innovation

Physical Assessment Vital Signs Respiratory Care

$810M2016

Revenue

US$MQ1 2016Revenue

Q1 2017Revenue

Reported Growth

CC Growth

Total $220.2 $201.8 (8.4%) (8.0%)

Thermometry

& Blood Pressure

Vital Signs

Physical

Assessment

Respiratory

Other

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SpotTM Vision Screener RetinaVueTM Network

Expanding Leadership In Ambulatory Care With Diagnostic Screening Products

Detecting diseases that impair vision

Increasing efficiency with testing in seconds

Objective and consistent approach to vision screening across care settings

Children WithVision Disorder

Detecting preventable blindness with diabetic retinopathy screening

Enabling diabetic retinopathy exams in primary care settings

Increasing compliance of diabetic retinopathy exams

Children Screened Prior To Kindergarten

U.S. Market Potential

Americans With Diabetes

Contract Diabetic

Retinopathy

only

1/312.5M 80%~30M$200M+

Recurring Revenue U.S. Market

Potential

$200M+

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Advancing Sensing And Connectivity Solutions In The Home Setting

Welch Allyn® HomeHypertension Program

VisiVestTM

System

Increased visibility to therapy aids health care team coaching and motivation

Enhances discussions and early interventions

Connected care via the cloud enables tailored treatment decisions*

*The VisiVest™ System transmits data about system usage. It does not make care decision recommendations.

Trusted Device Patient Application Clinical Portal

Clinically accurate connected blood pressure device for home use

Applications for patient to track and communicate readings

Free and cloud-based system allows clinician’s review of data

U.S. Blood Pressure Devices Sold

Annually

U.S. Existing Market

U.S. Cystic Fibrosis Patients

6M ~35k$500M

U.S. High Frequency Chest Wall

Oscillation Market

$100M+

U.S. Physician Offices

200k

U.S. Bronchiectasis

Patients

~48k

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Surgical Solutions

• Optimizing position with key customers while leveraging commercial presence in targeted geographic markets

• Capitalizing on comprehensive service infrastructure to support critical surgical equipment

• Focusing on patient safety and efficiency in the OR and peri-operative environment

• Expanding portfolio for minimally invasive surgical access with launch of Integrated Table Motion

Growth Drivers

Accelerating long-term growth of strong, innovative portfolio across global footprint

Operating Tables Operating Lights Consumables

$408M2016

Revenue

US$MQ1 2016Revenue

Q1 2017Revenue

Reported Growth

CC Growth

Total $99.3 $100.4 +1.1% +3.2%

OR Tables &

Lights

OR Booms, Pendants &

Other

Patient Positioning

Other OR Consumables

Blades &

Scalpels

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Enhancing Operating Room Efficiency With Innovative Surgical Solutions

Accelerating growth through new product introductions

Key Product Introductions Surgical SolutionsInnovation Priorities

Enhancing operating room efficiency with Integrated Table Motion

- Increase OR capacity - Improve patient safety- Perform a variety of complex

procedures

Improving patient safety in the peri-operative environment

Expanding portfolio for minimally invasive surgical access

Integrated Table Motion

iLED® 7 Operating Room

Light

Allen® AdvanceSpine Table

2017 Financial Outlook

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2017 Financial Guidance Update

10% - 13% Growth in

Adjusted EPS

125+ bpsOperating Margin

Expansion

3% - 4%*“Core” Revenue Growth

(constant currency excl. divestitures)

Delivering strong earnings growth and significant cash flow

Adjusted P&L 2017 Guidance(Q4 Conference Call)

2017 Guidance(Q1 Conference Call)

Revenue Growth

(constant currency) ~3% ~2%

Revenue Growth

(reported) ~3% ~1%

Gross Margin50 – 75 bps expansion ~49%

Operating Margin~100 bpsexpansion

125+ bpsExpansion

Diluted EPS $3.74 - $3.82 $3.74 - $3.82

Operational Cash Flow $330M - $340M $330M - $340M

Capital Expenditures $120M - $130M $120M - $130M

*“Core” revenue growth excludes the revenue impact from non-core operations the company has divested or may divest. These businesses contributed ~$75 million in FY2016

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2017 Financial Guidance (Revenue by Business)

Assuming stability in U.S. capital environment

Driving growth of higher margin platforms

Divesting non-core assets with lower growth and margin profile

International revenue declining low single digits

Assuming modest growth in surgical procedures

Accelerating revenue of Integrated Table Motion

Launching new products in patient positioning

Driving OUS growth following recent commercial realignment

Leveraging Hill-Rom global commercial platform

Continuing momentum in U.S. Vital Signs portfolio

Driving adoption of new diagnostic screening portfolio

Expanding recurring revenue streams in Respiratory Care


FY 2017(constant currency growth)

Surgical Solutions


Front Line Care


Note: All revenue growth rates are constant currency

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Q2 2017 Financial Guidance

Q2 2017 Guidance Reflects…

• Stable market dynamics in the U.S.

• Easing international comparisons

• Divestitures of Watch Child and Architectural Products negatively impact revenue by <$10m

• Sequential increase in SG&A and R&D investment

• Adjusted EPS growth of 9% to 11%

Adjusted P&LQ2 2017

Guidance

“Core” Revenue Growth*(constant currency excl. divestitures) 4% - 5%

Revenue Growth(Constant Currency) 3% - 4%

Revenue Growth(Reported) 2% - 3%

Diluted EPS $0.77 - $0.79

Accelerating revenue growth while investing to drive future growth

*“Core” revenue growth excludes the revenue impact from non-core operations the company has divested or may divest. These businesses contributed ~$75 million in FY2016

Revenue Reclassification

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Reported Revenue - Reconciliation of Segments

Note: Segment revenue by U.S. and International for Fiscal Year Ended 9/30/2015 and 9/30/2016 in US$ million

United States International Total United States International Total United States International Total United States International Total

Patient Support Systems 241$ 100$ 342$ 219$ 119$ 338$ 10% -16% 1% 10% -7% 4%

Front Line Care 155 65 220 21 1 22 N/M N/M N/M N/M N/M N/M

Surgical Solutions 47 53 99 45 60 105 5% -13% -5% 5% -3% 0%

Total Hill-Rom 443$ 218$ 661$ 284$ 181$ 465$ 56% 21% 42% 56% 34% 47%




Surgical Solutions 48 48 95 44 55 99 8% -14% -4% 8% -12% -3%

Total Hill-Rom 438$ 194$ 633$ 297$ 178$ 475$ 48% 9% 33% 48% 13% 35%




Surgical Solutions 53 49 102 47 52 99 13% -6% 3% 13% -6% 3%

Total Hill-Rom 451$ 204$ 655$ 308$ 167$ 475$ 47% 23% 38% 47% 24% 39%




Surgical Solutions 60 53 112 61 59 120 -2% -10% -6% -2% -8% -5%

Total Hill-Rom 497$ 209$ 706$ 384$ 190$ 574$ 29% 10% 23% 29% 12% 24%


Patient Support Systems 1,037$ 400$ 1,437$ 959$ 468$ 1,427$ 8% -15% 1% 8% -11% 2%



Total Hill-Rom 1,829$ 826$ 2,655$ 1,273$ 715$ 1,988$ 44% 15% 34% 44% 20% 35%

Q2 2016 Q2 2015 % Growth @ Actual Rates % Growth @ Constant Rates


YTD 2016 YTD 2015 % Growth @ Actual Rates % Growth @ Constant Rates



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Pro Forma Revenue* - Reconciliation of Segments

Note: Segment revenue by U.S. and International for Fiscal Year Ended 9/30/2015 and 9/30/2016 in US$ million* Pro Forma includes Welch Allyn in both periods



Front Line Care Pro Forma 155 65 220 140 69 208 11% -5% 6% 11% 4% 9%

Surgical Solutions 47 53 99 45 60 105 5% -13% -5% 5% -3% 0%

Total Hill-Rom 443$ 218$ 661$ 403$ 248$ 651$ 10% -12% 2% 10% -3% 5%





Total Hill-Rom 438$ 194$ 633$ 397$ 232$ 628$ 10% -16% 1% 11% -13% 2%



Front Line Care Pro Forma 139 54 193 141 50 190 -1% 8% 1% -1% 10% 2%

Surgical Solutions 53 49 102 47 52 99 13% -6% 3% 13% -6% 3%

Total Hill-Rom 451$ 204$ 655$ 427$ 216$ 643$ 6% -5% 2% 6% -4% 2%



Front Line Care Pro Forma 158 53 212 142 57 200 11% -7% 6% 11% -7% 6%

Surgical Solutions 60 53 112 61 59 120 -2% -10% -6% -2% -8% -5%

Total Hill-Rom 497$ 209$ 706$ 472$ 229$ 701$ 5% -9% 1% 5% -8% 1%


Patient Support Systems 1,037$ 400$ 1,437$ 959$ 468$ 1,427$ 8% -14% 1% 8% -11% 2%



Total Hill-Rom 1,829$ 826$ 2,655$ 1,699$ 924$ 2,623$ 8% -11% 1% 8% -7% 3%



YTD 2016 YTD 2015 % Growth @ Actual Rates % Growth @ Constant Rates



Appendix

Reconciliations of Non-GAAP Disclosures

Page 35


Reconciliation: Constant Currency Revenue (by Segment)

US

As Constant As As Constant

2016 2015 Reported Currency Reported Reported Currency

Product Sales and Service 541.9$ 565.1$ (4.1%) (3.2%) 1.1% (13.2%) (10.7%)

Rental 95.5 96.1 (0.6%) - 0.4% (7.9%) (2.6%)

Total 637.4$ 661.2$ (3.6%) (2.7%) 1.0% (12.9%) (10.3%)

US

As Constant As As Constant

2016 2015 Reported Currency Reported Reported Currency

Patient Support Systems 335.2$ 341.7$ (1.9%) (1.1%) 2.9% (13.5%) (10.7%)

Front Line Care 201.8 220.2 (8.4%) (8.0%) (4.8%) (16.9%) (15.7%)

Surgical Solutions 100.4 99.3 1.1% 3.2% 10.0% (6.9%) (2.9%)

Total 637.4$ 661.2$ (3.6%) (2.7%) 1.0% (12.9%) (10.3%)

OUS

OUSQuarter Ended December 31

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Reconciliation: Operating Expenses

2016 2015

Selling and Administrative Expenses (As Reported) $208.8 $221.2

Acquisition and integration costs (5.9) (6.3)

Acquisition-related intangible asset amortization (25.5) (24.2)

Selling and Administrative Expenses (Adjusted) $177.4 $190.7

Selling and Administrative Expenses As Percent of Total Revenue Adjusted 27.8% 28.8%

Year Over Year % Change -7.0%

Year Over Year Change (100) bps

Quarter Ended December 31

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Gross

Margin

Operating

Margin1

Income

Before

Income

Taxes

Income

Tax

Expense

Diluted

EPS1

Gross

Margin

Operating

Margin1

Income

Before

Income

Taxes

Income

Tax

Expense

Diluted

EPS

GAAP Basis 47.3% 8.7% 138.3$ 15.5$ 1.86$ 44.3% 4.2% 65.1$ 18.3$ 0.82$

Adjustments:

Acquisition and integration costs 0.8% 1.5% 38.9 11.3 0.41 0.8% 3.2% 62.8 18.0 0.76

Acquisition-related intangible asset amortization - 3.6% 95.9 31.7 0.96 - 1.7% 34.1 9.8 0.42

FDA remediation expenses - - - - - - 0.2% 3.8 1.2 0.04

Field corrective actions - - 0.2 (0.1) - 0.2% 0.2% 4.5 1.4 0.05

Litigation settlements and expenses - - - - - - - (0.6) (0.2) (0.01)

Special charges - 1.5% 39.9 13.4 0.40 - 2.1% 41.2 10.7 0.52

Supplemental stock compensation charge - - - - - - 0.3% 6.1 2.2 0.07

Foreign valuation allowance - - - 19.5 (0.29) - - - 1.9 (0.03)

Debt refinancing - - 12.9 4.7 0.12 - - - - -

Gain on disposition - - (10.1) (3.7) (0.10) - - - - -

Adjusted Basis 48.1% 15.3% 316.0$ 92.3$ 3.38$ 45.3% 11.8% 217.0$ 63.3$ 2.64$

1 Total does not add due to rounding.

Year Ended September 30, 2015Year Ended September 30, 2016

Reconciliation: Gross Margin, Operating Margin and Earnings Per Share

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Reconciliation: Gross Margin, Operating Margin and Earnings Per Share

Gross

Margin

Operating

Margin

Income

Before

Income

Taxes

Income

Tax

Expense

Diluted

EPS1

Gross

Margin

Operating

Margin1

Income

Before

Income

Taxes

Income

Tax

Expense

Diluted

EPS1

GAAP Basis 47.5% 8.8% 35.3$ 11.8$ 0.36$ 44.0% 4.4% 5.8$ 1.5$ 0.07$

Adjustments:

Acquisition and integration costs - 0.9% 6.0 2.2 0.06 2.9% 3.9% 25.8 7.6 0.27

Acquisition-related intangible asset amortization - 4.0% 25.5 8.3 0.26 - 3.7% 24.2 8.3 0.24

Field corrective actions - - - - - 0.2% 0.2% 1.1 0.2 0.01

Special charges - 0.9% 5.8 1.9 0.06 - 1.1% 7.1 2.0 0.08

Foreign tax law change - - - (2.2) 0.03 - - - - -

Gain on disposition - - (1.0) (0.4) (0.01) - - - - -

Adjusted Basis 47.5% 14.6% 71.6$ 21.6$ 0.75$ 47.1% 13.2% 64.0$ 19.6$ 0.68$

1 Total does not add due to rounding.

Quarter Ended December 31, 2016 Quarter Ended December 31, 2015

Documents

First Quarter 2017 Financial Results · revenue 4.6% of revenue 5.0% of revenue $3.7B $5.6B +21% $44M Fiscal Year 2016 Total Shareholder Return Enterprise Value Returned to Shareholders