10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2018

OR

o  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____ to ____

Commission File No. 1-6651

HILL-ROM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Indiana	35-1160484
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
130 E. Randolph St., Suite 1000 Chicago, IL	60601
(Address of principal executive offices)	(Zip Code)

(312) 819-7200

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No  o

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Rule12b-2 of the Exchange Act).

Large accelerated filer þ    Accelerated filer o    Non-accelerated filer o    Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, without par value – 66,277,670 shares as of April 23, 2018.

HILL-ROM HOLDINGS, INC.

INDEX TO FORM 10-Q

			Page
PART I - FINANCIAL INFORMATION
	Item 1 -	Financial Statements
		Condensed Consolidated Statements of Income (Unaudited)	3
		Condensed Consolidated Statements of Comprehensive Income (Unaudited)	4
		Condensed Consolidated Balance Sheets (Unaudited)	5
		Condensed Consolidated Statements of Cash Flows (Unaudited)	6
		Note 1. Summary of Significant Accounting Policies	7
		Note 2. Supplementary Balance Sheet Information	9
		Note 3. Acquisitions	9
		Note 4. Goodwill and Indefinite-Lived Intangible Assets	10
		Note 5. Financing Agreements	11
		Note 6. Retirement and Postretirement Plans	12
		Note 7. Other Comprehensive Income (Loss)	13
		Note 8. Special Charges	15
		Note 9. Income Taxes	15
		Note 10. Earnings per Common Share	17
		Note 11. Common Stock	18
		Note 12. Guarantees	18
		Note 13. Segment Reporting	19
		Note 14. Commitments and Contingencies	20
	Item 2 -	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3 -	Quantitative and Qualitative Disclosures About Market Risks	29
	Item 4 -	Controls and Procedures	29
PART II - OTHER INFORMATION
	Item 1 -	Legal Proceedings	31
	Item 1A -	Risk Factors	31
	Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 6 -	Exhibits	32
SIGNATURES			33

2

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Net Revenue
Product sales and service	$	610.7		$	579.6		$	1,185.9		$	1,121.5
Rental revenue	99.8			99.3			194.3			194.8
Total revenue	710.5			678.9			1,380.2			1,316.3
Cost of Revenue
Cost of goods sold	313.7			305.7			617.8			594.1
Rental expenses	46.4			48.8			92.4			95.2
Total cost of revenue	360.1			354.5			710.2			689.3
Gross Profit	350.4			324.4			670.0			627.0
Research and development expenses	34.7			35.3			67.0			67.3
Selling and administrative expenses	232.7			222.4			454.4			431.2
Special charges (Note 8)	36.9			3.1			50.4			8.9
Operating Profit	46.1			63.6			98.2			119.6
Interest expense	(24.2		)	(21.9		)	(47.3		)	(41.4		)
Investment income and other, net	(0.4		)	(0.4		)	1.4			(1.6		)
Income Before Income Taxes	21.5			41.3			52.3			76.6
Income tax expense (benefit) (Note 9)	(7.0		)	7.3			(64.5		)	19.1
Net Income	28.5			34.0			116.8			57.5
Less: Net loss attributable to noncontrolling interests	—			(0.4		)	—			(0.7		)
Net Income Attributable to Common Shareholders	$	28.5		$	34.4		$	116.8		$	58.2
Net Income Attributable to Common Shareholders per Common Share - Basic	$	0.43		$	0.52		$	1.77		$	0.89
Net Income Attributable to Common Shareholders per Common Share - Diluted	$	0.42		$	0.51		$	1.73		$	0.87
Dividends per Common Share	$	0.20		$	0.18		$	0.38		$	0.35
Average Common Shares Outstanding - Basic (thousands) (Note 10)	66,192			65,462			66,040			65,473
Average Common Shares Outstanding - Diluted (thousands) (Note 10)	67,597			67,132			67,508			67,057

See Notes to Condensed Consolidated Financial Statements (unaudited)

3

Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)

	Quarter Ended March 31					Year to Date Ended March 31
	2018		2017			2018		2017
Net Income	$	28.5	$	34.0		$	116.8	$	57.5
Other Comprehensive Income (Loss), net of tax (Note 7):
Derivative instruments and hedges	7.9		(0.2		)	11.3		10.0
Foreign currency translation adjustment	16.5		14.0			22.6		(25.5		)
Change in pension and postretirement defined benefit plans	0.8		0.8			1.6		2.1
Total Other Comprehensive Income (Loss), net of tax	25.2		14.6			35.5		(13.4		)
Total Comprehensive Income	53.7		48.6			152.3		44.1
Less: Comprehensive loss attributable to noncontrolling interests	—		(0.4		)	—		(0.7		)
Total Comprehensive Income Attributable to Common Shareholders	$	53.7	$	49.0		$	152.3	$	44.8

See Notes to Condensed Consolidated Financial Statements (unaudited)

4

Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

	March 31, 2018			September 30, 2017
ASSETS
Current Assets
Cash and cash equivalents	$	239.0		$	231.8
Trade accounts receivable, net of allowances (Note 2)	537.9			579.3
Inventories (Note 2)	315.1			284.5
Other current assets	109.0			70.6
Total current assets	1,201.0			1,166.2
Property, plant and equipment, net (Note 2)	341.8			355.4
Goodwill (Note 4)	1,754.2			1,759.6
Other intangible assets and software, net (Note 2)	1,088.1			1,144.0
Deferred income taxes (Notes 1 and 9)	41.5			40.9
Other assets	78.1			62.6
Total Assets	$	4,504.7		$	4,528.7
LIABILITIES
Current Liabilities
Trade accounts payable	$	159.6		$	167.9
Short-term borrowings (Note 5)	221.3			188.9
Accrued compensation	97.7			126.9
Accrued product warranties (Note 12)	25.0			25.5
Accrued rebates	38.0			39.7
Other current liabilities	108.9			109.8
Total current liabilities	650.5			658.7
Long-term debt (Note 5)	2,025.6			2,120.4
Accrued pension and postretirement benefits (Note 6)	78.7			78.1
Deferred income taxes (Notes 1 and 9)	180.0			266.2
Other long-term liabilities	59.5			39.7
Total Liabilities	2,994.3			3,163.1
Commitments and Contingencies (Note 14)
SHAREHOLDERS' EQUITY
Common Stock (Note 2)	4.4			4.4
Additional paid-in capital	596.7			584.4
Retained earnings	1,767.6			1,676.2
Accumulated other comprehensive loss (Note 7)	(74.5		)	(110.0		)
Treasury stock, at cost (Note 2)	(783.8		)	(796.8		)
Total Shareholders' Equity Attributable to Common Shareholders	1,510.4			1,358.2
Noncontrolling interests	—			7.4
Total Shareholders' Equity	1,510.4			1,365.6
Total Liabilities and Shareholders' Equity	$	4,504.7		$	4,528.7

See Notes to Condensed Consolidated Financial Statements (unaudited)

5

Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)	Year to Date Ended March 31
	2018			2017
Operating Activities
Net income	$	116.8		$	57.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	39.2			40.6
Amortization	9.6			10.0
Acquisition-related intangible asset amortization	53.7			52.1
Provision for deferred income taxes	(89.2		)	(14.6		)
Gain on disposal of property, equipment leased to others, intangible assets, and impairments	(0.6		)	(3.0		)
(Gain) loss on disposition of businesses	22.4			(1.0		)
Stock compensation	15.8			12.2
Change in working capital excluding cash, current debt, acquisitions and dispositions:
Trade accounts receivable	45.7			25.4
Inventories	(29.0		)	2.9
Other current assets	(37.9		)	2.8
Trade accounts payable	(8.7		)	(5.7		)
Accrued expenses and other liabilities	(35.8		)	(55.0		)
Other, net	23.6			2.2
Net cash provided by operating activities	125.6			126.4
Investing Activities
Capital expenditures and purchases of intangible assets	(51.4		)	(47.3		)
Proceeds on sale of property and equipment leased to others	3.7			10.6
Payment for acquisition of businesses, net of cash acquired	—			(314.3		)
Proceeds on sale of businesses	1.0			4.5
Other	(1.0		)	(0.4		)
Net cash used in investing activities	(47.7		)	(346.9		)
Financing Activities
Proceeds from borrowings on long-term debt	1.0			300.0
Payment of long-term debt	(54.9		)	(36.6		)
Borrowings on Revolving Credit Facility	75.0			53.0
Payments on Revolving Credit Facility	(95.0		)	(60.8		)
Borrowings on Securitization Program	51.4			—
Payments on Securitization Program	(37.3		)	—
Debt issuance costs	—			(4.3		)
Payment of cash dividends	(25.1		)	(22.9		)
Proceeds on exercise of stock options	10.5			14.6
Proceeds from stock issuance	3.0			2.3
Treasury stock acquired	(4.4		)	(33.6		)
Net cash provided by (used in) financing activities	(75.8		)	211.7
Effect of exchange rate changes on cash	5.1			(4.7		)
Net Cash Flows	7.2			(13.5		)
Cash and Cash Equivalents:
At beginning of period	231.8			232.2
At end of period	$	239.0		$	218.7

See Notes to Condensed Consolidated Financial Statements (unaudited)

6

Hill-Rom Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in millions, except per share data)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Unless the context otherwise requires, the terms “Hill-Rom,” “the Company,” “we,” “our,” and “us” refer to Hill-Rom Holdings, Inc. and its wholly-owned subsidiaries. The unaudited Condensed Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in Hill-Rom’s latest Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“2017 Form 10-K”) as filed with the United States (“U.S.”) Securities and Exchange Commission. The September 30, 2017 Condensed Consolidated Balance Sheet was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the Condensed Consolidated Financial Statements herein include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the interim periods presented. Quarterly results are not necessarily indicative of annual results.

The Condensed Consolidated Financial Statements include the accounts of Hill-Rom and its wholly-owned subsidiaries. In addition, we also consolidate variable interest entities (“VIEs”) where Hill-Rom is deemed to have a controlling financial interest. Intercompany accounts and transactions have been eliminated in consolidation, including the intercompany transactions with consolidated VIEs. Where our ownership interest is less than 100%, the noncontrolling interests are reported in our Condensed Consolidated Financial Statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates and such differences could be material. Examples of such estimates include, but are not limited to, income taxes (Notes 1 and 9), accounts receivable reserves (Note 2), accrued warranties (Note 12), the impairment of intangibles and goodwill (Note 4), pension expense (Note 6), and commitments and contingencies (Note 14).

Fair Value Measurements

Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.

• Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances, which might include our own data.

We record cash and cash equivalents, as disclosed on our Condensed Consolidated Balance Sheets, as Level 1 instruments and certain other derivatives and investments as either Level 2 or 3 instruments. Investments measured at Net Asset Value as a practical expedient are not categorized in the fair value hierarchy. There have not been significant changes in our classification among assets and liabilities during the fiscal quarter. Refer to Note 5 for disclosure of our debt instrument and interest rate swap fair values.

Taxes Collected from Customers and Remitted to Governmental Units

Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenue and costs) basis.

7

Income Taxes

Hill-Rom and its eligible domestic subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. Deferred income taxes are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

As of March 31, 2018, we had $60.0 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to certain foreign deferred tax attributes that are not expected to be utilized. The valuation allowance total was not materially impacted by the Tax Cuts and Jobs Act enacted in December 2017. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances.

We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit.

Dispositions

During the second quarter of fiscal 2018, we entered into an agreement to convey certain net assets related to the Company’s third-party rental business, which is comprised of purchased moveable medical equipment that can be rented to customers, to Universal Hospital Services, Inc. (“UHS”) in exchange for UHS's agreement to dismiss its previously disclosed litigation against the Company subject to satisfaction of customary closing conditions (“Settlement Agreement”). We recorded a loss of $23.4 million in special charges, which includes approximately $20.4 million related to the non-cash loss reserve for the assets to be conveyed, and other Settlement Agreement related costs of approximately $3.0 million. The third-party rental business is part of our Patient Support Systems segment. The transaction is expected to close during our fiscal third quarter.

During the fourth quarter of fiscal 2017, we sold our Völker business. During the first quarter of fiscal 2018, we recorded a gain of$1.0 million attributable to the final working capital settlement associated with the transaction.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which delayed the effective date of the new revenue guidance by one year, while permitting companies to early adopt the new standard as of the original effective date. As a result, the provisions of ASU 2014-09 and subsequent amendments, are effective for us in the first quarter of fiscal 2019 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We plan to adopt the new standard effective October 1, 2018 and are continuing to evaluate the impact of adoption on our Consolidated Financial Statements and the implementation approach to be used.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor’s perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for our first quarter of fiscal 2020. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements.

8

Except as noted above, there have been no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1 of our Consolidated Financial Statements in our 2017 Form 10-K.

Note 2. Supplementary Balance Sheet Information

	March 31, 2018		September 30, 2017
Allowance for possible losses and discounts on trade receivables	$	23.9	$	25.1
Inventories:
Finished products	$	156.5	$	147.5
Raw materials and work in process	158.6		137.0
Total inventory	$	315.1	$	284.5
Accumulated depreciation of property, plant and equipment	$	659.3	$	624.2
Accumulated amortization of software and other intangible assets	$	553.2	$	492.3
Preferred stock, without par value:
Shares authorized	1,000,000		1,000,000
Shares issued	None		None
Common stock, without par value:
Shares authorized	199,000,000		199,000,000
Shares issued	88,457,634		88,457,634
Shares outstanding	66,230,972		65,813,794
Treasury shares	22,226,662		22,643,840

Note 3. Acquisitions

Mortara Instrument

On February 14, 2017, we completed the acquisition of Mortara Instrument, Inc. (“Mortara”) for consideration of $330.0 million in cash ($311.2 million, net of cash acquired), primarily financed through a private offering of $300.0 million of senior unsecured notes (see Note 5 of our Condensed Consolidated Financial Statements). Mortara provides a portfolio of diagnostic cardiology devices designed to serve the full continuum of clinical care, from acute care to primary care and clinical research organizations.

The results of Mortara are included in the Condensed Consolidated Financial Statements since the date of acquisition. The impact to our comparable quarter and year to date fiscal 2017 revenue and net income on an unaudited proforma basis, as if the Mortara acquisition had been consummated at the beginning of our fiscal 2017 year, would not have been significant.

9

The following summarizes the fair value of assets acquired and liabilities assumed at the date of the Mortara acquisition. The results are considered final.

	Amount
Trade receivables	$	16.4
Inventory	21.5
Other current assets	2.8
Property, plant and equipment	18.2
Goodwill	165.5
Trade names (7-year weighted average useful life)	15.8
Customer relationships (8-year useful life)	37.9
Developed technology (7-year useful life)	52.3
Other noncurrent assets	4.8
Current liabilities	(22.8		)
Noncurrent liabilities	(1.2		)
Total purchase price, net of cash acquired	$	311.2

Goodwill in connection with the Mortara acquisition was allocated entirely to our Front Line Care segment. A majority of the goodwill is attributable to the acquired U.S. operations which is deductible for tax purposes.

Note 4. Goodwill and Indefinite-Lived Intangible Assets

The following summarizes goodwill activity by reportable segment:

	Patient Support Systems			Front Line Care		Surgical Solutions			Total
Balances at September 30, 2017
Goodwill	$	545.0		$	1,375.6	$	311.8		$	2,232.4
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at September 30, 2017	72.2			1,375.6		311.8			1,759.6
Changes in Goodwill during the period:
Goodwill related to acquisitions	—			0.8		—			0.8
Deconsolidation of VIE	—			—		(13.2		)	(13.2		)
Currency translation effect	1.3			1.0		4.7			7.0
Balances at March 31, 2018
Goodwill	546.3			1,377.4		303.3			2,227.0
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at March 31, 2018	$	73.5		$	1,377.4	$	303.3		$	1,754.2

During the second fiscal quarter of 2018, the Company deconsolidated a variable interest entity as a result of no longer having a controlling financial interest in the entity upon the termination of an exclusive distribution agreement. The portion of this entity's assets, including goodwill, liabilities and operating results that are not attributable to the Company are excluded from our Consolidated Financial Statements as of the effective date of the termination.

10

Note 5. Financing Agreements

Total debt consists of the following:

	March 31, 2018		September 30, 2017
Revolving credit facilities	$	70.0	$	90.0
Current portion of long-term debt	128.1		109.8
Senior secured Term Loan A, long-term portion	1,195.6		1,266.7
Senior unsecured 5.75% notes due on September 1, 2023	420.4		419.9
Senior unsecured 5.00% notes due on February 14, 2025	296.1		295.8
Unsecured 7.00% debentures due on February 15, 2024	13.6		13.6
Unsecured 6.75% debentures due on December 15, 2027	29.6		29.6
Securitization Program	93.2		79.1
Other	0.3		4.8
Total debt	2,246.9		2,309.3
Less Short-term borrowings	221.3		188.9
Total Long-term debt	$	2,025.6	$	2,120.4

In May 2017, we entered into a 364-day $110.0 million accounts receivable securitization program (the “Securitization Program”) with certain financial institutions. Under the terms of the Securitization Program, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time. As of March 31, 2018, $93.2 million was borrowed under the Securitization Program. Borrowings outstanding under the Securitization Program bear interest at the London Interbank Offered Rate (“LIBOR”) plus the applicable margin of 0.675% and are included as a component of Short-term borrowings, while the accounts receivable securing these obligations remain as a component of Trade accounts receivable, net of allowances in our Condensed Consolidated Balance Sheets. In addition, the agreement governing the Securitization Program contains various customary affirmative and negative covenants, and customary default and termination provisions. As of March 31, 2018, we were in compliance with these covenants and provisions.

In February 2017, we entered into $300.0 million of senior unsecured notes maturing February 2025 for purposes of financing the Mortara acquisition. These notes bear interest at a fixed rate of 5.00% annually. We also have outstanding senior unsecured notes of $425.0 million maturing in September 2023 that bear interest at a fixed rate of 5.75% annually (collectively, the “Senior Notes”). These Senior Notes were issued at par in private placement offerings and are not registered securities on any public market. All of the notes were outstanding as of March 31, 2018. We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes, other than in certain circumstances such as a change in control or material sale of assets. We may redeem the 5.75% and 5.00% notes prior to maturity, but doing so prior to September 1, 2021 and February 15, 2023, respectively, would require payment of a premium on any amounts redeemed, the amount of which varies based on the timing of the redemption. The indentures governing the Senior Notes contain certain covenants which impose limitations on the amount of dividends we may pay and the amount of common shares we may repurchase in the open market, but we do not expect these covenants to affect our current dividend policy or open share repurchase program. The terms of these indentures also impose certain restrictions on the amount and type of additional indebtedness we may obtain in the future, as well as the types of liens and guarantees we may provide.

Our Senior Credit Agreement consists of two facilities as follows:

• $1,462.5 million senior secured Term Loan A facility (“TLA Facility”), maturing in September 2021

• Revolving Credit Facility, providing borrowing capacity of up to $700.0 million, maturing in September 2021

The TLA Facility and Revolving Credit Facility bear interest at variable rates which currently approximate 3.4%. These interest rates are based primarily on LIBOR, but under certain conditions could also be based on the U.S. Federal Funds Rate or the U.S. Prime Rate, at our option. The TLA Facility requires minimum principal payments of $109.7 million in fiscal 2018 and $146.3 million annually thereafter, with the remaining unpaid principal balance due at maturity. We are able to voluntarily prepay outstanding loans under the TLA Facility at any time. During the year to date period ended March 31, 2018, we made required minimum payments of $54.8 million on the TLA Facility.

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At March 31, 2018, there were $70.0 million of borrowings on the Revolving Credit Facility, and available borrowing capacity was $622.0 million after giving effect to $8.0 million of outstanding standby letters of credit. The availability of borrowings under our Revolving Credit Facility is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the Senior Credit Agreement.

The facilities provided by the Senior Credit Agreement are held with a syndicate of banks, which includes over 30 institutions. Our general corporate assets, including those of our subsidiaries, collateralize these obligations. The credit agreement governing these facilities contains financial covenants which specify a maximum secured net leverage ratio and a minimum interest coverage ratio, as such terms are defined in the credit agreement. These financial covenants are measured at the end of each fiscal quarter. The required ratios vary providing a gradually decreasing maximum secured net leverage ratio and a gradually increasing minimum interest coverage ratio, as set forth in the table below:

Any Fiscal Quarter Ended During the Calendar Year Ending:	Maximum Secured Net Leverage Ratio	Minimum Interest Coverage Ratio
December 31, 2017	4.00x	3.50x
December 31, 2018	3.50x	3.75x
December 31, 2019 and thereafter	3.00x	4.00x

We were in compliance with all financial covenants under our Senior Credit Agreement as of March 31, 2018.

We are exposed to market risk from fluctuations in interest rates. We sometimes manage our exposure to interest rate fluctuations through the use of interest rate swaps. As of March 31, 2018, we had seven interest rate swap agreements, with notional amounts of $750.0 million, in aggregate, to hedge the variability of cash flows associated with a portion of the variable interest rate payments through September 2021 on the Senior Secured Credit Facilities. The interest rate swaps have effective start dates ranging between December 31, 2017 and September 8, 2020 and were designated as cash flow hedges. As of March 31, 2018, these swaps were in a net asset position with an aggregate fair value of $21.7 million, all of which were classified as Other assets. As of September 30, 2017, these swaps were in a net asset position with an aggregate fair value of $7.3 million, of which $8.5 million were classified as Other assets and $1.2 million were classified as Other current liabilities. We classify fair value measurements on our interest rate swaps as Level 2, as described in Note 1.

The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our short-term debt instruments and Revolving Credit Facility approximate fair value.

The estimated fair values of our long-term debt instruments, including the current portion, are described in the table below:

	March 31, 2018		September 30, 2017
Senior secured Term Loan A	$	1,309.3	$	1,364.8
Senior unsecured 5.75% notes due on September 1, 2023	440.5		449.3
Senior unsecured 5.00% notes due on February 14, 2025	297.9		311.9
Unsecured debentures	44.3		46.8
Total	$	2,092.0	$	2,172.8

The estimated fair values of our long-term unsecured debentures were based on observable inputs such as quoted prices in markets that are not active. The estimated fair values of our term loans and the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements are classified as Level 2, as described in Note 1.

Note 6. Retirement and Postretirement Plans

We sponsor five defined benefit retirement plans. Those plans include: a master defined benefit retirement plan, a nonqualified supplemental executive defined benefit retirement plan, and three defined benefit retirement plans covering employees in Germany and France. Benefits for such plans are based primarily on years of service and the employee’s level of compensation during specific periods of employment. We contribute funds to trusts as necessary to provide for current service and for any unfunded projected future benefit obligation over a reasonable period of time. All of our plans have a September 30 measurement date. The following table details the components of net pension expense for our defined benefit retirement plans.

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	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Service cost	$	1.2		$	1.5		$	2.4		$	2.9
Interest cost	2.8			2.4			5.5			4.9
Expected return on plan assets	(4.0		)	(3.6		)	(7.9		)	(7.3		)
Amortization of unrecognized prior service cost, net	—			—			—			0.1
Amortization of net loss	1.0			1.6			2.2			3.1
Net pension expense	$	1.0		$	1.9		$	2.2		$	3.7

In addition to defined benefit retirement plans, we also offer two domestic postretirement health care plans, one of which was assumed in the acquisition of Welch Allyn, that provide health care benefits to qualified retirees and their dependents. The plans are closed to new participants and include retiree cost sharing provisions. Annual costs related to these plans are not significant.

We have defined contribution savings plans that cover substantially all U.S. employees and certain non-U.S. employees. The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings. Our contributions to the plans are based on eligibility and employee contributions. Expense under these plans was $7.5 million and $7.1 million in each of the quarterly periods ended March 31, 2018 and 2017, and $13.9 million and $13.1 million in the year to date periods ended March 31, 2018 and 2017.

Note 7. Other Comprehensive Income (Loss)

The following table represents the changes in accumulated other comprehensive loss by component:

	Quarter Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	9.7		$	(0.5	)	$	9.2	$	(1.3	)	$	7.9	$	7.7		$	7.9	$	15.6
Foreign currency translation adjustment	16.5			—			16.5		—			16.5		(75.2		)	16.5		(58.7		)
Change in pension and postretirement defined benefit plans	(0.1		)	1.0			0.9		(0.1		)	0.8		(32.2		)	0.8		(31.4		)
Total	$	26.1		$	0.5		$	26.6	$	(1.4	)	$	25.2	$	(99.7	)	$	25.2	$	(74.5	)

	Quarter Ended March 31, 2017
	Other comprehensive income (loss)														Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	0.4	$	(0.5	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	7.1		$	(0.2	)	$	6.9
Foreign currency translation adjustment	14.0		—			14.0			—			14.0			(154.7		)	14.0			(140.7		)
Change in pension and postretirement defined benefit plans	—		1.4			1.4			(0.6		)	0.8			(49.5		)	0.8			(48.7		)
Total	$	14.4	$	0.9		$	15.3		$	(0.7	)	$	14.6		$	(197.1	)	$	14.6		$	(182.5	)

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	Year to Date Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	15.5		$	(0.9	)	$	14.6	$	(3.3	)	$	11.3	$	4.3		$	11.3	$	15.6
Foreign currency translation adjustment	22.6			—			22.6		—			22.6		(81.3		)	22.6		(58.7		)
Change in pension and postretirement defined benefit plans	(0.2		)	2.2			2.0		(0.4		)	1.6		(33.0		)	1.6		(31.4		)
Total	$	37.9		$	1.3		$	39.2	$	(3.7	)	$	35.5	$	(110.0	)	$	35.5	$	(74.5	)

	Year to Date Ended March 31, 2017
	Other comprehensive income (loss)															Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	16.6		$	(0.7	)	$	15.9		$	(5.9	)	$	10.0		$	(3.1	)	$	10.0		$	6.9
Foreign currency translation adjustment	(25.5		)	—			(25.5		)	—			(25.5		)	(115.2		)	(25.5		)	(140.7		)
Change in pension and postretirement defined benefit plans	0.4			2.9			3.3			(1.2		)	2.1			(50.8		)	2.1			(48.7		)
Total	$	(8.5	)	$	2.2		$	(6.3	)	$	(7.1	)	$	(13.4	)	$	(169.1	)	$	(13.4	)	$	(182.5	)

The following table represents the items reclassified out of accumulated other comprehensive loss and the related tax effects:

	Quarter Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.5	)	$	—		$	(0.5	)	$	(0.5	)	$	0.1		$	(0.4	)
Change in pension and postretirement defined benefit plans (b)	$	1.0		$	(0.1	)	$	0.9		$	1.4		$	(0.6	)	$	0.8

	Year to Date Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.9	)	$	0.2		$	(0.7	)	$	(0.7	)	$	0.2		$	(0.5	)
Change in pension and postretirement defined benefit plans (b)	$	2.2		$	(0.4	)	$	1.8		$	2.9		$	(1.1	)	$	1.8

(a) Reclassified from accumulated other comprehensive income (loss) into Interest expense.

(b) Reclassified from accumulated other comprehensive income (loss) into Cost of goods sold and Selling and administrative expenses. These components are included in the computation of net periodic pension expense.

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Note 8. Special Charges

In connection with various organizational changes to improve our business alignment and cost structure, we recognized special charges of $36.9 millionand $3.1 millionfor the quarters endedMarch 31, 2018and2017, and $50.4 million and $8.9 million for the year to date periods ended March 31, 2018 and 2017. These charges are summarized as follows:

Dispositions

During the second quarter of fiscal 2018, we entered into an agreement to convey certain assets related to the Company's third-party rental business to UHS and recorded an after-tax loss of $23.4 million in special charges.

Business Optimization

During the first quarter of fiscal 2018, we initiated a global transformation program focused on reducing complexity, increasing efficiency, improving our cost structure and accelerating growth with targeted investments that align with our strategic priorities. For the quarter and year to date periods ended March 31, 2018, this program resulted in charges of $9.6 million and $18.8 million, of which $4.8 million and $10.8 million were severance and benefit costs. We continue to evaluate additional actions related to this program and expect additional special charges to be incurred. However, it is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

Site Consolidation

In the third quarter of fiscal 2015, we initiated a plan to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). As part of this action, we have announced the closure of five sites. During the quarter and year to date periods ended March 31, 2018, we recorded total charges of $3.8 million and $7.8 million, related to these efforts, of which $0.5 million and $0.7 million were severance and benefit costs. These amounts compare to charges of $6.2 million and $9.8 million, during the quarter and year to date periods ended March 31, 2017, of which $1.7 million were severance and benefit costs for the quarter and year to dates periods ended March 31, 2017.

During the second quarter of fiscal 2017, we sold our Charleston property for $6.1 million in cash proceeds and recorded a gain of $5.2 million.

Since the inception of the Site Consolidation program through March 31, 2018, we have recognized aggregate special charges of $42.8 million. We continue to evaluate our facilities footprint and expect to incur additional costs with respect to other actions in the future, however, it is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

Integration and Business Realignment

We acquired Mortara and Tridien and initiated integration activities to optimize the available synergies of our combined company. Additionally, with the acquisition of Welch Allyn in September 2015, we initiated plans to realign our business structure to facilitate the integration, take full advantage of available synergies, and position our existing businesses to capitalize on opportunities for growth. We also incurred costs, including severance and benefit costs, associated with other business realignment and integration activities. During the quarter and year to date periods ended March 31, 2018, we incurred total integration and business realignment charges of approximately $0.1 million and $0.4 million. These amounts compare to charges of $2.1 million and $2.3 million during the quarter and year to date periods ended March 31, 2017, of which $1.4 million were severance and benefit costs for the quarter and year to date periods ended March 31, 2017. We do not expect to incur significant additional special charges in relation to these activities.

For all accrued severance and other benefit charges described above, we record restructuring reserves within Other current liabilities. The reserve activity for severance and other benefits during the year to date period ended March 31, 2018 was as follows:

Balance at September 30, 2017	$	9.0
Expenses	11.5
Cash Payments	(12.6		)
Balance at March 31, 2018	$	7.9

Note 9. Income Taxes

The effective tax rate for the quarter and year to date periods endedMarch 31, 2018was(32.6)% and (123.3)% compared to17.7% and 24.9%for the quarter and year to date periods in the prior year. The effective tax rate for the current quarter is lower than the comparable period in fiscal 2017 due to period tax benefits of $11.2 million primarily related to a change in a tax accounting

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method approved by the Internal Revenue Service in the current period. The change in accounting method resulted in a reduction in U.S. tax for prior year currency exchange losses.The effective tax rate for the year to date period is lower than the comparable period in fiscal 2017 due to the lower corporate tax rate and period tax benefits of $75.6 millionprimarily related to recording the items attributable to the new tax legislation in the U.S. as described below and the change in tax accounting method. The comparable prior year period included period tax benefits of $3.5 million primarily related to the adoption of the ASU 2016-09 partially offset by the expense to revalue the France deferred tax assets due to the law change that reduced the future corporate income tax rate in France.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code which will impact our fiscal year ended September 30, 2018 including, but not limited to (1) reducing the U.S. federal corporate tax rate, (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that may electively be paid over eight years, and (3) accelerated first year expensing of certain capital expenditures. The Tax Act reduces the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Internal Revenue Code Section 15 provides that our fiscal year ended September 30, 2018 will have a blended corporate tax rate of 24.5 percent, which is based on a proration of the applicable tax rates before and after effective date of the Tax Act. The statutory tax rate of 21 percent will apply for fiscal 2019 and beyond.

The Tax Act also puts in place new tax laws that will impact our taxable income beginning in fiscal 2019, which include, but are not limited to (1) creating a Base Erosion Anti-abuse Tax (BEAT), which is a new minimum tax, (2) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, (3) a new provision designed to tax currently global intangible low-taxed income (GILTI), which allows for the possibility of utilizing foreign tax credits and a deduction equal to 50 percent to offset the income tax liability (subject to some limitations), (4) a provision that could limit the amount of deductible interest expense, (5) the repeal of the domestic production activity deduction, (6) limitations on the deductibility of certain executive compensation, and (7) limitations on the utilization of foreign tax credits to reduce the U.S. income tax liability.

Shortly after the Tax Act was enacted, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) which provides guidance on accounting for the Tax Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Act enactment date, during which a company acting in good faith may complete the accounting for the impacts of the Tax Act under ASC Topic 740. In accordance with SAB 118, the Company must reflect the income tax effects of the Tax Act in the reporting period in which the accounting under ASC Topic 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, the Company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. If a Company cannot determine a provisional estimate to be included in the financial statements, the Company should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted. If a Company is unable to provide a reasonable estimate of the impacts of the Tax Act in a reporting period, a provisional amount must be recorded in the first reporting period in which a reasonable estimate can be determined.

We have recorded a provisional discrete net tax benefit of $61.4 million related to the Tax Act in the year to date period ending March 31, 2018. No additional adjustments were recorded in the current quarter. This net benefit primarily consists of a net benefit of $93.8 million due to the remeasurement of our deferred tax accounts to reflect the corporate rate reduction impact to our net deferred tax balances and a net expense for the transition tax of $32.4 million.

Reduction in U.S. Corporate Rate: The Tax Act reduces the U.S. federal statutory corporate tax rate to 24.5 percent in fiscal year ending September 30, 2018 and 21 percent for fiscal year ending September 30, 2019 and beyond. We have recorded a provisional adjustment to our net deferred tax balances, with a corresponding discrete net tax benefit of $93.8 million in the current year to date period. In our annual effective tax rate we have reflected the tax effect of the temporary differences that will originate subsequent to the Tax Act and are required to be remeasured at the 21 percent tax rate. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, we are continuing to analyze the temporary differences that existed on the date of enactment, and the temporary differences originating in the current fiscal year.

Transition Tax: The transition tax is a fiscal 2018 tax on the previously untaxed accumulated and current earnings and profits (E&P) of certain of our foreign subsidiaries.  In order to determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings.  E&P is similar to retained earnings of the subsidiary, but requires other adjustments to conform to U.S. tax rules.  We are able to make a reasonable estimate of the transition tax and recorded a provisional transition tax obligation of $32.4 million which we expect to elect to pay, net of certain tax credit carryforwards, over eight years beginning in fiscal 2019. This

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amount is presented in Other long-term liabilities. However, we are awaiting further interpretative guidance, continuing to assess available tax methods and elections, and continuing to gather additional information to more precisely compute the amount of the transition tax.

Global intangible low-taxed income (GILTI): The Tax Act includes a provision designed to currently tax global intangible low-taxed income starting in fiscal 2019. Due to the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act, the application of ASC 740, and are considering available accounting policy alternatives to adopt to either record the U.S. income tax effect of future GILTI inclusions in the period in which they arise or establish deferred taxes with respect to the expected future tax liabilities associated with future GILTI inclusions. Our accounting policies depend, in part, on analyzing our global income to determine whether we expect a tax liability resulting from the application of this provision, and, if so, whether and when to record related current and deferred income taxes. Whether we intend to recognize deferred tax liabilities related to the GILTI provisions is dependent, in part, on our assessment of the Company's future operating structure. In addition, we are awaiting further interpretive guidance in connection with the computation of the GILTI tax. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments relating to potential GILTI tax in our financial statements and have not made a policy decision regarding our accounting for GILTI.

As of September 30, 2017, our practice and intention was to reinvest the earnings in our non-U.S. subsidiaries outside of the U.S., and no U.S. deferred income taxes or foreign withholding taxes were recorded. The transition tax noted above will result in the previously untaxed foreign earnings being included in the federal and state fiscal 2018 taxable income. We are currently analyzing our global working capital requirements and the potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent, which include local country withholding tax and potential U.S. state taxation. Furthermore, the transition tax will close a majority of the outside basis differences in our foreign corporations and any remaining temporary difference will potentially have some interaction with the GILTI tax noted above. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act and have not recorded any withholding or state tax liabilities, any deferred taxes attributable to GILTI (as noted above) or any deferred taxes attributable to our investment in our foreign subsidiaries.

We are also currently analyzing other provisions of the Tax Act that come into effect for tax years starting October 1, 2018 to determine if these items would impact the effective tax rate. These provisions include BEAT, eliminating U.S. federal income taxes on dividends from foreign subsidiaries, the treatment of amounts in accumulated other comprehensive income, the new provision that could limit the amount of deductible interest expense, and the limitations on the deductibility of certain executive compensation.

Note 10. Earnings per Common Share

Basic earnings per share is calculated based upon the weighted average number of outstanding common shares for the period, plus the effect of deferred vested shares. Diluted earnings per share is calculated consistent with the basic earnings per share calculation plus the effect of dilutive unissued common shares related to stock-based employee compensation programs. For all periods presented, anti-dilutive stock options were excluded from the calculation of diluted earnings per share. Cumulative treasury stock acquired, less cumulative shares reissued, have been excluded in determining the average number of shares outstanding.

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Earnings per share are calculated as follows (share information in thousands):

	Quarter Ended March 31				Year to Date Ended March 31
	2018		2017		2018		2017
Net income attributable to common shareholders	$	28.5	$	34.4	$	116.8	$	58.2
Average shares outstanding - Basic	66,192		65,462		66,040		65,473
Add potential effect of exercise of stock options and other unvested equity awards	1,405		1,670		1,468		1,584
Average shares outstanding - Diluted	67,597		67,132		67,508		67,057
Net income attributable to common shareholders per common share - Basic	$	0.43	$	0.52	$	1.77	$	0.89
Net income attributable to common shareholders per common share - Diluted	$	0.42	$	0.51	$	1.73	$	0.87
Shares with anti-dilutive effect excluded from the computation of Diluted EPS	280		348		225		500

Note 11. Common Stock

The stock-based compensation cost that was charged against income, net of tax, for all plans was $7.0 million and $4.5 million in the quarterly periods ended March 31, 2018 and 2017, and $11.6 million and $7.7 million in the year to date periods ended March 31, 2018 and 2017.

During the first quarter of fiscal 2017, we purchased 0.6 million shares of our common stock for $30.0 million in the open market.

As of March 31, 2018, a cumulative total of $175.3 million of our share repurchase program had been used, leaving us with approximately $165.0 million of availability. This program does not have an expiration date and there are no plans to terminate this program in the future.

Note 12. Guarantees

We routinely grant limited warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year, however, certain components and products have substantially longer warranty periods. We recognize a reserve with respect to these obligations at the time of product sale, with subsequent warranty claims recorded directly against the reserve. The amount of the warranty reserve is determined based on historical trend experience for the covered products. For more significant warranty-related matters which might require a broad-based correction, separate reserves are established when such events are identified and the cost of correction can be reasonably estimated.

A reconciliation of changes in the warranty reserve for the periods covered in this report is as follows:

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Balance at beginning of period	$	25.3		$	26.3		$	25.5		$	27.5
Provision for warranties during the period	4.0			3.7			7.5			6.3
Warranty reserves acquired	—			1.9			—			1.9
Warranty claims during the period	(4.3		)	(4.5		)	(8.0		)	(8.3		)
Balance at end of period	$	25.0		$	27.4		$	25.0		$	27.4

In the normal course of business, we enter into various other guarantees and indemnities in our relationships with suppliers, service providers, customers, business partners and others. Examples of these arrangements would include guarantees of product performance, indemnifications to service providers and indemnifications of our actions to business partners. These guarantees and indemnifications have not historically had, nor do we expect them to have, a material impact on our financial condition or results of operations, although indemnifications associated with our actions generally have no dollar limitations.

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In conjunction with our acquisition and divestiture activities, we have entered into select guarantees and indemnifications of performance with respect to the fulfillment of commitments under applicable purchase and sale agreements. The arrangements generally indemnify the buyer or seller for damages associated with breach of contract, inaccuracies in representations and warranties surviving the closing date and satisfaction of liabilities and commitments retained under the applicable contract. With respect to sale transactions, we also routinely enter into non-competition agreements for varying periods of time. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on our financial condition and results of operations.

Note 13. Segment Reporting

We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure contains the following reporting segments:

• Patient Support Systems – globally provides our specialty bed frames and surfaces and mobility solutions, as well as our clinical workflow solutions which specializes in software and information technologies to improve care and deliver actionable insight to caregivers and patients.

• Front Line Care – globally provides and sells patient monitoring and diagnostic technologies, including a diversified portfolio of physical assessment tools that help diagnose, treat and manage a wide variety of illnesses and diseases, as well as a portfolio of respiratory care devices.

• Surgical Solutions – globally provides products that improve surgical safety and efficiency in the operating room including tables, lights, pendants, positioning devices and various other surgical products and accessories.

Our performance within each reportable segment continues to be measured on a divisional income basis before non-allocated operating and administrative costs, litigation, special charges, acquisition and integration costs, acquisition-related intangible asset amortization, and other unusual events. Divisional income generally represents the division’s gross profit less its direct operating costs along with an allocation of manufacturing and distribution costs, research and development and certain corporate functional expenses.

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Non-allocated operating costs, administrative costs, and other includes functional expenses that support the entire organization such as administration, finance, legal and human resources, expenses associated with strategic developments, acquisition-related intangible asset amortization, and other events that are not indicative of operating trends. We exclude such amounts from divisional income to allow management to evaluate and understand divisional operating trends. The chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment.

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Revenue:
Patient Support Systems	$	355.0		$	362.9		$	689.4		$	698.1
Front Line Care	237.9			211.0			462.5			412.8
Surgical Solutions	117.6			105.0			228.3			205.4
Total revenue	$	710.5		$	678.9		$	1,380.2		$	1,316.3
Divisional income:
Patient Support Systems	$	67.2		$	63.2		$	120.6		$	111.3
Front Line Care	60.5			50.7			115.9			103.9
Surgical Solutions	15.5			9.2			25.2			17.3
Other operating costs:
Non-allocated operating costs, administrative costs, and other	60.2			56.4			113.1			104.0
Special charges	36.9			3.1			50.4			8.9
Operating profit	46.1			63.6			98.2			119.6
Interest expense	(24.2		)	(21.9		)	(47.3		)	(41.4		)
Investment income and other, net	(0.4		)	(0.4		)	1.4			(1.6		)
Income before income taxes	$	21.5		$	41.3		$	52.3		$	76.6

Note 14. Commitments and Contingencies

General

We are subject to various claims and contingencies arising out of the normal course of business, including those relating to governmental investigations and proceedings, commercial transactions, product liability, employee related matters, antitrust, safety, health, taxes, environmental and other matters. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial condition, results of operations, and cash flows.

Self Insurance

We are also involved in other possible claims, including product and general liability, workers’ compensation, auto liability and employment related matters. Such claims in the United States have deductibles and self-insured retentions ranging from $25 thousand to $1.0 million per occurrence or per claim, depending upon the type of coverage and policy period. International deductibles and self-insured retentions are lower. We are also generally self-insured up to certain stop-loss limits for certain employee health benefits, including medical, drug and dental. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims and outside actuarial analysis, which are based on historical information along with certain assumptions about future events. Such estimated reserves are classified as Other Current Liabilities and Other Long-Term Liabilities within the Condensed Consolidated Balance Sheets.

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Universal Hospital Services, Inc. Litigation

On March 7, 2018, we entered into a Settlement Agreement with UHS related to previously disclosed litigation which, among other things, provided for the conveyance of certain net assets relating to our third party rental business, subject to the satisfaction of customary closing conditions. UHS has agreed to drop its lawsuit against the Company as part of the Settlement Agreement. We have recorded a loss of $23.4 million in special charges, which includes approximately $20.4 million related to the non-cash loss reserve for the assets to be conveyed, and other Settlement Agreement related costs of approximately $3.0 million.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Factors That May Affect Future Results

Certain statements in this Quarterly Report on Form 10-Q contain forward-looking statements, within the meanings of the Private Securities Litigation Reform Act of 1995, regarding our future plans, objectives, beliefs, expectations, representations and projections.

Forward-looking statements are not guarantees of future performance, and our actual results could differ materially from those set forth in any forward-looking statements. 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 our previously filed most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“2017 Form 10-K”) as well as the discussions in this “Management’s Discussion and Analysis”. We assume no obligation to update or revise any forward-looking statements unless required by law.

Overview

The following discussion and analysis should be read in conjunction with the accompanying interim financial statements and our 2017 Form 10-K.

Hill-Rom Holdings, Inc. (“we,” “us,” “our,” or the “Company”), is a leading global medical technology company and more than 10,000 employees worldwide help people get better care inside and outside the hospital. Our innovations in five core areas – Advancing Mobility, Wound Care and Prevention, Patient Monitoring and Diagnostics, Surgical Safety and Efficiency, and Respiratory Health – improve clinical and economic outcomes and ensure caregivers in more than 100 countries have the products they need to protect their patients, speed up recoveries and manage conditions. Every day, around the world, we enhance outcomes for patients and their caregivers.

Use of Non-GAAP Financial Measures

The accompanying Condensed Consolidated Financial Statements, including the related notes, are presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We routinely provide gross margin, operating margin, income tax expense and earnings per share results on an adjusted basis because the Company’s management believes these measures contribute to an understanding of our financial performance, provide additional analytical tools to understand our results from core operations and reveal underlying trends. These measures exclude strategic developments, acquisition and integration costs, special charges, the one-time impact of the Tax Act as described in Note 9 or other unusual events. The Company also excludes the amortization of intangible assets associated with prior business acquisitions. These adjustments are made to allow investors to evaluate and understand operating trends excluding the non-cash impact of acquired intangible amortization on operating income and earnings per share.

Management uses these measures internally for planning, forecasting and evaluating the performance of the business. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

In addition, we present certain results on a constant currency basis which compares results between periods as if foreign currency exchange rates had remained consistent period-over-period. We monitor sales performance on an adjusted basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars. We calculate constant currency by applying the foreign currency exchange rate for the prior period to the local currency results for the current period. We believe that evaluating growth in net revenue on a constant currency basis provides an additional and meaningful assessment to both management and investors.

Results of Operations

In this section, we provide an overview of our results of operations. We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure contains the following reporting segments:

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• Patient Support Systems – globally provides our specialty bed frames and surfaces and mobility solutions, as well as our clinical workflow solutions which specializes in software and information technologies to improve care and deliver actionable insight to caregivers and patients.

• Front Line Care – globally provides and sells patient monitoring and diagnostic technologies, including a diversified portfolio of physical assessment tools that help diagnose, treat and manage a wide variety of illnesses and diseases, as well as a portfolio of respiratory care devices.

• Surgical Solutions – globally provides products that improve surgical safety and efficiency in the operating room including tables, lights, pendants, positioning devices and various other surgical products and accessories.

Net Revenue

									U.S.		OUS
	Quarter Ended March 31				Change As Reported		Constant Currency		Change As Reported		Change As Reported		Constant Currency
	2018		2017
Revenue:
Product sales and service	$	610.7	$	579.6	5.4	%	2.2	%	1.1	%	13.0	%	4.1	%
Rental revenue	99.8		99.3		0.5	%	(0.8	)%	0.1	%	3.6	%	(8.0	)%
Total revenue	$	710.5	$	678.9	4.7	%	1.8	%	1.0	%	12.5	%	3.5	%
Revenue:
Patient Support Systems	$	355.0	$	362.9	(2.2	)%	(4.5	)%	(5.5	)%	6.5	%	(2.0	)%
Front Line Care	237.9		211.0		12.7	%	10.7	%	10.9	%	17.0	%	10.1	%
Surgical Solutions	117.6		105.0		12.0	%	5.6	%	5.4	%	18.4	%	5.8	%
Total revenue	$	710.5	$	678.9	4.7	%	1.8	%	1.0	%	12.5	%	3.5	%
OUS - Outside of the U.S.

									U.S.		OUS
	Year to Date Ended March 31				Change As Reported		Constant Currency		Change As Reported		Change As Reported		Constant Currency
	2018		2017
Revenue:
Product sales and service	$	1,185.9	$	1,121.5	5.7	%	3.0	%	1.7	%	13.4	%	5.5	%
Rental revenue	194.3		194.8		(0.3	)%	(1.3	)%	(0.8	)%	4.1	%	(5.5	)%
Total revenue	$	1,380.2	$	1,316.3	4.9	%	2.4	%	1.2	%	12.9	%	4.9	%
Revenue:
Patient Support Systems	$	689.4	$	698.1	(1.2	)%	(3.3	)%	(3.8	)%	5.6	%	(2.0	)%
Front Line Care	462.5		412.8		12.0	%	10.2	%	9.0	%	19.6	%	13.3	%
Surgical Solutions	228.3		205.4		11.1	%	5.7	%	3.6	%	18.5	%	7.7	%
Total revenue	$	1,380.2	$	1,316.3	4.9	%	2.4	%	1.2	%	12.9	%	4.9	%
OUS - Outside of the U.S.

Consolidated Revenue

Product sales and service revenue increased5.4% and 5.7% on a reported basis, or 2.2% and 3.0% on a constant currency basis, for the three and six months endedMarch 31, 2018 primarily due to our acquisition of Mortara in February 2017 and OUS growth.

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This growth was partially offset by declines from businesses we recently divested within our Patient Support Systems segment. Excluding Mortara up to the anniversary date of the acquisition and businesses we recently divested, revenue increased approximately 2% on a constant currency basis in comparison to the prior year for the three and six month periods.

Rental revenue increased0.5% and decreased(0.3)% on a reported basis, or (0.8)% and (1.3)% on a constant currency basis, for the three and six months endedMarch 31, 2018 primarily due to volume declines.

Business Segment Revenue

Patient Support Systems revenue decreased(2.2)% and (1.2)% on a reported basis, or (4.5)% and (3.3)% on a constant currency basis, compared to the prior year. Both periods were impacted by lower revenue from businesses we recently divested or non-strategic assets the Company plans to exit. Excluding revenue from the these businesses and non-strategic assets, revenue decreased (1)% on a constant currency basis for the three months ended March 31, 2018 and is flat for the year to date period in comparison to the prior year.

Front Line Care revenue increased12.7% and 12.0% on a reported basis, or 10.7% and 10.2% on a constant currency basis, for the three and six months endedMarch 31, 2018 compared to the prior year, primarily due to the additional revenue from our Mortara acquisition in February 2017 as well as strong second quarter growth in our Welch Allyn business.

Surgical Solutions revenue increased12.0% and 11.1% on a reported basis, or 5.6% and 5.7% on a constant currency basis, for the three and six months endedMarch 31, 2018 compared to the prior year, mainly due to strong OUS growth in Europe and the Middle East as well as second quarter growth in the U.S. from new products.

Gross Profit

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Gross Profit
Product sales and service	$	297.0		$	273.9		$	568.1		$	527.4
Percent of Related Revenue	48.6		%	47.3		%	47.9		%	47.0		%
Rental	53.4			50.5			101.9			99.6
Percent of Related Revenue	53.5		%	50.9		%	52.4		%	51.1		%
Total Gross Profit	$	350.4		$	324.4		$	670.0		$	627.0
Percent of Total Revenue	49.3		%	47.8		%	48.5		%	47.6		%

Product sales and service gross margin increased130 and 90 basis points for the three and six months endedMarch 31, 2018 compared to the prior year primarily due to product mix and supply chain improvements.

Rental gross margin increased260 and 130 basis points for the three and six months endedMarch 31, 2018 compared to the prior year due to product mix and cost improvements in our fleet and field service infrastructure.

Operating Expenses

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Research and development expenses	$	34.7		$	35.3		$	67.0		$	67.3
Percent of Total Revenue	4.9		%	5.2		%	4.9		%	5.1		%
Selling and administrative expenses	$	232.7		$	222.4		$	454.4		$	431.2
Percent of Total Revenue	32.8		%	32.8		%	32.9		%	32.8		%

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Research and development expenses decreased(1.7)% and (0.4)% for the three and six months endedMarch 31, 2018 compared to the prior year, primarily due to timing of projects. As a percentage of revenue, research and development expenses remained relatively consistent.

As a percentage of total revenue, selling and administrative expenses were relatively consistent during the quarter and year to date periods compared to the prior year. Selling and administrative expenses include acquisition-related intangible asset amortization, acquisition and integration costs and significant litigation related costs totaling $32.2 million and $65.3 million for the three and six months endedMarch 31, 2018 and $33.8 million and $65.2 million for the three and six months endedMarch 31, 2017. Excluding these items, selling and administrative expenses increased40 basis points for the quarter and year to date periods as compared to prior periods due to the acquisition of Mortara in February 2017 and investment in sales and marketing.

Business Segment Divisional Income

	Quarter Ended March 31				Change As Reported		Year to Date Ended March 31				Change As Reported
	2018		2017				2018		2017
Divisional income:
Patient Support Systems	$	67.2	$	63.2	6.3	%	$	120.6	$	111.3	8.4	%
Front Line Care	60.5		50.7		19.3	%	115.9		103.9		11.5	%
Surgical Solutions	15.5		9.2		68.5	%	25.2		17.3		45.7	%

Refer to Note 13 of our Condensed Consolidated Financial Statements for a description of how divisional income is determined.

Patient Support Systems divisional income increased6.3% and 8.4% for the three and six months endedMarch 31, 2018 compared to the prior year, primarily due to lower operating expenses and an increase in margins from product mix and operational improvements.

Front Line Care divisional income increased19.3% and 11.5% for the three and six months endedMarch 31, 2018 compared to the prior year as a result of revenue growth and higher margins from product mix.

Surgical Solutions divisional income increased68.5% and 45.7% for the three and six months endedMarch 31, 2018 compared to the prior year, primarily due to revenue growth and higher margins from supply chain improvements. 

Special Charges and Other

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Special charges	$	36.9		$	3.1		$	50.4		$	8.9
Interest expense	$	(24.2	)	$	(21.9	)	$	(47.3	)	$	(41.4	)
Investment income and other, net	$	(0.4	)	$	(0.4	)	$	1.4		$	(1.6	)

In connection with various organizational changes to improve our business alignment and cost structure, we recognized special charges of $36.9 millionand $3.1 million for the quarters ended March 31, 2018and2017, and $50.4 million and $8.9 million for the year to date periods ended March 31, 2018. These charges relate to the initiatives described in Note 8 of our Condensed Consolidated Financial Statements.

Interest expense was higher in the three and six months endedMarch 31, 2018 primarily due to the interest expense on our private offering of $300.0 million of senior unsecured notes in connection with the Mortara acquisition in February 2017. See Note 5 of our Condensed Consolidated Financial Statements for additional information.

Investment income and other, net increased in the six months ended March 31, 2018 primarily due to the gain we recorded related to the working capital settlement of the Völker disposition as well as favorable movements in foreign exchange rates.

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GAAP and Adjusted Earnings

Operating margin, income before income taxes, income tax expense, and earnings attributable to common shareholders per diluted share are summarized in the table below. GAAP amounts are adjusted for certain items to aid management in evaluating the performance of the business. Income tax expense is computed by applying a blended statutory tax rate based on the jurisdictional mix of the respective before tax adjustment.

	Quarter Ended March 31, 2018										Quarter Ended March 31, 2017
	Operating Margin		Income Before Income Taxes		Income Tax Expense			Diluted EPS			Operating Margin1		Income Before Income Taxes		Income Tax Expense			Diluted EPS
GAAP Basis	6.5	%	$	21.5	$	(7.0	)	$	0.42		9.4	%	$	41.3	$	7.3		$	0.51
Adjustments:
Acquisition and integration costs	0.4	%	2.6		0.7			0.03			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	%	0.5		(0.1		)	0.01
Litigation expenses	0.3	%	1.8		0.4			0.02			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		)	—	%	—		—			—
Adjusted Basis	16.2	%	$	90.6	$	19.4		$	1.05		15.0	%	$	79.6	$	20.8		$	0.88
1 Total does not add due to rounding

	Year to Date Ended March 31, 2018											Year to Date Ended March 31, 2017
	Operating Margin		Income Before Income Taxes			Income Tax Expense			Diluted EPS			Operating Margin1		Income Before Income Taxes			Income Tax Expense			Diluted EPS
GAAP Basis	7.1	%	$	52.3		$	(64.5	)	$	1.73		9.1	%	$	76.6		$	19.1		$	0.87
Adjustments:
Acquisition and integration costs	0.4	%	5.0			1.3			0.05			1.0	%	13.2			5.6			0.11
Acquisition-related intangible asset amortization	3.9	%	53.7			13.5			0.60			4.0	%	52.1			17.3			0.52
Field corrective actions	—	%	—			—			—			—	%	0.5			(0.1		)	0.01
Litigation expenses	0.4	%	5.8			1.5			0.06			0.1	%	0.9			0.3			0.01
Special charges	3.7	%	50.4			13.2			0.55			0.7	%	8.9			2.8			0.09
Tax method and law changes and related costs	—	%	0.8			69.0			(1.01		)	—	%	—			(2.2		)	0.03
Gain on disposition	—	%	(1.0		)	—			(0.01		)	—	%	(1.0		)	(0.4		)	(0.01		)
Adjusted Basis	15.5	%	$	167.0		$	34.0		$	1.97		14.8	%	$	151.2		$	42.4		$	1.63
1 Total does not add due to rounding

The effective tax rate for the quarter and year to date periods endedMarch 31, 2018was(32.6)% and (123.3)% compared to17.7% and 24.9%for the quarter and year to date periods in the prior year. The effective tax rate for the current quarter is lower than the comparable period in fiscal 2017 due to period tax benefits of $11.2 million primarily related to a change in a tax accounting method approved by the Internal Revenue Service in the current period. The change in accounting method resulted in a reduction

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in U.S. tax for prior year currency exchange losses.The effective tax rate for the year to date period is lower than the comparable period in fiscal 2017 due to the lower corporate tax rate and period tax benefits of $75.6 millionprimarily related to recording the items attributable to the new tax legislation in the U.S. as describedin Note 9 and the change in tax accounting method. The comparable prior year period included period tax benefits of $3.5 million primarily related to the adoption of the ASU 2016-09 partially offset by the expense to revalue the France deferred tax assets due to the law change that reduced the future corporate income tax rate in France.

The adjusted effective tax rate for the three and six months endedMarch 31, 2018 was 21.4% and 20.4% compared to 26.1% and 28.0% for the comparable period in the prior year. The lower adjusted tax rate in the current year is due primarily to the reduction in the U.S. federal corporate tax rate from the Tax Act legislation as described in Note 9 and period tax items related to the excess tax benefits on deductible stock compensation.

Diluted earnings per share decreased17.6% and increased98.9% on a reported basis and increased19.3% and 20.9% on an adjusted basis for the three and six months endedMarch 31, 2018. 

Liquidity and Capital Resources

	Year to Date Ended March 31
	2018			2017
Cash Flows Provided By (Used In):
Operating activities	$	125.6		$	126.4
Investing activities	(47.7		)	(346.9		)
Financing activities	(75.8		)	211.7
Effect of exchange rate changes on cash	5.1			(4.7		)
Decrease in Cash and Cash Equivalents	$	7.2		$	(13.5	)

Operating Activities

Cash provided by operating activities decreased$0.8 million compared to the prior year as higher net income, adjusted for non-cash items including the impact of the Tax Act legislation as described in Note 9, the conveyance of certain third party rental assets as described in Note 1, depreciation, amortization and stock compensation expense, was offset by changes in working capital activities. During the year to date period, net income adjusted for non-cash items and collection of receivables were partially offset by the payout of performance-based compensation related to our 2017 fiscal year and timing of other working capital activities.

Investing Activities

Cash used in investing activities decreased$299.2 million compared to the prior year, primarily due to our acquisition of Mortara in the second quarter of fiscal 2017. During the year to date period, cash used in investing activities consisted mainly of capital expenditures.

Financing Activities

Cash used in financing activities increased$287.5 million primarily due to proceeds from borrowings on long-term debt of $300.0 million during the prior year for the Mortara acquisition, partially offset by $30.0 million of share repurchases in the open market during the first quarter of fiscal 2017. During the year to date period, payments of long term debt totaled $54.9 million, while net borrowings decreased$20.0 million on our Revolving Credit Facility and increased$14.1 million on our Securitization Program. See Note 5 of our Condensed Consolidated Financial Statements for additional information on our financing agreements.

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Other Liquidity Matters

In addition to the discussion of our financing agreements and share repurchases detailed in Note 5 and Note 11 of our Condensed Consolidated Financial Statements, our primary pension plan invests in a variety of equity and debt securities. At September 30, 2017, our latest measurement date, our pension plans were underfunded by approximately $61.4 million. Based on our current funded status, we are not required to make any contributions to our primary pension plan in fiscal 2018.

We intend to continue to pay quarterly cash dividends comparable to those paid in the periods covered by these financial statements. However, the declaration and payment of dividends by us will be subject to the sole discretion of our Board and will depend upon many factors, including our financial condition, earnings, capital requirements, covenants associated with debt obligations, legal requirements, and other factors deemed relevant by our Board.

Over the long term, we intend to continue to pursue inorganic growth in certain areas of our business, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. 

As of March 31, 2018, approximately 82.7% of our cash and cash equivalents were held by our foreign subsidiaries. As of September 30, 2017, our practice and intention was to reinvest the earnings in our non-U.S. subsidiaries outside of the U.S. As a result of the Tax Act described in Note 9, we are currently analyzing our global working capital requirements and potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent.

We believe that cash on hand and cash generated from operations, along with amounts available under our Revolving Credit Facility and Securitization Program, will be sufficient to fund operations, working capital needs, capital expenditure requirements, and financing obligations for at least the next twelve months. Our $700.0 million Revolving Credit Facility is with a syndicate of banks, which we believe reduces our exposure to any one institution and would still leave us with significant borrowing capacity in the event that any one of the institutions within the group is unable to comply with the terms of our amended and restated credit agreement. However, disruption and volatility in the credit markets could impede our access to capital.

Contractual Obligations and Contingent Liabilities and Commitments

Other than the transition tax obligation discussed in Note 9, there have not been any significant changes since September 30, 2017 impacting our contractual obligations and contingent liabilities and commitments.

Critical Accounting Policies

Our accounting policies require management to make significant estimates and assumptions using information available at the time the estimates are made. Such estimates and assumptions significantly affect various reported amounts of assets, liabilities, revenue, and expenses. If future experience differs materially from these estimates and assumptions, our results of operations and financial condition could be affected. A detailed description of our accounting policies is included in Note 1 of our Condensed Consolidated Financial Statements and the Critical Accounting Policies Section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2017 Form 10-K. There have been no material changes to such policies since September 30, 2017.

For a further summary of certain accounting policies and estimates and recently issued accounting pronouncements applicable to us, see Note 1 of our Condensed Consolidated Financial Statements in this Form 10-Q.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to various market risks, including fluctuations in interest rates, collection risk associated with our accounts and notes receivable portfolio and variability in currency exchange rates. We have established policies, procedures, and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.

We are subject to variability in foreign currency exchange rates in our international operations. Exposure to this variability is periodically managed primarily through the use of natural hedges, whereby funding obligations and assets are both managed in the local currency. We, from time-to-time, enter into currency exchange agreements to manage our exposure arising from fluctuating exchange rates related to specific and forecasted transactions. We operate this program pursuant to documented corporate risk management policies and do not enter into derivative transactions for speculative purposes. The sensitivity of earnings and cash flows to variability in exchange rates is assessed by applying an appropriate range of potential rate fluctuations to our assets, obligations and projected results of operations denominated in foreign currencies.

Our currency risk consists primarily of foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions. At March 31, 2018, the notional amount of open foreign exchange contracts was $33.8 million. These contracts were in a net liability position with an aggregate fair value of $0.3 million. The maximum length of time over which we hedge transaction exposures is generally 15 months. Derivative gains/(losses), initially reported as a component of Accumulated Other Comprehensive Loss, are reclassified to earnings in the period when the transaction affects earnings.

Refer to Note 5 of our Condensed Consolidated Financial Statements for discussions about our interest rate swap agreements.

For additional information on market risks related to our pension plan assets, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our 2017 Form 10-K.

Item 4. CONTROLS AND PROCEDURES

Our management, with the supervision and participation of our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer (the “Certifying Officers”), has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2018. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including our Certifying Officers and our Board of Directors, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective as of March 31, 2018.

There have been no other changes to our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Item 5. OTHER INFORMATION

Amendment to Employment Agreements

On April 24, 2018, the Company entered into amended employment agreements with each of Mr. Andreas Frank, Mr. Paul Johnson, Mr. Carlos Alonso-Marum, Mr. Kenneth Meyers, Ms. Deborah Rasin, Mr. Alton Shader and Mr. Steven J. Strobel, and on April 23, 2018, the Company entered into an amended employment agreement with Mr. Francisco Canal Vega (collectively, the “Amended Employment Agreements”). Messrs. Frank’s and Shader’s employment agreements were initially entered into in 2011.  Mr. Strobel’s employment agreement was initially entered into in 2014.  Ms. Rasin’s and Messrs. Alonso-Marum’s and Meyers’ employment agreements were initially entered into in 2015. Mr. Johnson’s employment agreement was initially entered into in 2016.  Mr. Canal Vega’s employment agreement was initially entered into in 2017. 

The Amended Employment Agreements provide that in the event the executive’s employment is terminated by the Company without cause on or before November 16, 2019, the executive will be entitled to receive cash payments for all outstanding unvested equity awards that are forfeited as a result of termination of employment that otherwise would have vested on before November 16, 2019, calculated as follows:

(i) For each unvested stock option, an amount equal to the difference between the closing price of the Company’s common stock on the date of termination of employment and the stock option’s exercise price, with such payment to be made as soon as practicable following the date of termination of employment. 

(ii) For each unvested restricted stock unit, an amount equal to the closing price of the Company’s common stock on the date of termination of employment, with such cash payment to be made as soon as practicable following the effective date of termination of employment.

(iii) For each unvested performance share unit, an amount equal to the closing price of the Company’s common stock on the last day of the applicable three-year performance period for such performance share unit, with the number of performance share units earned to be determined as of the end of the performance period based on actual Company financial performance for the full performance period and with such cash payment to be made as soon as practicable following the completion of the performance period.   

Other than as set forth above, the respective employment agreements of the executive officers listed above remain unchanged.  The description of these Amended Employment Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the complete text of the Amended Employment Agreements, copies of which are included herein as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9, which exhibits are incorporated by reference.

30

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Note 14 of our Condensed Consolidated Financial Statements in this Form 10-Q for further information on our legal proceedings.

Item 1A. RISK FACTORS

For information regarding the risks we face, see the discussion under “Item 1A. Risk Factors” in our 2017 Form 10-K for the year ended September 30, 2017. There have been no material changes to the risk factors described in that report.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (2)
January 1, 2018 - January 31, 2018	9,903	$	85.60	—	$	164.7
February 1, 2018 - February 28, 2018	358	$	84.83	—	$	164.7
March 1, 2018 - March 31, 2018	176	$	87.63	—	$	164.7
Total	10,437			—

(1) Shares purchased during the quarter ended March 31, 2018 were in connection with employee payroll tax withholding for restricted and deferred stock distributions.

(2) In September 2017, the Board approved an increase to its previously announced share repurchase authorization to a total of $340.0 million. As of March 31, 2018, a cumulative total of $175.3 million had been used, leaving the Company with approximately $165.0 million of availability under the share repurchase program. The plan does not have an expiration date and currently there are no plans to terminate this program in the future.

31

Item 6. EXHIBITS

A. Exhibits

10.1		First Amendment to Employment Agreement between Andreas Frank and Hill-Rom Holdings, Inc. dated April 24, 2018
10.2		Employment Agreement between Paul Johnson and Hill-Rom Holdings, Inc. dated May 2, 2016
10.3		First Amendment to Employment Agreement between Paul Johnson and Hill-Rom Holdings, Inc. dated April 24, 2018
10.4		First Amendment to Employment Agreement between Carlos Alonso-Marum and Hill-Rom Holdings, Inc. dated April 24, 2018
10.5		First Amendment to Employment Agreement between Kenneth Meyers and Hill-Rom Holdings, Inc. dated April 24, 2018
10.6		First Amendment to Employment Agreement between Deborah Rasin and Hill-Rom Holdings, Inc. dated April 24, 2018
10.7		First Amendment to Employment Agreement between Alton Shader and Hill-Rom Holdings, Inc. dated April 24, 2018
10.8		First Amendment to Employment Agreement between Steven J. Strobel and Hill-Rom Holdings, Inc. dated April 24, 2018
10.9		First Amendment to Employment Agreement between Francisco Canal Vega and Hill-Rom Holdings, Inc. dated April 23, 2018
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Extension Labels Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HILL-ROM HOLDINGS, INC.

(Registrant)

DATE: April 27, 2018	By:	/s/ Steven J. Strobel
	Name: Title:	Steven J. Strobel Senior Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)

33

EX-10.6

EXHIBIT 10.6

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Deborah M. Rasin (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated November 6, 2015 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Deborah M. Rasin Printed: Deborah M. Rasin Dated: April 20, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 24, 2018

EX-10.7

EXHIBIT 10.7

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Alton E. Shader (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated July 11, 2011 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Alton Shader Printed: Alton Shader Dated: April 23, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 23, 2018

EX-10.1

EXHIBIT 10.1

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Andreas Frank (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated October 1, 2011 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Andreas Frank Printed: Andreas Frank Dated: April 20, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 24, 2018

EX-32.2

EXHIBIT 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, asAdopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Hill-Rom Holdings, Inc. (the “Company”) for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven J. Strobel, Senior Vice President and Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven J. Strobel

Steven J. Strobel

Senior Vice President and Chief Financial Officer

April 27, 2018

A signed original of this written statement required by Section 906 has beenprovided to Hill-Rom Holdings, Inc. and will be retained by Hill-Rom Holdings, Inc. and furnished to the Securities and Exchange Commission or itsstaff upon request.

EX-10.9

EXHIBIT 10.9

ADDENDUM II TO EMPLOYMENT AGREEMENT

THE UNDERSIGNED:

1. HR Europe B.V., a private limited liability company, having its registered office at the Hoogoorddreef 15, geb. Amerika, 7^th floor, (1101BA) in Amsterdam, the Netherlands, ("Company"), in this matter duly represented by Etienne Claessens, VP Human Resources International;
and

2. Mr. Francisco Canal Vega, residing at the Roemer Visscherstraat 34H, (1051EZ) in Amsterdam, the Netherlands ("Executive").

HR Europe and Director may be referred to hereinafter individually as a "Party" and jointly as the "Parties".

WHEREAS:

A. the Company and Executive entered into an employment agreement dated August 27, 2015 and subsequently into an Addendum thereto dated July 2017 (combined referred to as: “Employment Agreement”) which sets forth the terms and conditions upon which Executive is currently employed by the Company in the position Senior Vice President and President Global Surgical Solutions;

B. the Company and Executive desire to enter into this agreement (“Addendum II”) to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

C. NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as adopted in this Addendum II:

HAVE AGREED AS FOLLOWS:

Article 1

1.1    Article 1, paragraph 4 of the Employment Agreement (“Severance Payments”), is     hereby amended by adding the following at the end of paragraph 4:

“In addition to the entitlement to a lump sum severance payment and the continuation of health and active service and under the conditions as stated in

1

Article 1, paragraph 4of the Employment Agreement, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”

Article 2

2.1    Except as amended by this Addendum II, the Employment Agreement shall     continue in full force and effect. The Employment Agreement and this     Addendum II shall be construed as one and the same instrument.

Article 3: Miscellaneous

3.1    All other terms and conditions of the Employment Agreement will remain in     force.

3.2    This Addendum is governed by Dutch law.

2

Signed by Parties in duplicate originals on April 23rd, 2018.

For HR Europe B.V.:
/S/ Etienne Claessens	/S/ Francisco Canal Vega
Etienne Claessens	Francisco Canal Vega

3

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, asAdopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Hill-Rom Holdings, Inc. (the “Company”) for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John J. Greisch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John J. Greisch

John J. Greisch

President and Chief Executive Officer

April 27, 2018

A signed original of this written statement required by Section 906 has beenprovided to Hill-Rom Holdings, Inc. and will be retained by Hill-Rom Holdings, Inc. and furnished to the Securities and Exchange Commission or itsstaff upon request.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

Certification of Chief Executive Officer Pursuant to Section 302 of theSarbanes-Oxley Act of 2002

I, John J. Greisch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hill-Rom Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 27, 2018

/s/ John J. Greisch

John J. Greisch

President and Chief Executive Officer

EX-10.5

EXHIBIT 10.5

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Kenneth F. Meyers (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated September 21, 2015 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Kenneth F. Meyers Printed: Kenneth F. Meyers Dated: April 17, 2018	By: /S/ Deborah M. Rasin Title: SVP & Chief Legal Officer Dated: April 24, 2018

EX-10.3

EXHIBIT 10.3

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Paul Johnson (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated May 2, 2016 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Paul S. Johnson Printed: Paul S. Johnson Dated: April 24, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 24, 2018

EX-10.4

EXHIBIT 10.4

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Carlos Alonso Marum (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated and effective the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated March 19, 2015 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Carlos Alonso Marum Printed: Carlos Alonso Marum Dated: April 18, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 24, 2018

EX-10.8

EXHIBIT 10.8

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (“First Amendment”) between Steven J. Strobel (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated the 24th day of April, 2018.

W I T N E S S E T H:

WHEREAS, the Company and Executive entered into an Employment Agreement dated October 23, 2014 which sets forth the terms and conditions upon which Executive is currently employed by the Company in an executive position;

WHEREAS, the Company and Executive desire to amend the Employment Agreement to provide certain benefits to Executive in the event of Executive’s involuntary termination of employment by the Company under certain circumstances; and

NOW THEREFORE, in consideration of Executive’s continued employment with the Company and the mutual covenants set forth in the Employment Agreement and herein, as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive agree to amend the Employment Agreement as follows:

1. Paragraph 16 of the Employment Agreement, “Severance Payments”, is hereby amended by adding the following at the end of said Paragraph:

“In addition to the payment of severance pay and the continuation of health and welfare benefits as provided for in this Paragraph 16, Executive shall be eligible to receive cash payments as compensation for the forfeiture of all outstanding stock options, restricted stock units and performance share units that are unvested as of

the effective date of termination of employment and that are otherwise scheduled to vest by their terms in calendar years 2018 and 2019, as follows:

(i) For each such unvested stock option, an amount equal to the difference between the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment and the stock option’s exercise price;

(ii) For each such unvested restricted stock unit, an amount equal to the closing price of the Company’s Common Stock on the Executive’s effective date of termination of employment;

(iii) For each such unvested performance share unit, an amount equal to the closing price of the Company’s Common Stock on the last day of the applicable three-year performance share unit performance period, with the number of unvested performance share units to be determined as of the close of the applicable performance period based on actual Company financial performance for the full performance period.

(iv) Executive shall only be eligible for the cash payments provided for in subparagraphs (i), (ii) and (iii) above in the event Executive’s employment is terminated by the Company without “cause”, as defined above, on or before November 16, 2019.

(v) The cash payments provided for in subparagraphs (i) and (ii) above shall be paid to Executive as soon as practicable following Executive’s effective date of termination of employment and the cash payment provided for in subparagraph (iii) above shall be paid to Executive as soon as practicable

following the end of the applicable three-year performance share unit performance period; provided, however, that any such cash payments shall comply with any payment limitations or restrictions imposed by Code Section 409A.”     

2. Except as amended by this First Amendment, the Employment Agreement shall continue in full force and effect. The Employment Agreement and this First Amendment shall be construed as one and the same instrument.

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: /S/ Steven J. Strobel Printed: Steven J. Strobel Dated: April 24, 2018	By: /S/ Kenneth F. Meyers Title: SVP & Chief Human Resources Officer Dated: April 24, 2018

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

Certification of Chief Financial Officer Pursuant to Section 302 of theSarbanes-Oxley Act of 2002

I, Steven J. Strobel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hill-Rom Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 27, 2018

/s/ Steven J. Strobel

Steven J. Strobel

Senior Vice President and Chief Financial Officer

EX-10.2

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

P R E A M B L E

This Employment Agreement defines the essential terms and conditions of our employment relationship with you. The subjects covered in the Agreement are vitally important to you and to the Company. Thus, you should read the document carefully and ask any questions before signing the Agreement.

This EMPLOYMENT AGREEMENT between Paul Johnson (“Executive”) and Hill‑Rom Holdings, Inc. (“Company”) is dated this 2nd day of May, 2016.

W I T N E S S E T H:

WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical‑related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;

WHEREAS, the Company is willing to employ Executive in an executive or managerial position and Executive desires to be employed by the Company in such capacity based upon the terms and conditions set forth in this Agreement;

WHEREAS, in the course of the employment contemplated under this Agreement, it will be necessary for Executive to acquire and maintain knowledge of certain trade secrets and other confidential and proprietary information regarding the Company as well as any of its parent, subsidiary and/or affiliated entities (hereinafter jointly referred to as the “Companies”); and

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WHEREAS, the Company and Executive (collectively referred to as the “Parties”) acknowledge and agree that the execution of this Agreement is necessary to memorialize the terms and conditions of their employment relationship as well as safeguard against the unauthorized disclosure or use of the Company’s confidential information and to otherwise preserve the goodwill and ongoing business value of the Company;

NOW THEREFORE, in consideration of Executive’s employment, the Company’s willingness to disclose certain confidential and proprietary information to Executive and the mutual covenants contained herein as well as other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

1. Employment. As of Executive’s first date of employment with the Company (“Start Date”), as mutually agreed upon by the Company and Executive, the Executive agrees to serve as President, PSS US Acute Care for the Company, reporting to the Chief Operating Officer of the Company. Executive agrees to perform all duties and responsibilities traditionally assigned to, or falling within the normal responsibilities of, an individual employed as President, PSS US Acute Care of the Company. Executive also agrees to perform any and all additional duties or responsibilities consistent with such position as may be assigned by the Board of Directors or the Chief Opoerating Officer of the Company in its or his sole discretion.

2. Efforts and Duty of Loyalty. During the term of employment with the Company, Executive covenants and agrees to exercise reasonable efforts to perform all assigned duties in a diligent and professional manner and in the best interest of the Company. Executive agrees to devote his full working time, attention, talents, skills and efforts to further the Company’s business interests. Executive agrees not to engage in any outside business activity, whether or not

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pursued for gain, profit or other pecuniary advantage, without the express written consent of the Company. Executive shall act at all times in accordance with the Company’s Code of Ethical Business Conduct, and all other applicable policies which may exist or be adopted by the Company from time to time. The Executive may serve on other boards of directors as shall not interfere with the proper performance of his duties and obligations hereunder consistent with the Company’s Corporate Governance Standards for Board of Directors and applicable laws, with the prior consent of the Company.

3. At-Will Employment. Subject to the terms and conditions set forth below, Executive specifically acknowledges and accepts such employment on an “at-will” basis and agrees that both Executive and the Company retain the right to terminate this relationship at any time, with or without cause, for any reason not prohibited by applicable law upon notice as required by this Agreement. Executive acknowledges that nothing in this Agreement is intended to create, nor should be interpreted to create, an employment contract for any specified length of time between the Company and Executive.

4. Compensation. For all services rendered by Executive on behalf of, or at the request of, the Company, in his capacity as President, PSS US Acute Care of the Company, Executive shall be compensated as follows from and after the Start Date, subject to withholding for payment of any and all applicable federal, state and local payroll and withholding taxes.

(a) Base Salary. For the services performed by his under this Agreement, the Company shall pay Executive a base salary of Three Hundred Fifty Thousand Dollars ($350,000.00) per year, pro-rated for the period which Executive serves (“Base Salary”). The Base Salary shall be paid in the same increments as the Company’s normal payroll, but no less frequently than monthly and prorated for any period less

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than a full month. Executive’s Base Salary shall be reviewed at least annually, with the initial review taking place during the third quarter of 2016.

(b) STIC Bonus. Incentive compensation, payable solely at the discretion of the Board of Directors of the Company, pursuant to the Company’s existing Incentive Compensation Program or any other program as the Company may establish from time to time in its sole discretion. For each fiscal year, the annual performance bonus target will be not less than 50% of base salary earned during such fiscal year. Bonus will be based upon the performance measure and objectives established by the Board from time to time, but ultimately subject to the Compensation and Management Development Committee’s (“CMDC”) discretion. Minimum bonus will be 0% of target and maximum bonus will be 200% of target.

(c) Long-Term Incentive Plan. The Executive will be eligible to participate in the long-term incentive plan in place at the time and as authorized by the CMDC, at the time of the normal equity grant, with a target value of 100% of base salary. The Award is expected to be comprised of stock options, restricted stock units and performance shares, in combination or exclusively, realizing the proportional mix may change over time in consultation with the Executive and the Board.

(d) Promotion Equity Grant. Executive shall receive a one-time award in the amount of One Hundred Thousand Dollars ($100,000.00), comprised of a combination of Restricted Stock Units and will vest on the day following the third anniversary of the effective date of your promotion. Following the Start Date, Executive will be provided with a Hill-Rom Holdings, Inc. award agreement providing the terms and additional details regarding Executive’s one time award.

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(e) Retirement Plans. Commencing on the Start Date, Executive will be entitled to participate in Company retirement plans (e.g., 401(k) Savings Plan and Supplemental Executive Retirement Plan) consistent with plans, programs or policies available to other senior executive officers of the Company and subject to satisfaction of any applicable eligibility requirements.

(f) Other Benefits. Commencing on the Start Date, Executive will be entitled to participate in and receive such additional benefits and perquisites, including health and welfare benefits (such as a Company-paid Executive physical examination) as are available to other senior executives of the Company and as the Board of Directors of Company may deem appropriate and as pre-approved by the Compensation and Management Development Committee of the Board. Executive will be entitled to 21 days of paid time off.

5. Changes to Compensation. Notwithstanding anything contained herein to the contrary, Executive acknowledges that the Company specifically reserves the right to make changes to Executive’s compensation in its sole discretion including, but not limited to, modifying or eliminating a compensation component. The Parties agree that such changes shall be deemed effective immediately and a modification of this Agreement unless, within thirty (30) days after receiving notice of such change, Executive exercises his right to terminate this Agreement without cause or for “Good Reason,” as provided below in Paragraphs 9 and 11.

6. Direct Deposit. As a condition of employment, and within thirty (30) days of the Start Date of this Agreement, Executive agrees to make all necessary arrangements to have all sums

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paid pursuant to this Agreement direct deposited into one or more bank accounts as designated by Executive.

7. Predecessor Employers. Except as otherwise disclosed in writing to the Compensation Committee of the Board prior to the date hereof Executive warrants that he is not a party to any contract, restrictive covenant, or other agreement purporting to limit or otherwise adversely affecting his ability to secure employment with any third party. Alternatively, should any such agreement exist, Executive warrants that the contemplated services to be performed hereunder will not violate the terms and conditions of any such agreement.

8. Restricted Duties. Executive agrees not to disclose, or use for the benefit of the Company, any confidential or proprietary information belonging to any predecessor employer(s) that otherwise has not been made public and further acknowledges that the Company has specifically instructed him not to disclose or use such confidential or proprietary information. Based on his understanding of the anticipated duties and responsibilities hereunder, Executive acknowledges that such duties and responsibilities will not compel the disclosure or use of any such confidential and proprietary information.

9. Termination Without Cause. The Parties agree that either party may terminate this employment relationship at any time, without cause, upon sixty (60) days’ advance written notice or, if terminated by the Company, pay in lieu of notice (hereinafter referred to as “notice pay”). In such event, Executive shall only be entitled to such compensation, benefits and perquisites that have been paid or fully accrued as of the effective date of his separation and as otherwise explicitly set forth in this Agreement. However, in no event shall Executive be entitled to notice pay if Executive is eligible for and accepts severance payments pursuant

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to the provisions of Paragraphs 16 and 17, below. Notice pay shall be paid as if the Executive remained on payroll, subject to Paragraph 14 hereof.

10. Termination With Cause. Executive’s employment may be terminated by the Company at any time “for cause” without notice or prior warning. For purposes of this Agreement, “cause” shall mean the Company’s good faith determination that Executive has:

(a) Acted with gross neglect or willful misconduct in the discharge of his duties and responsibilities, or refused to follow or comply with the lawful direction of the Board of Directors of the Company, the Chief Operating Officer or the terms and conditions of this Agreement providing such refusal is not based primarily on Executive’s good faith compliance with applicable legal or ethical standards.

(b) Acquiesced or participated in any conduct that is dishonest, fraudulent, illegal, unethical, involves moral turpitude or is otherwise illegal and involves conduct that has the potential, in the Board of Directors’ reasonable opinion, to cause the Company, its officers or its directors significant embarrassment or ridicule;

(c) Violated a material requirement of any Company policy or procedure, specifically including a violation of the Company’s Code of Ethics or Employee Handbook;

(d) Disclosed without proper authorization any trade secrets or other Confidential Information (as defined herein);

(e) Engaged in any act that, in the reasonable opinion of the Board of Directors of the Company would hold the Company, its officers or directors up to probable civil or criminal liability, provided that, if Executive acts in good faith for compliance with applicable legal or ethical standards, such actions shall not be grounds for termination for cause;

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(f) Breached the warranties of Executive set forth in Paragraph 7 herein; or

(g) Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the right to terminate Executive’s employment, effective immediately, by providing notice thereof to Executive without further obligation to him other than accrued wages or other accrued wages, deferred compensation or other accrued benefits of employment (collectively referred to herein as “Accrued Obligations”), which shall be paid in accordance with the Company’s past practice and applicable law. To the extent any violation of this Paragraph is capable of being promptly cured by Executive (or cured within a reasonable period to the Company’s satisfaction), the Company agrees to provide Executive with a reasonable opportunity to so cure such defect. Absent written mutual agreement otherwise, the Parties agree in advance that it is not possible for Executive to cure any violations of sub-paragraphs (b), (d) or (f) and, therefore, no opportunity for cure need be provided in those circumstances. Notwithstanding the foregoing, the Company may not terminate the Executive’s employment for cause unless (A) a determination that cause exists is made and approved by a majority of the Company’s Board, (B) if the circumstance giving rise to the issue are capable of being cured the Executive is given at least ten (10) days’ written notice of the Board meeting called to make such determination, and (C) the Executive is given the opportunity to address such meeting.

11. Termination by Executive for Good Reason. Executive may terminate his employment and declare this Agreement to have been terminated “without cause” by the Company (and, therefore, for “Good Reason”) upon the occurrence, without Executive’s consent, of any of the following circumstances:

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(a) The assignment to Executives of duties that are materially inconsistent with Executive’s position as President, PSS US Acute Care;

(b) The failure to elect or reelect Executive as President, PSS US Acute Care of the Company (unless such failure is related in any way to the Company’s decision to terminate Executive for cause);

(c) A reduction by the Company in the amount of Executive’s base salary or the discontinuation or reduction by the Company of Executive’s participation at previously existing levels of eligibility in any incentive compensation, additional compensation or equity programs, benefits, policies or perquisites; provided, however, that the Company may make such changes and/or reductions without implicating the provisions of this subsection (c) so long as Executive is treated in a manner that is commensurate with the treatment of other senior executives of the Company;

(d) A failure by the Company to perform its obligations under this Employment Agreement,

which, in each of subsections (a) through (d) above, is not remedied by the Company within thirty (30) days of receipt of written notice of such event or breach delivered by Executive to the Company within ninety (90) days of the occurrence of the event. Any termination of employment by the Executive shall be within sixty (60) days of the end of the cure period.

12. Termination Due to Death or Disability. In the event Executive dies or suffers a disability (as defined herein) during the term of employment, this Agreement shall automatically be terminated on the date of such death or disability without further obligation on the part of the Company other than the Accrued Obligations (as defined in Section 10) except that

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Executive will be immediately vested in the Supplemental Executive Retirement Plan, which shall be paid in accordance with the award agreements, benefits plans, past practice and applicable law. For purposes of this Agreement, Executive shall be considered to have suffered a “disability”: (i) upon a good faith determination by Company that, as a result of any mental or physical impairment, Executive is and will likely remain unable to perform the essential functions of his duties or responsibilities hereunder on a full-time basis for one hundred eighty (180) days, with or without reasonable accommodation, or (ii) Executive becomes eligible for or receives any benefits pursuant to the Company’s long-term disability policy. Notwithstanding anything expressed or implied above to the contrary, the Company agrees to fully comply with its obligations under the Family and Medical Leave Act of 1993 and the Americans with Disabilities Act as well as any other applicable federal, state, or local law, regulation, or ordinance governing the provision of leave to individuals with serious health conditions or the protection of individuals with disabilities as well as the Company’s obligation to provide reasonable accommodation thereunder.

13. Reaffirmation. Upon termination of Executive’s employment for any reason, Executive agrees, if requested to reaffirm in writing his post-employment obligation as set forth in this Agreement.

14. Code Section 409A Notification. Executive acknowledges that he has been advised of the American Jobs Creation Act of 2004, which includes Internal Revenue Code Section 409A, and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”), and which also significantly changed the taxation of nonqualified deferred compensation plans and arrangements.

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(a) The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in accordance therewith. If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A, the Company shall, after consulting with the Executive, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered “nonqualified deferred compensation” under Code Section 409A unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered non-qualified deferred compensation under Code

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Section 409A payable on account of a “separation from service,” and with regard to which an exemption from such section does not apply, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 14 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.

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(d) For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered nonqualified deferred compensation. In no event shall the timing of Executive’s execution of the Separation and Release Agreement, directly or indirectly, result in the Executive designating the calendar year of payment, and if a payment that is subject to execution of the Separation and Release Agreement could be made in more than one taxable year, payment shall be made in the later taxable year.

15. Code Section 409A Acknowledgement. Executive acknowledges that, notwithstanding anything contained herein to the contrary, both Parties shall be independently responsible for assessing their own risks and liabilities under Code Section 409A that may be associated with any payment made under the terms of this Agreement or any other arrangement which may be deemed to trigger Code Section 409A. Further, the Parties agree that each shall independently bear responsibility for any and all taxes, penalties or other tax obligations as may be imposed upon them in their individual capacity as a matter or law.

16. Severance Payments. In the event Executive’s employment is terminated by the Company without cause (including by Executive for Good Reason), and subject to the normal terms and conditions imposed by the Company as set forth herein and in the attached Separation and Release Agreement (Exhibit A), Executive shall be eligible to receive severance pay based upon his base salary at the time of termination for a period of twelve (12) months. Executive will be immediately vested in the Supplemental Executive Retirement Plan.

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Additionally, the Company shall arrange for the excutive to continue to particiapte (through COBRA or otherwisde), on substantially the same terms and conditions as in effect for the Executive (including any active employee contribution) immediately prior to such termination, in the health and similar welfare benefits provided to the Executive until the earlier of (i) the end of the 12 month period beginning on the effective date of termination of the Executive’s employment hereunder, or (ii) such time as the Executive is eligible to be covered by comparable benefits of a subsequent employer. The Executive agrees to notify the Company promptly if and when he begins employment with another employer and if and when he becomes eligible to participate in any health or welfare plans of another employer. The foregoing severance rights and obligations shall not exist if Executive voluntarily leaves the Company’s employ without “Good Reason” (as defined above) or is terminated for “cause” (as defiend above).

17. Severance Payment Terms and Conditions. No severance pay shall be paid if Executive voluntarily leaves the Company’s employ without Good Reason, as defined above, or is terminated for cause. Any severance pay made payable under this Agreement shall be paid in lieu of, and not in addition to, any other contractual, notice or statutory pay or other accrued compensation obligation (excluding accrued wages and deferred compensation). Additionally, such severance pay is contingent upon Executive materially complying with the restrictive covenants contained herein and executing a Separation and Release Agreement in a form not substantially different from that attached as Exhibit A. Further, the Company’s obligation to provide severance hereunder shall be deemed null and void should Executive fail or refuse to execute and deliver to the Company the Company’s then standard Separation and Release Agreement (without modification) within any time period as may be prescribed

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by law or, in absence thereof, twenty-one (21) days after the Executive’s Effective Termination Date. Except as required by Code Section 409A, the above severance pay shall be paid in accordance with the Company’s standard payroll practices (e.g. bi-weekly), except no payment shall be made until after the Separation and Release Agreement becomes effective and the first payment thereafter shall include any missed payment. Notwithstanding the foregoing, if any execution and revocation period overlap two calendar years, payments will be paid in the second (2^nd) calendar year. Amounts that are nonqualified deferred compensation under Code Section 409A that would otherwise be payable during the six (6) month period immediately following termination shall be paid, with interest, settled, made, or provided, on the expiration of the Delay Period. Notwithstanding, the foregoing Section is subject to the provisions of Code Section 409A.

18. Assignment of Rights.

(a) Copyrights. Executive agrees that all works of authorship fixed in any tangible medium of expression by him during the term of this Agreement relating to the Company’s business (“Works”), either solely or jointly with others, shall be and remain exclusively the property of the Company. Each such Work created by Executive is a “work made for hire” under the copyright law and the Company may file applications to register copyright in such Works as author and copyright owner thereof. If, for any reason, a Work created by Executive is excluded from the definition of a “work made for hire” under the copyright law, then Executive does hereby assign, sell, and convey to the Company the entire rights, title, and interests in and to such Work, including the copyright therein, to the Company. Executive will execute any documents that the Company deems necessary in connection with

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the assignment of such Work and copyright therein. Executive will take whatever steps and do whatever acts the Company requests, including, but not limited to, placement of the Company’s proper copyright notice on Works created by Executive to secure or aid in securing copyright protection in such Works and will assist the Company or its nominees in filing applications to register claims of copyright in such Works. The Company shall have free and unlimited access at all times to all Works and all copies thereof and shall have the right to claim and take possession on demand of such Works and copies.

(b) Inventions. Executive agrees that all discoveries, concepts, and ideas, whether patentable or not, including, but not limited to, apparatus, processes, methods, compositions of matter, techniques, and formulae, as well as improvements thereof or know-how related thereto, relating to any present or prospective product, process, or service of the Company (“Inventions”) that Executive conceives or makes during the term of this Agreement relating to the Company’s business, shall become and remain the exclusive property of the Company, whether patentable or not, and Executive will, without royalty or any other consideration:

(i) Inform the Company promptly and fully of such Inventions by written reports, setting forth in detail the procedures employed and the results achieved;

(ii) Assign to the Company all of his rights, title, and interests in and to such Inventions, any applications for United States and foreign Letters Patent, any United States and foreign Letters Patent, and any renewals thereof granted upon such Inventions;

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(iii) Assist the Company or its nominees, at the expense of the Company, to obtain such United States and foreign Letters Patent for such Inventions as the Company may elect; and

(iv) Execute, acknowledge, and deliver to the Company at the Company’s expense such written documents and instruments, and do such other acts, such as giving testimony in support of his inventorship, as may be necessary in the opinion of the Company, to obtain and maintain United States and foreign Letters Patent upon such Inventions and to vest the entire rights and title thereto in the Company and to confirm the complete ownership by the Company of such Inventions, patent applications, and patents.

19. Company Property. All records, files, drawings, documents, data in whatever form, business equipment (including computers, PDAs, cell phones, etc.), and the like relating to, or provided by, the Company shall be and remain the sole property of the Company. Upon termination of employment, Executive shall immediately return to the Company all such items without retention of any copies and without additional request by the Company. De minimis items such as pay stubs, 401(k) plan summaries, employee bulletins, and the like are excluded from this requirement. Executive may retain his address books to the extent they only contain contact information.

20. Confidential Information. Executive acknowledges that the Company and its affiliated entities (herein collectively referred to as “Companies”) possess certain trade secrets as well as other confidential and proprietary information which they have acquired or will acquire at great effort and expense. Such information may include, without limitation, confidential information, whether in tangible or intangible form, regarding the Companies’ products and

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services, marketing strategies, business plans, operations, costs, current or prospective customer information (including customer identities, contacts, requirements, creditworthiness, preferences, and like matters), product concepts, designs, prototypes or specifications, research and development efforts, technical data and know‑how, sales information, including pricing and other terms and conditions of sale, financial information, internal procedures, techniques, forecasts, methods, trade information, trade secrets, software programs, project requirements, inventions, trademarks, trade names, and similar information regarding the Companies’ business(es) (collectively referred to herein as “Confidential Information”). Executive further acknowledges that, as a result of his employment with the Company, Executive will have access to, will become acquainted with, and/or may help develop, such Confidential Information. Confidential Information shall not include information readily available in the public so long as such information was not made available through fault of Executive or wrong doing by any other individual.

21. Restricted Use of Confidential Information. Executive agrees that all Confidential Information is and shall remain the sole and exclusive property of the Company and/or its affiliated entities. Except as may be expressly authorized by the Company in writing, or other than in the course of the Executive’s employment and for the benefit of the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party while employed by the Company and for as long thereafter as such information remains confidential (or as limited by applicable law). Further, Executive agrees to use such Confidential Information only in the course of Executive’s duties in furtherance of the Company’s business and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity

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or person. The foregoing shall not apply to information that (a) was known to the public prior to its disclosure to the Executive; (b) becomes generally known to the public subsequent to disclosure to the Executive through no wrongful act of the Executive or any representative of the Executive; or (c) the Executive is required to disclose by applicable law, regulation or legal process (provided that the Executive provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

22. Acknowledged Need for Limited Restrictive Covenants. Executive acknowledges that the Companies have spent and will continue to expend substantial amounts of time, money and effort to develop their business strategies, Confidential Information, customer identities and relationships, goodwill and Executive relationships, and that Executive will benefit from these efforts. Further, Executive acknowledges the inevitable use of, or near-certain influence by his knowledge of, the Confidential Information disclosed to Executive during the course of employment if allowed to compete against the Company in an unrestricted manner and that such use would be unfair and extremely detrimental to the Company. Accordingly, based on these legitimate business reasons, Executive acknowledges each of the Companies’ need to protect their legitimate business interests by reasonably restricting Executive’s ability to compete with the Company on a limited basis.

23. Non-Solicitation. During Executive’s employment and for a period of twenty-four (24) months thereafter, Executive agrees not to directly or indirectly engage in the following prohibited conduct:

(a) Solicit, offer products or services to, or accept orders for, any Competitive Products or otherwise transact any competitive business on behalf of any Competitor;

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(b) Attempt on behalf of any Competitor to entice or otherwise cause any third party to withdraw, curtail or cease doing business with the Company (or any Affiliate thereof), specifically including customers, vendors, independent contractors and other third party entities;

(c) Except in the course of the Executive’s employment and for the benefit of the Company, disclose to any person or entity the identities, contacts or preferences of any customers of the Company (or any Affiliate thereof), or the identity of any other persons or entities having business dealings with the Company (or any Affiliate thereof);

(d) Induce any individual who has been employed by or had provided services to the Company (or any Affiliate thereof) within the six (6) month period immediately preceding the effective date of Executive’s separation to terminate such relationship with the Company (or any Affiliate thereof);

(e) Assist, coordinate or otherwise offer employment to, accept employment inquiries from, or employ any individual who is or had been employed by the Company (or any Affiliate thereof) at any time within the six (6) month period immediately preceding such offer, or inquiry;

(f) Communicate or indicate in any way to any customer of the Company (or any Affiliate thereof), prior to formal separation from the Company, any interest, desire, plan, or decision to separate from the Company; other than by way of long term retirement plans; or

(g) Otherwise attempt on behalf of any Competitor to directly or indirectly interfere with the Company’s business, the business of any of the Companies or their

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relationship with their employees, consultants, independent contractors or customers.

24. Limited Non-Compete. For the above-stated reasons, and as a condition of employment to the fullest extent permitted by law, Executive agrees during the Relevant Non‑Compete Period not to directly or indirectly engage in the following competitive activities:

(a) Executive shall not have any ownership interest in, work for, advise, consult, or have any business connection or business or employment relationship in any competitive capacity with any Competitor unless Executive provides written notice to the Company of such relationship prior to entering into such relationship and, further, provides sufficient written assurances to the Company’s satisfaction that such relationship will not, jeopardize the Company’s legitimate interests or otherwise violate the terms of this Agreement;

(b) Executive shall not engage in any research, development, production, sale or distribution of any Competitive Products on behalf of a Competitor;

(c) Executive shall not market, sell, or otherwise offer or provide any Competitive Products within any Geographic Territory on behalf of a Competitor;

(d) Executive shall not distribute, market, sell or otherwise offer or provide any Competitive Products to any customer of the Company on behalf of a Competitor.

25. Non-Compete Definitions. For purposes of this Agreement, the Parties agree that the following terms shall apply:

(a) “Affiliate” includes any parent, subsidiary, joint venture, sister company, or other entity controlled, owned, managed or otherwise associated with the Company;

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(b) “Assigned Customer Base” shall include all accounts or customers formally assigned to Executive within a given territory or geographical area or contacted by him at any time during the eighteen (18) month period preceding Executive’s date of separation;

(c) “Competitive Products” shall include any product or service that directly or indirectly competes with, is substantially similar to, or serves as a reasonable substitute for, any product or service in research, development or design, or manufactured, produced, sold or distributed by the Company;

(d) “Competitor” shall mean the list of companies on Exhibit B, which can be changed at any time prior to 90 days before termination of employment by or of Executive by written notice to Executive, so long as the list does not exceed fifteen (15) companies and each of which is a material competitor of the Company.

(e) “Geographic Territory” shall include any territory in which the Company has provided any services or sold any products at any time during the twenty-four (24) month period preceding Executive’s date of separation;

(f) “Relevant Non-Compete Period” shall include the period of Executive’s employment with the Company as well as a period of twenty-four (24) months after such employment is terminated, regardless of the reason for such termination provided, however, that this period shall be reduced to the greater of (i) twelve (12) months or (ii) the total length of Executive’s employment with the Company, including employment with any parent, subsidiary or affiliated entity, if such employment is less than twenty-four (24) months;

(g) “Directly or indirectly” shall be construed such that the foregoing restrictions shall apply equally to Executive whether performed individually or as a partner,

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shareholder, officer, director, manager, Executive, salesperson, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

26. Consent to Reasonableness. In light of the above-referenced concerns, including Executive’s knowledge of and access to the Companies’ Confidential Information, Executive acknowledges that the terms of the foregoing restrictive covenants are reasonable and necessary to protect the Company’s legitimate business interests and will not unreasonably interfere with Executive’s ability to obtain alternate employment. As such, Executive hereby agrees that such restrictions are valid and enforceable, and affirmatively waives any argument or defense to the contrary. Executive acknowledges that this limited noncompetition provision is not an attempt to prevent Executive from obtaining other employment in violation of IC § 22-5-3-1 or any other similar statute. Executive further acknowledges that the Company may need to take action, including litigation, to enforce this limited non-competition provision, which efforts the Parties stipulate shall not be deemed an attempt to prevent Executive from obtaining other employment.

27. Survival of Restrictive Covenants. Executive acknowledges that the above restrictive covenants shall survive the termination of this Agreement and the termination of Executive’s employment for any reason. Executive further acknowledges that any alleged breach by the Company of any contractual, statutory or other obligation shall not excuse or terminate the obligations hereunder or otherwise preclude the Company from seeking injunctive or other relief. Rather, Executive acknowledges that such obligations are independent and separate covenants undertaken by Executive for the benefit of the Company.

28. [Intentionally Omitted]

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29. Post-Termination Notification. For the duration of his Relevant Non-compete Period or other restrictive covenant period, which ever is longer, Executive agrees to promptly notify the Company no later than five (5) business days of his acceptance of any employment or consulting engagement. Such notice shall include sufficient information to ensure Executive compliance with his non-compete obligations and must include2 at a minimum the following information: (i) the name of the employer or entity for which he is providing any consulting services; (ii) a description of his intended duties as well as (iii) the anticipated start date. Such information is required to ensure Executive’s compliance with his non-compete obligations as well as all other applicable restrictive covenants. Such notice shall be provided in writing to the Office of Vice President and General Counsel of the Company at 1069 State Road 46 E, Batesville, Indiana 47006. Failure to timely provide such notice shall be deemed a material breach of this Agreement and entitle the Company to return of any severance paid to Executive plus attorneys’ fees. Executive further consents to the Company’s notification to any new employer of Executive’s rights and obligations under this Agreement.

30. Scope of Restrictions. If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

31. Specific Enforcement/Injunctive Relief. Executive agrees that it would be difficult to measure any damages to the Company from a breach of the above-referenced restrictive covenants, but acknowledges that the potential for such damages would be great, incalculable and irremediable, and that monetary damages alone would be an inadequate remedy.

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Accordingly, Executive agrees that the Company shall be entitled to immediate injunctive relief against such breach, or threatened breach, in any court having jurisdiction. In addition, if Executive violates any such restrictive covenant, Executive agrees that the period of such violation shall be added to the term of the restriction. In determining the period of any violation, the Parties stipulate that in any calendar month in which Executive engages in any activity in violation of such provisions, Executive shall be deemed to have violated such provision for the entire month, and that month shall be added to the duration of the non-competition provision. Executive acknowledges that the remedies described above shall not be the exclusive remedies, and the Company may seek any other remedy available to it either in law or in equity, including, by way of example only, statutory remedies for misappropriation of trade secrets, and including the recovery of compensatory or punitive damages. Executive further agrees that the Company shall be entitled to an award of all costs and attorneys’ fees incurred by it in any attempt to enforce the terms of this Agreement if the Company prevails.

32. Publicly Traded Stock. The Parties agree that nothing contained in this Agreement shall be construed to prohibit Executive from investing his personal assets in any stock or corporate security traded or quoted on a national securities exchange or national market system provided, however, such investments do not require any services on the part of Executive in the operation or the affairs of the business or otherwise violate the Company’s Code of Ethics.

33. Notice of Claim and Contractual Limitations Period. Executive acknowledges the Company’s need for prompt notice, investigation, and resolution of any claims that may be filed against it due to the number of relationships it has with employees and others (and due

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to the turnover among such individuals with knowledge relevant to any underlying claim). Accordingly, Executive agrees prior to initiating any litigation of any type (including, but not limited to, employment discrimination litigation, wage litigation, defamation, or any other claim) to notify the Company, within One Hundred and Eighty (180) days after the claim accrued, by sending a certified letter addressed to the Company’s General Counsel setting forth: (i) claimant’s name, address, and phone; (ii) the name of any attorney representing Executive; (iii) the nature of the claim; (iv) the date the claim arose; and (v) the relief requested. This provision is in addition to any other notice and exhaustion requirements that might apply. For any dispute or claim of any type against the Company (including but not limited to employment discrimination litigation, wage litigation, defamation, or any other claim), Executive must commence legal action within the shorter of one (1) year of accrual of the cause of action or such shorter period that may be specified by law.

34. Non-Jury Trials. Notwithstanding any right to a jury trial for any claims, Executive waives any such right to a jury trial, and agrees that any claim of any type (including but not limited to employment discrimination litigation, wage litigation, defamation, or any other claim) lodged in any court will be tried, if at all, without a jury.

35. Choice of Forum. Executive acknowledges that the Company is primarily based in Indiana, and Executive understands and acknowledges the Company’s desire and need to defend any litigation against it in Illinois. Accordingly, the Parties agree that any claim of any type brought by Executive against the Company or any of its employees or agents must be maintained only in a court sitting in Cook County, Illinois, or, if a federal court, the Northern District of Illinois. Executive further understands and acknowledges that in the event the

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Company initiates litigation against Executive, the Company may need to prosecute such litigation in such state where the Executive is subject to personal jurisdiction. Accordingly, for purposes of enforcement of this Agreement, Executive specifically consents to personal jurisdiction in the State of Illinois.

36. Choice of Law. This Agreement shall be deemed to have been made within the County of Cook, State of Illinois and shall be interpreted and construed in accordance with the laws of the State of Illinois. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state’s choice of law provisions.

37. Titles. Titles are used for the purpose of convenience in this Agreement and shall be ignored in any construction of it.

38. Severability. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, in the event any portion of this Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall remain in effect and be enforced to the fullest extent permitted by law. Further, should any particular clause, covenant, or provision of this Agreement be held unreasonable or contrary to public policy for any reason, the Parties acknowledge and agree that such covenant, provision or clause shall automatically be deemed modified such that the contested covenant, provision or clause will have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law.

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39. Assignment-Notices. The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company. This Agreement, being personal to Executive, cannot be assigned by Executive, but his personal representative shall be bound by all its terms and conditions. Any notice required hereunder shall be sufficient if in writing and mailed to the last known residence of Executive or to the Company at its principal office with a copy mailed to the Office of the General Counsel.

40. Amendments and Modifications. Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or Executive unless in writing and signed by both Parties. The waiver by the Company or Executive of a breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach. Nothing in this Agreement shall be construed as a limitation upon the Company’s right to modify or amend any of its manuals or policies in its sole discretion and any such modification or amendment which pertains to matters addressed herein shall be deemed to be incorporated herein and made a part of this Agreement.

41. Outside Representations. Executive represents and acknowledges that in signing this Agreement he does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s employees, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

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42. Other Remedies. The Executive agrees to execute and be bound by the terms and conditions of the Company’s Limited Recapture Agreement, and any applicable laws, rules and regulations.

43. Voluntary and Knowing Execution. Executive acknowledges that he has been offered a reasonable amount of time within which to consider and review this Agreement; that he has carefully read and fully understands all of the provisions of this Agreement; and that he has entered into this Agreement knowingly and voluntarily, with the assistance of counsel.

44. Liability Insurance. The Company shall cover the Executive under directors and officers liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and non independent director.

45. Entire Agreement. This Agreement constitutes the entire employment agreement between the Parties hereto concerning the subject matter hereof and shall supersede all prior and contemporaneous agreements between the Parties in connection with the subject matter of this Agreement. Any pre-existing Employment Agreements shall be deemed null and void. Nothing in this Agreement, however, shall affect any separately‑executed written agreement addressing any other issues.

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IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the day and year first above written.

EXECUTIVE	HILL-ROM HOLDINGS, INC.
Signed: Printed: Dated:	By: Title: Chief Executive Officer Dated:

CAUTION: READ BEFORE SIGNING

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Exhibit ASAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between EMPLOYEE’S FULL NAME (“Executive”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”). To wit, the Parties agree as follows:

1. Executive’s active employment by the Company shall terminate effective [date of termination](Executive’s “Effective Termination Date”). Except as specifically provided by this Agreement, or in any other non-employment agreement that may exist between the Company and Executive, Executive agrees that the Company shall have no other obligations or liabilities to him/her following his/her Effective Termination Date and that his/her receipt of the Severance Benefits provided herein shall constitute a complete settlement, satisfaction and waiver of any and all claims he/she may have against the Company.

2. Executive further submits, and the Company hereby accepts, her resignation as an Executive, officer and director, as of her Effective Termination Date for any position he may hold. The Parties agree that this resignation shall apply to all such positions Executive may hold with the Company or any parent, subsidiary or affiliated entity thereof. Executive agrees to execute any documents needed to effectuate such resignation. Executive further agrees to take whatever steps are necessary to facilitate and ensure the smooth transition of her duties and responsibilities to others.

3. The Company agrees to provide Executive severance pay on the termination of her employment, as provided for in her Employment Agreement.

4. The Company further agrees to provide Executive with limited out-placement counseling with a company of its choice provided that Executive participates in such counseling immediately following termination of employment. Notwithstanding anything in this Section 4 to the contrary, the out-placement counseling shall not be provided after the last day of the second calendar year following the calendar year in which termination of employment occurs.

5. As of his/her Effective Termination Date, Executive will become ineligible to participate in the Company’s health insurance program and continuation of coverage requirements under COBRA (if any) will be triggered at that time. The medical insurance provided herein does not include any disability coverage.

6. Intentionally omitted

7. In exchange for the foregoing Severance Benefits, EMPLOYEE FULL NAME on behalf of himself/herself, his/her heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Company Name. (ii) its parent, subsidiary or affiliated entities, (iii) in such capacity, all of their present or former directors, officers, Executives, shareholders, and agents, as well as, (iv) all predecessors, successors and assigns thereof from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or unknown, which Executive now has or may have had through the effective date of this Agreement.

8. Without limiting the generality of the foregoing release, it shall include: (i) all claims or potential claims arising under any federal, state or local laws relating to the Parties’ employment relationship, including any claims Executive may have under the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) etseq.; the Civil Rights

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Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 etseq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 etseq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 etseq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, etseq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §1514,A etseq.; and any other federal, state or local law governing the Parties’ employment relationship; (ii) any claims on account of, arising out of or in any way connected with Executive’s employment with the Company or leaving of that employment; (iii) any claims alleged or which could have been alleged in any charge or complaint against the Company; (iv) any claims relating to the conduct of any Executive, officer, director, agent or other representative of the Company; (v) any claims of discrimination, harassment or retaliation on any basis; (vi) any claims arising from any legal restrictions on an employer’s right to separate its Executives; (vii) any claims for personal injury, compensatory or punitive damages or other forms of relief; and (viii) all other causes of action sounding in contract, tort or other common law basis, including (a) the breach of any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business relationship or (g) negligent or intentional infliction of emotional distress.

9. Executive further agrees and covenants not to sue the Company or any entity or individual subject to the foregoing General Release with respect to any claims, demands, liabilities or obligations release by this Agreement provided, however, that nothing contained in this Agreement shall:

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(a) prevent Executive from filing an administrative charge with the Equal Employment Opportunity Commission or any other federal state or local agency; or

(b) prevent employee from challenging, under the Older Worker’s Benefit Protection Act (29 U.S.C. § 626), the knowing and voluntary nature of his/her release of any age claims in this Agreement in court or before the Equal Employment Opportunity Commission.

10. Notwithstanding his/her right to file an administrative charge with the EEOC or any other federal, state, or local agency, Executive agrees that with his/her release of claims in this Agreement, he/she has waived any right he/she may have to recover monetary or other personal relief in any proceeding based in whole or in part on claims released by him/her in this Agreement. For example, Executive waives any right to monetary damages or reinstatement if an administrative charge is brought against the Company whether by Executive, the EEOC, or any other person or entity, including but not limited to any federal, state, or local agency. Further, with his/her release of claims in this Agreement, Executive specifically assigns to the Company his/her right to any recovery arising from any such proceeding.

11. The Parties acknowledge that it is their mutual and specific intent that the above waiver fully complies with the requirements of the Older Workers Benefit Protection Act (29 U.S.C. § 626) and any similar law governing release of claims. Accordingly, Executive hereby acknowledges that:

(a) He/she has carefully read and fully understands all of the provisions of this Agreement and that He/she has entered into this Agreement knowingly and voluntarily;

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(b) The Severance Benefits offered in exchange for Executive’s release of claims exceed in kind and scope that to which he/she would have otherwise been legally entitled absent the execution of this Agreement;

(c) Prior to signing this Agreement, Executive had been advised, and is being advised by this Agreement, to consult with an attorney of his/her choice concerning its terms and conditions; and

(d) He/she has been offered at least [twenty-one (21)/forty-five (45)] days within which to review and consider this Agreement.

12. The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both Parties or seven (7) calendar days after its execution by Executive, whichever is later. Executive may revoke this Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after he/she has signed this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits provided hereunder and rendering this Agreement null and void in its entirety.

13. The Parties agree that nothing contained herein shall purport to waive or otherwise affect any of Executive’s rights or claims that may arise after he/she signs this Agreement. It is further understood by the Parties that nothing in this Agreement shall affect any rights Executive may have under any Company sponsored Deferred Compensation Program, Executive Life Insurance Bonus Plan, Stock Grant Award, Stock Option Grant, Restricted Stock Unit Award, Pension Plan and/or Savings Plan (i.e., 401(k) plan) provided by the Company as of the date of his/her termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

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14. Similarly, notwithstanding any provision contained herein to the contrary, this Agreement shall not constitute a waiver or release or otherwise affect Executive’s rights with respect to any vested benefits, any rights he/she has to benefits which cannot be waived by law, any coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may have under any indemnification agreement he/she has with the Company prior to the date hereof, any rights he/she has as a shareholder, or any claim for breach of this Agreement, including, but not limited to the benefits promised by the terms of this Agreement.

15. [Option A] Executive acknowledges that his/her termination and the Severance Benefits offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary.

[Option B] Executive represents and agrees that he/she has been provided relevant cohort information based on the information available to the Company as of the date this Agreement was tendered to Executive. This information is attached hereto as Exhibit A. The Parties acknowledge that simply providing such information does not mean and should not be interpreted to mean that the Company was obligated to comply with 29 C.F.R. § 1625.22(f).

16. Executive hereby affirms and acknowledges his/her continued obligations to comply with the post-termination covenants contained in his/her Employment Agreement, including but not limited to, the non-compete, trade secret and confidentiality provisions. Executive acknowledges that a copy of the Employment Agreement has been attached to this Agreement as Exhibit A [B] or has otherwise been provided to him/her and, to the extent not inconsistent with the terms of this Agreement or applicable law, the terms thereof shall be incorporated herein by reference. Executive acknowledges that the restrictions contained

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therein are valid and reasonable in every respect and are necessary to protect the Company’s legitimate business interests. Executive hereby affirmatively waives any claim or defense to the contrary.

17. Executive acknowledges that the Company as well as its parent, subsidiary and affiliated companies (“Companies” herein) possess, and he/she has been granted access to, certain trade secrets as well as other confidential and proprietary information that they have acquired at great effort and expense. Such information includes, without limitation, confidential information regarding products and services, marketing strategies, business plans, operations, costs, current or, prospective customer information (including customer contacts, requirements, creditworthiness and like matters), product concepts, designs, prototypes or specifications, regulatory compliance issues, research and development efforts, technical data and know-how, sales information, including pricing and other terms and conditions of sale, financial information, internal procedures, techniques, forecasts, methods, trade information, trade secrets, software programs, project requirements, inventions, trademarks, trade names, and similar information regarding the Companies’ business (collectively referred to herein as “Confidential Information”).

18. Executive agrees that all such Confidential Information is and shall remain the sole and exclusive property of the Company. Except as may be expressly authorized by the Company in writing, or as may be required by law after providing due notice thereof to the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party for as long thereafter as such information remains confidential (or as limited by applicable law) and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity

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or person. The Parties acknowledge that Confidential Information shall not include any information that is otherwise made public through no fault of Executive or other wrong doing. The foregoing shall not apply to information that the Executive is required to disclose by applicable law, regulation or legal process (provided that the Executive provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

19. On or before Executive’s Effective Termination Date or per the Company’s request, Executive agrees to return the original and all copies of all things in his/her possession or control relating to the Company or its business, including but not limited to any and all contracts, reports, memoranda, correspondence, manuals, forms, records, designs, budgets, contact information or lists (including customer, vendor or supplier lists), ledger sheets or other financial information, drawings, plans (including, but not limited to, business, marketing and strategic plans), personnel or other business files, computer hardware, software, or access codes, door and file keys, identification, credit cards, pager, phone, and any and all other physical, intellectual, or personal property of any nature that he/she received, prepared, helped prepare, or directed preparation of in connection with his/her employment with the Company. Nothing contained herein shall be construed to require the return of any non-confidential and de minimis items regarding Executive’s pay, benefits or other rights of employment such as pay stubs, W-2 forms, 401(k) plan summaries, benefit statements, etc. Additionally, Executive may retain her address books to the extent they only contain contact information.

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20. Executive hereby consents and authorizes the Company to deduct as an offset from the above-referenced severance payments, so long as the deduction is not taken from nonqualified deferred compensation under the definition of Code Section 409A, the value of any Company property not returned or returned in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g., payment of any outstanding American Express bill).

21. Executive agrees to cooperate with the Company in connection with any pending or future litigation, proceeding or other matter which has been or may be brought against or by the Company before any agency, court, or other tribunal and concerning or relating in any way to any matter falling within Executive’s knowledge or former area of responsibility. Executive agrees to immediately notify the Company, through the Office of the General Counsel, in the event he/she is contacted by any outside attorney (including paralegals or other affiliated parties) with regard to matters related to her employment with the Company unless (i) the Company is represented by the attorney, (ii) Executive is represented by the attorney for the purpose of protecting his/her personal interests or (iii) the Company has been advised of and has approved such contact. Executive agrees to provide reasonable assistance and completely truthful testimony in such matters including, without limitation, facilitating and assisting in the preparation of any underlying defense, responding to discovery requests, preparing for and attending deposition(s) as well as appearing in court to provide truthful testimony. The Company agrees to reimburse Executive for all reasonable out of pocket expenses incurred at the request of the Company associated with such assistance and testimony.

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22. Executive agrees not to make any written or oral statement that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of (a) the Company, (b) its Executives, officers, directors or trustees or (c) the services and/or products provided by the Company and its subsidiaries or affiliate entities. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Executive, the Company agrees not to provide any information, and the senior officers shall not make any written or oral statement, that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Executive. The Parties acknowledge, however, that nothing contained herein shall be construed to prevent or prohibit the Company or the Executive from providing truthful information in response to any court order, discovery request, subpoena or other lawful request, rebutting statements by others or making normal competitive-type statements.

23. EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by law or unless authorized to do so by the Company in writing, Executive agrees that he/she shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than his/her spouse, legal counsel or financial advisor provided, however, that they are first advised of the confidential nature of this Agreement and Executive obtains their agreement to be bound by the same. The Company agrees that Executive may respond to legitimate inquiries regarding the termination of his/her employment by stating that the Parties have terminated

10

their relationship on an amicable basis and that the Parties have entered into a Confidential Separation and Release Agreement that prohibits him/her from further discussing the specifics of his/her separation. Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in his/her Employment Agreement. Further, nothing contained herein shall be construed to limit or otherwise restrict the Company’s ability to disclose the terms and conditions of this Agreement as may be required by business necessity.

24. In the event that Executive breaches or threatens to breach any provision of this Agreement, he/she agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief. Executive hereby waives any claim that the Company has an adequate remedy at law. In addition, and to the extent not prohibited by law, Executive agrees that the Company shall be entitled to discontinue providing any additional Severance Benefits upon such breach. Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Company’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages. Moreover, if Executive pursues any claims against the Company subject to the foregoing General Release, Executive agrees to immediately reimburse the Company for the value of all benefits received under this Agreement to the fullest extent permitted by law.

25. Similarly, in the event that the Company breaches or threatens to breach any provision of this Agreement, Executive shall be entitled to seek any and all equitable or other available relief provided by law, specifically including immediate and permanent injunctive relief.

11

In the event Executive is wholly unsuccessful, the Company shall be entitled to an award of its costs and attorneys’ fees.

26. Both Parties acknowledge that this Agreement is entered into solely for the purpose of terminating Executive’s employment relationship with the Company on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Company or Executive, both Parties having expressly denied any such liability or wrongdoing.

27. Each of the promises and obligations shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, assigns and successors in interest of each of the Parties.

28. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, if any portion of this Agreement should be deemed not enforceable for any reason, such portion shall be stricken and the remaining portion or portions thereof should continue to be enforced to the fullest extent permitted by applicable law.

29. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Illinois without regard to any applicable state’s choice of law provisions.

30. Executive represents and acknowledges that in signing this Agreement he/she does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

31. This Agreement represents the entire agreement between the Parties concerning the subject matter hereof, shall supersede any and all prior agreements which may otherwise exist between them concerning the subject matter hereof (specifically excluding, however, the

12

post-termination obligations contained in an Executive’s Employment Agreement, any obligations contained in an existing and valid Indemnity Agreement of Change in Control or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

13

IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by its terms and conditions.

[EXECUTIVE]	COMPANY NAME
Signed: Printed: Dated:	By: Title: Dated:

14

Exhibit B

List of Competitors

Stryker Corporation, Integra LifeSciences, Steris Corporation, CONMED Corporation, Gettinge AB, CareFusion Corp., Hospira, Inc., ResMed, Phillips Healthcare, Smith & Nephew plc, Arthrex Inc., including, for the avoidance of doubt and in each case, parents, subsidiaries and affiliates

15

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2018	Apr. 23, 2018
Document And Entity Information Abstract
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Entity Registrant Name	Hill-Rom Holdings, Inc.
Entity Central Index Key	0000047518
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		66,277,670
Trading Symbol	HRC

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Net Revenue
Product sales and service	$ 610.7	$ 579.6	$ 1,185.9	$ 1,121.5
Rental revenue	99.8	99.3	194.3	194.8
Total revenue	710.5	678.9	1,380.2	1,316.3
Cost of Revenue
Cost of goods sold	313.7	305.7	617.8	594.1
Rental expenses	46.4	48.8	92.4	95.2
Total cost of revenue	360.1	354.5	710.2	689.3
Gross Profit	350.4	324.4	670.0	627.0
Research and development expenses	34.7	35.3	67.0	67.3
Selling and administrative expenses	232.7	222.4	454.4	431.2
Special charges (Note 8)	36.9	3.1	50.4	8.9
Operating Profit	46.1	63.6	98.2	119.6
Interest expense	(24.2)	(21.9)	(47.3)	(41.4)
Investment income and other, net	(0.4)	(0.4)	1.4	(1.6)
Income Before Income Taxes	21.5	41.3	52.3	76.6
Income tax expense (benefit) (Note 9)	(7.0)	7.3	(64.5)	19.1
Net Income	28.5	34.0	116.8	57.5
Less: Net loss attributable to noncontrolling interests	0.0	(0.4)	0.0	(0.7)
Net Income Attributable to Common Shareholders	$ 28.5	$ 34.4	$ 116.8	$ 58.2
Net Income Attributable to Common Shareholders per Common Share - Basic (usd per share)	$ 0.43	$ 0.52	$ 1.77	$ 0.89
Net Income Attributable to Common Shareholders per Common Share - Diluted (usd per share)	0.42	0.51	1.73	0.87
Dividends per Common Share (usd per share)	$ 0.2	$ 0.18	$ 0.38	$ 0.35
Average Common Shares Outstanding - Basic (thousands) (Note 10) (in shares)	66,192	65,462	66,040	65,473
Average Common Shares Outstanding - Diluted (thousands) (Note 10) (in shares)	67,597	67,132	67,508	67,057

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 28.5	$ 34.0	$ 116.8	$ 57.5
Other Comprehensive (Loss) Income, net of tax (Note 7):
Derivative instruments and hedges	7.9	(0.2)	11.3	10.0
Foreign currency translation adjustment	16.5	14.0	22.6	(25.5)
Change in pension and postretirement defined benefit plans	0.8	0.8	1.6	2.1
Total Other Comprehensive Income (Loss), net of tax	25.2	14.6	35.5	(13.4)
Total Comprehensive Income	53.7	48.6	152.3	44.1
Net Income (Loss) Attributable to Noncontrolling Interest	0.0	(0.4)	0.0	(0.7)
Total Comprehensive Income Attributable to Common Shareholders	$ 53.7	$ 49.0	$ 152.3	$ 44.8

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Mar. 31, 2018	Sep. 30, 2017
Current Assets
Cash and cash equivalents	$ 239.0	$ 231.8
Trade accounts receivable, net of allowances (Note 2)	537.9	579.3
Inventories (Note 2)	315.1	284.5
Other current assets	109.0	70.6
Total current assets	1,201.0	1,166.2
Property, plant and equipment, net (Note 2)	341.8	355.4
Goodwill (Note 4)	1,754.2	1,759.6
Other intangible assets and software, net (Note 2)	1,088.1	1,144.0
Deferred income taxes (Notes 1 and 9)	41.5	40.9
Other assets	78.1	62.6
Total Assets	4,504.7	4,528.7
Current Liabilities
Trade accounts payable	159.6	167.9
Short-term borrowings (Note 5)	221.3	188.9
Accrued compensation	97.7	126.9
Accrued product warranties (Note 12)	25.0	25.5
Accrued rebates	38.0	39.7
Other current liabilities	108.9	109.8
Total current liabilities	650.5	658.7
Long-term debt (Note 5)	2,025.6	2,120.4
Accrued pension and postretirement benefits (Note 6)	78.7	78.1
Deferred income taxes (Notes 1 and 9)	180.0	266.2
Other long-term liabilities	59.5	39.7
Total Liabilities	2,994.3	3,163.1
Commitments and Contingencies (Note 14)
SHAREHOLDERS' EQUITY
Common Stock (Note 2)	4.4	4.4
Additional paid-in capital	596.7	584.4
Retained earnings	1,767.6	1,676.2
Accumulated other comprehensive loss (Note 7)	(74.5)	(110.0)
Treasury stock, at cost (Note 2)	(783.8)	(796.8)
Total Shareholders' Equity Attributable to Common Shareholders	1,510.4	1,358.2
Noncontrolling interests	0.0	7.4
Total Shareholders' Equity	1,510.4	1,365.6
Total Liabilities and Shareholders' Equity	$ 4,504.7	$ 4,528.7

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Activities
Net income	$ 116.8	$ 57.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	39.2	40.6
Amortization	9.6	10.0
Acquisition-related intangible asset amortization	53.7	52.1
Provision for deferred income taxes	(89.2)	(14.6)
Gain on disposal of property, equipment leased to others, intangible assets, and impairments	(0.6)	(3.0)
(Gain) loss on disposition of businesses	22.4	(1.0)
Stock compensation	15.8	12.2
Change in working capital excluding cash, current debt, acquisitions and dispositions:
Trade accounts receivable	45.7	25.4
Inventories	(29.0)	2.9
Other current assets	(37.9)	2.8
Trade accounts payable	(8.7)	(5.7)
Accrued expenses and other liabilities	(35.8)	(55.0)
Other, net	23.6	2.2
Net cash provided by operating activities	125.6	126.4
Investing Activities
Capital expenditures and purchases of intangible assets	(51.4)	(47.3)
Proceeds on sale of property and equipment leased to others	3.7	10.6
Payment for acquisition of businesses, net of cash acquired	0.0	(314.3)
Proceeds on sale of businesses	1.0	4.5
Other	(1.0)	(0.4)
Net cash used in investing activities	(47.7)	(346.9)
Financing Activities
Proceeds from borrowings on long-term debt	1.0	300.0
Payment of long-term debt	(54.9)	(36.6)
Borrowings on Revolving Credit Facility	75.0	53.0
Payments on Revolving Credit Facility	(95.0)	(60.8)
Borrowings on Securitization Program	51.4	0.0
Payments on Securitization Program	(37.3)	0.0
Debt issuance costs	0.0	(4.3)
Payment of cash dividends	(25.1)	(22.9)
Proceeds on exercise of stock options	10.5	14.6
Proceeds from stock issuance	3.0	2.3
Treasury stock acquired	(4.4)	(33.6)
Net cash provided by (used in) financing activities	(75.8)	211.7
Effect of exchange rate changes on cash	5.1	(4.7)
Net Cash Flows	7.2	(13.5)
Cash and Cash Equivalents:
At beginning of period	231.8	232.2
At end of period	$ 239.0	$ 218.7

XML

Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Unless the context otherwise requires, the terms “Hill-Rom,” “the Company,” “we,” “our,” and “us” refer to Hill-Rom Holdings, Inc. and its wholly-owned subsidiaries. The unaudited Condensed Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in Hill-Rom’s latest Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“2017 Form 10-K”) as filed with the United States (“U.S.”) Securities and Exchange Commission. The September 30, 2017 Condensed Consolidated Balance Sheet was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the Condensed Consolidated Financial Statements herein include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the interim periods presented. Quarterly results are not necessarily indicative of annual results.

The Condensed Consolidated Financial Statements include the accounts of Hill-Rom and its wholly-owned subsidiaries. In addition, we also consolidate variable interest entities (“VIEs”) where Hill-Rom is deemed to have a controlling financial interest. Intercompany accounts and transactions have been eliminated in consolidation, including the intercompany transactions with consolidated VIEs. Where our ownership interest is less than 100%, the noncontrolling interests are reported in our Condensed Consolidated Financial Statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates and such differences could be material. Examples of such estimates include, but are not limited to, income taxes (Notes 1 and 9), accounts receivable reserves (Note 2), accrued warranties (Note 12), the impairment of intangibles and goodwill (Note 4), pension expense (Note 6), and commitments and contingencies (Note 14).

Fair Value Measurements

Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.

• Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances, which might include our own data.

We record cash and cash equivalents, as disclosed on our Condensed Consolidated Balance Sheets, as Level 1 instruments and certain other derivatives and investments as either Level 2 or 3 instruments. Investments measured at Net Asset Value as a practical expedient are not categorized in the fair value hierarchy. There have not been significant changes in our classification among assets and liabilities during the fiscal quarter. Refer to Note 5 for disclosure of our debt instrument and interest rate swap fair values.

Taxes Collected from Customers and Remitted to Governmental Units

Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenue and costs) basis.

Income Taxes

Hill-Rom and its eligible domestic subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. Deferred income taxes are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

As of March 31, 2018, we had $60.0 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to certain foreign deferred tax attributes that are not expected to be utilized. The valuation allowance total was not materially impacted by the Tax Cuts and Jobs Act enacted in December 2017. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances.

We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit.

Dispositions

During the second quarter of fiscal 2018, we entered into an agreement to convey certain net assets related to the Company’s third-party rental business, which is comprised of purchased moveable medical equipment that can be rented to customers, to Universal Hospital Services, Inc. (“UHS”) in exchange for UHS's agreement to dismiss its previously disclosed litigation against the Company subject to satisfaction of customary closing conditions (“Settlement Agreement”). We recorded a loss of $23.4 million in special charges, which includes approximately $20.4 million related to the non-cash loss reserve for the assets to be conveyed, and other Settlement Agreement related costs of approximately $3.0 million. The third-party rental business is part of our Patient Support Systems segment. The transaction is expected to close during our fiscal third quarter.

During the fourth quarter of fiscal 2017, we sold our Völker business. During the first quarter of fiscal 2018, we recorded a gain of$1.0 million attributable to the final working capital settlement associated with the transaction.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which delayed the effective date of the new revenue guidance by one year, while permitting companies to early adopt the new standard as of the original effective date. As a result, the provisions of ASU 2014-09 and subsequent amendments, are effective for us in the first quarter of fiscal 2019 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We plan to adopt the new standard effective October 1, 2018 and are continuing to evaluate the impact of adoption on our Consolidated Financial Statements and the implementation approach to be used.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor’s perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for our first quarter of fiscal 2020. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements.

Except as noted above, there have been no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1 of our Consolidated Financial Statements in our 2017 Form 10-K.

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

Unless the context otherwise requires, the terms “Hill-Rom,” “the Company,” “we,” “our,” and “us” refer to Hill-Rom Holdings, Inc. and its wholly-owned subsidiaries. The unaudited Condensed Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in Hill-Rom’s latest Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“2017 Form 10-K”) as filed with the United States (“U.S.”) Securities and Exchange Commission. The September 30, 2017 Condensed Consolidated Balance Sheet was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the Condensed Consolidated Financial Statements herein include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the interim periods presented. Quarterly results are not necessarily indicative of annual results.

The Condensed Consolidated Financial Statements include the accounts of Hill-Rom and its wholly-owned subsidiaries. In addition, we also consolidate variable interest entities (“VIEs”) where Hill-Rom is deemed to have a controlling financial interest. Intercompany accounts and transactions have been eliminated in consolidation, including the intercompany transactions with consolidated VIEs. Where our ownership interest is less than 100%, the noncontrolling interests are reported in our Condensed Consolidated Financial Statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates and such differences could be material. Examples of such estimates include, but are not limited to, income taxes (Notes 1 and 9), accounts receivable reserves (Note 2), accrued warranties (Note 12), the impairment of intangibles and goodwill (Note 4), pension expense (Note 6), and commitments and contingencies (Note 14).

Fair Value Measurements

Fair Value Measurements

Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.

• Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances, which might include our own data.

We record cash and cash equivalents, as disclosed on our Condensed Consolidated Balance Sheets, as Level 1 instruments and certain other derivatives and investments as either Level 2 or 3 instruments. Investments measured at Net Asset Value as a practical expedient are not categorized in the fair value hierarchy. There have not been significant changes in our classification among assets and liabilities during the fiscal quarter. Refer to Note 5 for disclosure of our debt instrument and interest rate swap fair values.

Taxes Collected from Customers and Remitted to Governmental Units

Taxes Collected from Customers and Remitted to Governmental Units

Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenue and costs) basis.

Income Taxes

Income Taxes

Hill-Rom and its eligible domestic subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. Deferred income taxes are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

As of March 31, 2018, we had $60.0 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to certain foreign deferred tax attributes that are not expected to be utilized. The valuation allowance total was not materially impacted by the Tax Cuts and Jobs Act enacted in December 2017. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances.

We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which delayed the effective date of the new revenue guidance by one year, while permitting companies to early adopt the new standard as of the original effective date. As a result, the provisions of ASU 2014-09 and subsequent amendments, are effective for us in the first quarter of fiscal 2019 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We plan to adopt the new standard effective October 1, 2018 and are continuing to evaluate the impact of adoption on our Consolidated Financial Statements and the implementation approach to be used.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor’s perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for our first quarter of fiscal 2020. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements.

Except as noted above, there have been no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1 of our Consolidated Financial Statements in our 2017 Form 10-K.

XML

Supplementary Balance Sheet Information

6 Months Ended

Mar. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Supplementary Balance Sheet Information

Supplementary Balance Sheet Information

	March 31, 2018		September 30, 2017
Allowance for possible losses and discounts on trade receivables	$	23.9	$	25.1
Inventories:
Finished products	$	156.5	$	147.5
Raw materials and work in process	158.6		137.0
Total inventory	$	315.1	$	284.5
Accumulated depreciation of property, plant and equipment	$	659.3	$	624.2
Accumulated amortization of software and other intangible assets	$	553.2	$	492.3
Preferred stock, without par value:
Shares authorized	1,000,000		1,000,000
Shares issued	None		None
Common stock, without par value:
Shares authorized	199,000,000		199,000,000
Shares issued	88,457,634		88,457,634
Shares outstanding	66,230,972		65,813,794
Treasury shares	22,226,662		22,643,840

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Acquisitions

6 Months Ended

Mar. 31, 2018

Business Acquisition [Line Items]

Acquisitions

Acquisitions

Mortara Instrument

On February 14, 2017, we completed the acquisition of Mortara Instrument, Inc. (“Mortara”) for consideration of $330.0 million in cash ($311.2 million, net of cash acquired), primarily financed through a private offering of $300.0 million of senior unsecured notes (see Note 5 of our Condensed Consolidated Financial Statements). Mortara provides a portfolio of diagnostic cardiology devices designed to serve the full continuum of clinical care, from acute care to primary care and clinical research organizations.

The results of Mortara are included in the Condensed Consolidated Financial Statements since the date of acquisition. The impact to our comparable quarter and year to date fiscal 2017 revenue and net income on an unaudited proforma basis, as if the Mortara acquisition had been consummated at the beginning of our fiscal 2017 year, would not have been significant.

The following summarizes the fair value of assets acquired and liabilities assumed at the date of the Mortara acquisition. The results are considered final.

	Amount
Trade receivables	$	16.4
Inventory	21.5
Other current assets	2.8
Property, plant and equipment	18.2
Goodwill	165.5
Trade names (7-year weighted average useful life)	15.8
Customer relationships (8-year useful life)	37.9
Developed technology (7-year useful life)	52.3
Other noncurrent assets	4.8
Current liabilities	(22.8		)
Noncurrent liabilities	(1.2		)
Total purchase price, net of cash acquired	$	311.2

Goodwill in connection with the Mortara acquisition was allocated entirely to our Front Line Care segment. A majority of the goodwill is attributable to the acquired U.S. operations which is deductible for tax purposes.

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Goodwill

6 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill and Indefinite-Lived Intangible Assets

The following summarizes goodwill activity by reportable segment:

	Patient Support Systems			Front Line Care		Surgical Solutions			Total
Balances at September 30, 2017
Goodwill	$	545.0		$	1,375.6	$	311.8		$	2,232.4
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at September 30, 2017	72.2			1,375.6		311.8			1,759.6
Changes in Goodwill during the period:
Goodwill related to acquisitions	—			0.8		—			0.8
Deconsolidation of VIE	—			—		(13.2		)	(13.2		)
Currency translation effect	1.3			1.0		4.7			7.0
Balances at March 31, 2018
Goodwill	546.3			1,377.4		303.3			2,227.0
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at March 31, 2018	$	73.5		$	1,377.4	$	303.3		$	1,754.2

During the second fiscal quarter of 2018, the Company deconsolidated a variable interest entity as a result of no longer having a controlling financial interest in the entity upon the termination of an exclusive distribution agreement. The portion of this entity's assets, including goodwill, liabilities and operating results that are not attributable to the Company are excluded from our Consolidated Financial Statements as of the effective date of the termination.

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Financing Agreements

6 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Financing Agreements

Financing Agreements

Total debt consists of the following:

	March 31, 2018		September 30, 2017
Revolving credit facilities	$	70.0	$	90.0
Current portion of long-term debt	128.1		109.8
Senior secured Term Loan A, long-term portion	1,195.6		1,266.7
Senior unsecured 5.75% notes due on September 1, 2023	420.4		419.9
Senior unsecured 5.00% notes due on February 14, 2025	296.1		295.8
Unsecured 7.00% debentures due on February 15, 2024	13.6		13.6
Unsecured 6.75% debentures due on December 15, 2027	29.6		29.6
Securitization Program	93.2		79.1
Other	0.3		4.8
Total debt	2,246.9		2,309.3
Less Short-term borrowings	221.3		188.9
Total Long-term debt	$	2,025.6	$	2,120.4

In May 2017, we entered into a 364-day $110.0 million accounts receivable securitization program (the “Securitization Program”) with certain financial institutions. Under the terms of the Securitization Program, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time. As of March 31, 2018, $93.2 million was borrowed under the Securitization Program. Borrowings outstanding under the Securitization Program bear interest at the London Interbank Offered Rate (“LIBOR”) plus the applicable margin of 0.675% and are included as a component of Short-term borrowings, while the accounts receivable securing these obligations remain as a component of Trade accounts receivable, net of allowances in our Condensed Consolidated Balance Sheets. In addition, the agreement governing the Securitization Program contains various customary affirmative and negative covenants, and customary default and termination provisions. As of March 31, 2018, we were in compliance with these covenants and provisions.

In February 2017, we entered into $300.0 million of senior unsecured notes maturing February 2025 for purposes of financing the Mortara acquisition. These notes bear interest at a fixed rate of 5.00% annually. We also have outstanding senior unsecured notes of $425.0 million maturing in September 2023 that bear interest at a fixed rate of 5.75% annually (collectively, the “Senior Notes”). These Senior Notes were issued at par in private placement offerings and are not registered securities on any public market. All of the notes were outstanding as of March 31, 2018. We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes, other than in certain circumstances such as a change in control or material sale of assets. We may redeem the 5.75% and 5.00% notes prior to maturity, but doing so prior to September 1, 2021 and February 15, 2023, respectively, would require payment of a premium on any amounts redeemed, the amount of which varies based on the timing of the redemption. The indentures governing the Senior Notes contain certain covenants which impose limitations on the amount of dividends we may pay and the amount of common shares we may repurchase in the open market, but we do not expect these covenants to affect our current dividend policy or open share repurchase program. The terms of these indentures also impose certain restrictions on the amount and type of additional indebtedness we may obtain in the future, as well as the types of liens and guarantees we may provide.

Our Senior Credit Agreement consists of two facilities as follows:

• $1,462.5 million senior secured Term Loan A facility (“TLA Facility”), maturing in September 2021

• Revolving Credit Facility, providing borrowing capacity of up to $700.0 million, maturing in September 2021

The TLA Facility and Revolving Credit Facility bear interest at variable rates which currently approximate 3.4%. These interest rates are based primarily on LIBOR, but under certain conditions could also be based on the U.S. Federal Funds Rate or the U.S. Prime Rate, at our option. The TLA Facility requires minimum principal payments of $109.7 million in fiscal 2018 and $146.3 million annually thereafter, with the remaining unpaid principal balance due at maturity. We are able to voluntarily prepay outstanding loans under the TLA Facility at any time. During the year to date period ended March 31, 2018, we made required minimum payments of $54.8 million on the TLA Facility.

At March 31, 2018, there were $70.0 million of borrowings on the Revolving Credit Facility, and available borrowing capacity was $622.0 million after giving effect to $8.0 million of outstanding standby letters of credit. The availability of borrowings under our Revolving Credit Facility is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the Senior Credit Agreement.

The facilities provided by the Senior Credit Agreement are held with a syndicate of banks, which includes over 30 institutions. Our general corporate assets, including those of our subsidiaries, collateralize these obligations. The credit agreement governing these facilities contains financial covenants which specify a maximum secured net leverage ratio and a minimum interest coverage ratio, as such terms are defined in the credit agreement. These financial covenants are measured at the end of each fiscal quarter. The required ratios vary providing a gradually decreasing maximum secured net leverage ratio and a gradually increasing minimum interest coverage ratio, as set forth in the table below:

Any Fiscal Quarter Ended During the Calendar Year Ending:	Maximum Secured Net Leverage Ratio	Minimum Interest Coverage Ratio
December 31, 2017	4.00x	3.50x
December 31, 2018	3.50x	3.75x
December 31, 2019 and thereafter	3.00x	4.00x

We were in compliance with all financial covenants under our Senior Credit Agreement as of March 31, 2018.

We are exposed to market risk from fluctuations in interest rates. We sometimes manage our exposure to interest rate fluctuations through the use of interest rate swaps. As of March 31, 2018, we had seven interest rate swap agreements, with notional amounts of $750.0 million, in aggregate, to hedge the variability of cash flows associated with a portion of the variable interest rate payments through September 2021 on the Senior Secured Credit Facilities. The interest rate swaps have effective start dates ranging between December 31, 2017 and September 8, 2020 and were designated as cash flow hedges. As of March 31, 2018, these swaps were in a net asset position with an aggregate fair value of $21.7 million, all of which were classified as Other assets. As of September 30, 2017, these swaps were in a net asset position with an aggregate fair value of $7.3 million, of which $8.5 million were classified as Other assets and $1.2 million were classified as Other current liabilities. We classify fair value measurements on our interest rate swaps as Level 2, as described in Note 1.

The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our short-term debt instruments and Revolving Credit Facility approximate fair value.

The estimated fair values of our long-term debt instruments, including the current portion, are described in the table below:

	March 31, 2018		September 30, 2017
Senior secured Term Loan A	$	1,309.3	$	1,364.8
Senior unsecured 5.75% notes due on September 1, 2023	440.5		449.3
Senior unsecured 5.00% notes due on February 14, 2025	297.9		311.9
Unsecured debentures	44.3		46.8
Total	$	2,092.0	$	2,172.8

The estimated fair values of our long-term unsecured debentures were based on observable inputs such as quoted prices in markets that are not active. The estimated fair values of our term loans and the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements are classified as Level 2, as described in Note 1.

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Retirement and Postretirement Plans

6 Months Ended

Mar. 31, 2018

Compensation and Retirement Disclosure [Abstract]

Retirement and Postretirement Plans

Retirement and Postretirement Plans

We sponsor five defined benefit retirement plans. Those plans include: a master defined benefit retirement plan, a nonqualified supplemental executive defined benefit retirement plan, and three defined benefit retirement plans covering employees in Germany and France. Benefits for such plans are based primarily on years of service and the employee’s level of compensation during specific periods of employment. We contribute funds to trusts as necessary to provide for current service and for any unfunded projected future benefit obligation over a reasonable period of time. All of our plans have a September 30 measurement date. The following table details the components of net pension expense for our defined benefit retirement plans.

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Service cost	$	1.2		$	1.5		$	2.4		$	2.9
Interest cost	2.8			2.4			5.5			4.9
Expected return on plan assets	(4.0		)	(3.6		)	(7.9		)	(7.3		)
Amortization of unrecognized prior service cost, net	—			—			—			0.1
Amortization of net loss	1.0			1.6			2.2			3.1
Net pension expense	$	1.0		$	1.9		$	2.2		$	3.7

In addition to defined benefit retirement plans, we also offer two domestic postretirement health care plans, one of which was assumed in the acquisition of Welch Allyn, that provide health care benefits to qualified retirees and their dependents. The plans are closed to new participants and include retiree cost sharing provisions. Annual costs related to these plans are not significant.

We have defined contribution savings plans that cover substantially all U.S. employees and certain non-U.S. employees. The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings. Our contributions to the plans are based on eligibility and employee contributions. Expense under these plans was $7.5 million and $7.1 million in each of the quarterly periods ended March 31, 2018 and 2017, and $13.9 million and $13.1 million in the year to date periods ended March 31, 2018 and 2017.

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Other Comprehensive Income (Loss)

6 Months Ended

Mar. 31, 2018

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following table represents the changes in accumulated other comprehensive loss by component:

	Quarter Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	9.7		$	(0.5	)	$	9.2	$	(1.3	)	$	7.9	$	7.7		$	7.9	$	15.6
Foreign currency translation adjustment	16.5			—			16.5		—			16.5		(75.2		)	16.5		(58.7		)
Change in pension and postretirement defined benefit plans	(0.1		)	1.0			0.9		(0.1		)	0.8		(32.2		)	0.8		(31.4		)
Total	$	26.1		$	0.5		$	26.6	$	(1.4	)	$	25.2	$	(99.7	)	$	25.2	$	(74.5	)

	Quarter Ended March 31, 2017
	Other comprehensive income (loss)														Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	0.4	$	(0.5	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	7.1		$	(0.2	)	$	6.9
Foreign currency translation adjustment	14.0		—			14.0			—			14.0			(154.7		)	14.0			(140.7		)
Change in pension and postretirement defined benefit plans	—		1.4			1.4			(0.6		)	0.8			(49.5		)	0.8			(48.7		)
Total	$	14.4	$	0.9		$	15.3		$	(0.7	)	$	14.6		$	(197.1	)	$	14.6		$	(182.5	)

	Year to Date Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	15.5		$	(0.9	)	$	14.6	$	(3.3	)	$	11.3	$	4.3		$	11.3	$	15.6
Foreign currency translation adjustment	22.6			—			22.6		—			22.6		(81.3		)	22.6		(58.7		)
Change in pension and postretirement defined benefit plans	(0.2		)	2.2			2.0		(0.4		)	1.6		(33.0		)	1.6		(31.4		)
Total	$	37.9		$	1.3		$	39.2	$	(3.7	)	$	35.5	$	(110.0	)	$	35.5	$	(74.5	)

	Year to Date Ended March 31, 2017
	Other comprehensive income (loss)															Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	16.6		$	(0.7	)	$	15.9		$	(5.9	)	$	10.0		$	(3.1	)	$	10.0		$	6.9
Foreign currency translation adjustment	(25.5		)	—			(25.5		)	—			(25.5		)	(115.2		)	(25.5		)	(140.7		)
Change in pension and postretirement defined benefit plans	0.4			2.9			3.3			(1.2		)	2.1			(50.8		)	2.1			(48.7		)
Total	$	(8.5	)	$	2.2		$	(6.3	)	$	(7.1	)	$	(13.4	)	$	(169.1	)	$	(13.4	)	$	(182.5	)

The following table represents the items reclassified out of accumulated other comprehensive loss and the related tax effects:

	Quarter Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.5	)	$	—		$	(0.5	)	$	(0.5	)	$	0.1		$	(0.4	)
Change in pension and postretirement defined benefit plans (b)	$	1.0		$	(0.1	)	$	0.9		$	1.4		$	(0.6	)	$	0.8

	Year to Date Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.9	)	$	0.2		$	(0.7	)	$	(0.7	)	$	0.2		$	(0.5	)
Change in pension and postretirement defined benefit plans (b)	$	2.2		$	(0.4	)	$	1.8		$	2.9		$	(1.1	)	$	1.8

(a) Reclassified from accumulated other comprehensive income (loss) into Interest expense.

(b) Reclassified from accumulated other comprehensive income (loss) into Cost of goods sold and Selling and administrative expenses. These components are included in the computation of net periodic pension expense.

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Special Charges

6 Months Ended

Mar. 31, 2018

Special Charges [Abstract]

Special Charges

Special Charges

In connection with various organizational changes to improve our business alignment and cost structure, we recognized special charges of $36.9 millionand $3.1 millionfor the quarters endedMarch 31, 2018and2017, and $50.4 million and $8.9 million for the year to date periods ended March 31, 2018 and 2017. These charges are summarized as follows:

Dispositions

During the second quarter of fiscal 2018, we entered into an agreement to convey certain assets related to the Company's third-party rental business to UHS and recorded an after-tax loss of $23.4 million in special charges.

Business Optimization

During the first quarter of fiscal 2018, we initiated a global transformation program focused on reducing complexity, increasing efficiency, improving our cost structure and accelerating growth with targeted investments that align with our strategic priorities. For the quarter and year to date periods ended March 31, 2018, this program resulted in charges of $9.6 million and $18.8 million, of which $4.8 million and $10.8 million were severance and benefit costs. We continue to evaluate additional actions related to this program and expect additional special charges to be incurred. However, it is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

Site Consolidation

In the third quarter of fiscal 2015, we initiated a plan to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). As part of this action, we have announced the closure of five sites. During the quarter and year to date periods ended March 31, 2018, we recorded total charges of $3.8 million and $7.8 million, related to these efforts, of which $0.5 million and $0.7 million were severance and benefit costs. These amounts compare to charges of $6.2 million and $9.8 million, during the quarter and year to date periods ended March 31, 2017, of which $1.7 million were severance and benefit costs for the quarter and year to dates periods ended March 31, 2017.

During the second quarter of fiscal 2017, we sold our Charleston property for $6.1 million in cash proceeds and recorded a gain of $5.2 million.

Since the inception of the Site Consolidation program through March 31, 2018, we have recognized aggregate special charges of $42.8 million. We continue to evaluate our facilities footprint and expect to incur additional costs with respect to other actions in the future, however, it is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

Integration and Business Realignment

We acquired Mortara and Tridien and initiated integration activities to optimize the available synergies of our combined company. Additionally, with the acquisition of Welch Allyn in September 2015, we initiated plans to realign our business structure to facilitate the integration, take full advantage of available synergies, and position our existing businesses to capitalize on opportunities for growth. We also incurred costs, including severance and benefit costs, associated with other business realignment and integration activities. During the quarter and year to date periods ended March 31, 2018, we incurred total integration and business realignment charges of approximately $0.1 million and $0.4 million. These amounts compare to charges of $2.1 million and $2.3 million during the quarter and year to date periods ended March 31, 2017, of which $1.4 million were severance and benefit costs for the quarter and year to date periods ended March 31, 2017. We do not expect to incur significant additional special charges in relation to these activities.

For all accrued severance and other benefit charges described above, we record restructuring reserves within Other current liabilities. The reserve activity for severance and other benefits during the year to date period ended March 31, 2018 was as follows:

Balance at September 30, 2017	$	9.0
Expenses	11.5
Cash Payments	(12.6		)
Balance at March 31, 2018	$	7.9

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Income Taxes

6 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the quarter and year to date periods endedMarch 31, 2018was(32.6)% and (123.3)% compared to17.7% and 24.9%for the quarter and year to date periods in the prior year. The effective tax rate for the current quarter is lower than the comparable period in fiscal 2017 due to period tax benefits of $11.2 million primarily related to a change in a tax accounting method approved by the Internal Revenue Service in the current period. The change in accounting method resulted in a reduction in U.S. tax for prior year currency exchange losses.The effective tax rate for the year to date period is lower than the comparable period in fiscal 2017 due to the lower corporate tax rate and period tax benefits of $75.6 millionprimarily related to recording the items attributable to the new tax legislation in the U.S. as described below and the change in tax accounting method. The comparable prior year period included period tax benefits of $3.5 million primarily related to the adoption of the ASU 2016-09 partially offset by the expense to revalue the France deferred tax assets due to the law change that reduced the future corporate income tax rate in France.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code which will impact our fiscal year ended September 30, 2018 including, but not limited to (1) reducing the U.S. federal corporate tax rate, (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that may electively be paid over eight years, and (3) accelerated first year expensing of certain capital expenditures. The Tax Act reduces the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Internal Revenue Code Section 15 provides that our fiscal year ended September 30, 2018 will have a blended corporate tax rate of 24.5 percent, which is based on a proration of the applicable tax rates before and after effective date of the Tax Act. The statutory tax rate of 21 percent will apply for fiscal 2019 and beyond.

The Tax Act also puts in place new tax laws that will impact our taxable income beginning in fiscal 2019, which include, but are not limited to (1) creating a Base Erosion Anti-abuse Tax (BEAT), which is a new minimum tax, (2) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, (3) a new provision designed to tax currently global intangible low-taxed income (GILTI), which allows for the possibility of utilizing foreign tax credits and a deduction equal to 50 percent to offset the income tax liability (subject to some limitations), (4) a provision that could limit the amount of deductible interest expense, (5) the repeal of the domestic production activity deduction, (6) limitations on the deductibility of certain executive compensation, and (7) limitations on the utilization of foreign tax credits to reduce the U.S. income tax liability.

Shortly after the Tax Act was enacted, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118) which provides guidance on accounting for the Tax Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Act enactment date, during which a company acting in good faith may complete the accounting for the impacts of the Tax Act under ASC Topic 740. In accordance with SAB 118, the Company must reflect the income tax effects of the Tax Act in the reporting period in which the accounting under ASC Topic 740 is complete.

To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, the Company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. If a Company cannot determine a provisional estimate to be included in the financial statements, the Company should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted. If a Company is unable to provide a reasonable estimate of the impacts of the Tax Act in a reporting period, a provisional amount must be recorded in the first reporting period in which a reasonable estimate can be determined.

We have recorded a provisional discrete net tax benefit of $61.4 million related to the Tax Act in the year to date period ending March 31, 2018. No additional adjustments were recorded in the current quarter. This net benefit primarily consists of a net benefit of $93.8 million due to the remeasurement of our deferred tax accounts to reflect the corporate rate reduction impact to our net deferred tax balances and a net expense for the transition tax of $32.4 million.

Reduction in U.S. Corporate Rate: The Tax Act reduces the U.S. federal statutory corporate tax rate to 24.5 percent in fiscal year ending September 30, 2018 and 21 percent for fiscal year ending September 30, 2019 and beyond. We have recorded a provisional adjustment to our net deferred tax balances, with a corresponding discrete net tax benefit of $93.8 million in the current year to date period. In our annual effective tax rate we have reflected the tax effect of the temporary differences that will originate subsequent to the Tax Act and are required to be remeasured at the 21 percent tax rate. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, we are continuing to analyze the temporary differences that existed on the date of enactment, and the temporary differences originating in the current fiscal year.

Transition Tax: The transition tax is a fiscal 2018 tax on the previously untaxed accumulated and current earnings and profits (E&P) of certain of our foreign subsidiaries.  In order to determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings.  E&P is similar to retained earnings of the subsidiary, but requires other adjustments to conform to U.S. tax rules.  We are able to make a reasonable estimate of the transition tax and recorded a provisional transition tax obligation of $32.4 million which we expect to elect to pay, net of certain tax credit carryforwards, over eight years beginning in fiscal 2019. This amount is presented in Other long-term liabilities. However, we are awaiting further interpretative guidance, continuing to assess available tax methods and elections, and continuing to gather additional information to more precisely compute the amount of the transition tax.

Global intangible low-taxed income (GILTI): The Tax Act includes a provision designed to currently tax global intangible low-taxed income starting in fiscal 2019. Due to the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act, the application of ASC 740, and are considering available accounting policy alternatives to adopt to either record the U.S. income tax effect of future GILTI inclusions in the period in which they arise or establish deferred taxes with respect to the expected future tax liabilities associated with future GILTI inclusions. Our accounting policies depend, in part, on analyzing our global income to determine whether we expect a tax liability resulting from the application of this provision, and, if so, whether and when to record related current and deferred income taxes. Whether we intend to recognize deferred tax liabilities related to the GILTI provisions is dependent, in part, on our assessment of the Company's future operating structure. In addition, we are awaiting further interpretive guidance in connection with the computation of the GILTI tax. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments relating to potential GILTI tax in our financial statements and have not made a policy decision regarding our accounting for GILTI.

As of September 30, 2017, our practice and intention was to reinvest the earnings in our non-U.S. subsidiaries outside of the U.S., and no U.S. deferred income taxes or foreign withholding taxes were recorded. The transition tax noted above will result in the previously untaxed foreign earnings being included in the federal and state fiscal 2018 taxable income. We are currently analyzing our global working capital requirements and the potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent, which include local country withholding tax and potential U.S. state taxation. Furthermore, the transition tax will close a majority of the outside basis differences in our foreign corporations and any remaining temporary difference will potentially have some interaction with the GILTI tax noted above. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act and have not recorded any withholding or state tax liabilities, any deferred taxes attributable to GILTI (as noted above) or any deferred taxes attributable to our investment in our foreign subsidiaries.

We are also currently analyzing other provisions of the Tax Act that come into effect for tax years starting October 1, 2018 to determine if these items would impact the effective tax rate. These provisions include BEAT, eliminating U.S. federal income taxes on dividends from foreign subsidiaries, the treatment of amounts in accumulated other comprehensive income, the new provision that could limit the amount of deductible interest expense, and the limitations on the deductibility of certain executive compensation.

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Earnings per Common Share

6 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Earnings per Common Share

Earnings per Common Share

Basic earnings per share is calculated based upon the weighted average number of outstanding common shares for the period, plus the effect of deferred vested shares. Diluted earnings per share is calculated consistent with the basic earnings per share calculation plus the effect of dilutive unissued common shares related to stock-based employee compensation programs. For all periods presented, anti-dilutive stock options were excluded from the calculation of diluted earnings per share. Cumulative treasury stock acquired, less cumulative shares reissued, have been excluded in determining the average number of shares outstanding.

Earnings per share are calculated as follows (share information in thousands):

	Quarter Ended March 31				Year to Date Ended March 31
	2018		2017		2018		2017
Net income attributable to common shareholders	$	28.5	$	34.4	$	116.8	$	58.2
Average shares outstanding - Basic	66,192		65,462		66,040		65,473
Add potential effect of exercise of stock options and other unvested equity awards	1,405		1,670		1,468		1,584
Average shares outstanding - Diluted	67,597		67,132		67,508		67,057
Net income attributable to common shareholders per common share - Basic	$	0.43	$	0.52	$	1.77	$	0.89
Net income attributable to common shareholders per common share - Diluted	$	0.42	$	0.51	$	1.73	$	0.87
Shares with anti-dilutive effect excluded from the computation of Diluted EPS	280		348		225		500

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Common Stock

6 Months Ended

Mar. 31, 2018

Class of Stock Disclosures [Abstract]

Common Stock

Common Stock

The stock-based compensation cost that was charged against income, net of tax, for all plans was $7.0 million and $4.5 million in the quarterly periods ended March 31, 2018 and 2017, and $11.6 million and $7.7 million in the year to date periods ended March 31, 2018 and 2017.

During the first quarter of fiscal 2017, we purchased 0.6 million shares of our common stock for $30.0 million in the open market.

As of March 31, 2018, a cumulative total of $175.3 million of our share repurchase program had been used, leaving us with approximately $165.0 million of availability. This program does not have an expiration date and there are no plans to terminate this program in the future.

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Guarantees

6 Months Ended

Mar. 31, 2018

Product Warranties Disclosures [Abstract]

Guarantees

Guarantees

We routinely grant limited warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year, however, certain components and products have substantially longer warranty periods. We recognize a reserve with respect to these obligations at the time of product sale, with subsequent warranty claims recorded directly against the reserve. The amount of the warranty reserve is determined based on historical trend experience for the covered products. For more significant warranty-related matters which might require a broad-based correction, separate reserves are established when such events are identified and the cost of correction can be reasonably estimated.

A reconciliation of changes in the warranty reserve for the periods covered in this report is as follows:

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Balance at beginning of period	$	25.3		$	26.3		$	25.5		$	27.5
Provision for warranties during the period	4.0			3.7			7.5			6.3
Warranty reserves acquired	—			1.9			—			1.9
Warranty claims during the period	(4.3		)	(4.5		)	(8.0		)	(8.3		)
Balance at end of period	$	25.0		$	27.4		$	25.0		$	27.4

In the normal course of business, we enter into various other guarantees and indemnities in our relationships with suppliers, service providers, customers, business partners and others. Examples of these arrangements would include guarantees of product performance, indemnifications to service providers and indemnifications of our actions to business partners. These guarantees and indemnifications have not historically had, nor do we expect them to have, a material impact on our financial condition or results of operations, although indemnifications associated with our actions generally have no dollar limitations.

In conjunction with our acquisition and divestiture activities, we have entered into select guarantees and indemnifications of performance with respect to the fulfillment of commitments under applicable purchase and sale agreements. The arrangements generally indemnify the buyer or seller for damages associated with breach of contract, inaccuracies in representations and warranties surviving the closing date and satisfaction of liabilities and commitments retained under the applicable contract. With respect to sale transactions, we also routinely enter into non-competition agreements for varying periods of time. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on our financial condition and results of operations.

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Segment Reporting

6 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure contains the following reporting segments:

• Patient Support Systems – globally provides our specialty bed frames and surfaces and mobility solutions, as well as our clinical workflow solutions which specializes in software and information technologies to improve care and deliver actionable insight to caregivers and patients.

• Front Line Care – globally provides and sells patient monitoring and diagnostic technologies, including a diversified portfolio of physical assessment tools that help diagnose, treat and manage a wide variety of illnesses and diseases, as well as a portfolio of respiratory care devices.

• Surgical Solutions – globally provides products that improve surgical safety and efficiency in the operating room including tables, lights, pendants, positioning devices and various other surgical products and accessories.

Our performance within each reportable segment continues to be measured on a divisional income basis before non-allocated operating and administrative costs, litigation, special charges, acquisition and integration costs, acquisition-related intangible asset amortization, and other unusual events. Divisional income generally represents the division’s gross profit less its direct operating costs along with an allocation of manufacturing and distribution costs, research and development and certain corporate functional expenses.

Non-allocated operating costs, administrative costs, and other includes functional expenses that support the entire organization such as administration, finance, legal and human resources, expenses associated with strategic developments, acquisition-related intangible asset amortization, and other events that are not indicative of operating trends. We exclude such amounts from divisional income to allow management to evaluate and understand divisional operating trends. The chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment.

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Revenue:
Patient Support Systems	$	355.0		$	362.9		$	689.4		$	698.1
Front Line Care	237.9			211.0			462.5			412.8
Surgical Solutions	117.6			105.0			228.3			205.4
Total revenue	$	710.5		$	678.9		$	1,380.2		$	1,316.3
Divisional income:
Patient Support Systems	$	67.2		$	63.2		$	120.6		$	111.3
Front Line Care	60.5			50.7			115.9			103.9
Surgical Solutions	15.5			9.2			25.2			17.3
Other operating costs:
Non-allocated operating costs, administrative costs, and other	60.2			56.4			113.1			104.0
Special charges	36.9			3.1			50.4			8.9
Operating profit	46.1			63.6			98.2			119.6
Interest expense	(24.2		)	(21.9		)	(47.3		)	(41.4		)
Investment income and other, net	(0.4		)	(0.4		)	1.4			(1.6		)
Income before income taxes	$	21.5		$	41.3		$	52.3		$	76.6

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

General

We are subject to various claims and contingencies arising out of the normal course of business, including those relating to governmental investigations and proceedings, commercial transactions, product liability, employee related matters, antitrust, safety, health, taxes, environmental and other matters. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial condition, results of operations, and cash flows.

Self Insurance

We are also involved in other possible claims, including product and general liability, workers’ compensation, auto liability and employment related matters. Such claims in the United States have deductibles and self-insured retentions ranging from $25 thousand to $1.0 million per occurrence or per claim, depending upon the type of coverage and policy period. International deductibles and self-insured retentions are lower. We are also generally self-insured up to certain stop-loss limits for certain employee health benefits, including medical, drug and dental. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims and outside actuarial analysis, which are based on historical information along with certain assumptions about future events. Such estimated reserves are classified as Other Current Liabilities and Other Long-Term Liabilities within the Condensed Consolidated Balance Sheets.

Universal Hospital Services, Inc. Litigation

On March 7, 2018, we entered into a Settlement Agreement with UHS related to previously disclosed litigation which, among other things, provided for the conveyance of certain net assets relating to our third party rental business, subject to the satisfaction of customary closing conditions. UHS has agreed to drop its lawsuit against the Company as part of the Settlement Agreement. We have recorded a loss of $23.4 million in special charges, which includes approximately $20.4 million related to the non-cash loss reserve for the assets to be conveyed, and other Settlement Agreement related costs of approximately $3.0 million.

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Supplementary Balance Sheet Information (Tables)

6 Months Ended

Mar. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Supplementary Balance Sheet Information

	March 31, 2018		September 30, 2017
Allowance for possible losses and discounts on trade receivables	$	23.9	$	25.1
Inventories:
Finished products	$	156.5	$	147.5
Raw materials and work in process	158.6		137.0
Total inventory	$	315.1	$	284.5
Accumulated depreciation of property, plant and equipment	$	659.3	$	624.2
Accumulated amortization of software and other intangible assets	$	553.2	$	492.3
Preferred stock, without par value:
Shares authorized	1,000,000		1,000,000
Shares issued	None		None
Common stock, without par value:
Shares authorized	199,000,000		199,000,000
Shares issued	88,457,634		88,457,634
Shares outstanding	66,230,972		65,813,794
Treasury shares	22,226,662		22,643,840

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Acquisitions Acquisitions (Tables)

6 Months Ended

Mar. 31, 2018

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Trade receivables	$	16.4
Inventory	21.5
Other current assets	2.8
Property, plant and equipment	18.2
Goodwill	165.5
Trade names (7-year weighted average useful life)	15.8
Customer relationships (8-year useful life)	37.9
Developed technology (7-year useful life)	52.3
Other noncurrent assets	4.8
Current liabilities	(22.8		)
Noncurrent liabilities	(1.2		)
Total purchase price, net of cash acquired	$	311.2

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Goodwill (Tables)

6 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill Activity

The following summarizes goodwill activity by reportable segment:

	Patient Support Systems			Front Line Care		Surgical Solutions			Total
Balances at September 30, 2017
Goodwill	$	545.0		$	1,375.6	$	311.8		$	2,232.4
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at September 30, 2017	72.2			1,375.6		311.8			1,759.6
Changes in Goodwill during the period:
Goodwill related to acquisitions	—			0.8		—			0.8
Deconsolidation of VIE	—			—		(13.2		)	(13.2		)
Currency translation effect	1.3			1.0		4.7			7.0
Balances at March 31, 2018
Goodwill	546.3			1,377.4		303.3			2,227.0
Accumulated impairment losses	(472.8		)	—		—			(472.8		)
Goodwill, net at March 31, 2018	$	73.5		$	1,377.4	$	303.3		$	1,754.2

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Financing Agreements (Tables)

6 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Schedule of Total Debt

Total debt consists of the following:

	March 31, 2018		September 30, 2017
Revolving credit facilities	$	70.0	$	90.0
Current portion of long-term debt	128.1		109.8
Senior secured Term Loan A, long-term portion	1,195.6		1,266.7
Senior unsecured 5.75% notes due on September 1, 2023	420.4		419.9
Senior unsecured 5.00% notes due on February 14, 2025	296.1		295.8
Unsecured 7.00% debentures due on February 15, 2024	13.6		13.6
Unsecured 6.75% debentures due on December 15, 2027	29.6		29.6
Securitization Program	93.2		79.1
Other	0.3		4.8
Total debt	2,246.9		2,309.3
Less Short-term borrowings	221.3		188.9
Total Long-term debt	$	2,025.6	$	2,120.4

Schedule of Facilities Covenants

Any Fiscal Quarter Ended During the Calendar Year Ending:	Maximum Secured Net Leverage Ratio	Minimum Interest Coverage Ratio
December 31, 2017	4.00x	3.50x
December 31, 2018	3.50x	3.75x
December 31, 2019 and thereafter	3.00x	4.00x

Schedule of Fair Values of Long-Term Debt Instruments

The estimated fair values of our long-term debt instruments, including the current portion, are described in the table below:

	March 31, 2018		September 30, 2017
Senior secured Term Loan A	$	1,309.3	$	1,364.8
Senior unsecured 5.75% notes due on September 1, 2023	440.5		449.3
Senior unsecured 5.00% notes due on February 14, 2025	297.9		311.9
Unsecured debentures	44.3		46.8
Total	$	2,092.0	$	2,172.8

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Retirement and Postretirement Plans (Tables)

6 Months Ended

Mar. 31, 2018

Compensation and Retirement Disclosure [Abstract]

Schedule of Components of Net Pension Expense

The following table details the components of net pension expense for our defined benefit retirement plans.

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Service cost	$	1.2		$	1.5		$	2.4		$	2.9
Interest cost	2.8			2.4			5.5			4.9
Expected return on plan assets	(4.0		)	(3.6		)	(7.9		)	(7.3		)
Amortization of unrecognized prior service cost, net	—			—			—			0.1
Amortization of net loss	1.0			1.6			2.2			3.1
Net pension expense	$	1.0		$	1.9		$	2.2		$	3.7

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Mar. 31, 2018

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in AOCL by Component

The following table represents the changes in accumulated other comprehensive loss by component:

	Quarter Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	9.7		$	(0.5	)	$	9.2	$	(1.3	)	$	7.9	$	7.7		$	7.9	$	15.6
Foreign currency translation adjustment	16.5			—			16.5		—			16.5		(75.2		)	16.5		(58.7		)
Change in pension and postretirement defined benefit plans	(0.1		)	1.0			0.9		(0.1		)	0.8		(32.2		)	0.8		(31.4		)
Total	$	26.1		$	0.5		$	26.6	$	(1.4	)	$	25.2	$	(99.7	)	$	25.2	$	(74.5	)

	Quarter Ended March 31, 2017
	Other comprehensive income (loss)														Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	0.4	$	(0.5	)	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	7.1		$	(0.2	)	$	6.9
Foreign currency translation adjustment	14.0		—			14.0			—			14.0			(154.7		)	14.0			(140.7		)
Change in pension and postretirement defined benefit plans	—		1.4			1.4			(0.6		)	0.8			(49.5		)	0.8			(48.7		)
Total	$	14.4	$	0.9		$	15.3		$	(0.7	)	$	14.6		$	(197.1	)	$	14.6		$	(182.5	)

	Year to Date Ended March 31, 2018
	Other comprehensive income (loss)													Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax		Tax effect			Net of tax		Beginning balance			Net activity		Ending balance
Derivative instruments and hedges	$	15.5		$	(0.9	)	$	14.6	$	(3.3	)	$	11.3	$	4.3		$	11.3	$	15.6
Foreign currency translation adjustment	22.6			—			22.6		—			22.6		(81.3		)	22.6		(58.7		)
Change in pension and postretirement defined benefit plans	(0.2		)	2.2			2.0		(0.4		)	1.6		(33.0		)	1.6		(31.4		)
Total	$	37.9		$	1.3		$	39.2	$	(3.7	)	$	35.5	$	(110.0	)	$	35.5	$	(74.5	)

	Year to Date Ended March 31, 2017
	Other comprehensive income (loss)															Accumulated other comprehensive income (loss)
	Prior to reclassification			Reclassification from			Pre-tax			Tax effect			Net of tax			Beginning balance			Net activity			Ending balance
Derivative instruments and hedges	$	16.6		$	(0.7	)	$	15.9		$	(5.9	)	$	10.0		$	(3.1	)	$	10.0		$	6.9
Foreign currency translation adjustment	(25.5		)	—			(25.5		)	—			(25.5		)	(115.2		)	(25.5		)	(140.7		)
Change in pension and postretirement defined benefit plans	0.4			2.9			3.3			(1.2		)	2.1			(50.8		)	2.1			(48.7		)
Total	$	(8.5	)	$	2.2		$	(6.3	)	$	(7.1	)	$	(13.4	)	$	(169.1	)	$	(13.4	)	$	(182.5	)

Schedule of Items Reclassified out of AOCL

The following table represents the items reclassified out of accumulated other comprehensive loss and the related tax effects:

	Quarter Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.5	)	$	—		$	(0.5	)	$	(0.5	)	$	0.1		$	(0.4	)
Change in pension and postretirement defined benefit plans (b)	$	1.0		$	(0.1	)	$	0.9		$	1.4		$	(0.6	)	$	0.8

	Year to Date Ended March 31
	2018									2017
	Amount reclassified			Tax effect			Net of tax			Amount reclassified			Tax effect			Net of tax
Derivative instruments and hedges (a)	$	(0.9	)	$	0.2		$	(0.7	)	$	(0.7	)	$	0.2		$	(0.5	)
Change in pension and postretirement defined benefit plans (b)	$	2.2		$	(0.4	)	$	1.8		$	2.9		$	(1.1	)	$	1.8

(a) Reclassified from accumulated other comprehensive income (loss) into Interest expense.

(b) Reclassified from accumulated other comprehensive income (loss) into Cost of goods sold and Selling and administrative expenses. These components are included in the computation of net periodic pension expense.

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Special Charges (Tables)

6 Months Ended

Mar. 31, 2018

Special Charges [Abstract]

Restructuring Activity

The reserve activity for severance and other benefits during the year to date period ended March 31, 2018 was as follows:

Balance at September 30, 2017	$	9.0
Expenses	11.5
Cash Payments	(12.6		)
Balance at March 31, 2018	$	7.9

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Earnings per Common Share (Tables)

6 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Calculated Earnings per Share

Earnings per share are calculated as follows (share information in thousands):

	Quarter Ended March 31				Year to Date Ended March 31
	2018		2017		2018		2017
Net income attributable to common shareholders	$	28.5	$	34.4	$	116.8	$	58.2
Average shares outstanding - Basic	66,192		65,462		66,040		65,473
Add potential effect of exercise of stock options and other unvested equity awards	1,405		1,670		1,468		1,584
Average shares outstanding - Diluted	67,597		67,132		67,508		67,057
Net income attributable to common shareholders per common share - Basic	$	0.43	$	0.52	$	1.77	$	0.89
Net income attributable to common shareholders per common share - Diluted	$	0.42	$	0.51	$	1.73	$	0.87
Shares with anti-dilutive effect excluded from the computation of Diluted EPS	280		348		225		500

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Guarantees (Tables)

6 Months Ended

Mar. 31, 2018

Product Warranties Disclosures [Abstract]

Reconciliation of Changes in the Warranty Reserve

A reconciliation of changes in the warranty reserve for the periods covered in this report is as follows:

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Balance at beginning of period	$	25.3		$	26.3		$	25.5		$	27.5
Provision for warranties during the period	4.0			3.7			7.5			6.3
Warranty reserves acquired	—			1.9			—			1.9
Warranty claims during the period	(4.3		)	(4.5		)	(8.0		)	(8.3		)
Balance at end of period	$	25.0		$	27.4		$	25.0		$	27.4

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Segment Reporting (Tables)

6 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Reconciliation of Segment Information to Consolidated Financial Information

	Quarter Ended March 31						Year to Date Ended March 31
	2018			2017			2018			2017
Revenue:
Patient Support Systems	$	355.0		$	362.9		$	689.4		$	698.1
Front Line Care	237.9			211.0			462.5			412.8
Surgical Solutions	117.6			105.0			228.3			205.4
Total revenue	$	710.5		$	678.9		$	1,380.2		$	1,316.3
Divisional income:
Patient Support Systems	$	67.2		$	63.2		$	120.6		$	111.3
Front Line Care	60.5			50.7			115.9			103.9
Surgical Solutions	15.5			9.2			25.2			17.3
Other operating costs:
Non-allocated operating costs, administrative costs, and other	60.2			56.4			113.1			104.0
Special charges	36.9			3.1			50.4			8.9
Operating profit	46.1			63.6			98.2			119.6
Interest expense	(24.2		)	(21.9		)	(47.3		)	(41.4		)
Investment income and other, net	(0.4		)	(0.4		)	1.4			(1.6		)
Income before income taxes	$	21.5		$	41.3		$	52.3		$	76.6

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Summary of Significant Accounting Policies (Details) $ in Millions	Mar. 31, 2018 USD ($)
Accounting Policies [Abstract]
Deferred Tax Assets, Valuation Allowance	$ 60.0

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Summary of Significant Accounting Policies (Other Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale of businesses			$ 1.0	$ 4.5
Gain (Loss) on Disposition of Business		$ 1.0
MEMS [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on Disposition of Business	$ 23.4
Non-Cash Loss Reserve for Assets	20.4
Professional Fees	$ 3.0

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Supplementary Balance Sheet Information (Details) - USD ($) $ in Millions	Mar. 31, 2018	Sep. 30, 2017
Balance Sheet Related Disclosures [Abstract]
Allowance for possible losses and discounts on trade receivables	$ 23.9	$ 25.1
Inventories:
Finished products	156.5	147.5
Raw materials and work in process	158.6	137.0
Total inventory	315.1	284.5
Accumulated depreciation of property, plant and equipment	659.3	624.2
Accumulated amortization of software and other intangible assets	$ 553.2	$ 492.3
Preferred stock, without par value:
Shares authorized	1,000,000	1,000,000
Shares issued	0	0
Common stock, without par value:
Shares authorized	199,000,000	199,000,000
Shares issued (in shares)	88,457,634.000000	88,457,634
Shares outstanding (in shares)	66,230,972.000000	65,813,794
Treasury shares (in shares)	22,226,662.000000	22,643,840

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Acquisitions Acquisition (Mortara Instruments) (Details) - USD ($)		6 Months Ended
	Feb. 14, 2017	Mar. 31, 2018	Mar. 31, 2017	Feb. 28, 2017
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired		$ 0	$ 314,300,000
Goodwill		$ 1,754,200,000
Mortara [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 330,000,000
Payments to Acquire Businesses, Net of Cash Acquired	311,200,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	16,400,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	21,500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other	2,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	18,200,000
Goodwill	165,500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets	4,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities	(22,800,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other	(1,200,000)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	311,200,000
Trade names (7-year weighted average useful life) | Mortara [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	15,800,000
Customer relationships (8-year useful life) | Mortara [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		8 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	37,900,000
Developed technology (7-year useful life) | Mortara [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 52,300,000
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Business Acquisition [Line Items]
Aggregate value of debt				$ 300,000,000

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Goodwill (Schedule of Goodwill Activity) (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2018	Sep. 30, 2017
Goodwill [Roll Forward]
Goodwill	$ 2,227.0	$ 2,232.4
Accumulated impairment losses	(472.8)	(472.8)
Goodwill, net	1,754.2	1,759.6
Goodwill related to acquisitions	0.8
Goodwill, Written Off Related to Deconsolidation of VIE	(13.2)
Currency translation effect	7.0
Patient Support Systems [Member]
Goodwill [Roll Forward]
Goodwill	546.3	545.0
Accumulated impairment losses	(472.8)	(472.8)
Goodwill, net	73.5	72.2
Goodwill, Acquired During Period And Purchase Accounting Adjustments	0.0
Goodwill, Written Off Related to Deconsolidation of VIE	0.0
Currency translation effect	1.3
Front Line Care [Member]
Goodwill [Roll Forward]
Goodwill	1,377.4	1,375.6
Accumulated impairment losses	0.0	0.0
Goodwill, net	1,377.4	1,375.6
Goodwill, Acquired During Period And Purchase Accounting Adjustments	0.8
Goodwill, Written Off Related to Deconsolidation of VIE	0.0
Currency translation effect	1.0
Surgical Solutions [Member]
Goodwill [Roll Forward]
Goodwill	303.3	311.8
Accumulated impairment losses	0.0	0.0
Goodwill, net	303.3	$ 311.8
Goodwill, Acquired During Period And Purchase Accounting Adjustments	0.0
Goodwill, Written Off Related to Deconsolidation of VIE	(13.2)
Currency translation effect	$ 4.7

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Financing Agreements (Schedule of Total Debt) (Details)	6 Months Ended
	Mar. 31, 2018 USD ($) derivative	Mar. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	May 31, 2017 USD ($)	Feb. 28, 2017 USD ($)
Debt Instrument [Line Items]
Repayments of Long-term Debt	$ 54,900,000	$ 36,600,000
Long-term Debt, by Current and Noncurrent [Abstract]
Current portion of long-term debt	128,100,000		$ 109,800,000
Total debt	2,246,900,000		2,309,300,000
Less Short-term borrowings	221,300,000		188,900,000
Total Long-term debt	2,025,600,000		2,120,400,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	8,000,000
Long-term Debt, by Current and Noncurrent [Abstract]
Revolving credit facilities	70,000,000		90,000,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 700,000,000
Debt instrument, maturity date	Sep. 30, 2021
Line of Credit Facility, Remaining Borrowing Capacity	$ 622,000,000
Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate During Period	3.40%
Senior Secured Term Loan A [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Three	$ 146,300,000
Repayments of Long-term Debt	$ 54,800,000
Line of Credit Facility, Interest Rate During Period	0.00%
Long-term Debt, by Current and Noncurrent [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,462,500,000.0
Debt instrument, maturity date	Sep. 30, 2021
Total Long-term debt	$ 1,195,600,000		1,266,700,000
Long-term Debt, Maturities, Repayments of Principal in Year Five			0
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	$ 109,700,000
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate	5.75%
Debt Instrument, Face Amount			425,000,000
Debt instrument, maturity date	Sep. 01, 2023
Total Long-term debt	$ 420,400,000		419,900,000
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate	5.00%
Debt Instrument, Face Amount					$ 300,000,000
Debt instrument, maturity date	Feb. 14, 2025
Total Long-term debt	$ 296,100,000		295,800,000
Unsecured 7.00% Debentures Due on February 15, 2024 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate	7.00%
Debt instrument, maturity date	Feb. 15, 2024
Total debt	$ 13,600,000		13,600,000
Unsecured 6.75% Debentures Due on December 15, 2027 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate	6.75%
Debt instrument, maturity date	Dec. 15, 2027
Total debt	$ 29,600,000		29,600,000
Securitization Program [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate	0.675%
Debt Instrument, Face Amount				$ 110,000,000
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement	$ 93,200,000		79,100,000
Other Financing Agreements [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Total debt	$ 300,000		$ 4,800,000
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Number of Instruments Held | derivative	7

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Financing Agreements (Future Principal Payments of Long-Term Debt) (Details) - Interest Rate Swap [Member] - USD ($)	Mar. 31, 2018	Sep. 30, 2017
Debt Instrument [Line Items]
Derivative, Notional Amount	$ 750,000,000
Interest Rate Derivatives, at Fair Value, Net	$ 21,700,000	$ 7,300,000

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Financing Agreements (Narrative) (Details)	1 Months Ended	6 Months Ended
	May 31, 2017 USD ($)	Mar. 31, 2018 USD ($) derivative	Mar. 31, 2017 USD ($)	May 04, 2018 USD ($)	Sep. 30, 2017 USD ($)	Feb. 28, 2017 USD ($)
Debt Instrument [Line Items]
Payment of long-term debt		$ 54,900,000	$ 36,600,000
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Number of derivative agreements | derivative		7
Interest rate swap agreement, notional amount		$ 750,000,000
Interest rate swap, fair value		21,700,000			$ 7,300,000
Securitization Program [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	364 days
Aggregate value of debt	$ 110,000,000
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement		$ 93,200,000			79,100,000
Unsecured debenture interest rate		0.675%
Senior Secured Term Loan A [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Three		$ 146,300,000
Senior revolving credit facility, maximum borrowing amount		$ 1,462,500,000.0
Debt instrument, maturity date		Sep. 30, 2021
Maximum interest rate during period		0.00%
Payment of long-term debt		$ 54,800,000
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months		109,700,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Senior revolving credit facility, maximum borrowing amount		$ 700,000,000
Debt instrument, maturity date		Sep. 30, 2021
Revolving credit facilities		$ 70,000,000			90,000,000
Current borrowing capacity under the facility		622,000,000
Outstanding letters of credit		$ 8,000,000
Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Maximum interest rate during period		3.40%
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date		Sep. 01, 2023
Aggregate value of debt					425,000,000
Unsecured debenture interest rate		5.75%
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date		Feb. 14, 2025
Aggregate value of debt						$ 300,000,000
Unsecured debenture interest rate		5.00%
Maximum [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Securitization Program				$ 0
London Interbank Offered Rate (LIBOR) [Member] | Securitization Program [Member]
Debt Instrument [Line Items]
Unsecured debenture interest rate		0.675%
Other Assets [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Interest rate swap, fair value					8,500,000
Other Current Liabilities [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Interest rate swap, fair value					$ 1,200,000

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Financing Agreements (Schedule of Covenants) (Details) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	May 04, 2018 USD ($)	Dec. 31, 2017
Debt Instrument [Line Items]
Secured Net Leverage Ratio				4.00
Interest Coverage Ratio				3.50
Scenario, Forecast [Member]
Debt Instrument [Line Items]
Secured Net Leverage Ratio	3.00	3.50
Interest Coverage Ratio	4.00	3.75
Maximum [Member] | Scenario, Forecast [Member]
Debt Instrument [Line Items]
Accounts Receivable from Securitization			$ 0.0

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Financing Agreements (Schedule of Fair Value) (Details) - USD ($) $ in Millions	Mar. 31, 2018	Sep. 30, 2017
Debt Instrument [Line Items]
Total	$ 2,092.0	$ 2,172.8
Unsecured Debentures [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	44.3	46.8
Senior Secured Term Loan A [Member]
Debt Instrument [Line Items]
Senior secured Term Loan A	1,309.3	1,364.8
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	440.5	449.3
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	$ 297.9	$ 311.9

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Retirement and Postretirement Plans (Defined Benefit Plans) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Compensation and Retirement Disclosure [Abstract]
Service cost	$ 1.2	$ 1.5	$ 2.4	$ 2.9
Interest cost	2.8	2.4	5.5	4.9
Expected return on plan assets	(4.0)	(3.6)	(7.9)	(7.3)
Amortization of unrecognized prior service cost, net	0.0	0.0	0.0	0.1
Amortization of net loss	1.0	1.6	2.2	3.1
Net pension expense	$ 1.0	$ 1.9	$ 2.2	$ 3.7

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Retirement and Postretirement Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined contribution savings plans expense	$ 7.5	$ 7.1	$ 13.9	$ 13.1

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Other Comprehensive Income (Loss) (Schedule of Changes in AOCL by Component) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Other comprehensive income (loss)
Total Other Comprehensive Income (Loss), net of tax	$ 25.2	$ 14.6	$ 35.5	$ (13.4)
Accumulated other comprehensive loss
Beginning balance			1,358.2
Net activity	25.2	14.6	35.5	(13.4)
Ending balance	1,510.4		1,510.4
Available-for-sale Securities and Hedges [Member]
Other comprehensive income (loss)
Prior to reclassification	9.7	0.4	15.5	16.6
Reclassification from	(0.5)	(0.5)	(0.9)	(0.7)
Pre-tax	9.2	(0.1)	14.6	15.9
Tax effect	(1.3)	(0.1)	(3.3)	(5.9)
Total Other Comprehensive Income (Loss), net of tax	7.9	(0.2)	11.3	10.0
Accumulated other comprehensive loss
Beginning balance	7.7	7.1	4.3	(3.1)
Net activity	7.9	(0.2)	11.3	10.0
Ending balance	15.6	6.9	15.6	6.9
Foreign Currency Translation Adjustment [Member]
Other comprehensive income (loss)
Prior to reclassification	16.5	14.0	22.6	(25.5)
Reclassification from	0.0	0.0	0.0	0.0
Pre-tax	16.5	14.0	22.6	(25.5)
Tax effect	0.0	0.0	0.0	0.0
Total Other Comprehensive Income (Loss), net of tax	16.5	14.0	22.6	(25.5)
Accumulated other comprehensive loss
Beginning balance	(75.2)	(154.7)	(81.3)	(115.2)
Net activity	16.5	14.0	22.6	(25.5)
Ending balance	(58.7)	(140.7)	(58.7)	(140.7)
Change in Pension and Postretirement Defined Benefit Plans [Member]
Other comprehensive income (loss)
Prior to reclassification	(0.1)	0.0	(0.2)	0.4
Reclassification from	1.0	1.4	2.2	2.9
Pre-tax	0.9	1.4	2.0	3.3
Tax effect	(0.1)	(0.6)	(0.4)	(1.2)
Total Other Comprehensive Income (Loss), net of tax	0.8	0.8	1.6	2.1
Accumulated other comprehensive loss
Beginning balance	(32.2)	(49.5)	(33.0)	(50.8)
Net activity	0.8	0.8	1.6	2.1
Ending balance	(31.4)	(48.7)	(31.4)	(48.7)
Accumulated Other Comprehensive Income (Loss) [Member]
Other comprehensive income (loss)
Prior to reclassification	26.1	14.4	37.9	(8.5)
Reclassification from	0.5	0.9	1.3	2.2
Pre-tax	26.6	15.3	39.2	(6.3)
Tax effect	(1.4)	(0.7)	(3.7)	(7.1)
Total Other Comprehensive Income (Loss), net of tax	25.2	14.6	35.5	(13.4)
Accumulated other comprehensive loss
Beginning balance	(99.7)	(197.1)	(110.0)	(169.1)
Net activity	25.2	14.6	35.5	(13.4)
Ending balance	$ (74.5)	$ (182.5)	$ (74.5)	$ (182.5)

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Other Comprehensive Income (Loss) (Schedule of Items Reclassified out of AOCL) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount reclassified	$ (21.5)	$ (41.3)	$ (52.3)	$ (76.6)
Tax effect	(7.0)	7.3	(64.5)	19.1
Net of tax	(28.5)	(34.4)	(116.8)	(58.2)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount reclassified	(0.5)	(0.5)	(0.9)	(0.7)
Tax effect	0.0	0.1	0.2	0.2
Net of tax	(0.5)	(0.4)	(0.7)	(0.5)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount reclassified			2.2	2.9
Tax effect			(0.4)	(1.1)
Net of tax			$ 1.8	$ 1.8
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount reclassified	1.0	1.4
Tax effect	(0.1)	(0.6)
Net of tax	$ 0.9	$ 0.8

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Special Charges (Narrative) (Details) $ in Millions	3 Months Ended			6 Months Ended
	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2017 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Jun. 30, 2015 site
Restructuring Cost and Reserve [Line Items]
Special charges	$ 36.9		$ 3.1	$ 50.4	$ 8.9
Proceeds from Sale of Buildings			6.1
Gain (Loss) on Sale of Properties			5.2
Gain (Loss) on Disposition of Business		$ 1.0
Restructuring charges				11.5
Number of site closures | site						5
Integration and Business Realignment [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	0.1		2.1	0.4	2.3
Integration and Business Realignment [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Special charges			1.4		1.4
Site Consolidation [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	0.5		1.7	0.7	1.7
Site Consolidation [Member] | Facility Closing [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	3.8		$ 6.2	7.8	$ 9.8
Aggregate special charges recognized	42.8			42.8
Business Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	9.6			18.8
Business Optimization [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	$ 4.8			$ 10.8

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Special Charges (Schedule of Restructuring Activity) (Details) $ in Millions	6 Months Ended
	Mar. 31, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 9.0
Expenses	11.5
Cash Payments	(12.6)
Ending Balance	$ 7.9

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Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2018
Effective tax rate	(32.60%)	17.70%	(123.30%)	24.90%
Other Tax Expense (Benefit)	$ 11,200,000		$ 75,600,000
Federal Corporate tax rate	35.00%		35.00%				21.00%
Blended Corporate Tax rate	24.50%		24.50%
Global intangible low-taxed income- foreign tax deduction	50.00%		50.00%
Discrete net tax benefit- Tax Act			$ 61,400,000.0
Income tax expense (benefit) (Note 9)	$ (7,000,000)	$ 7,300,000	(64,500,000)	$ 19,100,000
DTA Corporate Rate Reduction Net Benefit			93,800,000
Transition tax obligation			$ 32,400,000
Foreign Tax Authority [Member] | France [Member]
Current period tax expense		$ 3,500,000
Scenario, Forecast [Member]
Federal Corporate tax rate						24.50%
Federal statutory income tax rate					21.00%

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Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Income (Loss) Attributable to Parent	$ 28.5	$ 34.4	$ 116.8	$ 58.2
Average Common Shares Outstanding - Basic (in shares)	66,192	65,462	66,040	65,473
Add potential effect of exercise of stock options and other unvested equity awards (in shares)	1,405	1,670	1,468	1,584
Average shares outstanding - Diluted (in shares)	67,597	67,132	67,508	67,057
Net income attributable to common shareholders per common share - Basic (usd per share)	$ 0.43	$ 0.52	$ 1.77	$ 0.89
Net income attributable to common shareholders per common share - Diluted (usd per share)	$ 0.42	$ 0.51	$ 1.73	$ 0.87
Shares with anti-dilutive effect excluded from the computation of Diluted EPS (in shares)	280	348	225	500

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Common Stock (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Class of Stock Disclosures [Abstract]
Stock based compensation cost charged against income, net of tax	$ 7.0	$ 4.5	$ 11.6	$ 7.7

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Common Stock Common Stock (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2016	Mar. 31, 2018
Class of Stock Disclosures [Abstract]
Shares acquired through share repurchase program	0.6
Value of shares repurchased under share repuchase program	$ 30.0
Share repurchase program, remaining authorized repurchase amount		$ 165.0

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Common Stock Common Stock (Narrative) (Details) $ in Millions	55 Months Ended
	Mar. 31, 2018 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 165.0
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Repurchased During Period, Value	$ 175.3

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Guarantees (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 25.3	$ 26.3	$ 25.5	$ 27.5
Provision for warranties during the period	4.0	3.7	7.5	6.3
Standard Product Warranty Accrual, Additions from Business Acquisition	0.0	1.9	0.0	1.9
Warranty claims during the period	(4.3)	(4.5)	(8.0)	(8.3)
Balance at end of period	$ 25.0	$ 27.4	$ 25.0	$ 27.4

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Segment Reporting (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Revenue	$ 710.5	$ 678.9	$ 1,380.2	$ 1,316.3
Operating profit	46.1	63.6	98.2	119.6
Special charges	36.9	3.1	50.4	8.9
Interest expense	(24.2)	(21.9)	(47.3)	(41.4)
Investment income and other, net	(0.4)	(0.4)	1.4	(1.6)
Income Before Income Taxes	21.5	41.3	52.3	76.6
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Operating profit			113.1	104.0
Non-Allocated operating costs, administrative and other	60.2	56.4
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenue	710.5	678.9	1,380.2	1,316.3
Operating Segments [Member] | Patient Support Systems [Member]
Segment Reporting Information [Line Items]
Revenue	355.0	362.9	689.4	698.1
Operating profit	67.2	63.2	120.6	111.3
Operating Segments [Member] | Front Line Care [Member]
Segment Reporting Information [Line Items]
Revenue	237.9	211.0	462.5	412.8
Operating profit	60.5	50.7	115.9	103.9
Operating Segments [Member] | Surgical Solutions [Member]
Segment Reporting Information [Line Items]
Revenue	117.6	105.0	228.3	205.4
Operating profit	$ 15.5	$ 9.2	$ 25.2	$ 17.3

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Commitments and Contingencies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Loss Contingencies [Line Items]
Gain (Loss) on Disposition of Business		$ 1,000,000
Uninsured Risk [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Deductibles and self-insured retentions	$ 25,000
Uninsured Risk [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Deductibles and self-insured retentions	1,000,000
MEMS [Member]
Loss Contingencies [Line Items]
Professional Fees	3,000,000
Gain (Loss) on Disposition of Business	23,400,000
Non-Cash Loss Reserve for Assets	$ 20,400,000