10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2020

OR

☐ 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)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, without par value	HRC	New York Stock Exchange

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 ☑ No  ☐

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  ☑ No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act).

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

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. ☐

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

Yes ☐ No ☑

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 – 66,555,501 shares as of April 29, 2020.

Table of Contents

HILL-ROM HOLDINGS, INC.

INDEX TO FORM 10-Q

			Page
PART I - FINANCIAL INFORMATION
	Item 1 -	Financial Statements
		Condensed Consolidated Statements of Income (Unaudited)	4
		Condensed Consolidated Statements of Comprehensive Income (Unaudited)	5
		Condensed Consolidated Balance Sheets (Unaudited)	6
		Condensed Consolidated Statements of Cash Flows (Unaudited)	7
		Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)	8
		Note 1. Summary of Significant Accounting Policies	10
		Note 2. Revenue from Contracts with Customers	13
		Note 3. Supplementary Financial Statement Information	14
		Note 4. Business Combinations	14
		Note 5. Financing Agreements	18
		Note 6. Derivative Instruments and Hedging Activity	19
		Note 7. Leases	20
		Note 8. Retirement and Postretirement Plans	21
		Note 9. Other Comprehensive Income (Loss)	22
		Note 10. Special Charges	25
		Note 11. Income Taxes	26
		Note 12. Earnings per Common Share	26
		Note 13. Warranties and Guarantees	27
		Note 14. Segment Reporting	28
		Note 15. Commitments and Contingencies	30
	Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Item 3 -	Quantitative and Qualitative Disclosures About Market Risks	44
	Item 4 -	Controls and Procedures	44
PART II - OTHER INFORMATION
	Item 1 -	Legal Proceedings	45
	Item 1A -	Risk Factors	45
	Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	46
	Item 6 -	Exhibits	47
SIGNATURES			48

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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, as amended, 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 forward-looking statements, see the discussions under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (“2019 Form 10-K”) and subsequent filings with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). Our actual results also could be materially adversely impacted by the length and severity of the recent coronavirus pandemic (“COVID-19,” “the pandemic,” or “the virus”) and related impacts on our business, results of operations, financial condition and prospects. We assume no obligation to update or revise any forward-looking statements unless required by law.

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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)

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Revenue
Product sales and service	$	647.0	$	636.5	$	1,261.3	$	1,248.1
Rental revenue	76.2		77.7		146.9		149.6
Total net revenue	723.2		714.2		1,408.2		1,397.7
Cost of Net Revenue
Cost of goods sold	317.2		322.7		623.5		639.0
Rental expenses	38.5		38.9		75.5		76.1
Total cost of net revenue (excludes acquisition-related intangible asset amortization)	355.7		361.6		699.0		715.1
Research and development expenses	34.4		36.6		65.9		69.8
Selling and administrative expenses	209.9		203.9		406.7		396.2
Acquisition-related intangible asset amortization	27.1		27.3		53.8		53.0
Special charges	8.8		3.5		16.6		11.5
Operating Profit	87.3		81.3		166.2		152.1
Interest expense	(19.1)		(21.8)		(38.5)		(43.1)
Loss on extinguishment of debt	—		—		(15.6)		—
Investment income (expense) and other, net	(11.4)		1.2		(12.7)		1.3
Income Before Income Taxes	56.8		60.7		99.4		110.3
Income tax expense	9.9		11.2		12.7		18.6
Net Income	$	46.9	$	49.5	$	86.7	$	91.7
Net Income per Basic Common Share	$	0.70	$	0.74	$	1.30	$	1.37
Net Income per Diluted Common Share	$	0.70	$	0.74	$	1.29	$	1.36
Average Basic Common Shares Outstanding (in thousands)	66,685		66,696		66,731		66,866
Average Diluted Common Shares Outstanding (in thousands)	67,218		67,344		67,309		67,525

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Income	$	46.9	$	49.5	$	86.7	$	91.7
Other Comprehensive Income (Loss), net of tax:
Derivative instruments designated as hedges	(23.1)		(1.9)		(25.7)		(5.6)
Foreign currency translation adjustment	(31.6)		(3.6)		(8.5)		(17.2)
Change in pension and postretirement defined benefit plans	(7.6)		0.5		(6.9)		0.9
Total Other Comprehensive Income (Loss), net of tax	(62.3)		(5.0)		(41.1)		(21.9)
Total Comprehensive Income (Loss)	$	(15.4)	$	44.5	$	45.6	$	69.8

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

	March 31, 2020		September 30, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	290.5	$	214.1
Restricted cash	—		419.7
Trade accounts receivable, net of allowances of $20.8 and $20.6 as of March 31, 2020 and September 30, 2019	655.4		653.3
Inventories, net of reserves	265.5		269.6
Other current assets	130.3		106.7
Total current assets	1,341.7		1,663.4
Property, plant and equipment	841.2		829.6
Less accumulated depreciation	(546.8)		(532.8)
Property, plant and equipment, net	294.4		296.8
Goodwill	1,805.7		1,800.9
Other intangible assets and software, net	1,006.5		1,033.5
Deferred income taxes	32.6		33.1
Other assets	166.2		91.3
Total Assets	$	4,647.1	$	4,919.0
LIABILITIES
Current Liabilities
Trade accounts payable	$	224.7	$	197.6
Short-term borrowings	245.6		660.4
Accrued compensation	98.5		130.4
Accrued product warranties	29.0		29.7
Accrued rebates	47.5		47.7
Deferred revenue	105.7		107.3
Other current liabilities	134.4		95.2
Total current liabilities	885.4		1,268.3
Long-term debt	1,864.4		1,783.1
Accrued pension and postretirement benefits	100.8		80.8
Deferred income taxes	123.7		143.0
Other long-term liabilities	123.9		70.5
Total Liabilities	3,098.2		3,345.7
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Capital Stock:
Preferred stock - without par value: Authorized - 1,000,000; none issued or outstanding
Common stock - without par value: Authorized - 199,000,000	4.4		4.4
Issued: 88,457,634 shares as of March 31, 2020 and September 30, 2019; Outstanding: 66,527,730 as of March 31, 2020 and 66,625,011 as of September 30, 2019
Additional paid-in capital	644.4		637.4
Retained earnings	2,025.2		1,967.4
Accumulated other comprehensive loss	(223.6)		(182.5)
Treasury stock, common shares at cost: 21,929,904 as of March 31, 2020 and 21,832,623 as of September 30, 2019	(901.5)		(853.4)
Total Shareholders’ Equity	1,548.9		1,573.3
Total Liabilities and Shareholders' Equity	$	4,647.1	$	4,919.0

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Six Months Ended March 31
	2020		2019
Operating Activities
Net income	$	86.7	$	91.7
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities:
Depreciation and amortization of property, plant, equipment and software	34.1		36.4
Acquisition-related intangible asset amortization	53.8		53.0
Amortization of debt discounts and issuance costs	2.1		3.2
Loss on extinguishment of debt	15.6		—
Benefit for deferred income taxes	(8.4)		(8.2)
Loss (Gain) on disposal of property, equipment, intangible assets, and impairments	1.2		(0.2)
Stock compensation	19.0		16.9
Other operating activities	12.4		(4.1)
Change in working capital excluding cash, current debt, acquisitions and dispositions:
Trade accounts receivable	12.2		24.0
Inventories	(1.7)		(1.5)
Other current assets	(23.6)		3.7
Trade accounts payable	6.3		(6.6)
Accrued expenses and other liabilities	(55.2)		(54.3)
Other assets and liabilities	2.2		4.2
Net cash, cash equivalents and restricted cash provided by operating activities	156.7		158.2
Investing Activities
Purchases of property, plant, equipment and software	(46.1)		(31.4)
Proceeds on sale of property and equipment	1.4		3.1
Payment for acquisition of business, net of cash acquired	(13.1)		—
Payment for acquisition of intangible assets	—		(17.1)
Payments for acquisition of investments	—		(26.6)
Other investing activities	(0.1)		0.2
Net cash, cash equivalents and restricted cash used in investing activities	(57.9)		(71.8)
Financing Activities
Payment of long-term debt	(25.1)		(0.1)
Borrowings on Revolving Credit Facility	190.0		110.0
Payments on Revolving Credit Facility	(85.0)		(105.0)
Borrowings on Securitization Facility	13.2		4.9
Payments on Securitization Facility	(17.7)		(4.9)
Borrowings on Note Securitization Facility	32.6		37.5
Payments on Note Securitization Facility	(21.2)		(28.4)
Prepayment premium on extinguishment of 5.75% Notes	(12.2)		—
Redemption of 5.75% Notes	(425.0)		—
Cash dividends	(28.7)		(27.4)
Proceeds on exercise of stock options	5.7		8.6
Stock repurchases for stock award withholding obligations	(15.8)		(4.0)
Stock repurchases in the open market	(54.1)		(75.0)
Other financing activities	3.9		3.7
Net cash, cash equivalents and restricted cash used in financing activities	(439.4)		(80.1)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2.7)		(2.3)
Net Cash Flows	(343.3)		4.0
Cash, Cash Equivalents and Restricted Cash:
At beginning of period	633.8		183.0
At end of period	$	290.5	$	187.0

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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Hill-Rom Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(In millions, except share amounts)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Issued	Amount
Balance as of December 31, 2019	88,457,634	$	4.4	$	632.7	$	1,993.1	$	(161.3)	$	(849.9)	$	1,619.0
Net income	—	—		—		46.9		—		—		46.9
Other comprehensive income (loss), net of tax of $9.4	—	—		—		—		(62.3)		—		(62.3)
Dividends ($0.22 per common share)	—	—		0.2		(14.8)		—		—		(14.6)
Stock repurchases for stock award withholding obligations	—	—		—		—		—		(0.7)		(0.7)
Stock repurchases in open market	—	—		—		—		—		(54.1)		(54.1)
Stock compensation on equity-classified awards	—	—		10.2		—		—		—		10.2
Stock option exercises	—	—		0.6		—		—		1.4		2.0
Vesting of stock awards	—	—		(0.7)		—		—		0.8		0.1
Shares issued under employee stock purchase plan	—	—		1.4		—		—		1.0		2.4
Balance as of March 31, 2020	88,457,634	$	4.4	$	644.4	$	2,025.2	$	(223.6)	$	(901.5)	$	1,548.9

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Issued	Amount
Balance as of September 30, 2019	88,457,634	$	4.4	$	637.4	$	1,967.4	$	(182.5)	$	(853.4)	$	1,573.3
Net income	—	—		—		86.7		—		—		86.7
Other comprehensive income (loss), net of tax of $9.8	—	—		—		—		(41.1)		—		(41.1)
Dividends ($0.43 per common share)	—	—		0.2		(28.9)		—		—		(28.7)
Stock repurchases for stock award withholding obligations	—	—		—		—		—		(15.8)		(15.8)
Stock repurchases in the open market	—	—		—		—		—		(54.1)		(54.1)
Stock compensation on equity-classified awards	—	—		18.5		—		—		—		18.5
Stock option exercises	—	—		1.7		—		—		4.0		5.7
Vesting of stock awards	—	—		(16.1)		—		—		16.2		0.1
Shares issued under employee stock purchase plan	—	—		2.7		—		—		1.6		4.3
Balance as of March 31, 2020	88,457,634	$	4.4	$	644.4	$	2,025.2	$	(223.6)	$	(901.5)	$	1,548.9

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	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Issued	Amount
Balance as of December 31, 2018	88,457,634	$	4.4	$	606.9	$	1,899.9	$	(135.3)	$	(824.4)	$	1,551.5
Net Income	—	—		—		49.5		—		—		49.5
Other comprehensive income (loss), net of tax of $1.4	—	—		—		—		(5.0)		—		(5.0)
Dividends ($0.21 per common share)	—	—		0.1		(14.2)		—		—		(14.1)
Stock repurchases for stock award withholding obligations	—	—		—		—		—		(0.5)		(0.5)
Stock compensation on equity-classified awards	—	—		11.1		—		—		—		11.1
Stock option exercises	—	—		1.0		—		—		3.0		4.0
Vesting of stock awards	—	—		(0.7)		—		—		0.7		—
Shares issued under employee stock purchase plan	—	—		1.5		—		—		0.8		2.3
Balance as of March 31, 2019	88,457,634	$	4.4	$	619.9	$	1,935.2	$	(140.3)	$	(820.4)	$	1,598.8

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Issued	Amount
Balance as of September 30, 2018	88,457,634	$	4.4	$	602.9	$	1,876.2	$	(113.0)	$	(754.3)	$	1,616.2
Cumulative effect of ASC 606 adoption, net of tax of $4.8 million	—	—		—		(4.9)		—		—		(4.9)
Cumulative effect of ASU 2016-16 adoption, net of tax of $0.2 million	—	—		—		(5.6)				—		(5.6)
Reclassification due to ASU 2018-02 adoption	—	—		—		5.4		(5.4)		—		—
Net income	—	—		—		91.7		—		—		91.7
Other comprehensive income (loss), net of tax of $1.5 million	—	—		—		—		(21.9)		—		(21.9)
Dividends ($0.41 per common share)	—	—		0.2		(27.6)		—		—		(27.4)
Stock repurchases for stock award withholding obligations	—	—		—		—		—		(4.0)		(4.0)
Stock repurchases in the open market	—	—		—		—		—		(75.0)		(75.0)
Stock compensation on equity-classified awards	—	—		16.9		—		—		—		16.9
Stock option exercises	—	—		2.0		—		—		6.6		8.6
Vesting of stock awards	—	—		(4.7)		—		—		4.7		—
Shares issued under employee stock purchase plan	—	—		2.6		—		—		1.6		4.2
Balance as of March 31, 2019	88,457,634	$	4.4	$	619.9	$	1,935.2	$	(140.3)	$	(820.4)	$	1,598.8

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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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

Nature of Operations

Hill-Rom Holdings, Inc. (the “Company,” “Hillrom,” “we,” “us,” or “our”) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Chicago, Illinois. We are a global medical technology leader whose approximately 10,000 employees have a single purpose: enhancing outcomes for patients and their caregivers by Advancing Connected Care™. Around the world, our innovations touch over 7 million patients each day. Our products and services help enable earlier diagnosis and treatment, optimize surgical efficiency and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. We make these outcomes possible through connected smart beds, patient lifts, patient assessment and monitoring technologies, caregiver collaboration tools, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care.

Basis of Presentation and Principles of Consolidation

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 Hillrom’s latest fiscal 2019 Form 10-K as filed with the SEC. The September 30, 2019 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 United States. In the opinion of management, the Condensed Consolidated Financial Statements herein include all 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 Hillrom and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

The Company makes a number of significant estimates, assumptions and judgments in the preparation of its financial statements. Additionally, the Company measures and classifies fair value measurements in accordance with the level hierarchy in conformity with accounting principles generally accepted in the United States (“GAAP”). As of March 31, 2020, the Company's significant accounting policies and estimates and valuation techniques used to measure fair value have not changed from September 30, 2019. See Note 1. Summary of Significant Accounting Policies within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Prior Period Reclassification

Beginning in fiscal year 2020, we are presenting Acquisition-related intangible asset amortization as a separate line item on our Condensed Consolidated Statements of Income for all periods presented. Acquisition-related intangible asset amortization was previously included in Selling and administrative expenses. Additionally, we will no longer present Gross Profit as a subtotal on our Statements of Income.

The following table presents Acquisition-related intangible asset amortization and Selling and administrative expenses, excluding the Acquisition-related intangible asset amortization, for the years ended September 30, 2019, 2018 and 2017, and for each quarterly period of fiscal 2019.

	Quarter Ended								Year Ended
	December 31, 2018		March 31, 2019		June 30, 2019		September 30, 2019		September 30, 2019		September 30, 2018		September 30, 2017
Selling and administrative expense, previously reported	$	218.0	$	231.2	$	246.4	$	245.4	$	941.0	$	891.6	$	874.5
Less, Acquisition-related intangible asset amortization	25.7		27.3		29.3		40.1		122.4		106.9		108.4
Selling and administrative expense, currently reported	$	192.3	$	203.9	$	217.1	$	205.3	$	818.6	$	784.7	$	766.1

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Goodwill

As of March 31, 2020, we evaluated goodwill for impairment in response to the impacts of the COVID-19 pandemic on the global economy and the results of this evaluation did not result in any impairments.

For the Surgical Solutions segment, we expect near-term lower demand for operating room infrastructure due to project delays as customers are currently focusing on the demands of the pandemic.

Slower recovery resulting from extended project delays, an increase in discount rates, unfavorable changes in earnings multiples or a decline in future cash flow projections, among other factors, may cause a change in circumstances indicating that the carrying value of our goodwill may not be recoverable. If future financial assumptions significantly differ from those evaluated in the assessment noted above due to duration or magnitude of the impact of COVID-19, we can provide no assurance that a future goodwill impairment charge would not be incurred.

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and subsequently issued related amendments, collectively referred to as “ASC 842”. The objective of this guidance is to increase transparency and comparability among organizations through recognizing leased assets, called right-of-use assets (“ROU”), and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  As a lessee, the new standard requires us to recognize both the ROU assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (referred to as capital leases) were recognized in the balance sheet. In addition, for both lessees and lessors, the definition of a lease has been revised, which may result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used is a lease, whereas the previous definition focused on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgments of an entity’s accounting for leases and the related cash flows are expanded under the new standard. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of revenues, expenses and cash flows arising from a lease have not significantly changed from previous GAAP.

We adopted ASC 842 effective October 1, 2019 using the optional transition method approach. We elected the package of practical expedients, which applies to both lessees and lessors, to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification and (3) not reassess initial direct costs associated with existing leases.

As a lessee, the adoption of the guidance on October 1, 2019 resulted in the recognition of ROU assets of $82.5 million and lease liabilities of $85.8 million, which all related to operating leases. The ROU assets were lower than the lease liabilities due to the derecognition of deferred rent balances of $3.3 million. As a lessor, our accounting was not impacted by the adoption of this guidance. We did not recognize any adjustment to the comparative period presented in the financial statements in accordance with our adoption method. The guidance did not have a material impact on our Condensed Consolidated Statements of Income.

See Note 7. Leases for additional information on the impacts of ASC 842.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. ASU 2017-04 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We early adopted this standard in the first quarter of fiscal 2020 and the guidance did not have a material impact on our Condensed Consolidated Financial Statements.

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In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The purpose of the standard is to allow the use of the OIS rate based on the SOFR for hedge accounting purposes, which allows entities to designate changes in the fair values of fixed-rate financial assets or liabilities attributable to the OIS rate as the hedged risk.  The amendment recognizes the OIS rate based on the SOFR as likely London Interbank Offered Rate (“LIBOR”) replacements and supports the marketplace transition by adding the new reference rate as a benchmark rate.  The adoption of this ASU did not impact our financial statements as we have not yet utilized the OIS rate based on the SOFR for borrowings under our lending arrangements or as a benchmark rate for hedge accounting purposes. We will continue to monitor, assess and plan for the phase out of LIBOR.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments and subsequently issued related amendments, collectively referred to as “Topic 326”. Topic 326 requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. For available-for-sale debt securities with unrealized losses, entities will recognize credit losses through an allowance for credit losses. Topic 326 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The purpose of the standard is to improve the overall usefulness of fair value disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-13 is effective for our first quarter of fiscal 2021 and requires the application of the prospective method of transition (for only the most recent interim or annual period presented in the initial fiscal year of adoption) to the new disclosure requirements for (1) changes in unrealized gains and losses included in other comprehensive income and (2) the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 also requires prospective application to any modifications to disclosures made because of the change to the requirements for the narrative description of measurement uncertainty. The effects of all other amendments made by ASU 2018-13 must be applied retrospectively to all periods presented. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The purpose of the standard is to improve the overall usefulness of defined benefit pension and other postretirement plan disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-14 is effective for our fourth quarter of fiscal 2021 and requires a retrospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement to be consistent with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for our first quarter of fiscal 2021 and allows a retrospective or a prospective transition method to all implementation costs incurred after the date of adoption. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. The purpose of the standard is to (1) clarify that transactions between participants in a collaborative agreement should be accounted for under Topic 606 and (2) add unit-of-account guidance in Topic 808 to align with Topic 606. ASU 2018-18 is effective for our first quarter of fiscal 2021 and must be applied retrospectively to the first quarter of fiscal 2020. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

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In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of the standard is to remove certain exceptions to the general principles of Topic 740: Income Taxes in order to reduce the cost and complexity of its application and to maintain or improve the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for our first quarter of fiscal 2021 and will be applied either retrospectively or prospectively depending on the specific Topic 740 exception affected. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The purpose of the standard is to provide guidance for the effects of the marketplace transition from LIBOR to a new reference rate as a benchmark rate.  ASU 2020-04 is optional and is effective for a limited period of time from March 12,2020 through December 31, 2022. We are continuing to monitor, assess and plan for the phase out of LIBOR and will evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

Except as noted above, there are no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1. Summary of Significant Accounting Policies of our Consolidated Financial Statements in our 2019 Form 10-K.

Note 2. Revenue from Contracts with Customers

As of March 31, 2020, the Company's significant accounting policies for recognizing revenue have not changed from September 30, 2019. See Note 1. Summary of Significant Accounting Policies and Note 2. Revenue Recognition within our 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Disaggregation of Revenue

The Company disaggregates revenue recognized from contracts with customers by geography and reportable segments consistent with the way in which management operates and views the business. See Note 14. Segment Reporting for the presentation of the Company's revenue disaggregation.

Contract Balances

The nature of our products and services does not give rise to contract assets as we typically do not have instances where a right to payment for goods and services already transferred to a customer exists that is conditional on something other than the passage of time.

The following summarizes contract liability activity for fiscal 2019 and the six months ended March 31, 2020. The contract liability balance represents the transaction price allocated to the remaining performance obligations.

	Contract Liabilities
Balance as of October 1, 2018	$	47.8
Revenue deferred due to ASC 606 initial adoption	58.4
Deferred revenue acquired	10.7
New revenue deferrals	282.1
Revenue recognized upon satisfaction of performance obligations	(273.2)
Balance as of September 30, 2019	125.8
Deferred revenue acquired	2.7
New revenue deferrals	168.4
Revenue recognized upon satisfaction of performance obligations	(166.2)
Balance as of March 31, 2020	$	130.7

These contract liabilities are recorded in Deferred revenue and Other long-term liabilities. We expect to satisfy the majority of the remaining performance obligations and recognize revenue related to installation and service contracts within 12 to 24 months.

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Note 3. Supplementary Financial Statement Information

	March 31, 2020		September 30, 2019
Inventories, net of reserves:
Finished products	$	114.3	$	120.5
Work in process	42.7		42.4
Raw materials	108.5		106.7
Total inventories, net of reserves	$	265.5	$	269.6
Accumulated amortization of software and other intangible assets	$	602.2	$	597.0
Investments included in Other assets	$	47.7	$	51.1

Investments

In the first quarter of fiscal 2019, we acquired $26.6 million of non-marketable equity securities that are valued at cost.

During the six months ended March 31, 2020, we sold an equity investment with a carrying value of $3.1 million and recognized a loss of $0.3 million, which is recorded as a component of Investment income (expense) and other, net. Additionally, we recognized an impairment loss of $1.7 million on a cost method investment. The loss was recorded as a component of Investment income (expense) and other, net.

Supplemental Cash Flow Information

	Six Months Ended March 31
	2020		2019
Non-cash investing activities:
Change in capital expenditures not paid	$	4.0	$	0.3
Sale of equity method investment	2.8		—
Total non-cash investing activities:	$	6.8	$	0.3
Non-cash financing activities:
Distribution of shares issued under stock-based compensation plans	$	27.1	$	9.9

Note 4. Business Combinations

Acquisitions

Excel Medical Electronics

On January 10, 2020, we acquired all of the outstanding equity interest of Excel Medical Electronics (“Excel Medical”), a clinical communications software company located in the United States, for total aggregate consideration of $19.2 million, comprised of $13.1 million cash and $6.1 million of contingent consideration measured at fair value as of the acquisition date. The purchase price is subject to certain post-closing adjustments. Contingent consideration is comprised of $1.6 million, which was withheld at the close of the transaction and is payable upon completion of contract stipulation, and estimated consideration measured at a fair value of $4.5 million, which is payable of up to $15.0 million based upon the achievement of certain commercial milestones over the next two years.

The results of Excel Medical are included in the Patient Support Systems segment since the date of acquisition. The impact to reported revenue and net income for the three and six months ended March 31, 2020 was not significant.

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The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Excel Medical acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.6
Inventories	0.9
Other current assets	0.1
Property, plant and equipment	0.1
Goodwill	9.8
Developed technology	10.9
Deferred revenue	(2.7)
Other current liabilities	(0.5)
Total purchase price, net of cash acquired	$	19.2

Goodwill in connection with the Excel Medical acquisition of $9.8 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies, accelerating our leadership in care communications platform and advancing our digital and mobile communications platform and capabilities. The goodwill was allocated entirely to our Patient Support Systems segment and is deductible for tax purposes in the United States.

The estimated useful life of the acquired intangible assets is 5 years for developed technology.

For the three and six months ended March 31, 2020, we recognized $0.7 million and $0.8 million of acquisition and integration costs in Selling and administrative expenses.

Breathe Technologies, Inc.

On September 3, 2019, we acquired all of the outstanding equity interests of Breathe Technologies, Inc. (“Breathe”), a developer and manufacturer of a patented wearable, non-invasive ventilation technology that supports improved patient mobility, for total aggregate cash consideration of $127.6 million.

The results of Breathe are included in the Front Line Care segment since the date of acquisition.

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The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Breathe acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.3
Inventories	6.3
Other current assets	0.1
Property, plant and equipment	2.1
Goodwill	60.2
Trade name	4.0
Customer relationships	0.4
Developed technology	56.0
Other assets	0.2
Trade accounts payable	(0.5)
Other current liabilities	(1.6)
Deferred income taxes	0.9
Other long-term liabilities	(0.8)
Total purchase price, net of cash acquired	$	127.6

Goodwill in connection with the Breathe acquisition of $60.2 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies and accelerating our leadership in respiratory health products. The goodwill was allocated entirely to our Front Line Care segment, which is not deductible for tax purposes in the United States.

The estimated useful lives of the acquired intangible assets are 2 years for trade name, 8 years for customer relationships and 11 years for developed technology.

For the three and six months ended March 31, 2020, we recognized $0.6 million and $1.5 million of acquisition and integration costs in Selling and administrative expenses and $0.5 million and $2.2 million in Special charges related to this acquisition.

Voalte, Inc.

On April 1, 2019, we acquired all of the outstanding equity interests of Voalte, Inc. (“Voalte”), a clinical communications software company located in the United States, for total aggregate consideration of $181.0 million, comprised of $175.8 million cash and $5.2 million of contingent consideration measured at fair value as of the acquisition date. Contingent consideration was payable up to $15.0 million based upon achievement of certain commercial milestones by March 31, 2020. No milestones were met and therefore no contingent consideration was paid.

The results of Voalte are included in the Patient Support Systems segment since the date of acquisition.

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

	Amount
Trade accounts receivable	$	5.8
Inventories	0.1
Other current assets	2.7
Property, plant and equipment	0.2
Goodwill	98.5
Non-competition agreements	2.7
Trade name	13.5
Customer relationships	29.0
Developed technology	55.0
Trade accounts payable	(1.7)
Deferred revenue	(10.7)
Other current liabilities	(4.3)
Deferred income taxes	(9.8)
Total purchase price, net of cash acquired	$	181.0

Goodwill in connection with the Voalte acquisition of $98.5 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies, accelerating our leadership in care communications platform and advancing our digital and mobile communications platform and capabilities. The goodwill was allocated entirely to our Patient Support Systems segment, which is not deductible for tax purposes in the United States.

The estimated useful lives of the acquired intangible assets are 5 years for non-competition agreements and between 8 and 10 years for trade name, customer relationships and developed technology.

In the first quarter of fiscal 2020, we reduced the contingent consideration accrual by $8.4 million as the commercial milestones were not expected to be achieved. This was recorded as a component of Selling and administrative expenses. There were no further adjustments to the contingent consideration accrual in the second quarter of fiscal 2020.

Asset Acquisition

On October 1, 2018, we acquired the right to use patented technology and certain related assets from a supplier to our Front Line Care segment. We paid $17.1 million of cash and committed to guaranteed minimum future royalty payments of $22.0 million, which are presented in Other intangible assets and software, net and are being amortized over the 7-year term of the agreement.

Disposition

On August 2, 2019, we completed a disposition to sell certain of our surgical consumable products and related assets for a purchase price of $166.6 million, which is net of cash and working capital adjustments. In fiscal 2019, we recorded a pre-tax loss on this disposition of $15.9 million in Investment income (expense) and other, net, including transaction costs of $4.0 million. This disposition did not have a major effect on the Company's operations or financial results, and, therefore, has not been reported as a discontinued operation.

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Note 5. Financing Agreements

Short-Term Borrowings

Securitization Facilities

The Company has a 364-day accounts receivable securitization program (the “Securitization Facility”) for borrowings up to $110.0 million and a 364-day facility for borrowings up to $90.0 million (the “Note Securitization Facility”) with certain financial institutions. Under the terms of each the Securitization Facility and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount of permissible borrowings outstanding is determined based on the amount of qualifying accounts receivable at any point in time. Borrowings outstanding under the Securitization Facility and Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 1.0% 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.

As of March 31, 2020 these facilities had an expiration date of May 1, 2020, but were renewed on April 27, 2020 through April 26, 2021. The terms and conditions of the renewed facilities are substantially similar to the expired facilities. Borrowings outstanding under the renewed Securitization Facility and renewed Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 0.9%.

Long-Term Debt

Long-Term Debt Redemption

In September 2019, we issued senior unsecured notes of $425.0 million maturing September 2027 that bear interest at a fixed rate of 4.375% annually and capitalized debt issuance costs of $6.3 million. On October 7, 2019, we used the net proceeds from the offering of these notes, together with funds borrowed from the Revolving Credit Facility maturing in August 2024 (“2024 Revolving Credit Facility”), to redeem all of our previously outstanding senior unsecured 5.75% notes due September 2023 and to pay the prepayment premium of $12.2 million. We recorded a loss on extinguishment of debt of $15.6 million, which was comprised of the $12.2 million prepayment premium and $3.4 million of debt issuance costs previously capitalized.

As of March 31, 2020, there were $185.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,007.8 million after giving effect to the $7.2 million of outstanding standby letters of credit. As of September 30, 2019, there were $80.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,112.8 million after giving effect to $7.2 million of outstanding standby letters of credit.

See Note 6. Financing Agreements within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Fair Value

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 variable rate short-term debt instruments, our senior secured Term Loan A facility maturing in August 2024 (“2024 TLA Facility”) and our 2024 Revolving Credit Facility approximate fair value.

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

	March 31, 2020		September 30, 2019
Senior unsecured 5.00% notes due on February 14, 2025	$	303.1	$	312.4
Senior unsecured 4.375% notes due on September 15, 2027	419.1		435.4
Unsecured debentures	44.8		48.1
Total	$	767.0	$	795.9

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 the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements were classified as Level 2.

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Debt Covenants

As of March 31, 2020, we were in compliance with all debt covenants under our financing agreements.

Note 6. Derivative Instruments and Hedging Activity

We are exposed to various market risks, including fluctuations in interest rates and variability in foreign 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 employ cash flow hedges, net investment hedges, and other derivative instruments not designated for hedge accounting to manage these risks.

Cash Flow Hedges

To manage our exposure to market risk from fluctuations in interest rates, we enter into interest rate swaps that are designated as cash flow hedges. As of March 31, 2020, we had interest rate swap agreements with an aggregate notional amount of $750.0 million to hedge the variability of cash flows through August 2024 associated with a portion of the variable interest rate payments on outstanding borrowings under our Senior Credit Agreement. As of March 31, 2020, these swaps were in a net liability position with an aggregate fair value of $45.2 million and were classified as Other current liabilities. As of September 30, 2019, we had interest rate swap agreements, with an aggregate notional amount of $750.0 million to hedge the variability of cash flows associated with a portion of the variable interest rate payments on outstanding borrowings under our Senior Credit Agreement through September 2021. As of September 30, 2019, these swaps were in a net liability position with an aggregate fair value of $6.8 million, of which $0.9 million were classified as Other assets and $7.7 million were classified as Other current liabilities. We classify fair value measurements on our interest rate swaps as Level 2.

We are subject to variability in foreign currency exchange rates due to our international operations. We enter into currency exchange agreements that are designated as cash flow hedges to manage our exposure arising from fluctuating exchange rates related to specific and projected 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 projected foreign currency denominated intercompany and third-party transactions. As of March 31, 2020, there were no foreign exchange contracts outstanding. As of September 30, 2019, the notional amount of outstanding foreign exchange contracts was $6.7 million and they were in a net asset position reported in Other current assets with an aggregate fair value of $0.2 million. The maximum length of time over which we hedge transaction exposures is generally 15 months. Derivative gains and losses, initially reported as a component of Accumulated other comprehensive income (loss), are reclassified to earnings in the period when the transaction affects earnings.

Net Investment Hedges

As of March 31, 2020, we had cross-currency swap agreements, with an aggregate notional amount of $198.3 million, to hedge the variability of net assets due to changes in the U.S. dollar-Euro spot exchange rates through July 2023. These cross-currency swaps are designated as net investment hedges of subsidiaries using the Euro as their functional currency. As of March 31, 2020 and September 30, 2019, these swaps were in a net asset position with aggregate fair values of $22.3 million and $16.9 million, respectively, and were classified as Other assets.

We classify fair value measurements on our cross-currency swaps as Level 2. We assess hedge effectiveness under the spot-to-spot method and record changes in fair value attributable to the translation of foreign currencies through Accumulated other comprehensive income (loss). We amortize the impact of all other changes in fair value of the derivatives through Interest expense, which was income of $1.3 million and $2.6 million for the three and six months ended March 31, 2020 compared to income of $1.2 million and expense of $0.1 million for the three and six months ended March 31, 2019.

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Undesignated Derivative Instruments

We use forward contracts to mitigate the foreign exchange revaluation risk associated with recorded monetary assets and liabilities that are denominated in a non-functional currency. These derivative instruments are not formally designated as hedges and the terms of these instruments generally do not exceed one month. As of March 31, 2020, we had forward contracts not designated as hedges with aggregate notional amounts of $76.0 million. As of September 30, 2019, we had forward contracts not designated as hedges with aggregate notional amounts of $76.7 million. For the three months ended March 31, 2020, we recognized unrealized gains of $0.1 million and realized gains of $0.6 million. For the six months ended March 31, 2020, we recognized unrealized gains of $0.1 million and realized gains of $1.1 million. We recognized unrealized losses of $0.5 million and realized losses of $0.3 million for both the three and six months ended March 31, 2019. The unrealized and realized gains and losses for forward contracts not designated as hedges are recorded in Investment income (expense) and other, net.

Note 7. Leases

Hillrom as the Lessee

We determine if an arrangement is a lease or contains a lease at contract inception. We lease real estate, automobiles and equipment under various operating leases. A lease liability and ROU asset is recognized for operating leases with terms greater than one year at the lease commencement date. The lease liability is measured as the present value of all remaining fixed payments calculated using our estimated secured incremental borrowing rate. The ROU asset is measured as the sum of the lease liability and any initial indirect costs incurred, less any lease incentives received. We use our estimated secured incremental borrowing rate as most lease agreements do not specify an interest rate. Our lease agreements include leases that have both lease and non-lease components. We have elected to account for lease components and the associated non-lease components as a single lease component.

Our leases have remaining lease terms of approximately 1 year to 8.6 years. Many of our real estate and equipment leases include options to renew. Renewal periods are generally not included when calculating the remaining lease term unless we are reasonably certain to exercise a renewal option based on beneficial terms or significance of the leased asset to our operations.

Expense for operating leases and leases with a term of one year or less is recognized on a straight-line basis over the lease term. Lease expense for the three months ended March 31, 2020 was $9.8 million, of which $7.0 million related to operating leases and $2.8 million related to short-term leases and variable lease payments. For the six months ended March 31, 2020, lease expense was $19.4 million, of which $13.8 million related to operating leases and $5.6 million related to short-term leases and variable lease payments. Lease expense is recorded in Cost of goods sold or Selling and administrative expenses based on the purpose of the leased asset.

The following table summarizes the balance sheet classification of our operating leases and amounts of the ROU asset and lease liability as of March 31, 2020:

	Balance Sheet Classification	March 31, 2020
Right-of-use assets	Other assets	$	72.6
Current lease liabilities	Other current liabilities	22.0
Non-current lease liabilities	Other long-term liabilities	55.2

Supplemental information:	March 31, 2020
Weighted-average discount rate	3.3	%
Weighted-average remaining lease term in years	4.8

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The following table summarizes the maturities of our operating leases as of March 31, 2020:

Fiscal Year	Amount
Remaining 2020	$	12.7
2021	22.5
2022	17.2
2023	12.1
2024	7.3
2025	4.8
Thereafter	10.2
Total lease payments	86.8
Less: imputed interest	(9.6)
Total lease liability	$	77.2

Disclosures Related to Periods Prior to Adopting the New Lease Guidance

As disclosed in the 2019 Form 10-K, future minimum payments under non-cancellable operating leases (excluding executory costs) aggregating $94.9 million for manufacturing facilities, warehouse distribution centers, service centers, sales offices, automobiles and other equipment consisted of the following:

Fiscal Year	Amount
2020	$	25.7
2021	21.4
2022	15.7
2023	11.1
2024	6.4
2025 and beyond	14.6

Rental expense in fiscal 2019, 2018 and 2017 was $39.8 million, $41.3 million and $38.0 million.

Hillrom as the Lessor

We make certain products available to customers under short-term lease arrangements. Rental usage of these products is provided as an alternative to product sales and is short-term in nature. Products primarily include smart beds, including, but not limited to, bariatric, critical care, maternal, and home care beds, as well as other surfaces. These lease arrangements provide our customers with our products during periods of peak demand or often times for specialty purposes. Additionally, we provide wearable, non-invasive ventilation products to patients covered by monthly medical insurance reimbursements, which are considered month-to-month leasing arrangements. Income arising from these lease arrangements where we are the lessor is recognized within Rental revenue. We have accounted for these lease arrangements as operating leases.

Note 8. Retirement and Postretirement Plans

We sponsor six defined benefit retirement plans. Those plans include a master defined benefit retirement plan in the United States, a nonqualified supplemental executive defined benefit retirement plan, three defined benefit retirement plans covering employees in Germany and France, and a defined benefit retirement plan of Excel Medical that was acquired on January 10, 2020. Benefits for such plans are based primarily on years of service and the employee’s level of compensation in 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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	Three Months Ended March 31				Six Months Ended March 31				Condensed Consolidated Statements of Income Item
	2020		2019		2020		2019
Service cost	$	0.4	$	0.4	$	0.8	$	0.7	Cost of goods sold
Service cost	0.8		0.7		1.6		1.5		Selling and administrative expenses
Interest cost	2.4		3.2		4.9		6.3		Investment income (expense) and other, net
Expected return on plan assets	(3.7)		(3.7)		(7.4)		(7.4)		Investment income (expense) and other, net
Amortization of unrecognized prior service cost, net	—		—		0.1		—		Investment income (expense) and other, net
Amortization of net loss	1.6		0.6		3.1		1.2		Investment income (expense) and other, net
Settlement charge	8.5		—		8.5		—		Investment income (expense) and other, net
Net pension expense	$	10.0	$	1.2	$	11.6	$	2.3

In addition to defined benefit retirement plans, we also offer two postretirement health care plans in the United States that provide health care benefits to qualified retirees and their dependents. The plans are closed to new participants and include retiree cost sharing provisions and generally extend retiree coverage for medical and prescription benefits beyond the COBRA continuation period to the date of Medicare eligibility. Annual costs related to these plans are not significant.

On March 9, 2020, we transferred pension assets totaling $40.6 million to purchase annuity contracts for a certain population of retirees with a third-party insurance company. As a result, we recognized a non-cash settlement loss of $8.5 million, which is recorded as a component of Investment income (expense) and other, net in the Condensed Consolidated Statements of Income.

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 in retirement by providing employees with an incentive to regularly save a portion of their earnings. Our contributions to the plans are based on eligibility and, in some cases, employee contributions. Expense under these plans was $10.1 million and $16.3 million for the three and six months ended March 31, 2020, and $8.3 million and $14.5 million for the three and six months ended March 31, 2019.

Note 9. Other Comprehensive Income (Loss)

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate swaps	(39.7)		(0.4)		(40.1)		9.2		(30.9)		(3.9)		(30.9)		(34.8)
Cross-currency swaps	10.2		—		10.2		(2.4)		7.8		8.5		7.8		16.3
Derivative instruments designated as hedges total	(29.5)		(0.4)		(29.9)		6.8		(23.1)		4.6		(23.1)		(18.5)
Foreign currency translation adjustment	(31.6)		—		(31.6)		—		(31.6)		(122.3)		(31.6)		(153.9)
Change in pension and postretirement defined benefit plans	0.1		(10.3)		(10.2)		2.6		(7.6)		(43.6)		(7.6)		(51.2)
Total	$	(61.0)	$	(10.7)	$	(71.7)	$	9.4	$	(62.3)	$	(161.3)	$	(62.3)	$	(223.6)

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	Three Months Ended March 31, 2019
	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 designated as hedges 1:
Foreign exchange forward contracts	$	(0.7)	$	(0.1)	$	(0.8)	$	0.3	$	(0.5)	$	0.9	$	(0.5)	$	0.4
Interest rate swaps	(9.1)		(1.7)		(10.8)		2.3		(8.5)		13.8		(8.5)		5.3
Cross-currency swaps	8.1		—		8.1		(1.0)		7.1		(0.8)		7.1		6.3
Derivative instruments designated as hedges total	(1.7)		(1.8)		(3.5)		1.6		(1.9)		13.9		(1.9)		12.0
Foreign currency translation adjustment	(3.6)		—		(3.6)		—		(3.6)		(118.9)		(3.6)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		0.6		0.7		(0.2)		0.5		(30.3)		0.5		(29.8)
Total	$	(5.2)	$	(1.2)	$	(6.4)	$	1.4	$	(5.0)	$	(135.3)	$	(5.0)	$	(140.3)

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	(0.3)	$	0.1	$	(0.2)	$	—	$	(0.2)	$	0.2	$	(0.2)	$	—
Interest rate swaps	(38.8)		0.4		(38.4)		8.8		(29.6)		(5.2)		(29.6)		(34.8)
Cross-currency swaps	5.4		—		5.4		(1.3)		4.1		12.2		4.1		16.3
Derivative instruments designated as hedges total	(33.7)		0.5		(33.2)		7.5		(25.7)		7.2		(25.7)		(18.5)
Foreign currency translation adjustment	(8.5)		—		(8.5)		—		(8.5)		(145.4)		(8.5)		(153.9)
Change in pension and postretirement defined benefit plans	(0.1)		(9.1)		(9.2)		2.3		(6.9)		(44.3)		(6.9)		(51.2)
Total	$	(42.3)	$	(8.6)	$	(50.9)	$	9.8	$	(41.1)	$	(182.5)	$	(41.1)	$	(223.6)

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	Six Months Ended March 31, 2019
	Other comprehensive income (loss)										Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from		Pre-tax		Tax effect		Net of tax		Beginning balance		Impacts of ASU 2018-02 Adoption as of October 1, 2018		Net activity		Ending balance
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	0.5	$	(0.2)	$	0.3	$	(0.1)	$	0.2	$	0.2	$	—	$	0.2	$	0.4
Interest rate swaps	(14.2)		(3.8)		(18.0)		4.2		(13.8)		18.3		0.8		(13.8)		5.3
Cross-currency swaps	10.3		—		10.3		(2.3)		8.0		(1.7)		—		8.0		6.3
Derivative instruments designated as hedges total	(3.4)		(4.0)		(7.4)		1.8		(5.6)		16.8		0.8		(5.6)		12.0
Foreign currency translation adjustment	(17.2)		—		(17.2)		—		(17.2)		(105.3)		—		(17.2)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		1.1		1.2		(0.3)		0.9		(24.5)		(6.2)		0.9		(29.8)
Total	$	(20.5)	$	(2.9)	$	(23.4)	$	1.5	$	(21.9)	$	(113.0)	$	(5.4)	$	(21.9)	$	(140.3)

¹ See Note 6. Derivative Instruments and Hedging Activity for information regarding our hedging strategies.

² The estimated net amount of gains and losses reported in Accumulated other comprehensive income (loss) related to our derivative instruments designated as hedges as of March 31, 2020 that are expected to be reclassified into earnings within the next 12 months is expense of $4.8 million.

The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	—	$	—	$	—	$	(0.1)	$	(0.1)	$	(0.2)
Interest rate swaps 2	(0.4)		0.1		(0.3)		(1.7)		0.5		(1.2)
Derivative instruments designated as hedges total	(0.4)		0.1		(0.3)		(1.8)		0.4		(1.4)
Change in pension and postretirement defined benefit plans 3	(10.3)		2.6		(7.7)		0.6		(0.2)		0.4

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The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	0.1	$	(0.1)	$	—	$	(0.2)	$	—	$	(0.2)
Interest rate swaps 2	0.4		(0.1)		0.3		(3.8)		1.1		(2.7)
Derivative instruments designated as hedges total	0.5		(0.2)		0.3		(4.0)		1.1		(2.9)
Change in pension and postretirement defined benefit plans 3	(9.1)		2.3		(6.8)		1.1		(6.5)		(5.4)

¹ Reclassified from Accumulated other comprehensive income (loss) into Investment income (expense) and other, net.

² Reclassified from Accumulated other comprehensive income (loss) into Interest expense.

³ Reclassified from Accumulated other comprehensive income (loss) into Cost of goods sold and Investment income (expense) and other, net. These components are included in the computation of net periodic pension expense.

⁴ As a result of the adoption of ASU 2018-02, we reclassified $5.4 million from Accumulated other comprehensive income (loss) to Retained earnings.

Note 10. Special Charges

In connection with various organizational changes to improve our business alignment and cost structure, we recognized Special charges of $8.8 million and $16.6 million for the three and six months ended March 31, 2020 compared to $3.5 million and $11.5 million for the three and six months ended March 31, 2019. Although these charges are non-recurring in nature, additional Special charges are expected to be incurred related to restructuring and transformative initiatives in future periods. It is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

These charges are summarized as follows:

Business Optimization and Realignment

Management pursues opportunities to align our operations to achieve synergies and position the business for growth. In fiscal 2018, a global transformation program was launched that was focused on reducing complexity, increasing efficiency and improving our cost structure with targeted investments that align with our strategic priorities.

As part of this program, management launched an initiative related to a global information technology transformation, including rationalizing and transforming our enterprise resource planning software solutions and other complementary information technology systems. For the three months ended March 31, 2020, the Company incurred $9.9 million related to this initiative, of which $5.4 million was capitalized and $4.5 million was expensed in Special charges. For the six months ended March 31, 2020, the Company incurred $19.3 million, of which $10.7 million was capitalized and $8.6 million was expensed in Special charges. The objective of this initiative is to consolidate and streamline our key workstreams that interact with customers and vendors and support our financial reporting processes while maintaining the security of our data. The solutions designed under this initiative will be implemented over the next five to seven years.

We acquired several businesses in fiscal 2019 and 2020 as disclosed within Note 4. Business Combinations for which we continue to incur integration-related costs and severance costs. These costs were recorded to Special charges for the three and six months ended March 31, 2020. We also incurred costs, including severance and benefit costs, associated with other business realignment and integration activities. 

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For the three and six months ended March 31, 2020, we incurred total business optimization and realignment charges of $8.2 million and $15.5 million, of which $2.1 million and $3.9 million were severance and benefit costs with the remainder related to professional fees and project management costs. These amounts compare to charges of $2.5 million and $6.3 million for the three and six months ended March 31, 2019, of which $1.0 million and $3.8 million were severance and benefit costs with the remainder related to professional fees and project management costs.

Site Consolidation

We continue to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). For the three and six months ended March 31, 2020, we recorded charges of $0.7 million and $1.2 million related to these efforts, primarily comprised of site closure costs and severance and benefit costs. These amounts compare to charges of $1.0 million and $5.1 million related to these efforts for the three and six months ended March 31, 2019, primarily comprised of severance and benefit costs, lease termination and facility closure costs.

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 for the six months ended March 31, 2020 was as follows:

Balance as of September 30, 2019	$	8.5
Expenses	4.4
Cash Payments	(7.8)
Reversals	(0.3)
Balance as of March 31, 2020	$	4.8

Note 11. Income Taxes

The effective tax rate for the three months ended March 31, 2020 was 17.4% compared to 18.5% for the comparable period in the prior year. The effective tax rate for the three months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to foreign derived intangible income (“FDII”).

The effective tax rate for the six months ended March 31, 2020 was 12.8% compared to 16.9% for the comparable period in the prior year. The effective tax rate for the six months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to FDII as well as a small benefit from current year discrete items. The effective tax rate for the six months ended March 31, 2020 was also favorably impacted by the reduction of the contingent consideration accrual of $8.4 million, that is not subject to tax.

On March 25, 2020, the U.S. government approved the Coronavirus Aid, Relief and Economic Security (“CARES”) Act to provide economic stimulus to address the impact of the pandemic. We continue to evaluate what impact, if any, the CARES Act, or any similar legislation in other non-U.S. jurisdictions, may have on our related tax positions and our effective tax rate.

Note 12. Earnings per Common Share

Basic earnings per share (“EPS”) 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:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Income	$	46.9	$	49.5	$	86.7	$	91.7
Net Income per Basic Common Share	$	0.70	$	0.74	$	1.30	$	1.37
Net Income per Diluted Common Share	$	0.70	$	0.74	$	1.29	$	1.36
Average Basic Common Shares Outstanding (in thousands)	66,685		66,696		66,731		66,866
Add potential effect of exercise of stock options and other unvested equity awards	533		648		578		659
Average Diluted Common Shares Outstanding (in thousands)	67,218		67,344		67,309		67,525
Shares with anti-dilutive effect excluded from the computation of diluted EPS	320		307		332		286

Note 13. Warranties and 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 that 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 rollforward of changes in the Accrued product warranties reserve for the periods covered in this report is as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Balance as of beginning of period	$	28.8	$	24.9	$	29.7	$	20.5
Provision for warranties in the period	4.3		4.1		7.8		9.2
Warranty reserves assumed 1	—		—		—		2.8
Warranty claims in the period	(4.1)		(4.5)		(8.5)		(8.0)
Balance as of end of period	$	29.0	$	24.5	$	29.0	$	24.5

¹ As a result of the asset acquisition in our Front Line Care segment discussed in Note 4. Business Combinations.

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 a material impact on our financial condition or results of operations, nor do we expect them to, 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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Note 14. 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 reportable segments:

•Patient Support Systems – globally provides our med-surg and specialty bed systems and surfaces, safe patient handling equipment and mobility solutions, as well as our care communications platform that delivers software and information technologies to improve care and deliver actionable insight to caregivers and patients.

•Front Line Care – globally provides 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, including a portfolio of vision care and respiratory health devices.

•Surgical Solutions – globally provides products that improve safety and efficiency in the surgical space, including tables, lights, pendants, precision positioning devices and other 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, excluding acquisition-related intangible asset amortization, 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 reportable segment and, accordingly, we do not report asset information by reportable segment.

Effective for fiscal 2020, the allocation of operating costs to each segment was modified to improve the alignment to how management evaluates the performance of each segment. The fiscal 2019 segment information has been recast to conform to the current presentation. The reclassification did not impact our reported Consolidated Net Revenue or Income Before Income Taxes.

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	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Revenue - United States:
Patient Support Systems	$	289.3	$	267.2	$	555.9	$	515.3
Front Line Care	179.2		170.2		357.3		336.7
Surgical Solutions	38.0		55.6		75.1		109.5
Total net revenue - United States	$	506.5	$	493.0	$	988.3	$	961.5
Net Revenue - Outside of the United States (“OUS”):
Patient Support Systems	$	92.8	$	92.4	$	170.4	$	185.3
Front Line Care	79.0		72.9		155.5		139.8
Surgical Solutions	44.9		55.9		94.0		111.1
Total net revenue - OUS	$	216.7	$	221.2	$	419.9	$	436.2
Net Revenue:
Patient Support Systems	$	382.1	$	359.6	$	726.3	$	700.6
Front Line Care	258.2		243.1		512.8		476.5
Surgical Solutions	82.9		111.5		169.1		220.6
Total net revenue	$	723.2	$	714.2	$	1,408.2	$	1,397.7
Divisional Income:
Patient Support Systems	$	74.9	$	72.2	$	133.3	$	131.9
Front Line Care	77.7		67.2		151.2		128.9
Surgical Solutions	13.7		15.1		26.5		26.4
Other Operating Costs:
Non-allocated operating costs, administrative costs, and other	70.2		69.7		128.2		123.6
Special charges	8.8		3.5		16.6		11.5
Operating Profit	87.3		81.3		166.2		152.1
Interest expense	(19.1)		(21.8)		(38.5)		(43.1)
Loss on extinguishment of debt	—		—		(15.6)		—
Investment income (expense) and other, net	(11.4)		1.2		(12.7)		1.3
Income Before Income Taxes	$	56.8	$	60.7	$	99.4	$	110.3

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Note 15. 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 materially adverse effect on our financial condition, results of operations and cash flows.

Self-Insurance

We are involved in various 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 at various limits up 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.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following discussion and analysis should be read in conjunction with the accompanying interim financial statements and our 2019 Form 10-K.

Hill-Rom Holdings, Inc. (the “Company,” “Hillrom,” “we,” “us,” or “our”) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Chicago, Illinois. We are a global medical technology leader whose approximately 10,000 employees have a single purpose: enhancing outcomes for patients and their caregivers by Advancing Connected Care^TM. Around the world, our innovations touch over 7 million patients each day. Our products and services help enable earlier diagnosis and treatment, optimize surgical efficiency and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. We make these outcomes possible through connected smart beds, patient lifts, patient assessment and monitoring technologies, caregiver collaboration tools, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care.

Use of Non-GAAP Financial Measures

The accompanying Condensed Consolidated Financial Statements and related notes are presented in accordance with GAAP. In addition to the results reported in accordance with GAAP, we routinely provide operating margin, income tax expense and earnings per diluted share results on an adjusted basis as we believe these measures contribute to the understanding of our financial performance, provide additional analytical tools to understand our results from core operations and reveal underlying operating trends. These measures exclude strategic developments, acquisition and integration costs and related fair value adjustments, gains and losses associated with disposals of businesses or significant product lines, regulatory costs related to updating existing product registrations to comply with the European Medical Device Regulations, Special charges as described in Note 10. Special Charges, the transitional impacts of the U.S. Tax Cuts and Jobs Act (the “Tax Act”), changes in tax accounting methods, and other tax law changes as described in Note 11. Income Taxes within the 2019 Form 10-K, expenses associated with these tax items, the impacts of significant litigation matters, or other unusual events. We also exclude expenses associated with the amortization of purchased intangible assets. These adjustments are made to allow investors to evaluate and understand operating trends excluding their impact on operating income and earnings per diluted share.

Management uses these measures internally for planning, forecasting and evaluating the performance of the business. Investors

should consider these 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.

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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 reportable segments:

•Patient Support Systems – globally provides our med-surg and specialty bed systems and surfaces, safe patient handling equipment and mobility solutions, as well as our care communications platform that delivers software and information technologies to improve care and deliver actionable insight to caregivers and patients.

•Front Line Care – globally provides 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, including a portfolio of vision care and respiratory health devices.

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

Net Revenue

(In millions)									U.S.		OUS
	Three Months Ended March 31				Change As Reported		Constant Currency		Change As Reported		Change As Reported		Constant Currency
	2020		2019
Net Revenue:
Product sales and service	$	647.0	$	636.5	1.6	%	2.6	%	3.4	%	(1.9)	%	1.1	%
Rental revenue	76.2		77.7		(1.9)	%	(1.7)	%	(1.6)	%	(4.9)	%	(2.9)	%
Total net revenue	$	723.2	$	714.2	1.3	%	2.2	%	2.7	%	(2.0)	%	0.9	%
Net Revenue:
Patient Support Systems	$	382.1	$	359.6	6.3	%	7.2	%	8.3	%	0.4	%	4.1	%
Front Line Care	258.2		243.1		6.2	%	7.0	%	5.3	%	8.4	%	10.8	%
Surgical Solutions	82.9		111.5		(25.7)	%	(24.6)	%	(31.6)	%	(19.7)	%	(17.4)	%
Total net revenue	$	723.2	$	714.2	1.3	%	2.2	%	2.7	%	(2.0)	%	0.9	%
OUS - Outside of the United States

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Consolidated Revenue

Product sales and service revenue increased 1.6% on a reported basis, and 2.6% on a constant currency basis, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increases were driven by increased demand, partially attributable to the COVID-19 pandemic, for Patient Support Systems and Front Line Care products. New products and recent acquisitions also contributed to revenue growth. These increases were partially offset by the decline in Surgical Solutions primarily due to the disposition of the surgical consumable products business in August 2019.

Rental revenue decreased 1.9% on a reported basis, and 1.7% on a constant currency basis, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decreases were attributable to the exit of a rental arrangement remaining from the previously divested third-party rental business.

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Business Segment Revenue

Patient Support Systems revenue increased 6.3% on a reported basis, and 7.2% on a constant currency basis, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increases were driven primarily by growth in the United States, with growth in new products, accelerated customer orders globally for our beds and surfaces, partially due to the COVID-19 pandemic, and contributions from recent acquisitions. The increases during the three months ended March 31, 2020 were partially offset by project delays for products that require installation or customization, such as our care communications products. Revenue for the three months ended March 31, 2020 does not reflect approximately $1.4 million of revenue that was eliminated in fair value purchase accounting adjustments to deferred revenue related to recent acquisitions.

Front Line Care revenue increased 6.2% on a reported basis, and 7.0% on a constant currency basis, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The increases were driven by higher demand globally for patient diagnostic and monitoring products and respiratory health products, including Breathe, which was acquired in September 2019.

Surgical Solutions revenue decreased 25.7% on a reported basis, and 24.6% on a constant currency basis, for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 primarily due to the disposition of the surgical consumable products business in August 2019. The decreases were partially offset by sales growth from integrated operating tables.

Refer to the section titled “The Impacts of COVID-19 on Hillrom” within Management’s Discussion & Analysis of Financial Condition and Results of Operations for further information.

Net Revenue

(In millions)									U.S.		OUS
	Six Months Ended March 31				Change As Reported		Constant Currency		Change As Reported		Change As Reported		Constant Currency
	2020		2019
Net Revenue:
Product sales and service	$	1,261.3	$	1,248.1	1.1	%	1.8	%	3.4	%	(3.7)	%	(1.4)	%
Rental revenue	146.9		149.6		(1.8)	%	(1.5)	%	(1.3)	%	(5.5)	%	(3.5)	%
Total net revenue	$	1,408.2	$	1,397.7	0.8	%	1.4	%	2.8	%	(3.7)	%	(1.5)	%
Net Revenue:
Patient Support Systems	$	726.3	$	700.6	3.7	%	4.4	%	7.9	%	(8.0)	%	(5.3)	%
Front Line Care	512.8		476.5		7.6	%	8.1	%	6.1	%	11.2	%	12.9	%
Surgical Solutions	169.1		220.6		(23.3)	%	(22.3)	%	(31.4)	%	(15.4)	%	(13.3)	%
Total net revenue	$	1,408.2	$	1,397.7	0.8	%	1.4	%	2.8	%	(3.7)	%	(1.5)	%
OUS - Outside of the United States

Six Months Ended March 31, 2020 Compared to the Six Months Ended March 31, 2019

Consolidated Revenue

Product sales and service revenue increased 1.1% on a reported basis, and 1.8% on a constant currency basis, for the six months ended March 31, 2020 compared to the six months ended March 31, 2019. The increases were primarily due to Patient Support Systems sales growth in the United States driven by new products and recent acquisitions, as well as Front Line Care growth globally. The increases were partially offset by the decline in Surgical Solutions sales related to the disposition of the surgical consumable products business in August 2019. Increased demand for our products due to the COVID-19 pandemic also contributed to the sales growth for Patient Support Systems and Front Line Care.

Rental revenue decreased 1.8% on a reported basis, and 1.5% on a constant currency basis, for the six months ended March 31, 2020 compared to the six months ended March 31, 2019. The decreases were attributable to the exit of a rental arrangement remaining from the previously divested third-party rental business.

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Business Segment Revenue

Patient Support Systems revenue increased 3.7% on a reported basis, and 4.4% on a constant currency basis, for the six months ended March 31, 2020 compared to the six months ended March 31, 2019. The increases were driven primarily by growth in the United States from our care communications platform, which includes recent acquisitions, new product introductions and increased demand for beds and surfaces, partially due to the COVID-19 pandemic. The increases were partially offset by lower sales outside of the United States due to notable declines mainly in the Middle East due to the timing of large projects. Revenue for the six months ended March 31, 2020 does not reflect approximately $2.0 million of revenue that was eliminated in fair value purchase accounting adjustments to deferred revenue related to recent acquisitions.

Front Line Care revenue increased 7.6% on a reported basis, and 8.1% on a constant currency basis, for the six months ended March 31, 2020 compared to the six months ended March 31, 2019. The increases were driven by global sales growth for patient diagnostic and monitoring products and incremental revenue from the acquisition of Breathe.

Surgical Solutions revenue decreased 23.3% on a reported basis, and 22.3% on a constant currency basis, for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 primarily due to the disposition of the surgical consumable products business in August 2019. The decreases were partially offset by sales growth from integrated operating tables.

Refer to the section titled “The Impacts of COVID-19 on Hillrom” within Management’s Discussion & Analysis of Financial Condition and Results of Operations for further information.

Gross Profit

(In millions)	Three Months Ended March 31						Six Months Ended March 31
	2020			2019			2020			2019
Gross Profit 1
Product sales and service	$	329.8		$	313.8		$	637.8		$	609.1
Percent of Related Net Revenue	51.0		%	49.3		%	50.6		%	48.8		%
Rental	$	37.7		$	38.8		$	71.4		$	73.5
Percent of Related Net Revenue	49.5		%	49.9		%	48.6		%	49.1		%
Total Gross Profit	$	367.5		$	352.6		$	709.2		$	682.6
Percent of Total Net Revenue	50.8		%	49.4		%	50.4		%	48.8		%

¹ Gross Profit is calculated as net product sales and service revenue and rental revenue less the related cost of goods sold or rental expenses as disclosed on the face of the Condensed Consolidated Statements of Income.

Three and Six Months Ended March 31, 2020 Compared to the Three and Six Months Ended March 31, 2019

Product sales and service gross profit increased by $16.0 million and $28.7 million, or 5.1% and 4.7%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019.  The increases in gross profit were primarily driven by strategic changes in product sales mix across all segments, which included recent acquisitions and the disposition of the surgical consumable products business in August 2019. The increases were also attributable to product mix within Patient Support Systems and Front Line Care and improved operating efficiencies resulting in lower operating costs.

Rental gross profit decreased $1.1 million and $2.1 million, or 2.8% and 2.9%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 primarily due to the exit of a rental arrangement remaining from the previously divested third-party rental business.

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Operating Expenses

(In millions)	Three Months Ended March 31						Six Months Ended March 31
	2020			2019			2020			2019
Research and development expenses	$	34.4		$	36.6		$	65.9		$	69.8
Percent of Total Net Revenue	4.8		%	5.1		%	4.7		%	5.0		%
Selling and administrative expenses	$	209.9		$	203.9		$	406.7		$	396.2
Percent of Total Net Revenue	29.0		%	28.5		%	28.9		%	28.3		%
Acquisition-related intangible asset amortization	$	27.1		$	27.3		$	53.8		$	53.0
Percent of Total Net Revenue	3.7		%	3.8		%	3.8		%	3.8		%

Three and Six Months Ended March 31, 2020 Compared to the Three and Six Months Ended March 31, 2019

Research and development expenses decreased $2.2 million and $3.9 million, or 6.0% and 5.6%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 due to the timing of projects.

Selling and administrative expenses increased $6.0 million and $10.5 million, or 2.9% and 2.7%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 due to increased information technology costs and increased investment in emerging markets.

Acquisition-related intangible asset amortization remained relatively flat for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. For the six months ended March 31, 2020, Acquisition-related intangible asset amortization increased $0.8 million, or 1.5%, compared to the six months ended March 31, 2019 due to the acquisitions of Voalte and Breathe during fiscal 2019 and Excel Medical in January 2020.

Special Charges and Other

(In millions)	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Special charges	$	8.8	$	3.5	$	16.6	$	11.5
Interest expense	$	(19.1)	$	(21.8)	$	(38.5)	$	(43.1)
Loss on extinguishment of debt	$	—	$	—	$	(15.6)	$	—
Investment income (expense) and other, net	$	(11.4)	$	1.2	$	(12.7)	$	1.3

Three and Six Months Ended March 31, 2020 Compared to the Three and Six Months Ended March 31, 2019

In connection with various organizational changes to improve our business alignment and cost structure, we recognized Special charges of $8.8 million and $16.6 million for the three and six months ended March 31, 2020 compared to $3.5 million and $11.5 million for the three and six months ended March 31, 2019. These charges related to the initiatives described in Note 10. Special Charges.

Interest expense decreased $2.7 million and $4.6 million, or 12.4% and 10.7%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 due to lower interest rates resulting from the refinancing of senior unsecured notes of $425.0 million in September 2019.  See Note 5. Financing Agreements for additional information.

Loss on extinguishment of debt related to the refinancing of senior unsecured notes of $425.0 million in September 2019.  See Note 5. Financing Agreements for further information.

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Investment income (expense) and other, net for the three and six months ended March 31, 2020 was expense of $11.4 million and $12.7 million comprised primarily of $2.0 million of losses related to our cost and equity method investments, the recognition of a non-cash pension plan settlement loss of $8.5 million, and unfavorable movements in foreign exchange rates. These balances were partially offset by a $1.2 million litigation settlement award. See Note 3. Supplementary Financial Statement Information and Note 8. Retirement and Postretirement Plans for additional information. Investment income (expense) and other, net for the three and six months ended March 31, 2019 was income of $1.2 million and $1.3 million driven primarily by favorable movements in foreign exchange rates.

Income Tax Expense

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

The effective tax rate for the three months ended March 31, 2020 was 17.4% compared to 18.5% for the comparable period in the prior year. The effective tax rate for the three months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to foreign derived intangible income (“FDII”).

The adjusted effective tax rate for the three months ended March 31, 2020 was 20.9% compared to 20.4% for the comparable period in the prior year. The differences from the current year period and the prior year period primarily relate to discrete items, including the excess tax benefits on deductible stock compensation.

Six Months Ended March 31, 2020 Compared to the Six Months Ended March 31, 2019

The effective tax rate for the six months ended March 31, 2020 was 12.8% compared to 16.9% for the comparable period in the prior year. The effective tax rate for the six months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to FDII as well as a small benefit from current year discrete items. The effective tax rate for the six months ended March 31, 2020 was also favorably impacted by the reduction of the contingent consideration accrual of $8.4 million, that is not subject to tax. See Note 4. Business Combinations for additional information.

The adjusted effective tax rate for the six months ended March 31, 2020 was 19.0% compared to 20.1% for the comparable period in the prior year. The differences from the current year period and the prior year period primarily relate to discrete items, including the excess tax benefits on deductible stock compensation.

On March 25, 2020, the U.S. government approved the Coronavirus Aid, Relief and Economic Security (“CARES”) Act to provide economic stimulus to address the impact of the pandemic. We continue to evaluate what impact, if any, the CARES Act, or any similar legislation in other non-U.S. jurisdictions, may have on our related tax positions and our effective tax rate.

Earnings per Share

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Diluted earnings per share decreased from $0.74 to $0.70 for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 due to a pension settlement loss of $8.5 million. See Note 8. Retirement and Postretirement Plans for additional information.

Six Months Ended March 31, 2020 Compared to the Six Months Ended March 31, 2019

Diluted earnings per share decreased from $1.36 to $1.29 for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 due to a loss on the extinguishment of debt of $15.6 million and a pension plan settlement loss of $8.5 million. The losses were partially offset by higher gross profits and lower tax rates. See Note 5. Financing Agreements and Note 8. Retirement and Postretirement Plans for additional information.

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Business Segment Divisional Income

(In millions)	Three Months Ended March 31				Change As Reported		Six Months Ended March 31				Change As Reported
	2020		2019				2020		2019
Divisional Income:
Patient Support Systems	$	74.9	$	72.2	3.7	%	$	133.3	$	131.9	1.1	%
Front Line Care	77.7		67.2		15.6	%	151.2		128.9		17.3	%
Surgical Solutions	13.7		15.1		(9.3)	%	26.5		26.4		0.4	%

Refer to Note 14. Segment Reporting for a description of how divisional income is determined.

Three and Six Months Ended March 31, 2020 Compared to the Three and Six Months Ended March 31, 2019

Patient Support Systems divisional income increased $2.7 million and $1.4 million, or 3.7% and 1.1%, for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 primarily due to revenue growth in the United States from our care communications platform, which includes recent acquisitions, and sales growth during the three months ended March 31, 2020. The increases in revenue were offset primarily by an increase in investments to support growth initiatives.

Front Line Care divisional income increased $10.5 million and $22.3 million, or 15.6% and 17.3% for the three and six months ended March 31, 2020 compared to the three and six months ended March 31, 2019 due to overall revenue growth in the United States and internationally driven by sales of respiratory health and patient monitoring products as well as higher gross margins.

Surgical Solutions divisional income decreased $1.4 million, or 9.3% for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 as a result of the disposition of the surgical consumable products business in August 2019, partially offset by higher gross margins and reductions in operating costs. Divisional income remained relatively flat for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 due to sales growth from integrated operating tables and other equipment installed as part of new construction, which was offset by the disposition of the surgical consumable products business in August 2019.

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 tables below for the three and six months ended March 31, 2020 and the three and six months ended March 31, 2019. GAAP amounts are adjusted for certain items to aid management in evaluating the performance of the business. Investors should consider these measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Income tax expense is computed by applying a blended statutory tax rate based on the jurisdictional mix of the respective before tax adjustment.

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Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

	Three Months Ended March 31, 2020								Three Months Ended March 31, 2019
	Operating Margin		Income Before Income Taxes		Income Tax Expense		Diluted EPS		Operating Margin		Income Before Income Taxes		Income Tax Expense		Diluted EPS
GAAP Basis	12.1	%	$	56.8	$	9.9	$	0.70	11.4	%	$	60.7	$	11.2	$	0.74
Adjustments:
Acquisition and integration costs and related fair value adjustments 1	0.4	%	2.7		0.7		0.03		0.2	%	1.6		0.3		0.02
Acquisition-related intangible asset amortization 2	3.7	%	27.1		6.6		0.31		3.8	%	27.3		6.4		0.30
Field corrective actions 3	0.2	%	1.4		0.4		0.01		—	%	—		—		—
Regulatory compliance costs 4	0.7	%	4.8		1.2		0.05		0.5	%	3.3		0.9		0.04
Special charges 5	1.2	%	8.8		2.3		0.10		0.5	%	3.5		0.9		0.04
Pension Settlement Expense 6	—	%	8.5		2.0		0.09		—	%	—		—		—
Litigation Settlement 7	—	%	(1.2)		(0.3)		(0.01)		—	%	—		—		—
Adjusted Basis	18.3	%	$	108.9	$	22.8	$	1.28	16.4	%	$	96.4	$	19.7	$	1.14
1 Acquisition and integration costs and related fair value adjustments include legal and professional fees, temporary labor, consulting and other costs related to the closing and integration of acquired businesses, including purchase accounting adjustments for deferred revenue and other items, and contingent consideration. For the three months ended March 31, 2020, a fair value adjustment of $1.7 million represents purchase accounting adjustments for deferred revenue and contingent consideration associated with our business combinations in Note 4. Business Combinations.
2 Acquisition-related intangible asset amortization relates to the amortization of intangible assets associated with our business combinations.
3 Field corrective action costs relate to costs incurred to address broad-based product performance matters outside of normal warranty provisions. These costs are included in Cost of goods sold.
4 Regulatory compliance costs relate to updating existing product registrations to comply with the European Medical Device Regulations. These costs are included in Selling and administrative expenses.
5 Special charges represent a variety of costs associated with restructuring actions, including severance and related benefits, lease termination fees, asset write-downs and temporary labor on shutdown of operations. It also includes costs related to a global information technology transformation, including rationalizing and transforming our enterprise resource planning software solutions and other complementary information technology systems.
6 Pension settlement expense represents an actuarial loss totaling $8.5 million recorded as a component of Investment income (expense) and other, net. See Note 8. Retirement and Postretirement Plans for additional information.
7 Litigation settlements and expenses are the aggregate charges, costs or recoveries associated with litigation settlements. For the three months ended March 31, 2020, we received a litigation settlement award totaling $1.2 million, which was recorded as a component of Investment income (expense) and other, net.

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Six Months Ended March 31, 2020 Compared to the Six Months Ended March 31, 2019

	Six Months Ended March 31, 2020								Six Months Ended March 31, 2019
	Operating Margin		Income Before Income Taxes		Income Tax Expense		Diluted EPS		Operating Margin		Income Before Income Taxes		Income Tax Expense		Diluted EPS
GAAP Basis	11.8	%	$	99.4	$	12.7	$	1.29	10.9	%	$	110.3	$	18.6	$	1.36
Adjustments:
Acquisition and integration costs and related fair value adjustments 1	(0.3)	%	(3.8)		1.0		(0.07)		0.1	%	1.8		0.4		0.02
Acquisition-related intangible asset amortization 2	3.8	%	53.8		13.0		0.61		3.8	%	53.0		12.3		0.60
Field corrective actions 3	0.1	%	1.4		0.4		0.01		—	%	—		—		—
Regulatory compliance costs 4	0.6	%	8.7		1.8		0.10		0.5	%	6.1		1.6		0.07
Special charges 5	1.2	%	16.6		3.5		0.19		0.8	%	11.5		2.8		0.13
Tax law and method changes 6	—	%	—		—		—		—	%	—		1.0		(0.02)
Debt refinancing costs 7	—	%	16.1		3.7		0.18		—	%	—		—		—
Loss on disposition of business 8	—	%	0.4		0.1		0.01		—	%	—		—		—
Pension settlement expense 9	—	%	8.5		2.0		0.10		—	%	—		—		—
Litigation settlement 10	—	%	(1.2)		(0.3)		(0.01)		—	%	—		—		—
Adjusted Basis	17.2	%	$	199.9	$	37.9	$	2.41	16.1	%	$	182.7	$	36.7	$	2.16
1 Acquisition and integration costs and related fair value adjustments include legal and professional fees, temporary labor, consulting and other costs related to the closing and integration of acquired businesses, including purchase accounting adjustments for deferred revenue and other items, and contingent consideration. For the six months ended March 31, 2020, a fair value adjustment of $6.2 million represents purchase accounting adjustments for deferred revenue and contingent consideration associated with our business combinations in Note 4. Business Combinations.
2 Acquisition-related intangible asset amortization relates to the amortization of intangible assets associated with our business combinations.
3 Field corrective action costs relate to costs incurred to address broad-based product performance matters outside of normal warranty provisions. These costs are included in Cost of goods sold.
4 Regulatory compliance costs relate to updating existing product registrations to comply with the European Medical Device Regulations. These costs are included in Selling and administrative expenses.
5 Special charges represent a variety of costs associated with restructuring actions, including severance and related benefits, lease termination fees, asset write-downs and temporary labor on shutdown of operations. It also includes costs related to a global information technology transformation, including rationalizing and transforming our enterprise resource planning software solutions and other complementary information technology systems.
6 Tax law and method changes relate to tax expenses and related unrecognized tax benefits due to the Tax Cuts and Jobs Act enacted in the United States in December 2017. See Note 11. Income Taxes within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information
7 Debt refinancing costs are expenses related to the costs incurred between the issuance and redemption of our senior unsecured notes due 2027 and 2023. For the six months ended March 31, 2020, debt refinancing costs include a loss on extinguishment of debt of $15.6 million related to the redemption of all of our previously outstanding senior unsecured 5.75% notes due September 2023 as discussed within Note 5. Financing Agreements, as well as $0.5 million of duplicative interest costs.
8 Loss on disposition of business relates to losses recorded in Investment income (expense) and other, net resulting from business dispositions.
9 Pension settlement expense represents an actuarial loss totaling $8.5 million recorded as a component of Investment income (expense) and other, net. See Note 8. Retirement and Postretirement Plans for additional information.
10 Litigation settlements and expenses are the aggregate charges, costs or recoveries associated with litigation settlements. For the six months ended March 31, 2020, we received a litigation settlement award totaling $1.2 million, which was recorded as a component of Investment income (expense) and other, net.

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Liquidity and Capital Resources

	Six Months Ended March 31
	2020		2019
Cash Flows Provided By (Used In):
Operating activities	$	156.7	$	158.2
Investing activities	(57.9)		(71.8)
Financing activities	(439.4)		(80.1)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2.7)		(2.3)
(Decrease) Increase in Cash and cash equivalents	$	(343.3)	$	4.0

Net cash flows from operating activities and selected borrowings represented our primary sources of funds for growth of the

business, including capital expenditures and acquisitions. Our financing agreements contain certain restrictions relating to dividend payments, the making of restricted payments, and the incurrence of additional secured and unsecured indebtedness. None of our financing agreements contain any credit rating triggers that would increase or decrease our cost of borrowings. Credit rating changes can, however, impact the cost of borrowings and any potential future borrowings under any new financing agreements.

Operating Activities

Cash provided by operating activities decreased $1.5 million for the six months ended March 31, 2020 compared to the six months ended March 31, 2019. The primary drivers include an increase in incentive compensation payments, partially offset by improved operating profit margins.

Investing Activities

Cash used in investing activities decreased by $13.9 million for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 primarily due to our acquisitions of non-marketable securities of $26.6 million and the right to use patented technology and certain related assets of $17.1 million during the six months ended March 31, 2019. The decrease was partially offset by the payment of $13.1 million for the acquisition of Excel Medical in January 2020. See Note 3. Supplementary Financial Statement Information and Note 4. Business Combinations for additional information.

Financing Activities

Cash used in financing activities increased $359.3 million for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 primarily due to the redemption of our previously outstanding senior unsecured 5.75% notes due September 2023 of $425.0 million and the related prepayment premium of $12.2 million as described within Note 5. Financing Agreements.

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Other Liquidity Matters

Our cash balances and cash flows generated from operations may be used to fund strategic investments, business acquisitions, working capital needs, capital expenditures, investments in technology and marketing, share repurchases and payments of dividends to our shareholders. We believe that our cash balances and cash flows generated from operations, along with amounts available under our financing agreements, will be sufficient to fund operations, working capital needs, capital expenditure requirements, and financing obligations for at least the next 12 months from the date of this filing.

As of March 31, 2020, there were $185.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,007.8 million after giving effect to the $7.2 million of outstanding standby letters of credit. As of September 30, 2019, there were $80.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,112.8 million after giving effect to $7.2 million of outstanding standby letters of credit.

Hillrom’s cash flows from operating activities for the six months ended March 31, 2020 were not materially impacted by the outbreak of a respiratory illness caused by the coronavirus. There have been no changes to our cost of or access to our capital and funding sources. We have not currently identified instability of the financial institutions with whom we maintain our financing relationships. Hillrom believes it will continue to service our outstanding borrowings or other financial obligations.

Hillrom’s long-term debt instruments require nominal repayments over the next 12 months, with our next significant maturity occurring in August 2024. Since the beginning of the global COVID-19 pandemic in December 2019, we have not experienced liquidity constraints through either the movement of cash or under our 2024 Revolving Credit Facility. Furthermore, Hillrom has successfully extended its 364-day accounts receivable securitization facilities as of April 27, 2020. As of March 31, 2020, we were in compliance with all debt covenants under our financing agreements. See Note 5. Financing Agreements for additional information on our financing agreements.

Hillrom does not anticipate incurring significant incremental capital expenditures due to the pandemic. We may delay discretionary capital spending or redirect capital spending to support the increased demand for certain products used to treat patients diagnosed with COVID-19.

Refer to the section titled “The Impacts of COVID-19 on Hillrom” within Management’s Discussion & Analysis of Financial Condition and Results of Operations for further information.

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.

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 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 considered relevant by our Board.

As of March 31, 2020, approximately 53.0% of our cash and cash equivalents were held by our foreign subsidiaries. As of March 31, 2020, our practice and intention were to reinvest the earnings in our non-U.S. subsidiaries outside of the United States.

With regard to our non-U.S. subsidiaries, it is our practice and intention to reinvest the earnings in those businesses to fund capital expenditures and other operating cash needs. Because the undistributed earnings of non-U.S. subsidiaries are considered to be permanently reinvested, no U.S. deferred income taxes or foreign withholding taxes have been provided on earnings subsequent to the enactment of the Tax Act. Future repatriations of cash and cash equivalents, if any, held by our foreign subsidiaries will generally not be subject to U.S. Federal tax if earned prior to the enactment of the Tax Act. As we evaluate the impact of the Tax Act and the future cash needs of our global operations, we may revise the amount of foreign earnings generated prior to the enactment of the Tax Act considered to be permanently reinvested in our foreign subsidiaries. We believe that cash on hand and cash generated from U.S. operations, along with amounts available under our financing agreements, will be sufficient to fund U.S. operations, working capital needs, capital expenditure requirements and financing obligations.

The U.S. Internal Revenue Service and Treasury Department continue to release proposed guidance with respect to the Tax Act. We continue to evaluate what impact, if any, each piece of guidance may have on our related tax positions and our effective tax rate if, and when, such guidance is finalized.

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Contractual Obligations and Contingent Liabilities and Commitments

There have not been any significant changes since September 30, 2019 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 significantly 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. Summary of Significant Accounting Policies and the Critical Accounting Policies Section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2019 Form 10-K. There have been no significant changes to such policies since September 30, 2019.

For a further summary of certain accounting policies and estimates and recently issued accounting pronouncements applicable to us, see Note 1. Summary of Significant Accounting Policies.

The Impacts of COVID-19 on Hillrom

During December 2019, an outbreak of COVID-19 was reported in Wuhan, China. Since that time, the virus spread globally and has resulted in confirmed cases in regions and countries in which we conduct our business. Subsequent to December 31, 2019, the World Health Organization declared COVID-19 a “Public Health Emergency of International Concern.” The United States and countries around the world are taking extreme precautionary and preventive measures to reduce the spread of COVID-19. COVID-19 has impacted global economies as travel, leisure and discretionary consumer spending has reduced significantly causing companies to make drastic changes to their investments, human capital, and financial outlooks.

Revenues and Customers

As a result of preventive and cautionary measures taken by Hillrom, other businesses and governments, we may experience changes in demand for certain of our products as health care customers prioritize the treatment of patients diagnosed with COVID-19. For the three and six months ended March 31, 2020, we experienced an increase in demand for select products including ICU and med-surg beds, specialty surfaces and patient mobility solutions within Patient Support Systems, and respiratory health ventilators, thermometry and patient monitoring products within Front Line Care. We also experienced declines in revenue related to project delays in our care communications business. The combined impact to total net revenues in the second quarter of fiscal 2020 was a net increase of approximately $15 million due to higher demand for products used to treat patients diagnosed with COVID-19.

In the second half of 2020, the Company expects near-term increases in demand for products used to treat patients diagnosed with COVID-19. This demand is expected to be partially offset by near-term lower demand for information technologies and software solutions in Patient Support Systems due to limited access to hospitals and the near term reprioritization of customer demand for products used to treat patients diagnosed with COVID-19. In addition, we expect near-term lower demand for operating room infrastructure in Surgical Solutions due to project delays as customers are focusing on the demands of the pandemic. The ultimate impact of the COVID-19 pandemic or a similar public health event is highly uncertain and subject to change. In this regard, the extent of potential impacts on our business, healthcare systems and other customers and the U.S. and global economies as a whole is evolving, and the development of customer demand described above and other factors could materially and adversely affect our business, results of operations, financial condition and prospects. Management intends to continue focusing on the Company's strategic growth objectives, while also working to meet the immediate demands relating to the COVID-19 pandemic.

Operations and Workforce

We are actively managing our supply chain to ensure we are securing raw materials and components for manufacturing products in high demand due to COVID-19. We have not experienced significant supply chain constraints nor significant increases in supply costs as a result of the pandemic and we are adjusting resource allocation as needed to meet customer demand.

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Hillrom continues to operate our production facilities as our products are essential to healthcare providers. Some of our products are specifically being used to treat patients diagnosed with COVID-19. Many employees in our administrative functions have effectively worked remotely since mid-March. Due to the importance of Hillrom’s products relative to treating the virus, the Company has maintained employment levels and has prudently augmented staffing as needed to meet near-term incremental demand as a result of the pandemic. Management does not believe that the pandemic will have a long-term impact on Hillrom’s organizational structure or number of employees.

Hillrom is currently evaluating governmental subsidies and incentives available within the various jurisdictions in which we operate. Management will evaluate these opportunities as well as the related requirements or restrictions to support our operations and workforce in a manner that allow us to continue to operate efficiently and effectively.

While the financial impact on Hillrom has not been significant to date, given the rapid and evolving nature of the pandemic, COVID-19 could negatively affect our sales, and it is uncertain how COVID-19 will affect our global operations generally if these impacts persist or exacerbate over an extended period of time. Any of these impacts could have a material adverse effect on our business, financial condition and results of operations. For further discussion, see the risk factor within PART II – OTHER INFORMATION, Item 1.A Risk Factors, entitled “Our business, results of operations, financial condition and prospects could be materially and adversely affected by the recent COVID-19 pandemic and the related effects on public health.”

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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. From time-to-time, we enter into currency exchange agreements to manage exposures 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. The maximum length of time over which we hedge transaction exposures is generally 15 months. Derivative gains and losses, initially reported as a component of Accumulated other comprehensive income (loss), are reclassified to earnings in the period when the transaction affects earnings.

Refer to Note 6. Derivative Instruments and Hedging Activity for discussions and quantitative disclosures about our derivative 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 2019 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, 2020. 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, 2020.

There have been no 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 in 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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PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to Note 15. Commitments and Contingencies for further information on our legal proceedings.

Item 1A. RISK FACTORS

Our business involves risks. With the exception of the below risk, there have been no material changes to our risk factors as disclosed in Item 1A. Risk Factors in our 2019 Form 10-K for the year ended September 30, 2019. The following information about the risk should be considered carefully together with the other information contained herein.

Our business, results of operations, financial condition and prospects could be materially and adversely affected by the recent COVID-19 pandemic and the related effects on public health.

We are susceptible to a widespread outbreak of an illness or other public health issue, such as the recent COVID-19 pandemic that has resulted in confirmed cases in regions and countries in which we conduct our business. Such outbreaks, including the COVID-19 pandemic, could, among other things:

•interrupt, slow, or render our supply chains inoperable, resulting in more expensive alternative sources of labor and materials or an inability to find such alternative sources of labor and materials for our products;

•subject us to governmental mandates and quarantines that may require forced shutdowns of our facilities for extended or indefinite periods due to public health measures;

•increase regulation of our industry, up to and including the exercise of war powers under The Defense Production Act of 1950 that could require us to turn over our production capabilities to the U.S. Government;

•substantially interfere with general commercial activity related to our customer base if our customers’ businesses are affected by the outbreak, including through delays or reductions of our customers’ purchases from us;

•cause health care providers to limit or restrict access to their facilities to only essential personnel for a material amount of time, adversely impacting our ability to complete installations of our care communications offerings and operating room equipment, and limiting contact with our sales personnel;

•reduce the number of ambulatory care or office visits if health care providers prioritize pandemic-related treatment and governmental and industry associations recommend the deferral of elective surgeries;

•cause our employees, including key executives, our production and service workforce and functional team members to become ill, quarantined or otherwise unable to work or travel due to health reasons or governmental restrictions;

•increase absenteeism or cause workplace disruption related to employees working from home or remotely;

•contribute to adverse changes in general domestic and global economic conditions, including recession or economic slowdown and disruption of domestic and international credit markets, which could negatively impact our customers’ ability to pay us as well as our ability to access capital that could in the future negatively affect our liquidity;

•result in the establishment of trade barriers that disrupt the flow of goods and increase costs associated with logistics and transportation;

•decrease our ability to grow our business through mergers, acquisitions and other similar business arrangements during any such pandemic or other outbreak as targets focus on operating their respective businesses;

•negatively impact innovation and development of new products as our R&D teams may be required to work from home and resources and energy may be redirected during any such outbreak; or

•contribute to a recession or market correction that could adversely affect the value of our common stock.

If the COVID-19 pandemic continues to spread and escalate domestically or internationally, or if governments impose additional measures intended to mitigate the spread and related effects of the pandemic, the risks described above could be elevated significantly.

There are no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the outbreak is highly uncertain and subject to change. We do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. However, the effects could have a material adverse impact on our business, results of operations, financial condition and prospects and could heighten many of our known risks described in Item 1A. Risk Factors of our 2019 Form 10-K.

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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, 2020 - January 31, 2020	95,415	$	108.96	91,600	$	207.5
February 1, 2020 - February 29, 2020	408,538	$	108.04	408,400	$	163.4
March 1, 2020 - March 31, 2020	2,864	$	95.69	—	$	163.4
Total	506,817			500,000

(1)Shares purchased in the three months ended March 31, 2020 were in connection with employee payroll tax withholding for restricted stock distributions and shares purchased of our common stock in the open market under our share repurchase program.

(2)In September 2019, the Board approved an additional $170.0 million for share repurchases. The below table reflects the date of Board approval, the authorized dollar value of the shares to be repurchased under each approval and the availability to repurchase as of March 31, 2020. As of March 31, 2020, a cumulative total of $346.6 million had been used, leaving us with availability of $163.4 million under the share repurchase program. There is no expiration date or plans to terminate this program in the future.

Board Approval Date	Authorized Dollar Value		Dollar Value of Shares Purchased Prior to Fiscal 2020		Dollar Value of Shares Purchased in Fiscal 2020		Availability to Purchase as of March 31, 2020
November 2017	$	150.0	$	102.5	$	47.5	$	—
September 2019	170.0		—		6.6		163.4
Totals	$	320.0	$	102.5	$	54.1	$	163.4

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Item 6. EXHIBITS

A. Exhibits

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

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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: May 1, 2020	By:	/s/ Barbara W. Bodem
	Name: Title:	Barbara W. Bodem Senior Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)

48

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

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

I, John P. Groetelaars, 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: May 1, 2020

/s/ John P. Groetelaars

John P. Groetelaars

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

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

I, Barbara W. Bodem, 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: May 1, 2020

/s/ Barbara W. Bodem

Barbara W. Bodem

Senior Vice President and Chief Financial Officer

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, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Groetelaars, 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 P. Groetelaars

John P. Groetelaars

President and Chief Executive Officer

May 1, 2020

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-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, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barbara W. Bodem, 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/ Barbara W. Bodem

Barbara W. Bodem

Senior Vice President and Chief Financial Officer

May 1, 2020

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.

XML

Common Stock Common Stock (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payment, Tax Withholding, Share-based Payment Arrangement	$ 0.7	$ 0.5	$ 15.8	$ 4.0
Payments for Repurchase of Common Stock			$ 54.1	$ (75.0)

XML

Other Comprehensive Income (Loss) (Schedule of Changes in AOCL by Component) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ (4,800,000)
Other comprehensive income (loss)
Total Other Comprehensive Income (Loss), net of tax	(62,300,000)	$ (5,000,000.0)	$ (41,100,000)	$ (21,900,000)
Accumulated other comprehensive loss
Beginning balance			1,573,300,000
Net activity	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Ending balance	1,548,900,000		1,548,900,000
Income tax expense	9,900,000	11,200,000	12,700,000	18,600,000
Net Income (Loss) Attributable to Parent	46,900,000	49,500,000	86,700,000	91,700,000
Available-for-sale Securities and Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				(800,000)
Other comprehensive income (loss)
Prior to reclassification	(29,500,000)	(1,700,000)	(33,700,000)	(3,400,000)
Reclassification from	(400,000)	(1,800,000)	500,000	(4,000,000.0)
Pre-tax	(29,900,000)	(3,500,000)	(33,200,000)	(7,400,000)
Tax effect	6,800,000	1,600,000	7,500,000	1,800,000
Total Other Comprehensive Income (Loss), net of tax	(23,100,000)	(1,900,000)	(25,700,000)	(5,600,000)
Accumulated other comprehensive loss
Beginning balance	4,600,000	13,900,000	7,200,000	16,800,000
Net activity	(23,100,000)	(1,900,000)	(25,700,000)	(5,600,000)
Ending balance	(18,500,000)	12,000,000.0	(18,500,000)	12,000,000.0
Net Income (Loss) Attributable to Parent	300,000	1,400,000	(300,000)	2,900,000
Foreign Currency Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				0
Other comprehensive income (loss)
Prior to reclassification	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Reclassification from	0	0	0	0
Pre-tax	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Tax effect	0	0	0	0
Total Other Comprehensive Income (Loss), net of tax	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Accumulated other comprehensive loss
Beginning balance	(122,300,000)	(118,900,000)	(145,400,000)	(105,300,000)
Net activity	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Ending balance	(153,900,000)	(122,500,000)	(153,900,000)	(122,500,000)
Change in Pension and Postretirement Defined Benefit Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				6,200,000
Other comprehensive income (loss)
Prior to reclassification	100,000	100,000	(100,000)	100,000
Reclassification from	(10,300,000)	600,000	(9,100,000)	1,100,000
Pre-tax	(10,200,000)	700,000	(9,200,000)	1,200,000
Tax effect	(2,600,000)	200,000	(2,300,000)	300,000
Total Other Comprehensive Income (Loss), net of tax	(7,600,000)	500,000	(6,900,000)	900,000
Accumulated other comprehensive loss
Beginning balance	(43,600,000)	(30,300,000)	(44,300,000)	(24,500,000)
Net activity	(7,600,000)	500,000	(6,900,000)	900,000
Ending balance	(51,200,000)	(29,800,000)	(51,200,000)	(29,800,000)
Income tax expense	2,600,000	(200,000)	2,300,000	(6,500,000)
Change in Pension and Postretirement Defined Benefit Plans [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Accumulated other comprehensive loss
Net Income (Loss) Attributable to Parent	7,700,000	(400,000)	6,800,000	5,400,000
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				(5,400,000)
Other comprehensive income (loss)
Prior to reclassification	(61,000,000.0)	(5,200,000)	(42,300,000)	(20,500,000)
Reclassification from	(10,700,000)	(1,200,000)	(8,600,000)	(2,900,000)
Pre-tax	(71,700,000)	(6,400,000)	(50,900,000)	(23,400,000)
Tax effect	9,400,000	1,400,000	(9,800,000)	(1,500,000)
Total Other Comprehensive Income (Loss), net of tax	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Accumulated other comprehensive loss
Beginning balance	(161,300,000)	(135,300,000)	(182,500,000)	(113,000,000.0)
Net activity	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Ending balance	(223,600,000)	(140,300,000)	(223,600,000)	(140,300,000)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Other comprehensive income (loss)
Reclassification from	400,000	1,800,000	(500,000)	4,000,000.0
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income [Member]
Accumulated other comprehensive loss
Income tax expense	100,000	400,000	(200,000)	1,100,000
Foreign Exchange Forward [Member] | Available-for-sale Securities and Hedges [Member]
Other comprehensive income (loss)
Pre-tax	0	(800,000)	(200,000)	300,000
Total Other Comprehensive Income (Loss), net of tax	0	(500,000)	(200,000)	200,000
Accumulated other comprehensive loss
Beginning balance	0	900,000	200,000	200,000
Net activity	0	(500,000)	(200,000)	200,000
Ending balance	0	400,000	0	400,000
Foreign Exchange Forward [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Other comprehensive income (loss)
Tax effect	0	(300,000)	0	100,000
Interest Rate Swap [Member] | Available-for-sale Securities and Hedges [Member]
Other comprehensive income (loss)
Pre-tax	(40,100,000)	(10,800,000)	(38,400,000)	(18,000,000.0)
Total Other Comprehensive Income (Loss), net of tax	(30,900,000)	(8,500,000)	(29,600,000)	(13,800,000)
Accumulated other comprehensive loss
Beginning balance	(3,900,000)	13,800,000	(5,200,000)	18,300,000
Net activity	(30,900,000)	(8,500,000)	(29,600,000)	(13,800,000)
Ending balance	(34,800,000)	5,300,000	(34,800,000)	5,300,000
Interest Rate Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				800,000
Other comprehensive income (loss)
Prior to reclassification	(39,700,000)	(9,100,000)	(38,800,000)	(14,200,000)
Reclassification from	400,000	1,700,000	(400,000)	3,800,000
Tax effect	(9,200,000)	(2,300,000)	(8,800,000)	(4,200,000)
Accumulated other comprehensive loss
Income tax expense	100,000	500,000	(100,000)	1,100,000
Net Income (Loss) Attributable to Parent	(300,000)	(1,200,000)	300,000	(2,700,000)
Currency Swap [Member] | Available-for-sale Securities and Hedges [Member]
Accumulated other comprehensive loss
Beginning balance	8,500,000	(800,000)	12,200,000	(1,700,000)
Currency Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				0
Other comprehensive income (loss)
Prior to reclassification	10,200,000	8,100,000	5,400,000	10,300,000
Reclassification from	0	0	0	0
Tax effect	2,400,000	1,000,000.0	1,300,000	2,300,000
Foreign Exchange Contract [Member] | Available-for-sale Securities and Hedges [Member]
Other comprehensive income (loss)
Pre-tax	10,200,000	8,100,000	5,400,000	10,300,000
Total Other Comprehensive Income (Loss), net of tax	7,800,000	7,100,000	4,100,000	8,000,000.0
Accumulated other comprehensive loss
Net activity	7,800,000	7,100,000	4,100,000	8,000,000.0
Ending balance	16,300,000	6,300,000	16,300,000	6,300,000
Foreign Exchange | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				0
Other comprehensive income (loss)
Prior to reclassification	0	(700,000)	(300,000)	500,000
Reclassification from	0	100,000	(100,000)	200,000
Accumulated other comprehensive loss
Income tax expense	0	(100,000)	(100,000)	0
Net Income (Loss) Attributable to Parent	$ 0	$ (200,000)	$ 0	$ (200,000)

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Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Effective tax rate	17.40%	18.50%	12.80%	16.90%
Income tax expense	$ 9,900,000	$ 11,200,000	$ 12,700,000	$ 18,600,000
Voalte [Member]
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	$ 8,400,000

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Segment Reporting (Tables)

6 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Reconciliation of Segment Information to Consolidated Financial Information

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Revenue - United States:
Patient Support Systems	$	289.3	$	267.2	$	555.9	$	515.3
Front Line Care	179.2		170.2		357.3		336.7
Surgical Solutions	38.0		55.6		75.1		109.5
Total net revenue - United States	$	506.5	$	493.0	$	988.3	$	961.5
Net Revenue - Outside of the United States (“OUS”):
Patient Support Systems	$	92.8	$	92.4	$	170.4	$	185.3
Front Line Care	79.0		72.9		155.5		139.8
Surgical Solutions	44.9		55.9		94.0		111.1
Total net revenue - OUS	$	216.7	$	221.2	$	419.9	$	436.2
Net Revenue:
Patient Support Systems	$	382.1	$	359.6	$	726.3	$	700.6
Front Line Care	258.2		243.1		512.8		476.5
Surgical Solutions	82.9		111.5		169.1		220.6
Total net revenue	$	723.2	$	714.2	$	1,408.2	$	1,397.7
Divisional Income:
Patient Support Systems	$	74.9	$	72.2	$	133.3	$	131.9
Front Line Care	77.7		67.2		151.2		128.9
Surgical Solutions	13.7		15.1		26.5		26.4
Other Operating Costs:
Non-allocated operating costs, administrative costs, and other	70.2		69.7		128.2		123.6
Special charges	8.8		3.5		16.6		11.5
Operating Profit	87.3		81.3		166.2		152.1
Interest expense	(19.1)		(21.8)		(38.5)		(43.1)
Loss on extinguishment of debt	—		—		(15.6)		—
Investment income (expense) and other, net	(11.4)		1.2		(12.7)		1.3
Income Before Income Taxes	$	56.8	$	60.7	$	99.4	$	110.3

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Mar. 31, 2020

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

Schedule of Changes in AOCL by Component

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate swaps	(39.7)		(0.4)		(40.1)		9.2		(30.9)		(3.9)		(30.9)		(34.8)
Cross-currency swaps	10.2		—		10.2		(2.4)		7.8		8.5		7.8		16.3
Derivative instruments designated as hedges total	(29.5)		(0.4)		(29.9)		6.8		(23.1)		4.6		(23.1)		(18.5)
Foreign currency translation adjustment	(31.6)		—		(31.6)		—		(31.6)		(122.3)		(31.6)		(153.9)
Change in pension and postretirement defined benefit plans	0.1		(10.3)		(10.2)		2.6		(7.6)		(43.6)		(7.6)		(51.2)
Total	$	(61.0)	$	(10.7)	$	(71.7)	$	9.4	$	(62.3)	$	(161.3)	$	(62.3)	$	(223.6)

	Three Months Ended March 31, 2019
	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 designated as hedges 1:
Foreign exchange forward contracts	$	(0.7)	$	(0.1)	$	(0.8)	$	0.3	$	(0.5)	$	0.9	$	(0.5)	$	0.4
Interest rate swaps	(9.1)		(1.7)		(10.8)		2.3		(8.5)		13.8		(8.5)		5.3
Cross-currency swaps	8.1		—		8.1		(1.0)		7.1		(0.8)		7.1		6.3
Derivative instruments designated as hedges total	(1.7)		(1.8)		(3.5)		1.6		(1.9)		13.9		(1.9)		12.0
Foreign currency translation adjustment	(3.6)		—		(3.6)		—		(3.6)		(118.9)		(3.6)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		0.6		0.7		(0.2)		0.5		(30.3)		0.5		(29.8)
Total	$	(5.2)	$	(1.2)	$	(6.4)	$	1.4	$	(5.0)	$	(135.3)	$	(5.0)	$	(140.3)

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	(0.3)	$	0.1	$	(0.2)	$	—	$	(0.2)	$	0.2	$	(0.2)	$	—
Interest rate swaps	(38.8)		0.4		(38.4)		8.8		(29.6)		(5.2)		(29.6)		(34.8)
Cross-currency swaps	5.4		—		5.4		(1.3)		4.1		12.2		4.1		16.3
Derivative instruments designated as hedges total	(33.7)		0.5		(33.2)		7.5		(25.7)		7.2		(25.7)		(18.5)
Foreign currency translation adjustment	(8.5)		—		(8.5)		—		(8.5)		(145.4)		(8.5)		(153.9)
Change in pension and postretirement defined benefit plans	(0.1)		(9.1)		(9.2)		2.3		(6.9)		(44.3)		(6.9)		(51.2)
Total	$	(42.3)	$	(8.6)	$	(50.9)	$	9.8	$	(41.1)	$	(182.5)	$	(41.1)	$	(223.6)

	Six Months Ended March 31, 2019
	Other comprehensive income (loss)										Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from		Pre-tax		Tax effect		Net of tax		Beginning balance		Impacts of ASU 2018-02 Adoption as of October 1, 2018		Net activity		Ending balance
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	0.5	$	(0.2)	$	0.3	$	(0.1)	$	0.2	$	0.2	$	—	$	0.2	$	0.4
Interest rate swaps	(14.2)		(3.8)		(18.0)		4.2		(13.8)		18.3		0.8		(13.8)		5.3
Cross-currency swaps	10.3		—		10.3		(2.3)		8.0		(1.7)		—		8.0		6.3
Derivative instruments designated as hedges total	(3.4)		(4.0)		(7.4)		1.8		(5.6)		16.8		0.8		(5.6)		12.0
Foreign currency translation adjustment	(17.2)		—		(17.2)		—		(17.2)		(105.3)		—		(17.2)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		1.1		1.2		(0.3)		0.9		(24.5)		(6.2)		0.9		(29.8)
Total	$	(20.5)	$	(2.9)	$	(23.4)	$	1.5	$	(21.9)	$	(113.0)	$	(5.4)	$	(21.9)	$	(140.3)

¹ See Note 6. Derivative Instruments and Hedging Activity for information regarding our hedging strategies.

² The estimated net amount of gains and losses reported in Accumulated other comprehensive income (loss) related to our derivative instruments designated as hedges as of March 31, 2020 that are expected to be reclassified into earnings within the next 12 months is expense of $4.8 million.

Schedule of Items Reclassified out of AOCL

The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	—	$	—	$	—	$	(0.1)	$	(0.1)	$	(0.2)
Interest rate swaps 2	(0.4)		0.1		(0.3)		(1.7)		0.5		(1.2)
Derivative instruments designated as hedges total	(0.4)		0.1		(0.3)		(1.8)		0.4		(1.4)
Change in pension and postretirement defined benefit plans 3	(10.3)		2.6		(7.7)		0.6		(0.2)		0.4

The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	0.1	$	(0.1)	$	—	$	(0.2)	$	—	$	(0.2)
Interest rate swaps 2	0.4		(0.1)		0.3		(3.8)		1.1		(2.7)
Derivative instruments designated as hedges total	0.5		(0.2)		0.3		(4.0)		1.1		(2.9)
Change in pension and postretirement defined benefit plans 3	(9.1)		2.3		(6.8)		1.1		(6.5)		(5.4)

¹ Reclassified from Accumulated other comprehensive income (loss) into Investment income (expense) and other, net.

² Reclassified from Accumulated other comprehensive income (loss) into Interest expense.

³ Reclassified from Accumulated other comprehensive income (loss) into Cost of goods sold and Investment income (expense) and other, net. These components are included in the computation of net periodic pension expense.

⁴ As a result of the adoption of ASU 2018-02, we reclassified $5.4 million from Accumulated other comprehensive income (loss) to Retained earnings.

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Supplementary Balance Sheet Information (Details) - USD ($)	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Inventories, net of reserves:
Finished products	$ 114,300,000		$ 120,500,000
Inventory, Work in Process, Gross	42,700,000		42,400,000
Inventory, Raw Materials, Net of Reserves	108,500,000		106,700,000
Total inventories, net of reserves	265,500,000		269,600,000
Accumulated amortization of software and other intangible assets	602,200,000		597,000,000.0
Equity Securities without Readily Determinable Fair Value, Amount				$ 26,600,000
Equity Method Investment, Aggregate Cost	3,100,000
Loss on Sale of Investments	(300,000)
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net	(1,700,000)
Investments	47,700,000		$ 51,100,000
Capital Expenditures Incurred but Not yet Paid	4,000,000.0	$ 300,000
Equity Method Investment, Realized Gain (Loss) on Disposal	2,800,000
Non-cash Investing Activities	6,800,000	300,000
Restricted Stock or Unit Expense	$ 27,100,000	$ 9,900,000

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Leases

6 Months Ended

Mar. 31, 2020

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Leases

Hillrom as the Lessee

We determine if an arrangement is a lease or contains a lease at contract inception. We lease real estate, automobiles and equipment under various operating leases. A lease liability and ROU asset is recognized for operating leases with terms greater than one year at the lease commencement date. The lease liability is measured as the present value of all remaining fixed payments calculated using our estimated secured incremental borrowing rate. The ROU asset is measured as the sum of the lease liability and any initial indirect costs incurred, less any lease incentives received. We use our estimated secured incremental borrowing rate as most lease agreements do not specify an interest rate. Our lease agreements include leases that have both lease and non-lease components. We have elected to account for lease components and the associated non-lease components as a single lease component.

Our leases have remaining lease terms of approximately 1 year to 8.6 years. Many of our real estate and equipment leases include options to renew. Renewal periods are generally not included when calculating the remaining lease term unless we are reasonably certain to exercise a renewal option based on beneficial terms or significance of the leased asset to our operations.

Expense for operating leases and leases with a term of one year or less is recognized on a straight-line basis over the lease term. Lease expense for the three months ended March 31, 2020 was $9.8 million, of which $7.0 million related to operating leases and $2.8 million related to short-term leases and variable lease payments. For the six months ended March 31, 2020, lease expense was $19.4 million, of which $13.8 million related to operating leases and $5.6 million related to short-term leases and variable lease payments. Lease expense is recorded in Cost of goods sold or Selling and administrative expenses based on the purpose of the leased asset.

The following table summarizes the balance sheet classification of our operating leases and amounts of the ROU asset and lease liability as of March 31, 2020:

	Balance Sheet Classification	March 31, 2020
Right-of-use assets	Other assets	$	72.6
Current lease liabilities	Other current liabilities	22.0
Non-current lease liabilities	Other long-term liabilities	55.2

Supplemental information:	March 31, 2020
Weighted-average discount rate	3.3	%
Weighted-average remaining lease term in years	4.8

The following table summarizes the maturities of our operating leases as of March 31, 2020:

Fiscal Year	Amount
Remaining 2020	$	12.7
2021	22.5
2022	17.2
2023	12.1
2024	7.3
2025	4.8
Thereafter	10.2
Total lease payments	86.8
Less: imputed interest	(9.6)
Total lease liability	$	77.2

Disclosures Related to Periods Prior to Adopting the New Lease Guidance

As disclosed in the 2019 Form 10-K, future minimum payments under non-cancellable operating leases (excluding executory costs) aggregating $94.9 million for manufacturing facilities, warehouse distribution centers, service centers, sales offices, automobiles and other equipment consisted of the following:

Fiscal Year	Amount
2020	$	25.7
2021	21.4
2022	15.7
2023	11.1
2024	6.4
2025 and beyond	14.6

Rental expense in fiscal 2019, 2018 and 2017 was $39.8 million, $41.3 million and $38.0 million.

Hillrom as the Lessor

We make certain products available to customers under short-term lease arrangements. Rental usage of these products is provided as an alternative to product sales and is short-term in nature. Products primarily include smart beds, including, but not limited to, bariatric, critical care, maternal, and home care beds, as well as other surfaces. These lease arrangements provide our customers with our products during periods of peak demand or often times for specialty purposes. Additionally, we provide wearable, non-invasive ventilation products to patients covered by monthly medical insurance reimbursements, which are considered month-to-month leasing arrangements. Income arising from these lease arrangements where we are the lessor is recognized within Rental revenue. We have accounted for these lease arrangements as operating leases.

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Income Taxes

6 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the three months ended March 31, 2020 was 17.4% compared to 18.5% for the comparable period in the prior year. The effective tax rate for the three months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to foreign derived intangible income (“FDII”).

The effective tax rate for the six months ended March 31, 2020 was 12.8% compared to 16.9% for the comparable period in the prior year. The effective tax rate for the six months ended March 31, 2020 was favorably impacted primarily by an increased projected benefit for the deduction attributed to FDII as well as a small benefit from current year discrete items. The effective tax rate for the six months ended March 31, 2020 was also favorably impacted by the reduction of the contingent consideration accrual of $8.4 million, that is not subject to tax.

On March 25, 2020, the U.S. government approved the Coronavirus Aid, Relief and Economic Security (“CARES”) Act to provide economic stimulus to address the impact of the pandemic. We continue to evaluate what impact, if any, the CARES Act, or any similar legislation in other non-U.S. jurisdictions, may have on our related tax positions and our effective tax rate.

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Retirement and Postretirement Plans (Tables)

6 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Schedule of Components of Net Pension Expense

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

	Three Months Ended March 31				Six Months Ended March 31				Condensed Consolidated Statements of Income Item
	2020		2019		2020		2019
Service cost	$	0.4	$	0.4	$	0.8	$	0.7	Cost of goods sold
Service cost	0.8		0.7		1.6		1.5		Selling and administrative expenses
Interest cost	2.4		3.2		4.9		6.3		Investment income (expense) and other, net
Expected return on plan assets	(3.7)		(3.7)		(7.4)		(7.4)		Investment income (expense) and other, net
Amortization of unrecognized prior service cost, net	—		—		0.1		—		Investment income (expense) and other, net
Amortization of net loss	1.6		0.6		3.1		1.2		Investment income (expense) and other, net
Settlement charge	8.5		—		8.5		—		Investment income (expense) and other, net
Net pension expense	$	10.0	$	1.2	$	11.6	$	2.3

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2020

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 materially adverse effect on our financial condition, results of operations and cash flows.

Self-Insurance

We are involved in various 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 at various limits up 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.

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Supplementary Balance Sheet Information (Tables)

6 Months Ended

Mar. 31, 2020

Balance Sheet Related Disclosures [Abstract]

Supplementary Balance Sheet Information

	March 31, 2020		September 30, 2019
Inventories, net of reserves:
Finished products	$	114.3	$	120.5
Work in process	42.7		42.4
Raw materials	108.5		106.7
Total inventories, net of reserves	$	265.5	$	269.6
Accumulated amortization of software and other intangible assets	$	602.2	$	597.0
Investments included in Other assets	$	47.7	$	51.1

Schedule of Cash Flow, Supplemental Disclosures

Supplemental Cash Flow Information

	Six Months Ended March 31
	2020		2019
Non-cash investing activities:
Change in capital expenditures not paid	$	4.0	$	0.3
Sale of equity method investment	2.8		—
Total non-cash investing activities:	$	6.8	$	0.3
Non-cash financing activities:
Distribution of shares issued under stock-based compensation plans	$	27.1	$	9.9

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Revenue Recognition

6 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue from Contracts with Customers

As of March 31, 2020, the Company's significant accounting policies for recognizing revenue have not changed from September 30, 2019. See Note 1. Summary of Significant Accounting Policies and Note 2. Revenue Recognition within our 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Disaggregation of Revenue

The Company disaggregates revenue recognized from contracts with customers by geography and reportable segments consistent with the way in which management operates and views the business. See Note 14. Segment Reporting for the presentation of the Company's revenue disaggregation.

Contract Balances

The nature of our products and services does not give rise to contract assets as we typically do not have instances where a right to payment for goods and services already transferred to a customer exists that is conditional on something other than the passage of time.

The following summarizes contract liability activity for fiscal 2019 and the six months ended March 31, 2020. The contract liability balance represents the transaction price allocated to the remaining performance obligations.

	Contract Liabilities
Balance as of October 1, 2018	$	47.8
Revenue deferred due to ASC 606 initial adoption	58.4
Deferred revenue acquired	10.7
New revenue deferrals	282.1
Revenue recognized upon satisfaction of performance obligations	(273.2)
Balance as of September 30, 2019	125.8
Deferred revenue acquired	2.7
New revenue deferrals	168.4
Revenue recognized upon satisfaction of performance obligations	(166.2)
Balance as of March 31, 2020	$	130.7

These contract liabilities are recorded in Deferred revenue and Other long-term liabilities. We expect to satisfy the majority of the remaining performance obligations and recognize revenue related to installation and service contracts within 12 to 24 months.

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2020	Sep. 30, 2019
Investments	$ 47,700,000	$ 51,100,000
Current Assets
Cash and cash equivalents	290,500,000	214,100,000
Restricted Cash, Current	0	419,700,000
Trade accounts receivable, net of allowances of $20.8 and $20.6 as of March 31, 2020 and September 30, 2019	655,400,000	653,300,000
Inventories, net of reserves	265,500,000	269,600,000
Other current assets	130,300,000	106,700,000
Total current assets	1,341,700,000	1,663,400,000
Property, plant and equipment	841,200,000	829,600,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	546,800,000	532,800,000
Property, Plant and Equipment, Net	294,400,000	296,800,000
Goodwill	1,805,700,000	1,800,900,000
Other intangible assets and software, net	1,006,500,000	1,033,500,000
Deferred Income Tax Assets, Net	32,600,000	33,100,000
Other assets	166,200,000	91,300,000
Assets	4,647,100,000	4,919,000,000.0
Current Liabilities
Trade accounts payable	224,700,000	197,600,000
Short-term borrowings	245,600,000	660,400,000
Accrued compensation	98,500,000	130,400,000
Accrued product warranties	29,000,000.0	29,700,000
Accrued rebates	47,500,000	47,700,000
Deferred Revenue	105,700,000	107,300,000
Other current liabilities	134,400,000	95,200,000
Total current liabilities	885,400,000	1,268,300,000
Long-term debt	1,864,400,000	1,783,100,000
Accrued pension and postretirement benefits	100,800,000	80,800,000
Deferred Income Tax Liabilities, Net	123,700,000	143,000,000.0
Other long-term liabilities	123,900,000	70,500,000
Total Liabilities	3,098,200,000	3,345,700,000
Commitments and Contingencies (Note 14)
SHAREHOLDERS' EQUITY
Common Stock, Value, Issued	4,400,000	4,400,000
Additional paid-in capital	644,400,000	637,400,000
Retained earnings	2,025,200,000	1,967,400,000
Accumulated other comprehensive loss	(223,600,000)	(182,500,000)
Treasury stock, common shares at cost: 21,929,904 as of March 31, 2020 and 21,832,623 as of September 30, 2019	(901,500,000)	(853,400,000)
Total Shareholders’ Equity	1,548,900,000	1,573,300,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,548,900,000	1,573,300,000
Total Liabilities and Shareholders' Equity	4,647,100,000	4,919,000,000.0
Allowance for possible losses and discounts on trade receivables	$ 20.8	$ 20.6
Shares authorized	1,000,000
Common Stock, Shares Authorized	199,000,000
Common Stock, Shares, Issued	88,457,634
Common Stock, Shares, Outstanding	66,527,730	66,625,011
Treasury Stock, Common, Shares	21,929,904	21,832,623

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Financing Agreements (Future Principal Payments of Long-Term Debt) (Details) $ in Millions	Sep. 30, 2019 USD ($)
Senior Unsecured 4.375% Notes due September 2027 [Member]
Debt Instrument [Line Items]
Debt Issuance Costs, Gross	$ 6.3

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Business Combinations Dispositions (Details) $ in Millions	3 Months Ended
	Dec. 31, 2019 USD ($)
Noncash or Part Noncash Divestitures [Line Items]
Professional Fees	$ 4.0
Gain (Loss) on Disposition of Other Assets	$ 15.9

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Leases (Details) - USD ($)	3 Months Ended		6 Months Ended			12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2017	Sep. 30, 2019	Sep. 30, 2018
Leases [Abstract]
Lease, Cost	$ 9,800,000		$ 19,400,000
Operating Lease, Expense	7,000,000.0		13,800,000
Variable Lease, Cost	2,800,000		5,600,000
Operating Lease, Right-of-Use Asset	72,600,000		72,600,000
Operating Lease, Liability, Current	22,000,000.0		22,000,000.0
Operating Lease, Liability, Noncurrent	$ 55,200,000		$ 55,200,000
Lessee, Operating Lease, Discount Rate	3.30%		3.30%
Operating Lease, Weighted Average Remaining Lease Term	4 years 9 months 18 days		4 years 9 months 18 days
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 12,700,000		$ 12,700,000
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months	22,500,000		22,500,000
Lessee, Operating Lease, Liability, Payments, Due Year Two	17,200,000		17,200,000
Lessee, Operating Lease, Liability, Payments, Due Year Three	12,100,000		12,100,000
Lessee, Operating Lease, Liability, Payments, Due Year Four	7,300,000		7,300,000
Lessee, Operating Lease, Liability, Payments, Due Year Five	4,800,000		4,800,000
Lessee, Operating Lease, Liability, Payments, Due after Year Five	10,200,000		10,200,000
Lessee, Operating Lease, Liability, Payments, Due	86,800,000		86,800,000
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(9,600,000)		(9,600,000)
Operating Lease, Liability	77,200,000		77,200,000
Operating Leases, Future Minimum Payments Receivable						$ 94,900,000
Operating Leases, Future Minimum Payments Receivable, Current						25,700,000
Operating Leases, Future Minimum Payments Receivable, in Two Years						21,400,000
Operating Leases, Future Minimum Payments Receivable, in Three Years						15,700,000
Operating Leases, Future Minimum Payments Receivable, in Four Years						11,100,000
Operating Leases, Future Minimum Payments Receivable, in Five Years						6,400,000
Operating Leases, Future Minimum Payments Receivable, Thereafter						14,600,000
Operating Leases, Rent Expense					$ 38,000,000.0	$ 39,800,000	$ 41,300,000
Rental expenses	38,500,000	$ 38,900,000	75,500,000	$ 76,100,000
Lessee, Lease, Description [Line Items]
Operating Lease, Expense	7,000,000.0		13,800,000
Variable Lease, Cost	$ 2,800,000		$ 5,600,000
Operating Lease, Weighted Average Remaining Lease Term	4 years 9 months 18 days		4 years 9 months 18 days

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Segment Reporting

6 Months Ended

Mar. 31, 2020

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 reportable segments:

•Patient Support Systems – globally provides our med-surg and specialty bed systems and surfaces, safe patient handling equipment and mobility solutions, as well as our care communications platform that delivers software and information technologies to improve care and deliver actionable insight to caregivers and patients.

•Front Line Care – globally provides 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, including a portfolio of vision care and respiratory health devices.

•Surgical Solutions – globally provides products that improve safety and efficiency in the surgical space, including tables, lights, pendants, precision positioning devices and other 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, excluding acquisition-related intangible asset amortization, 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 reportable segment and, accordingly, we do not report asset information by reportable segment.

Effective for fiscal 2020, the allocation of operating costs to each segment was modified to improve the alignment to how management evaluates the performance of each segment. The fiscal 2019 segment information has been recast to conform to the current presentation. The reclassification did not impact our reported Consolidated Net Revenue or Income Before Income Taxes.

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Revenue - United States:
Patient Support Systems	$	289.3	$	267.2	$	555.9	$	515.3
Front Line Care	179.2		170.2		357.3		336.7
Surgical Solutions	38.0		55.6		75.1		109.5
Total net revenue - United States	$	506.5	$	493.0	$	988.3	$	961.5
Net Revenue - Outside of the United States (“OUS”):
Patient Support Systems	$	92.8	$	92.4	$	170.4	$	185.3
Front Line Care	79.0		72.9		155.5		139.8
Surgical Solutions	44.9		55.9		94.0		111.1
Total net revenue - OUS	$	216.7	$	221.2	$	419.9	$	436.2
Net Revenue:
Patient Support Systems	$	382.1	$	359.6	$	726.3	$	700.6
Front Line Care	258.2		243.1		512.8		476.5
Surgical Solutions	82.9		111.5		169.1		220.6
Total net revenue	$	723.2	$	714.2	$	1,408.2	$	1,397.7
Divisional Income:
Patient Support Systems	$	74.9	$	72.2	$	133.3	$	131.9
Front Line Care	77.7		67.2		151.2		128.9
Surgical Solutions	13.7		15.1		26.5		26.4
Other Operating Costs:
Non-allocated operating costs, administrative costs, and other	70.2		69.7		128.2		123.6
Special charges	8.8		3.5		16.6		11.5
Operating Profit	87.3		81.3		166.2		152.1
Interest expense	(19.1)		(21.8)		(38.5)		(43.1)
Loss on extinguishment of debt	—		—		(15.6)		—
Investment income (expense) and other, net	(11.4)		1.2		(12.7)		1.3
Income Before Income Taxes	$	56.8	$	60.7	$	99.4	$	110.3

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Revenue Recognition (Tables)

6 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

The following summarizes contract liability activity for fiscal 2019 and the six months ended March 31, 2020. The contract liability balance represents the transaction price allocated to the remaining performance obligations.

	Contract Liabilities
Balance as of October 1, 2018	$	47.8
Revenue deferred due to ASC 606 initial adoption	58.4
Deferred revenue acquired	10.7
New revenue deferrals	282.1
Revenue recognized upon satisfaction of performance obligations	(273.2)
Balance as of September 30, 2019	125.8
Deferred revenue acquired	2.7
New revenue deferrals	168.4
Revenue recognized upon satisfaction of performance obligations	(166.2)
Balance as of March 31, 2020	$	130.7

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Leases (Tables)

6 Months Ended

Mar. 31, 2020

Leases [Abstract]

Lease, Cost [Table Text Block]

The following table summarizes the balance sheet classification of our operating leases and amounts of the ROU asset and lease liability as of March 31, 2020:

	Balance Sheet Classification	March 31, 2020
Right-of-use assets	Other assets	$	72.6
Current lease liabilities	Other current liabilities	22.0
Non-current lease liabilities	Other long-term liabilities	55.2

Supplemental information:	March 31, 2020
Weighted-average discount rate	3.3	%
Weighted-average remaining lease term in years	4.8

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table summarizes the maturities of our operating leases as of March 31, 2020:

Fiscal Year	Amount
Remaining 2020	$	12.7
2021	22.5
2022	17.2
2023	12.1
2024	7.3
2025	4.8
Thereafter	10.2
Total lease payments	86.8
Less: imputed interest	(9.6)
Total lease liability	$	77.2

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

As disclosed in the 2019 Form 10-K, future minimum payments under non-cancellable operating leases (excluding executory costs) aggregating $94.9 million for manufacturing facilities, warehouse distribution centers, service centers, sales offices, automobiles and other equipment consisted of the following:

Fiscal Year	Amount
2020	$	25.7
2021	21.4
2022	15.7
2023	11.1
2024	6.4
2025 and beyond	14.6

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating Activities
Net Income (Loss) Attributable to Parent	$ 86,700,000	$ 91,700,000
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by operating activities:
Depreciation and Amortization of PP&E and Software	34,100,000	36,400,000
Acquisition-related intangible asset amortization	53,800,000	53,000,000.0
Amortization of Debt Issuance Costs and Discounts	2,100,000	3,200,000
Gain (Loss) on Extinguishment of Debt	15,600,000	0
Benefit for deferred income taxes	(8,400,000)	(8,200,000)
Loss (Gain) on disposal of property, equipment, intangible assets, and impairments	1,200,000	(200,000)
Stock compensation	19,000,000.0	16,900,000
Other Operating Activities, Cash Flow Statement	12,400,000	(4,100,000)
Change in working capital excluding cash, current debt, acquisitions and dispositions:
Trade accounts receivable	12,200,000	24,000,000.0
Inventories	(1,700,000)	(1,500,000)
Other current assets	(23,600,000)	3,700,000
Trade accounts payable	6,300,000	(6,600,000)
Accrued expenses and other liabilities	(55,200,000)	(54,300,000)
Increase (Decrease) in Accounts Receivable	(12,200,000)	(24,000,000.0)
Increase (Decrease) in Inventories	1,700,000	1,500,000
Increase (Decrease) in Other Operating Assets	23,600,000	(3,700,000)
Increase (Decrease) in Accounts Payable, Trade	6,300,000	(6,600,000)
Accrued expenses and other liabilities	(55,200,000)	(54,300,000)
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	(2,200,000)	(4,200,000)
Net cash, cash equivalents and restricted cash provided by operating activities	156,700,000	158,200,000
Investing Activities
Purchases of property, plant, equipment and software	(46,100,000)	31,400,000
Proceeds on sale of property and equipment	1,400,000	3,100,000
Payments to Acquire Businesses, Gross	(13,100,000)	0
Payments to Acquire Intangible Assets	0	(17,100,000)
Payments to Acquire Investments	0	(26,600,000)
Other investing activities	(100,000)	(200,000)
Net cash, cash equivalents and restricted cash used in investing activities	(57,900,000)	(71,800,000)
Financing Activities
Payment of long-term debt	25,100,000	(100,000)
Borrowings on Revolving Credit Facility	190,000,000.0	(110,000,000.0)
Payments on Revolving Credit Facility	85,000,000.0	(105,000,000.0)
Borrowings on Securitization Facility	13,200,000	4,900,000
Payments on Securitization Facility	(17,700,000)	4,900,000
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement	32,600,000	37,500,000
Payments on Note Securitization Facility	(21,200,000)	28,400,000
Payment for Debt Extinguishment or Debt Prepayment Cost	(12,200,000)	0
Repayments of Senior Debt	(425,000,000.0)	0
Cash dividends	(28,700,000)	(27,400,000)
Proceeds on exercise of stock options	5,700,000	8,600,000
Payment, Tax Withholding, Share-based Payment Arrangement	(15,800,000)	(4,000,000.0)
Payments for Repurchase of Common Stock	(54,100,000)	75,000,000.0
Proceeds from (Payments for) Other Financing Activities	3,900,000	3,700,000
Net cash, cash equivalents and restricted cash used in financing activities	(439,400,000)	(80,100,000)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,700,000)	(2,300,000)
Net Cash Flows	(343,300,000)	4,000,000.0
Cash, Cash Equivalents and Restricted Cash:
Cash and cash equivalents	214,100,000	187,000,000.0
At beginning of period	214,100,000	183,000,000.0
At end of period	290,500,000	187,000,000.0
Capital Expenditures Incurred but Not yet Paid	4,000,000.0	300,000
Restricted Stock or Unit Expense	27,100,000	9,900,000
Equity Method Investment, Realized Gain (Loss) on Disposal	2,800,000
Treasury Stock, Value, Acquired, Cost Method	(54,100,000)	(75,000,000.0)
Net Income (Loss) Attributable to Parent	86,700,000	91,700,000
Treasury Stock [Member]
Financing Activities
Payment, Tax Withholding, Share-based Payment Arrangement	(15,800,000)	(4,000,000.0)
Cash, Cash Equivalents and Restricted Cash:
Treasury Stock, Value, Acquired, Cost Method	$ (54,100,000)	$ (75,000,000.0)

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Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2020	Apr. 29, 2020
Document And Entity Information Abstract
Document Type	10-Q
Title of 12(b) Security	Common Stock, without par value
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	1-6651
Entity Registrant Name	HILL-ROM HOLDINGS, INC.
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-1160484
Entity Address, Address Line One	130 E. Randolph St.
Entity Address, Address Line Two	Suite 1000
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60601
City Area Code	312
Local Phone Number	819-7200
Trading Symbol	HRC
Security Exchange Name	NYSE
Amendment Flag	false
Entity Central Index Key	0000047518
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		66,555,501
Entity Emerging Growth Company	false
Entity Small Business	false

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Supplementary Balance Sheet Information

6 Months Ended

Mar. 31, 2020

Balance Sheet Related Disclosures [Abstract]

Supplementary Balance Sheet Information

Supplementary Financial Statement Information

	March 31, 2020		September 30, 2019
Inventories, net of reserves:
Finished products	$	114.3	$	120.5
Work in process	42.7		42.4
Raw materials	108.5		106.7
Total inventories, net of reserves	$	265.5	$	269.6
Accumulated amortization of software and other intangible assets	$	602.2	$	597.0
Investments included in Other assets	$	47.7	$	51.1

Investments

In the first quarter of fiscal 2019, we acquired $26.6 million of non-marketable equity securities that are valued at cost.

During the six months ended March 31, 2020, we sold an equity investment with a carrying value of $3.1 million and recognized a loss of $0.3 million, which is recorded as a component of Investment income (expense) and other, net. Additionally, we recognized an impairment loss of $1.7 million on a cost method investment. The loss was recorded as a component of Investment income (expense) and other, net.

Supplemental Cash Flow Information

	Six Months Ended March 31
	2020		2019
Non-cash investing activities:
Change in capital expenditures not paid	$	4.0	$	0.3
Sale of equity method investment	2.8		—
Total non-cash investing activities:	$	6.8	$	0.3
Non-cash financing activities:
Distribution of shares issued under stock-based compensation plans	$	27.1	$	9.9

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Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2020 USD ($)
Uninsured Risk [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Deductibles and self-insured retentions	$ 1.0

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Retirement and Postretirement Plans (Defined Benefit Plans) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 2,400,000	$ 3,200,000	$ 4,900,000	$ 6,300,000
Expected return on plan assets	(3,700,000)	(3,700,000)	(7,400,000)	(7,400,000)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	0	0	100,000	0
Amortization of net loss	1,600,000	600,000	3,100,000	1,200,000
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Remeasurement due to Settlement	8,500,000		8,500,000
Net pension expense	10,000,000.0	1,200,000	11,600,000	2,300,000
Defined Benefit Plan, Plan Assets, Increase (Decrease) for Assets Transferred to (from) Plan	40,600,000
Defined contribution savings plans expense	10,100,000	8,300,000	16,300,000	14,500,000
Cost of Goods and Service Benchmark [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	400,000	400,000	800,000	700,000
Selling, General and Administrative Expenses [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 800,000	$ 700,000	$ 1,600,000	$ 1,500,000

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Financing Agreements (Narrative) (Details) - USD ($)		3 Months Ended			6 Months Ended		12 Months Ended
	May 01, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019	Jun. 30, 2019
Debt Instrument [Line Items]
Payment of long-term debt					$ (25,100,000)	$ 100,000
Payment for Debt Extinguishment or Debt Prepayment Cost					(12,200,000)	0
Gain (Loss) on Extinguishment of Debt		$ 0		$ 0	(15,600,000)	$ 0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Revolving credit facility, matures September 2021							$ 80,000,000.0
Securitization Program [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	364 days
Aggregate value of debt	$ 110,000,000.0
Unsecured debenture interest rate								0.675%
Note Securitization Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	364 days
Aggregate value of debt	$ 90,000,000.0
Senior Secured Term Loan A [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Three								$ 0
Maximum interest rate during period							0.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Senior revolving credit facility, maximum borrowing amount		1,007.8			1,007.8
Current borrowing capacity under the facility							$ 1,112.8
Outstanding letters of credit		7,200,000			7,200,000		$ 7,200,000
Debtor-in-Possession Financing, Borrowings Outstanding		$ 185,000,000.0			$ 185,000,000.0
Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Maximum interest rate during period			2.30%
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member]
Debt Instrument [Line Items]
Unsecured debenture interest rate		5.75%			5.75%			5.75%
Payment for Debt Extinguishment or Debt Prepayment Cost		$ (12,200,000)
Gain (Loss) on Extinguishment of Debt		15,600,000
Write off of Deferred Debt Issuance Cost		$ 3,400,000
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Debt Instrument [Line Items]
Unsecured debenture interest rate							5.00%
Senior Unsecured 4.375% Notes due September 2027 [Member]
Debt Instrument [Line Items]
Aggregate value of debt							$ 425,000,000.0
Unsecured debenture interest rate							4.375%
London Interbank Offered Rate (LIBOR) [Member] | Securitization Program [Member]
Debt Instrument [Line Items]
Unsecured debenture interest rate		0.80%			0.80%
London Interbank Offered Rate (LIBOR) [Member] | Note Securitization Facility [Member]
Debt Instrument [Line Items]
Unsecured debenture interest rate		0.90%			0.90%		100.00%

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Business Combinations Breathe Acquisition (Details) - USD ($)		3 Months Ended	6 Months Ended
	Oct. 01, 2018	Dec. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019	Sep. 03, 2019
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 17,100,000		$ (13,100,000)	$ 0
Goodwill			$ 1,805,700,000		$ 1,800,900,000
Professional Fees		$ 4,000,000.0
Customer Relationships [Member] | Breathe [Member]
Business Acquisition [Line Items]
Intangible Assets						$ 400,000

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Retirement and Postretirement Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Retirement Benefits [Abstract]
Defined contribution savings plans expense	$ 10.1	$ 8.3	$ 16.3	$ 14.5

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Special Charges (Schedule of Restructuring Activity) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2020
Restructuring Cost and Reserve [Line Items]
Beginning Balance		$ 8.5
Expenses		4.4
Cash Payments		(7.8)
Restructuring Reserve, Accrual Adjustment		(0.3)
Ending Balance	$ 4.8	4.8
Other Restructuring [Member] | Global Restructuring Program [Member]
Restructuring Cost and Reserve [Line Items]
Expenses	$ 9.9	$ 19.3

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Common Stock Common Stock (Share Repurchase Program) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2020	Mar. 31, 2019
Equity, Class of Treasury Stock [Line Items]
Payments for Repurchase of Common Stock		$ 54,100,000	$ (75,000,000.0)
Payments for Repurchase of Common Stock	$ 54,100,000	$ 54,100,000	$ 75,000,000.0

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Business Combinations Acquisitions (Details) - USD ($)					3 Months Ended						6 Months Ended
	Jan. 10, 2020	Sep. 03, 2019	Apr. 01, 2019	Oct. 01, 2018	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2020	Mar. 31, 2019
Business Acquisition, Contingent Consideration [Line Items]
Payments to Acquire Businesses, Gross				$ 17,100,000							$ (13,100,000)	$ 0
Professional Fees						$ 4,000,000.0
Goodwill					$ 1,805,700,000		$ 1,800,900,000				1,805,700,000
Prepaid Royalties							$ 22,000,000.0
Special charges					8,800,000				$ 3,500,000		16,600,000	$ 11,500,000
BreatheAcquisition [Member]
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables		$ 300,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory		6,300,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other		100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		2,100,000
Goodwill		60,200,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Assets		200,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable		(500,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other		(1,600,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities		(800,000)
Payments to Acquire Businesses, Net of Cash Acquired		127,600,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities		900,000
Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability					8,400,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High			$ 15,000,000.0
Payments to Acquire Businesses, Gross			175,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables			5,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory			100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other			2,700,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment			200,000
Goodwill			98,500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable			(1,700,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue			(10,700,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other			(4,300,000)
Business Combination, Contingent Consideration, Liability			5,200,000
Payments to Acquire Businesses, Net of Cash Acquired			181,000,000.0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities			(9,800,000)
Excel [Member]
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability					1,600,000
Contingent Consideration Classified as Equity, Fair Value Disclosure					4.5						4.5
Business Combination, Integration Related Costs					0.7						0.8
Excel Medical
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 15,000,000.0
Payments to Acquire Businesses, Gross											13,100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	600,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	900,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other	100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	100,000
Goodwill	9,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	(2,700,000)
Business Combination, Contingent Consideration, Liability	6,100,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities	(500,000)
Payments to Acquire Businesses, Net of Cash Acquired	19,200,000
Breathe [Member]
Business Acquisition, Contingent Consideration [Line Items]
Business Combination, Integration Related Costs					0.6						1.5
Special charges					$ 0.5						$ 2.2
Noncompete Agreements [Member] | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets			2,700,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life								5 years
Trade Names [Member] | BreatheAcquisition [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets		4,000,000.0
Trade Names [Member] | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets			13,500,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life								10 years
Trade Names [Member] | Breathe [Member]
Business Acquisition, Contingent Consideration [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life										2 years
Customer Relationships [Member] | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets			29,000,000.0
Customer Relationships [Member] | Breathe [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets		400,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life							8 years
Developed Technology Rights [Member] | BreatheAcquisition [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets		$ 56,000,000.0
Developed Technology Rights [Member] | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets			$ 55,000,000.0
Developed Technology Rights [Member] | Excel Medical
Business Acquisition, Contingent Consideration [Line Items]
Intangible Assets	$ 10,900,000
Technology-Based Intangible Assets [Member] | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life								8 years
Technology-Based Intangible Assets [Member] | Excel [Member]
Business Acquisition, Contingent Consideration [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life					5 years
Technology-Based Intangible Assets [Member] | Breathe [Member]
Business Acquisition, Contingent Consideration [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life							11 years
Customer-Related Intangible Assets | Voalte [Member]
Business Acquisition, Contingent Consideration [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life								10 years

XML

Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended					6 Months Ended		12 Months Ended
	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017	Oct. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Liability	$ 77,200,000					$ 77,200,000
Operating Lease, Right-of-Use Asset	72,600,000					72,600,000
Selling and administrative expenses	$ 209,900,000	$ 245,400,000	$ 246,400,000	$ 231,200,000	$ 218,000,000.0	406,700,000		$ 941,000,000.0	$ 891,600,000	$ 874,500,000
Acquisition-related intangible asset amortization		40,100,000	29,300,000	27,300,000	25,700,000	$ 53,800,000	$ 53,000,000.0	122,400,000	106,900,000	108,400,000
Selling and administrative expense, revised		$ 205,300,000	$ 217,100,000	$ 203,900,000	$ 192,300,000		396,200,000	$ 818,600,000	$ 784,700,000	$ 766,100,000
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Liability											$ 85,800,000
Operating Lease, Right-of-Use Asset											82,500,000
Deferred Rent Credit, Noncurrent											$ 3,300,000
Accounting Standards Update 2016-16 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative Effect on Retained Earnings, Net of Tax							$ (5,600,000)

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Special Charges (Tables)

6 Months Ended

Mar. 31, 2020

Special Charges [Abstract]

Restructuring Activity

The reserve activity for severance and other benefits for the six months ended March 31, 2020 was as follows:

Balance as of September 30, 2019	$	8.5
Expenses	4.4
Cash Payments	(7.8)
Reversals	(0.3)
Balance as of March 31, 2020	$	4.8

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Derivatives

6 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Instruments and Hedging Activity

We are exposed to various market risks, including fluctuations in interest rates and variability in foreign 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 employ cash flow hedges, net investment hedges, and other derivative instruments not designated for hedge accounting to manage these risks.

Cash Flow Hedges

To manage our exposure to market risk from fluctuations in interest rates, we enter into interest rate swaps that are designated as cash flow hedges. As of March 31, 2020, we had interest rate swap agreements with an aggregate notional amount of $750.0 million to hedge the variability of cash flows through August 2024 associated with a portion of the variable interest rate payments on outstanding borrowings under our Senior Credit Agreement. As of March 31, 2020, these swaps were in a net liability position with an aggregate fair value of $45.2 million and were classified as Other current liabilities. As of September 30, 2019, we had interest rate swap agreements, with an aggregate notional amount of $750.0 million to hedge the variability of cash flows associated with a portion of the variable interest rate payments on outstanding borrowings under our Senior Credit Agreement through September 2021. As of September 30, 2019, these swaps were in a net liability position with an aggregate fair value of $6.8 million, of which $0.9 million were classified as Other assets and $7.7 million were classified as Other current liabilities. We classify fair value measurements on our interest rate swaps as Level 2.

We are subject to variability in foreign currency exchange rates due to our international operations. We enter into currency exchange agreements that are designated as cash flow hedges to manage our exposure arising from fluctuating exchange rates related to specific and projected 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 projected foreign currency denominated intercompany and third-party transactions. As of March 31, 2020, there were no foreign exchange contracts outstanding. As of September 30, 2019, the notional amount of outstanding foreign exchange contracts was $6.7 million and they were in a net asset position reported in Other current assets with an aggregate fair value of $0.2 million. The maximum length of time over which we hedge transaction exposures is generally 15 months. Derivative gains and losses, initially reported as a component of Accumulated other comprehensive income (loss), are reclassified to earnings in the period when the transaction affects earnings.

Net Investment Hedges

As of March 31, 2020, we had cross-currency swap agreements, with an aggregate notional amount of $198.3 million, to hedge the variability of net assets due to changes in the U.S. dollar-Euro spot exchange rates through July 2023. These cross-currency swaps are designated as net investment hedges of subsidiaries using the Euro as their functional currency. As of March 31, 2020 and September 30, 2019, these swaps were in a net asset position with aggregate fair values of $22.3 million and $16.9 million, respectively, and were classified as Other assets.

We classify fair value measurements on our cross-currency swaps as Level 2. We assess hedge effectiveness under the spot-to-spot method and record changes in fair value attributable to the translation of foreign currencies through Accumulated other comprehensive income (loss). We amortize the impact of all other changes in fair value of the derivatives through Interest expense, which was income of $1.3 million and $2.6 million for the three and six months ended March 31, 2020 compared to income of $1.2 million and expense of $0.1 million for the three and six months ended March 31, 2019.

Undesignated Derivative Instruments

We use forward contracts to mitigate the foreign exchange revaluation risk associated with recorded monetary assets and liabilities that are denominated in a non-functional currency. These derivative instruments are not formally designated as hedges and the terms of these instruments generally do not exceed one month. As of March 31, 2020, we had forward contracts not designated as hedges with aggregate notional amounts of $76.0 million. As of September 30, 2019, we had forward contracts not designated as hedges with aggregate notional amounts of $76.7 million. For the three months ended March 31, 2020, we recognized unrealized gains of $0.1 million and realized gains of $0.6 million. For the six months ended March 31, 2020, we recognized unrealized gains of $0.1 million and realized gains of $1.1 million. We recognized unrealized losses of $0.5 million and realized losses of $0.3 million for both the three and six months ended March 31, 2019. The unrealized and realized gains and losses for forward contracts not designated as hedges are recorded in Investment income (expense) and other, net.

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Special Charges

6 Months Ended

Mar. 31, 2020

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 $8.8 million and $16.6 million for the three and six months ended March 31, 2020 compared to $3.5 million and $11.5 million for the three and six months ended March 31, 2019. Although these charges are non-recurring in nature, additional Special charges are expected to be incurred related to restructuring and transformative initiatives in future periods. It is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

These charges are summarized as follows:

Business Optimization and Realignment

Management pursues opportunities to align our operations to achieve synergies and position the business for growth. In fiscal 2018, a global transformation program was launched that was focused on reducing complexity, increasing efficiency and improving our cost structure with targeted investments that align with our strategic priorities.

As part of this program, management launched an initiative related to a global information technology transformation, including rationalizing and transforming our enterprise resource planning software solutions and other complementary information technology systems. For the three months ended March 31, 2020, the Company incurred $9.9 million related to this initiative, of which $5.4 million was capitalized and $4.5 million was expensed in Special charges. For the six months ended March 31, 2020, the Company incurred $19.3 million, of which $10.7 million was capitalized and $8.6 million was expensed in Special charges. The objective of this initiative is to consolidate and streamline our key workstreams that interact with customers and vendors and support our financial reporting processes while maintaining the security of our data. The solutions designed under this initiative will be implemented over the next five to seven years.

We acquired several businesses in fiscal 2019 and 2020 as disclosed within Note 4. Business Combinations for which we continue to incur integration-related costs and severance costs. These costs were recorded to Special charges for the three and six months ended March 31, 2020. We also incurred costs, including severance and benefit costs, associated with other business realignment and integration activities. 

For the three and six months ended March 31, 2020, we incurred total business optimization and realignment charges of $8.2 million and $15.5 million, of which $2.1 million and $3.9 million were severance and benefit costs with the remainder related to professional fees and project management costs. These amounts compare to charges of $2.5 million and $6.3 million for the three and six months ended March 31, 2019, of which $1.0 million and $3.8 million were severance and benefit costs with the remainder related to professional fees and project management costs.

Site Consolidation

We continue to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). For the three and six months ended March 31, 2020, we recorded charges of $0.7 million and $1.2 million related to these efforts, primarily comprised of site closure costs and severance and benefit costs. These amounts compare to charges of $1.0 million and $5.1 million related to these efforts for the three and six months ended March 31, 2019, primarily comprised of severance and benefit costs, lease termination and facility closure costs.

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 for the six months ended March 31, 2020 was as follows:

Balance as of September 30, 2019	$	8.5
Expenses	4.4
Cash Payments	(7.8)
Reversals	(0.3)
Balance as of March 31, 2020	$	4.8

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Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Nature of Operations

Hill-Rom Holdings, Inc. (the “Company,” “Hillrom,” “we,” “us,” or “our”) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Chicago, Illinois. We are a global medical technology leader whose approximately 10,000 employees have a single purpose: enhancing outcomes for patients and their caregivers by Advancing Connected Care™. Around the world, our innovations touch over 7 million patients each day. Our products and services help enable earlier diagnosis and treatment, optimize surgical efficiency and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. We make these outcomes possible through connected smart beds, patient lifts, patient assessment and monitoring technologies, caregiver collaboration tools, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care.

Basis of Presentation and Principles of Consolidation

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 Hillrom’s latest fiscal 2019 Form 10-K as filed with the SEC. The September 30, 2019 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 United States. In the opinion of management, the Condensed Consolidated Financial Statements herein include all 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 Hillrom and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

The Company makes a number of significant estimates, assumptions and judgments in the preparation of its financial statements. Additionally, the Company measures and classifies fair value measurements in accordance with the level hierarchy in conformity with accounting principles generally accepted in the United States (“GAAP”). As of March 31, 2020, the Company's significant accounting policies and estimates and valuation techniques used to measure fair value have not changed from September 30, 2019. See Note 1. Summary of Significant Accounting Policies within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Prior Period Reclassification

Beginning in fiscal year 2020, we are presenting Acquisition-related intangible asset amortization as a separate line item on our Condensed Consolidated Statements of Income for all periods presented. Acquisition-related intangible asset amortization was previously included in Selling and administrative expenses. Additionally, we will no longer present Gross Profit as a subtotal on our Statements of Income.

The following table presents Acquisition-related intangible asset amortization and Selling and administrative expenses, excluding the Acquisition-related intangible asset amortization, for the years ended September 30, 2019, 2018 and 2017, and for each quarterly period of fiscal 2019.

	Quarter Ended								Year Ended
	December 31, 2018		March 31, 2019		June 30, 2019		September 30, 2019		September 30, 2019		September 30, 2018		September 30, 2017
Selling and administrative expense, previously reported	$	218.0	$	231.2	$	246.4	$	245.4	$	941.0	$	891.6	$	874.5
Less, Acquisition-related intangible asset amortization	25.7		27.3		29.3		40.1		122.4		106.9		108.4
Selling and administrative expense, currently reported	$	192.3	$	203.9	$	217.1	$	205.3	$	818.6	$	784.7	$	766.1

Goodwill

As of March 31, 2020, we evaluated goodwill for impairment in response to the impacts of the COVID-19 pandemic on the global economy and the results of this evaluation did not result in any impairments.

For the Surgical Solutions segment, we expect near-term lower demand for operating room infrastructure due to project delays as customers are currently focusing on the demands of the pandemic.

Slower recovery resulting from extended project delays, an increase in discount rates, unfavorable changes in earnings multiples or a decline in future cash flow projections, among other factors, may cause a change in circumstances indicating that the carrying value of our goodwill may not be recoverable. If future financial assumptions significantly differ from those evaluated in the assessment noted above due to duration or magnitude of the impact of COVID-19, we can provide no assurance that a future goodwill impairment charge would not be incurred.

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and subsequently issued related amendments, collectively referred to as “ASC 842”. The objective of this guidance is to increase transparency and comparability among organizations through recognizing leased assets, called right-of-use assets (“ROU”), and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  As a lessee, the new standard requires us to recognize both the ROU assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (referred to as capital leases) were recognized in the balance sheet. In addition, for both lessees and lessors, the definition of a lease has been revised, which may result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used is a lease, whereas the previous definition focused on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgments of an entity’s accounting for leases and the related cash flows are expanded under the new standard. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of revenues, expenses and cash flows arising from a lease have not significantly changed from previous GAAP.

We adopted ASC 842 effective October 1, 2019 using the optional transition method approach. We elected the package of practical expedients, which applies to both lessees and lessors, to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification and (3) not reassess initial direct costs associated with existing leases.

As a lessee, the adoption of the guidance on October 1, 2019 resulted in the recognition of ROU assets of $82.5 million and lease liabilities of $85.8 million, which all related to operating leases. The ROU assets were lower than the lease liabilities due to the derecognition of deferred rent balances of $3.3 million. As a lessor, our accounting was not impacted by the adoption of this guidance. We did not recognize any adjustment to the comparative period presented in the financial statements in accordance with our adoption method. The guidance did not have a material impact on our Condensed Consolidated Statements of Income.

See Note 7. Leases for additional information on the impacts of ASC 842.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. ASU 2017-04 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We early adopted this standard in the first quarter of fiscal 2020 and the guidance did not have a material impact on our Condensed Consolidated Financial Statements.

In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The purpose of the standard is to allow the use of the OIS rate based on the SOFR for hedge accounting purposes, which allows entities to designate changes in the fair values of fixed-rate financial assets or liabilities attributable to the OIS rate as the hedged risk.  The amendment recognizes the OIS rate based on the SOFR as likely London Interbank Offered Rate (“LIBOR”) replacements and supports the marketplace transition by adding the new reference rate as a benchmark rate.  The adoption of this ASU did not impact our financial statements as we have not yet utilized the OIS rate based on the SOFR for borrowings under our lending arrangements or as a benchmark rate for hedge accounting purposes. We will continue to monitor, assess and plan for the phase out of LIBOR.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments and subsequently issued related amendments, collectively referred to as “Topic 326”. Topic 326 requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. For available-for-sale debt securities with unrealized losses, entities will recognize credit losses through an allowance for credit losses. Topic 326 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The purpose of the standard is to improve the overall usefulness of fair value disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-13 is effective for our first quarter of fiscal 2021 and requires the application of the prospective method of transition (for only the most recent interim or annual period presented in the initial fiscal year of adoption) to the new disclosure requirements for (1) changes in unrealized gains and losses included in other comprehensive income and (2) the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 also requires prospective application to any modifications to disclosures made because of the change to the requirements for the narrative description of measurement uncertainty. The effects of all other amendments made by ASU 2018-13 must be applied retrospectively to all periods presented. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The purpose of the standard is to improve the overall usefulness of defined benefit pension and other postretirement plan disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-14 is effective for our fourth quarter of fiscal 2021 and requires a retrospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement to be consistent with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for our first quarter of fiscal 2021 and allows a retrospective or a prospective transition method to all implementation costs incurred after the date of adoption. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. The purpose of the standard is to (1) clarify that transactions between participants in a collaborative agreement should be accounted for under Topic 606 and (2) add unit-of-account guidance in Topic 808 to align with Topic 606. ASU 2018-18 is effective for our first quarter of fiscal 2021 and must be applied retrospectively to the first quarter of fiscal 2020. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of the standard is to remove certain exceptions to the general principles of Topic 740: Income Taxes in order to reduce the cost and complexity of its application and to maintain or improve the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for our first quarter of fiscal 2021 and will be applied either retrospectively or prospectively depending on the specific Topic 740 exception affected. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The purpose of the standard is to provide guidance for the effects of the marketplace transition from LIBOR to a new reference rate as a benchmark rate.  ASU 2020-04 is optional and is effective for a limited period of time from March 12,2020 through December 31, 2022. We are continuing to monitor, assess and plan for the phase out of LIBOR and will evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

Except as noted above, there are no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1. Summary of Significant Accounting Policies of our Consolidated Financial Statements in our 2019 Form 10-K.

Nature of Operations

Hill-Rom Holdings, Inc. (the “Company,” “Hillrom,” “we,” “us,” or “our”) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Chicago, Illinois. We are a global medical technology leader whose approximately 10,000 employees have a single purpose: enhancing outcomes for patients and their caregivers by Advancing Connected Care™. Around the world, our innovations touch over 7 million patients each day. Our products and services help enable earlier diagnosis and treatment, optimize surgical efficiency and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. We make these outcomes possible through connected smart beds, patient lifts, patient assessment and monitoring technologies, caregiver collaboration tools, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care.

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net Income	$ 46,900,000	$ 49,500,000	$ 86,700,000
Other Comprehensive (Loss) Income, net of tax (Note 7):
Derivative instruments designated as hedges	(23,100,000)	(1,900,000)	(25,700,000)	$ (5,600,000)
Foreign currency translation adjustment	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Change in pension and postretirement defined benefit plans	(7,600,000)	500,000	(6,900,000)	900,000
Total Other Comprehensive Income (Loss), net of tax	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ (15,400,000)	$ 44,500,000	$ 45,600,000	$ 69,800,000

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Summary of Significant Accounting Policies Nature of Operations (Policies)

6 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Use of Estimates

The Company makes a number of significant estimates, assumptions and judgments in the preparation of its financial statements. Additionally, the Company measures and classifies fair value measurements in accordance with the level hierarchy in conformity with accounting principles generally accepted in the United States (“GAAP”). As of March 31, 2020, the Company's significant accounting policies and estimates and valuation techniques used to measure fair value have not changed from September 30, 2019. See Note 1. Summary of Significant Accounting Policies within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) and subsequently issued related amendments, collectively referred to as “ASC 842”. The objective of this guidance is to increase transparency and comparability among organizations through recognizing leased assets, called right-of-use assets (“ROU”), and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  As a lessee, the new standard requires us to recognize both the ROU assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (referred to as capital leases) were recognized in the balance sheet. In addition, for both lessees and lessors, the definition of a lease has been revised, which may result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used is a lease, whereas the previous definition focused on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgments of an entity’s accounting for leases and the related cash flows are expanded under the new standard. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of revenues, expenses and cash flows arising from a lease have not significantly changed from previous GAAP.

We adopted ASC 842 effective October 1, 2019 using the optional transition method approach. We elected the package of practical expedients, which applies to both lessees and lessors, to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification and (3) not reassess initial direct costs associated with existing leases.

As a lessee, the adoption of the guidance on October 1, 2019 resulted in the recognition of ROU assets of $82.5 million and lease liabilities of $85.8 million, which all related to operating leases. The ROU assets were lower than the lease liabilities due to the derecognition of deferred rent balances of $3.3 million. As a lessor, our accounting was not impacted by the adoption of this guidance. We did not recognize any adjustment to the comparative period presented in the financial statements in accordance with our adoption method. The guidance did not have a material impact on our Condensed Consolidated Statements of Income.

See Note 7. Leases for additional information on the impacts of ASC 842.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. ASU 2017-04 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We early adopted this standard in the first quarter of fiscal 2020 and the guidance did not have a material impact on our Condensed Consolidated Financial Statements.

In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The purpose of the standard is to allow the use of the OIS rate based on the SOFR for hedge accounting purposes, which allows entities to designate changes in the fair values of fixed-rate financial assets or liabilities attributable to the OIS rate as the hedged risk.  The amendment recognizes the OIS rate based on the SOFR as likely London Interbank Offered Rate (“LIBOR”) replacements and supports the marketplace transition by adding the new reference rate as a benchmark rate.  The adoption of this ASU did not impact our financial statements as we have not yet utilized the OIS rate based on the SOFR for borrowings under our lending arrangements or as a benchmark rate for hedge accounting purposes. We will continue to monitor, assess and plan for the phase out of LIBOR.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments and subsequently issued related amendments, collectively referred to as “Topic 326”. Topic 326 requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses rather than incurred losses. For available-for-sale debt securities with unrealized losses, entities will recognize credit losses through an allowance for credit losses. Topic 326 is effective for our first quarter of fiscal 2021 and requires a prospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The purpose of the standard is to improve the overall usefulness of fair value disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-13 is effective for our first quarter of fiscal 2021 and requires the application of the prospective method of transition (for only the most recent interim or annual period presented in the initial fiscal year of adoption) to the new disclosure requirements for (1) changes in unrealized gains and losses included in other comprehensive income and (2) the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 also requires prospective application to any modifications to disclosures made because of the change to the requirements for the narrative description of measurement uncertainty. The effects of all other amendments made by ASU 2018-13 must be applied retrospectively to all periods presented. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. The purpose of the standard is to improve the overall usefulness of defined benefit pension and other postretirement plan disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. ASU 2018-14 is effective for our fourth quarter of fiscal 2021 and requires a retrospective transition method. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement to be consistent with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for our first quarter of fiscal 2021 and allows a retrospective or a prospective transition method to all implementation costs incurred after the date of adoption. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. The purpose of the standard is to (1) clarify that transactions between participants in a collaborative agreement should be accounted for under Topic 606 and (2) add unit-of-account guidance in Topic 808 to align with Topic 606. ASU 2018-18 is effective for our first quarter of fiscal 2021 and must be applied retrospectively to the first quarter of fiscal 2020. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The purpose of the standard is to remove certain exceptions to the general principles of Topic 740: Income Taxes in order to reduce the cost and complexity of its application and to maintain or improve the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for our first quarter of fiscal 2021 and will be applied either retrospectively or prospectively depending on the specific Topic 740 exception affected. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The purpose of the standard is to provide guidance for the effects of the marketplace transition from LIBOR to a new reference rate as a benchmark rate.  ASU 2020-04 is optional and is effective for a limited period of time from March 12,2020 through December 31, 2022. We are continuing to monitor, assess and plan for the phase out of LIBOR and will evaluating the impact of adoption on our Condensed Consolidated Financial Statements.

Except as noted above, there are no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1. Summary of Significant Accounting Policies of our Consolidated Financial Statements in our 2019 Form 10-K.

Basis of Presentation and Principles of Consolidation

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 Hillrom’s latest fiscal 2019 Form 10-K as filed with the SEC. The September 30, 2019 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 United States. In the opinion of management, the Condensed Consolidated Financial Statements herein include all 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 Hillrom and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

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Business Combinations Acquisitions (Tables)

6 Months Ended

Mar. 31, 2020

Business Combination [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Excel Medical acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.6
Inventories	0.9
Other current assets	0.1
Property, plant and equipment	0.1
Goodwill	9.8
Developed technology	10.9
Deferred revenue	(2.7)
Other current liabilities	(0.5)
Total purchase price, net of cash acquired	$	19.2

The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Breathe acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.3
Inventories	6.3
Other current assets	0.1
Property, plant and equipment	2.1
Goodwill	60.2
Trade name	4.0
Customer relationships	0.4
Developed technology	56.0
Other assets	0.2
Trade accounts payable	(0.5)
Other current liabilities	(1.6)
Deferred income taxes	0.9
Other long-term liabilities	(0.8)
Total purchase price, net of cash acquired	$	127.6

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

	Amount
Trade accounts receivable	$	5.8
Inventories	0.1
Other current assets	2.7
Property, plant and equipment	0.2
Goodwill	98.5
Non-competition agreements	2.7
Trade name	13.5
Customer relationships	29.0
Developed technology	55.0
Trade accounts payable	(1.7)
Deferred revenue	(10.7)
Other current liabilities	(4.3)
Deferred income taxes	(9.8)
Total purchase price, net of cash acquired	$	181.0

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Derivatives (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019
Cash Flow Hedging [Member] | Other Assets [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Fair Value, Net					$ 900,000
Cash Flow Hedging [Member] | Other Current Liabilities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Fair Value, Net	$ (45,200,000)		$ (45,200,000)		(7,700,000)
Currency Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount					6,700,000
Derivative, Fair Value, Net					200,000
Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount	76,000,000.0		76,000,000.0		76,700,000
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments	(100,000)		(100,000)	$ 500,000
Derivative, Gain on Derivative	(600,000)		(1,100,000)
Derivative, Loss on Derivative				300,000
Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount	750,000,000.0		750,000,000.0		750,000,000.0
Derivative, Fair Value, Net					(6,800,000)
Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount	198,300,000		198,300,000
Net Investment Hedging [Member] | Other Assets [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Fair Value, Net	22,300,000		22,300,000		$ 16,900,000
Net Investment Hedging [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments	$ 1,300,000	$ 1,200,000	$ 2,600,000	$ (100,000)

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Financing Agreements (Schedule of Total Debt) (Details) - USD ($)	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	May 01, 2019
Debt Instrument [Line Items]
Repayments of Long-term Debt		$ (25,100,000)	$ 100,000
Long-term Debt, by Current and Noncurrent [Abstract]
Revolving credit facility, matures September 2021		245,600,000		$ 660,400,000
Total Long-term debt		1,864,400,000		1,783,100,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount		7,200,000		7,200,000
Long-term Debt, by Current and Noncurrent [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,007.8
Line of Credit Facility, Remaining Borrowing Capacity				$ 1,112.8
Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate During Period	2.30%
Senior Secured Term Loan A [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Three					$ 0
Line of Credit Facility, Interest Rate During Period				0.00%
Long-term Debt, by Current and Noncurrent [Abstract]
Long-term Debt, Maturities, Repayments of Principal in Year Five					$ 0
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%			5.75%
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%
Unsecured 7.00% Debentures Due on February 15, 2024 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate					7.00%
Unsecured 6.75% Debentures Due on December 15, 2027 [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate					6.75%
Securitization Program [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Unsecured debenture interest rate					0.675%
Debt Instrument, Face Amount						$ 110,000,000.0
Note Securitization Facility [Member]
Long-term Debt, by Current and Noncurrent [Abstract]
Debt Instrument, Face Amount						$ 90,000,000.0

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Guarantees (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 28.8	$ 24.9	$ 29.7	$ 20.5
Provision for warranties in the period	4.3	4.1	7.8	9.2
Standard Product Warranty Accrual, Additions from Business Acquisition	0.0	0.0	0.0	2.8
Warranty claims in the period	(4.1)	(4.5)	(8.5)	(8.0)
Balance at end of period	$ 29.0	$ 24.5	$ 29.0	$ 24.5

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Other Comprehensive Income (Loss) (Schedule of Items Reclassified out of AOCL) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount reclassified	$ (56,800,000)	$ (60,700,000)	$ (99,400,000)	$ (110,300,000)
Tax effect	9,900,000	11,200,000	12,700,000	18,600,000
Net of tax	(46,900,000)	(49,500,000)	(86,700,000)	(91,700,000)
Net activity	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Stockholders' Equity Attributable to Parent	1,548,900,000		1,548,900,000			$ 1,573,300,000
Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	(400,000)	(1,800,000)	500,000	(4,000,000.0)
Net of tax	(300,000)	(1,400,000)	300,000	(2,900,000)
Prior to reclassification	(29,500,000)	(1,700,000)	(33,700,000)	(3,400,000)
Other Comprehensive Income (Loss), before Tax	(29,900,000)	(3,500,000)	(33,200,000)	(7,400,000)
Other Comprehensive Income (Loss), Tax	(6,800,000)	(1,600,000)	(7,500,000)	(1,800,000)
Net activity	(23,100,000)	(1,900,000)	(25,700,000)	(5,600,000)
Stockholders' Equity Attributable to Parent	(18,500,000)	12,000,000.0	(18,500,000)	12,000,000.0	$ 4,600,000	7,200,000	$ 13,900,000	$ 16,800,000
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	0	0	0
Prior to reclassification	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Other Comprehensive Income (Loss), before Tax	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Other Comprehensive Income (Loss), Tax	0	0	0	0
Net activity	(31,600,000)	(3,600,000)	(8,500,000)	(17,200,000)
Stockholders' Equity Attributable to Parent	(153,900,000)	(122,500,000)	(153,900,000)	(122,500,000)	(122,300,000)	(145,400,000)	(118,900,000)	(105,300,000)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	(10,300,000)	600,000	(9,100,000)	1,100,000
Tax effect	2,600,000	(200,000)	2,300,000	(6,500,000)
Prior to reclassification	100,000	100,000	(100,000)	100,000
Other Comprehensive Income (Loss), before Tax	(10,200,000)	700,000	(9,200,000)	1,200,000
Other Comprehensive Income (Loss), Tax	2,600,000	(200,000)	2,300,000	(300,000)
Net activity	(7,600,000)	500,000	(6,900,000)	900,000
Stockholders' Equity Attributable to Parent	(51,200,000)	(29,800,000)	(51,200,000)	(29,800,000)	(43,600,000)	(44,300,000)	(30,300,000)	(24,500,000)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	400,000	1,800,000	(500,000)	4,000,000.0
Accumulated Other Comprehensive Income (Loss) [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	(10,700,000)	(1,200,000)	(8,600,000)	(2,900,000)
Prior to reclassification	(61,000,000.0)	(5,200,000)	(42,300,000)	(20,500,000)
Other Comprehensive Income (Loss), before Tax	(71,700,000)	(6,400,000)	(50,900,000)	(23,400,000)
Other Comprehensive Income (Loss), Tax	(9,400,000)	(1,400,000)	9,800,000	1,500,000
Net activity	(62,300,000)	(5,000,000.0)	(41,100,000)	(21,900,000)
Stockholders' Equity Attributable to Parent	(223,600,000)	(140,300,000)	(223,600,000)	(140,300,000)	(161,300,000)	(182,500,000)	(135,300,000)	(113,000,000.0)
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]
Net of tax	(7,700,000)	400,000	(6,800,000)	(5,400,000)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax effect	100,000	400,000	(200,000)	1,100,000
Foreign Exchange Forward [Member] | Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), before Tax	0	(800,000)	(200,000)	300,000
Net activity	0	(500,000)	(200,000)	200,000
Stockholders' Equity Attributable to Parent	0	400,000	0	400,000	0	200,000	900,000	200,000
Foreign Exchange Forward [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), Tax	0	300,000	0	(100,000)
Interest Rate Swap [Member] | Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), before Tax	(40,100,000)	(10,800,000)	(38,400,000)	(18,000,000.0)
Net activity	(30,900,000)	(8,500,000)	(29,600,000)	(13,800,000)
Stockholders' Equity Attributable to Parent	(34,800,000)	5,300,000	(34,800,000)	5,300,000	(3,900,000)	(5,200,000)	13,800,000	18,300,000
Interest Rate Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	400,000	1,700,000	(400,000)	3,800,000
Tax effect	100,000	500,000	(100,000)	1,100,000
Net of tax	300,000	1,200,000	(300,000)	2,700,000
Prior to reclassification	(39,700,000)	(9,100,000)	(38,800,000)	(14,200,000)
Other Comprehensive Income (Loss), Tax	9,200,000	2,300,000	8,800,000	4,200,000
Foreign Exchange | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	100,000	(100,000)	200,000
Tax effect	0	(100,000)	(100,000)	0
Net of tax	0	200,000	0	200,000
Prior to reclassification	0	(700,000)	(300,000)	500,000
Currency Swap [Member] | Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Stockholders' Equity Attributable to Parent					$ 8,500,000	$ 12,200,000	$ (800,000)	$ (1,700,000)
Currency Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	0	0	0
Prior to reclassification	10,200,000	8,100,000	5,400,000	10,300,000
Other Comprehensive Income (Loss), Tax	(2,400,000)	(1,000,000.0)	(1,300,000)	(2,300,000)
Foreign Exchange Contract [Member] | Available-for-sale Securities and Hedges [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), before Tax	10,200,000	8,100,000	5,400,000	10,300,000
Net activity	7,800,000	7,100,000	4,100,000	8,000,000.0
Stockholders' Equity Attributable to Parent	$ 16,300,000	$ 6,300,000	$ 16,300,000	$ 6,300,000

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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, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net Income (Loss) Attributable to Parent	$ 46.9	$ 49.5	$ 86.7	$ 91.7
Net income attributable to common shareholders per common share - Basic (usd per share)	$ 0.70	$ 0.74	$ 1.30	$ 1.37
Net income attributable to common shareholders per common share - Diluted (usd per share)	$ 0.70	$ 0.74	$ 1.29	$ 1.36
Average Common Shares Outstanding - Basic (in shares)	66,685	66,696	66,731	66,866
Add potential effect of exercise of stock options and other unvested equity awards (in shares)	533	648	578	659
Average shares outstanding - Diluted (in shares)	67,218	67,344	67,309	67,525
Shares with anti-dilutive effect excluded from the computation of Diluted EPS (in shares)	320	307	332	286

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Earnings per Common Share

6 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings per Common Share

Earnings per Common Share Basic earnings per share (“EPS”) 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:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Income	$	46.9	$	49.5	$	86.7	$	91.7
Net Income per Basic Common Share	$	0.70	$	0.74	$	1.30	$	1.37
Net Income per Diluted Common Share	$	0.70	$	0.74	$	1.29	$	1.36
Average Basic Common Shares Outstanding (in thousands)	66,685		66,696		66,731		66,866
Add potential effect of exercise of stock options and other unvested equity awards	533		648		578		659
Average Diluted Common Shares Outstanding (in thousands)	67,218		67,344		67,309		67,525
Shares with anti-dilutive effect excluded from the computation of diluted EPS	320		307		332		286

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Acquisitions

6 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Acquisitions

Business Combinations

Acquisitions

Excel Medical Electronics

On January 10, 2020, we acquired all of the outstanding equity interest of Excel Medical Electronics (“Excel Medical”), a clinical communications software company located in the United States, for total aggregate consideration of $19.2 million, comprised of $13.1 million cash and $6.1 million of contingent consideration measured at fair value as of the acquisition date. The purchase price is subject to certain post-closing adjustments. Contingent consideration is comprised of $1.6 million, which was withheld at the close of the transaction and is payable upon completion of contract stipulation, and estimated consideration measured at a fair value of $4.5 million, which is payable of up to $15.0 million based upon the achievement of certain commercial milestones over the next two years.

The results of Excel Medical are included in the Patient Support Systems segment since the date of acquisition. The impact to reported revenue and net income for the three and six months ended March 31, 2020 was not significant.

The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Excel Medical acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.6
Inventories	0.9
Other current assets	0.1
Property, plant and equipment	0.1
Goodwill	9.8
Developed technology	10.9
Deferred revenue	(2.7)
Other current liabilities	(0.5)
Total purchase price, net of cash acquired	$	19.2

Goodwill in connection with the Excel Medical acquisition of $9.8 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies, accelerating our leadership in care communications platform and advancing our digital and mobile communications platform and capabilities. The goodwill was allocated entirely to our Patient Support Systems segment and is deductible for tax purposes in the United States.

The estimated useful life of the acquired intangible assets is 5 years for developed technology.

For the three and six months ended March 31, 2020, we recognized $0.7 million and $0.8 million of acquisition and integration costs in Selling and administrative expenses.

Breathe Technologies, Inc.

On September 3, 2019, we acquired all of the outstanding equity interests of Breathe Technologies, Inc. (“Breathe”), a developer and manufacturer of a patented wearable, non-invasive ventilation technology that supports improved patient mobility, for total aggregate cash consideration of $127.6 million.

The results of Breathe are included in the Front Line Care segment since the date of acquisition.

The following table summarizes the preliminary estimate of the fair value of assets acquired and liabilities assumed at the date of the Breathe acquisition. The fair value of assets acquired and liabilities assumed are still considered to be preliminary, however we do not expect further adjustments to be significant.

	Amount
Trade accounts receivable	$	0.3
Inventories	6.3
Other current assets	0.1
Property, plant and equipment	2.1
Goodwill	60.2
Trade name	4.0
Customer relationships	0.4
Developed technology	56.0
Other assets	0.2
Trade accounts payable	(0.5)
Other current liabilities	(1.6)
Deferred income taxes	0.9
Other long-term liabilities	(0.8)
Total purchase price, net of cash acquired	$	127.6

Goodwill in connection with the Breathe acquisition of $60.2 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies and accelerating our leadership in respiratory health products. The goodwill was allocated entirely to our Front Line Care segment, which is not deductible for tax purposes in the United States.

The estimated useful lives of the acquired intangible assets are 2 years for trade name, 8 years for customer relationships and 11 years for developed technology.

For the three and six months ended March 31, 2020, we recognized $0.6 million and $1.5 million of acquisition and integration costs in Selling and administrative expenses and $0.5 million and $2.2 million in Special charges related to this acquisition.

Voalte, Inc.

On April 1, 2019, we acquired all of the outstanding equity interests of Voalte, Inc. (“Voalte”), a clinical communications software company located in the United States, for total aggregate consideration of $181.0 million, comprised of $175.8 million cash and $5.2 million of contingent consideration measured at fair value as of the acquisition date. Contingent consideration was payable up to $15.0 million based upon achievement of certain commercial milestones by March 31, 2020. No milestones were met and therefore no contingent consideration was paid.

The results of Voalte are included in the Patient Support Systems segment since the date of acquisition.

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

	Amount
Trade accounts receivable	$	5.8
Inventories	0.1
Other current assets	2.7
Property, plant and equipment	0.2
Goodwill	98.5
Non-competition agreements	2.7
Trade name	13.5
Customer relationships	29.0
Developed technology	55.0
Trade accounts payable	(1.7)
Deferred revenue	(10.7)
Other current liabilities	(4.3)
Deferred income taxes	(9.8)
Total purchase price, net of cash acquired	$	181.0

Goodwill in connection with the Voalte acquisition of $98.5 million was recognized at the acquisition date related to the excess of the purchase price over the estimated fair value of the assets acquired and the liabilities assumed, reflecting the value associated with enhancing synergies, accelerating our leadership in care communications platform and advancing our digital and mobile communications platform and capabilities. The goodwill was allocated entirely to our Patient Support Systems segment, which is not deductible for tax purposes in the United States.

The estimated useful lives of the acquired intangible assets are 5 years for non-competition agreements and between 8 and 10 years for trade name, customer relationships and developed technology.

In the first quarter of fiscal 2020, we reduced the contingent consideration accrual by $8.4 million as the commercial milestones were not expected to be achieved. This was recorded as a component of Selling and administrative expenses. There were no further adjustments to the contingent consideration accrual in the second quarter of fiscal 2020.

Asset Acquisition

On October 1, 2018, we acquired the right to use patented technology and certain related assets from a supplier to our Front Line Care segment. We paid $17.1 million of cash and committed to guaranteed minimum future royalty payments of $22.0 million, which are presented in Other intangible assets and software, net and are being amortized over the 7-year term of the agreement.

Disposition

On August 2, 2019, we completed a disposition to sell certain of our surgical consumable products and related assets for a purchase price of $166.6 million, which is net of cash and working capital adjustments. In fiscal 2019, we recorded a pre-tax loss on this disposition of $15.9 million in Investment income (expense) and other, net, including transaction costs of $4.0 million. This disposition did not have a major effect on the Company's operations or financial results, and, therefore, has not been reported as a discontinued operation.

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Retirement and Postretirement Plans

6 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Retirement and Postretirement Plans

Retirement and Postretirement Plans We sponsor six defined benefit retirement plans. Those plans include a master defined benefit retirement plan in the United States, a nonqualified supplemental executive defined benefit retirement plan, three defined benefit retirement plans covering employees in Germany and France, and a defined benefit retirement plan of Excel Medical that was acquired on January 10, 2020. Benefits for such plans are based primarily on years of service and the employee’s level of compensation in 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.

	Three Months Ended March 31				Six Months Ended March 31				Condensed Consolidated Statements of Income Item
	2020		2019		2020		2019
Service cost	$	0.4	$	0.4	$	0.8	$	0.7	Cost of goods sold
Service cost	0.8		0.7		1.6		1.5		Selling and administrative expenses
Interest cost	2.4		3.2		4.9		6.3		Investment income (expense) and other, net
Expected return on plan assets	(3.7)		(3.7)		(7.4)		(7.4)		Investment income (expense) and other, net
Amortization of unrecognized prior service cost, net	—		—		0.1		—		Investment income (expense) and other, net
Amortization of net loss	1.6		0.6		3.1		1.2		Investment income (expense) and other, net
Settlement charge	8.5		—		8.5		—		Investment income (expense) and other, net
Net pension expense	$	10.0	$	1.2	$	11.6	$	2.3

In addition to defined benefit retirement plans, we also offer two postretirement health care plans in the United States that provide health care benefits to qualified retirees and their dependents. The plans are closed to new participants and include retiree cost sharing provisions and generally extend retiree coverage for medical and prescription benefits beyond the COBRA continuation period to the date of Medicare eligibility. Annual costs related to these plans are not significant.

On March 9, 2020, we transferred pension assets totaling $40.6 million to purchase annuity contracts for a certain population of retirees with a third-party insurance company. As a result, we recognized a non-cash settlement loss of $8.5 million, which is recorded as a component of Investment income (expense) and other, net in the Condensed Consolidated Statements of Income.

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 in retirement by providing employees with an incentive to regularly save a portion of their earnings. Our contributions to the plans are based on eligibility and, in some cases, employee contributions. Expense under these plans was $10.1 million and $16.3 million for the three and six months ended March 31, 2020, and $8.3 million and $14.5 million for the three and six months ended March 31, 2019.

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Revenue Recognition (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2018
Revenue from Contract with Customer [Abstract]
Other Liabilities and Deferred Revenue, Noncurrent	$ 130.7	$ 125.8	$ 47.8
Revenue Deferred due to ASC 606 Initial Adoption		58.4
Contract with Customer, Liability, Change in Timeframe, Performance Obligation Satisfied, Revenue Recognized	(166.2)	(273.2)
Deferred Revenue	105.7	107.3
Deferred Revenue, Additions	168.4	282.1
Capitalized Contract Cost [Line Items]
Deferred Revenue, Additions	168.4	282.1
Voalte [Member]
Revenue from Contract with Customer [Abstract]
Deferred Revenue, Additions	2.7	10.7
Capitalized Contract Cost [Line Items]
Deferred Revenue, Additions	$ 2.7	$ 10.7

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Guarantees (Tables)

6 Months Ended

Mar. 31, 2020

Product Warranties Disclosures [Abstract]

Reconciliation of Changes in the Warranty Reserve

A rollforward of changes in the Accrued product warranties reserve for the periods covered in this report is as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Balance as of beginning of period	$	28.8	$	24.9	$	29.7	$	20.5
Provision for warranties in the period	4.3		4.1		7.8		9.2
Warranty reserves assumed 1	—		—		—		2.8
Warranty claims in the period	(4.1)		(4.5)		(8.5)		(8.0)
Balance as of end of period	$	29.0	$	24.5	$	29.0	$	24.5

¹ As a result of the asset acquisition in our Front Line Care segment discussed in Note 4. Business Combinations.

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Special Charges (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Restructuring Cost and Reserve [Line Items]
Special charges	$ 8.8		$ 3.5	$ 16.6	$ 11.5
Professional Fees		$ 4.0
Restructuring charges				4.4
Site Consolidation [Member] | Facility Closing [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	0.7		1.0	1.2	5.1
Business Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	8.2		2.5	15.5	6.3
Business Optimization [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	2.1		$ 1.0	3.9	$ 3.8
Global Restructuring Program [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Special charges	4.5			8.6
Restructuring charges	9.9			19.3
Property, Plant and Equipment [Member] | Global Restructuring Program [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 5.4			$ 10.7

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Common Stock (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Class of Stock Disclosures [Abstract]
Share-based Payment Arrangement, Noncash Expense	$ 19.0	$ 16.9

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Financing Agreements

6 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Financing Agreements

Financing Agreements

Short-Term Borrowings

Securitization Facilities

The Company has a 364-day accounts receivable securitization program (the “Securitization Facility”) for borrowings up to $110.0 million and a 364-day facility for borrowings up to $90.0 million (the “Note Securitization Facility”) with certain financial institutions. Under the terms of each the Securitization Facility and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount of permissible borrowings outstanding is determined based on the amount of qualifying accounts receivable at any point in time. Borrowings outstanding under the Securitization Facility and Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 1.0% 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.

As of March 31, 2020 these facilities had an expiration date of May 1, 2020, but were renewed on April 27, 2020 through April 26, 2021. The terms and conditions of the renewed facilities are substantially similar to the expired facilities. Borrowings outstanding under the renewed Securitization Facility and renewed Note Securitization Facility bear interest at LIBOR plus the applicable margin of 0.8% and 0.9%.

Long-Term Debt

Long-Term Debt Redemption

In September 2019, we issued senior unsecured notes of $425.0 million maturing September 2027 that bear interest at a fixed rate of 4.375% annually and capitalized debt issuance costs of $6.3 million. On October 7, 2019, we used the net proceeds from the offering of these notes, together with funds borrowed from the Revolving Credit Facility maturing in August 2024 (“2024 Revolving Credit Facility”), to redeem all of our previously outstanding senior unsecured 5.75% notes due September 2023 and to pay the prepayment premium of $12.2 million. We recorded a loss on extinguishment of debt of $15.6 million, which was comprised of the $12.2 million prepayment premium and $3.4 million of debt issuance costs previously capitalized.

As of March 31, 2020, there were $185.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,007.8 million after giving effect to the $7.2 million of outstanding standby letters of credit. As of September 30, 2019, there were $80.0 million outstanding borrowings on the 2024 Revolving Credit Facility, and available borrowing capacity was $1,112.8 million after giving effect to $7.2 million of outstanding standby letters of credit.

See Note 6. Financing Agreements within the 2019 Form 10-K for the fiscal year ended September 30, 2019 for further information.

Fair Value

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 variable rate short-term debt instruments, our senior secured Term Loan A facility maturing in August 2024 (“2024 TLA Facility”) and our 2024 Revolving Credit Facility approximate fair value.

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

	March 31, 2020		September 30, 2019
Senior unsecured 5.00% notes due on February 14, 2025	$	303.1	$	312.4
Senior unsecured 4.375% notes due on September 15, 2027	419.1		435.4
Unsecured debentures	44.8		48.1
Total	$	767.0	$	795.9

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 the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements were classified as Level 2.

Debt Covenants

As of March 31, 2020, we were in compliance with all debt covenants under our financing agreements.

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Other Comprehensive Income (Loss)

6 Months Ended

Mar. 31, 2020

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

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate swaps	(39.7)		(0.4)		(40.1)		9.2		(30.9)		(3.9)		(30.9)		(34.8)
Cross-currency swaps	10.2		—		10.2		(2.4)		7.8		8.5		7.8		16.3
Derivative instruments designated as hedges total	(29.5)		(0.4)		(29.9)		6.8		(23.1)		4.6		(23.1)		(18.5)
Foreign currency translation adjustment	(31.6)		—		(31.6)		—		(31.6)		(122.3)		(31.6)		(153.9)
Change in pension and postretirement defined benefit plans	0.1		(10.3)		(10.2)		2.6		(7.6)		(43.6)		(7.6)		(51.2)
Total	$	(61.0)	$	(10.7)	$	(71.7)	$	9.4	$	(62.3)	$	(161.3)	$	(62.3)	$	(223.6)

	Three Months Ended March 31, 2019
	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 designated as hedges 1:
Foreign exchange forward contracts	$	(0.7)	$	(0.1)	$	(0.8)	$	0.3	$	(0.5)	$	0.9	$	(0.5)	$	0.4
Interest rate swaps	(9.1)		(1.7)		(10.8)		2.3		(8.5)		13.8		(8.5)		5.3
Cross-currency swaps	8.1		—		8.1		(1.0)		7.1		(0.8)		7.1		6.3
Derivative instruments designated as hedges total	(1.7)		(1.8)		(3.5)		1.6		(1.9)		13.9		(1.9)		12.0
Foreign currency translation adjustment	(3.6)		—		(3.6)		—		(3.6)		(118.9)		(3.6)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		0.6		0.7		(0.2)		0.5		(30.3)		0.5		(29.8)
Total	$	(5.2)	$	(1.2)	$	(6.4)	$	1.4	$	(5.0)	$	(135.3)	$	(5.0)	$	(140.3)

The following tables represent the changes in Other comprehensive income (loss) and Accumulated other comprehensive income (loss) by component for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31, 2020
	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 2
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	(0.3)	$	0.1	$	(0.2)	$	—	$	(0.2)	$	0.2	$	(0.2)	$	—
Interest rate swaps	(38.8)		0.4		(38.4)		8.8		(29.6)		(5.2)		(29.6)		(34.8)
Cross-currency swaps	5.4		—		5.4		(1.3)		4.1		12.2		4.1		16.3
Derivative instruments designated as hedges total	(33.7)		0.5		(33.2)		7.5		(25.7)		7.2		(25.7)		(18.5)
Foreign currency translation adjustment	(8.5)		—		(8.5)		—		(8.5)		(145.4)		(8.5)		(153.9)
Change in pension and postretirement defined benefit plans	(0.1)		(9.1)		(9.2)		2.3		(6.9)		(44.3)		(6.9)		(51.2)
Total	$	(42.3)	$	(8.6)	$	(50.9)	$	9.8	$	(41.1)	$	(182.5)	$	(41.1)	$	(223.6)

	Six Months Ended March 31, 2019
	Other comprehensive income (loss)										Accumulated other comprehensive income (loss)
	Prior to reclassification		Reclassification from		Pre-tax		Tax effect		Net of tax		Beginning balance		Impacts of ASU 2018-02 Adoption as of October 1, 2018		Net activity		Ending balance
Derivative instruments designated as hedges 1:
Foreign exchange forward contracts	$	0.5	$	(0.2)	$	0.3	$	(0.1)	$	0.2	$	0.2	$	—	$	0.2	$	0.4
Interest rate swaps	(14.2)		(3.8)		(18.0)		4.2		(13.8)		18.3		0.8		(13.8)		5.3
Cross-currency swaps	10.3		—		10.3		(2.3)		8.0		(1.7)		—		8.0		6.3
Derivative instruments designated as hedges total	(3.4)		(4.0)		(7.4)		1.8		(5.6)		16.8		0.8		(5.6)		12.0
Foreign currency translation adjustment	(17.2)		—		(17.2)		—		(17.2)		(105.3)		—		(17.2)		(122.5)
Change in pension and postretirement defined benefit plans	0.1		1.1		1.2		(0.3)		0.9		(24.5)		(6.2)		0.9		(29.8)
Total	$	(20.5)	$	(2.9)	$	(23.4)	$	1.5	$	(21.9)	$	(113.0)	$	(5.4)	$	(21.9)	$	(140.3)

¹ See Note 6. Derivative Instruments and Hedging Activity for information regarding our hedging strategies.

² The estimated net amount of gains and losses reported in Accumulated other comprehensive income (loss) related to our derivative instruments designated as hedges as of March 31, 2020 that are expected to be reclassified into earnings within the next 12 months is expense of $4.8 million.

The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	—	$	—	$	—	$	(0.1)	$	(0.1)	$	(0.2)
Interest rate swaps 2	(0.4)		0.1		(0.3)		(1.7)		0.5		(1.2)
Derivative instruments designated as hedges total	(0.4)		0.1		(0.3)		(1.8)		0.4		(1.4)
Change in pension and postretirement defined benefit plans 3	(10.3)		2.6		(7.7)		0.6		(0.2)		0.4

The following table represents the items reclassified out of Accumulated other comprehensive income (loss) and the related tax effects for the six months ended March 31, 2020 and 2019:

	Six Months Ended March 31
	2020						2019
	Amount reclassified		Tax effect		Net of tax		Amount reclassified		Tax effect 4		Net of tax
Derivative instruments designated as hedges:
Foreign exchange forward contracts 1	$	0.1	$	(0.1)	$	—	$	(0.2)	$	—	$	(0.2)
Interest rate swaps 2	0.4		(0.1)		0.3		(3.8)		1.1		(2.7)
Derivative instruments designated as hedges total	0.5		(0.2)		0.3		(4.0)		1.1		(2.9)
Change in pension and postretirement defined benefit plans 3	(9.1)		2.3		(6.8)		1.1		(6.5)		(5.4)

¹ Reclassified from Accumulated other comprehensive income (loss) into Investment income (expense) and other, net.

² Reclassified from Accumulated other comprehensive income (loss) into Interest expense.

³ Reclassified from Accumulated other comprehensive income (loss) into Cost of goods sold and Investment income (expense) and other, net. These components are included in the computation of net periodic pension expense.

⁴ As a result of the adoption of ASU 2018-02, we reclassified $5.4 million from Accumulated other comprehensive income (loss) to Retained earnings.

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Guarantees

6 Months Ended

Mar. 31, 2020

Product Warranties Disclosures [Abstract]

Guarantees

Warranties and 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 that 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 rollforward of changes in the Accrued product warranties reserve for the periods covered in this report is as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Balance as of beginning of period	$	28.8	$	24.9	$	29.7	$	20.5
Provision for warranties in the period	4.3		4.1		7.8		9.2
Warranty reserves assumed 1	—		—		—		2.8
Warranty claims in the period	(4.1)		(4.5)		(8.5)		(8.0)
Balance as of end of period	$	29.0	$	24.5	$	29.0	$	24.5

¹ As a result of the asset acquisition in our Front Line Care segment discussed in Note 4. Business Combinations.

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 a material impact on our financial condition or results of operations, nor do we expect them to, 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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Summary of Significant Accounting Policies (Other Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended			6 Months Ended
	Aug. 02, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Revenues		$ 723.2		$ 714.2	$ 1,408.2	$ 1,397.7
Sale of businesses	$ 166.6
Professional Fees			$ 4.0
Net Income (Loss) Attributable to Parent		46.9		49.5	86.7	$ 91.7
Net Income		$ 46.9		$ 49.5	$ 86.7
Net Income Attributable to Common Shareholders per Common Share - Basic (usd per share)		$ 0.70		$ 0.74	$ 1.30	$ 1.37
Earnings Per Share, Diluted		$ 0.70		$ 0.74	$ 1.29	$ 1.36

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Earnings per Common Share (Tables)

6 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Calculated Earnings per Share

Earnings per share are calculated as follows:

	Three Months Ended March 31				Six Months Ended March 31
	2020		2019		2020		2019
Net Income	$	46.9	$	49.5	$	86.7	$	91.7
Net Income per Basic Common Share	$	0.70	$	0.74	$	1.30	$	1.37
Net Income per Diluted Common Share	$	0.70	$	0.74	$	1.29	$	1.36
Average Basic Common Shares Outstanding (in thousands)	66,685		66,696		66,731		66,866
Add potential effect of exercise of stock options and other unvested equity awards	533		648		578		659
Average Diluted Common Shares Outstanding (in thousands)	67,218		67,344		67,309		67,525
Shares with anti-dilutive effect excluded from the computation of diluted EPS	320		307		332		286

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Condensed Consolidated Statements of Shareholders' Equity (unaudited) Statement - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]
Common Stock, Shares, Outstanding, Beginning Balance at Sep. 30, 2018		88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2018	$ 1,616,200,000	$ 4,400,000	$ 602,900,000	$ 1,876,200,000	$ (113,000,000.0)	$ (754,300,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative Effect on Retained Earnings, Net of Tax | Accounting Standards Update 2014-09 [Member]	(4,900,000)			(4,900,000)
Cumulative Effect on Retained Earnings, Net of Tax | Accounting Standards Update 2016-16 [Member]	(5,600,000)			(5,600,000)
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification				5,400,000	(5,400,000)
Net Income (Loss) Attributable to Parent	91,700,000			91,700,000
Other Comprehensive Income (Loss), Net of Tax	(21,900,000)				(21,900,000)
Dividends	27,400,000		(200,000)	27,600,000
Payment, Tax Withholding, Share-based Payment Arrangement	(4,000,000.0)					(4,000,000.0)
Payments for Repurchase of Common Stock	(75,000,000.0)					(75,000,000.0)
Share-based Compensation on Equity-Classified Awards	16,900,000		16,900,000
Stock Issued During Period, Value, Stock Options Exercised	(8,600,000)		(2,000,000.0)			(6,600,000)
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition			(4,700,000)
Stock Issued During Period, Value, Restricted Stock Award, Gross						4,700,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	4,200,000		2,600,000			1,600,000
Payments for Repurchase of Common Stock	$ (75,000,000.0)
Other Comprehensive Income (Loss), Tax					1,500,000
Common Stock, Dividends, Per Share, Cash Paid	$ 0.41
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2019		88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019	$ 1,598,800,000	$ 4,400,000	619,900,000	1,935,200,000	(140,300,000)	(820,400,000)
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2018		88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2018	1,551,500,000	$ 4,400,000	606,900,000	1,899,900,000	(135,300,000)	(824,400,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	49,500,000
Net Income (Loss) Attributable to Parent	49,500,000			49,500,000
Other Comprehensive Income (Loss), Net of Tax	(5,000,000.0)				(5,000,000.0)
Dividends	(14,100,000)		(100,000)	(14,200,000)
Payment, Tax Withholding, Share-based Payment Arrangement	(500,000)					(500,000)
Share-based Compensation on Equity-Classified Awards	11,100,000		11,100,000
Stock Issued During Period, Value, Stock Options Exercised	4,000,000.0		(1,000,000.0)			(3,000,000.0)
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition			(700,000)
Stock Issued During Period, Value, Restricted Stock Award, Gross						700,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	$ 2,300,000		1,500,000			800,000
Other Comprehensive Income (Loss), Tax					(1,400,000)
Common Stock, Dividends, Per Share, Cash Paid	$ 0.21
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2019		88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019	$ 1,598,800,000	$ 4,400,000	619,900,000	1,935,200,000	(140,300,000)	(820,400,000)
Common Stock, Shares, Outstanding, Beginning Balance at Sep. 30, 2019	66,625,011	88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2019	$ 1,573,300,000	$ 4,400,000	637,400,000	1,967,400,000	(182,500,000)	(853,400,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	86,700,000
Net Income (Loss) Attributable to Parent	86,700,000
Other Comprehensive Income (Loss), Net of Tax	(41,100,000)				(41,100,000)
Dividends	(28,700,000)		(200,000)	(28,900,000)
Payment, Tax Withholding, Share-based Payment Arrangement	(15,800,000)					(15,800,000)
Payments for Repurchase of Common Stock	(54,100,000)					(54,100,000)
Share-based Compensation on Equity-Classified Awards	18,500,000		18,500,000
Stock Issued During Period, Value, Stock Options Exercised	(5,700,000)		(1,700,000)			(4,000,000.0)
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition			(16,100,000)
Stock Issued During Period, Value, Restricted Stock Award, Gross	100,000					16,200,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	4,300,000		2,700,000			1,600,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans		0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period		0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		0
Payments for Repurchase of Common Stock	$ 54,100,000
Other Comprehensive Income (Loss), Tax					9,800,000
Common Stock, Dividends, Per Share, Cash Paid	$ 0.43
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2020	66,527,730	88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020	$ 1,548,900,000	$ 4,400,000	644,400,000	2,025,200,000	(223,600,000)	(901,500,000)
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2019		88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019	1,619,000,000.0	$ 4,400,000	632,700,000	1,993,100,000	(161,300,000)	(849,900,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	46,900,000
Net Income (Loss) Attributable to Parent	46,900,000
Other Comprehensive Income (Loss), Net of Tax	(62,300,000)				(62,300,000)
Dividends	(14,600,000)		(200,000)	(14,800,000)
Payment, Tax Withholding, Share-based Payment Arrangement	(700,000)					(700,000)
Payments for Repurchase of Common Stock	(54,100,000)					(54,100,000)
Share-based Compensation on Equity-Classified Awards	10,200,000		10,200,000
Stock Issued During Period, Value, Stock Options Exercised	(2,000,000.0)		(600,000)			(1,400,000)
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition			(700,000)
Stock Issued During Period, Value, Restricted Stock Award, Gross	100,000					800,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	$ 2,400,000		1,400,000			1,000,000.0
Other Comprehensive Income (Loss), Tax					(9,400,000)
Common Stock, Dividends, Per Share, Cash Paid	$ 0.22
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2020	66,527,730	88,457,634
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020	$ 1,548,900,000	$ 4,400,000	$ 644,400,000	$ 2,025,200,000	$ (223,600,000)	$ (901,500,000)

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Product sales and service revenue	$ 647,000,000.0	$ 636,500,000	$ 1,261,300,000	$ 1,248,100,000
Rental revenue	76,200,000	77,700,000	146,900,000	149,600,000
Revenues	723,200,000	714,200,000	1,408,200,000	1,397,700,000
Total cost of net revenue (excludes acquisition-related intangible asset amortization)	317,200,000	322,700,000	623,500,000	639,000,000.0
Rental expenses	38,500,000	38,900,000	75,500,000	76,100,000
Cost of Revenue	355,700,000	361,600,000	699,000,000.0	715,100,000
Research and development expenses	34,400,000	36,600,000	65,900,000	69,800,000
Selling and administrative expenses	209,900,000	231,200,000	406,700,000
Selling and administrative expense, revised		203,900,000		396,200,000
Amortization of Intangible Assets	27,100,000	27,300,000	53,800,000	53,000,000.0
Special charges	8,800,000	3,500,000	16,600,000	11,500,000
Income tax expense	9,900,000	11,200,000	12,700,000	18,600,000
Income Before Income Taxes	56,800,000	60,700,000	99,400,000	110,300,000
Operating Profit	87,300,000	81,300,000	166,200,000	152,100,000
Interest expense	(19,100,000)	(21,800,000)	(38,500,000)	(43,100,000)
Gain (Loss) on Extinguishment of Debt	0	0	(15,600,000)	0
Investment income (expense) and other, net	(11,400,000)	1,200,000	(12,700,000)	1,300,000
Income Before Income Taxes	56,800,000	60,700,000	99,400,000	110,300,000
Income tax expense	9,900,000	11,200,000	12,700,000	18,600,000
Net Income	$ 46,900,000	$ 49,500,000	$ 86,700,000	$ 91,700,000
Net Income Attributable to Common Shareholders per Common Share - Basic (usd per share)	$ 0.70	$ 0.74	$ 1.30	$ 1.37
Earnings Per Share, Diluted	$ 0.70	$ 0.74	$ 1.29	$ 1.36
Average Common Shares Outstanding - Basic (thousands) (Note 10) (in shares)	66,685	66,696	66,731	66,866
Average Common Shares Outstanding - Diluted (thousands) (Note 10) (in shares)	67,218	67,344	67,309	67,525

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Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Prior Period Reclassification

The following table presents Acquisition-related intangible asset amortization and Selling and administrative expenses, excluding the Acquisition-related intangible asset amortization, for the years ended September 30, 2019, 2018 and 2017, and for each quarterly period of fiscal 2019.

	Quarter Ended								Year Ended
	December 31, 2018		March 31, 2019		June 30, 2019		September 30, 2019		September 30, 2019		September 30, 2018		September 30, 2017
Selling and administrative expense, previously reported	$	218.0	$	231.2	$	246.4	$	245.4	$	941.0	$	891.6	$	874.5
Less, Acquisition-related intangible asset amortization	25.7		27.3		29.3		40.1		122.4		106.9		108.4
Selling and administrative expense, currently reported	$	192.3	$	203.9	$	217.1	$	205.3	$	818.6	$	784.7	$	766.1

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Financing Agreements (Tables)

6 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of Fair Values of Long-Term Debt Instruments

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

	March 31, 2020		September 30, 2019
Senior unsecured 5.00% notes due on February 14, 2025	$	303.1	$	312.4
Senior unsecured 4.375% notes due on September 15, 2027	419.1		435.4
Unsecured debentures	44.8		48.1
Total	$	767.0	$	795.9

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 the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements were classified as Level 2.

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Financing Agreements (Schedule of Fair Value) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Total	$ 767.0	$ 795.9
Unsecured Debentures [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	44.8	48.1
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	303.1	312.4
Senior Unsecured 4.375% Notes due September 2027 [Member]
Debt Instrument [Line Items]
Fair value of unsecured notes	$ 419.1	$ 435.4

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Goodwill (Schedule of Goodwill Activity) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Sep. 30, 2019	Apr. 01, 2019
Goodwill [Roll Forward]
Goodwill, net	$ 1,805.7	$ 1,800.9
Voalte [Member]
Goodwill [Roll Forward]
Goodwill, net			$ 98.5

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Segment Reporting (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 723,200,000	$ 714,200,000	$ 1,408,200,000	$ 1,397,700,000
Special charges	8,800,000	3,500,000	16,600,000	11,500,000
Operating profit	87,300,000	81,300,000	166,200,000	152,100,000
Interest expense	(19,100,000)	(21,800,000)	(38,500,000)	(43,100,000)
Gain (Loss) on Extinguishment of Debt	0	0	(15,600,000)	0
Investment income (expense) and other, net	(11,400,000)	1,200,000	(12,700,000)	1,300,000
Income Before Income Taxes	56,800,000	60,700,000	99,400,000	110,300,000
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Non-allocated operating costs, administrative and other	70,200,000	69,700,000	128,200,000	123,600,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	723,200,000	714,200,000	1,408,200,000	1,397,700,000
Operating Segments [Member] | Patient Support Systems [Member]
Segment Reporting Information [Line Items]
Revenues	382,100,000	359,600,000	726,300,000	700,600,000
Divisional Income	74,900,000	72,200,000	133,300,000	131,900,000
Operating Segments [Member] | Front Line Care [Member]
Segment Reporting Information [Line Items]
Revenues	258,200,000	243,100,000	512,800,000	476,500,000
Divisional Income	77,700,000	67,200,000	151,200,000	128,900,000
Operating Segments [Member] | Surgical Solutions [Member]
Segment Reporting Information [Line Items]
Revenues	82,900,000	111,500,000	169,100,000	220,600,000
Divisional Income	13,700,000	15,100,000	26,500,000	26,400,000
Geographic Distribution, Domestic [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	506,500,000	493,000,000.0	988,300,000	961,500,000
Geographic Distribution, Domestic [Member] | Operating Segments [Member] | Patient Support Systems [Member]
Segment Reporting Information [Line Items]
Revenues	289,300,000	267,200,000	555,900,000	515,300,000
Geographic Distribution, Domestic [Member] | Operating Segments [Member] | Front Line Care [Member]
Segment Reporting Information [Line Items]
Revenues	179,200,000	170,200,000	357,300,000	336,700,000
Geographic Distribution, Domestic [Member] | Operating Segments [Member] | Surgical Solutions [Member]
Segment Reporting Information [Line Items]
Revenues	38,000,000.0	55,600,000	75,100,000	109,500,000
Non-US [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	216,700,000	221,200,000	419,900,000	436,200,000
Non-US [Member] | Operating Segments [Member] | Patient Support Systems [Member]
Segment Reporting Information [Line Items]
Revenues	92,800,000	92,400,000	170,400,000	185,300,000
Non-US [Member] | Operating Segments [Member] | Front Line Care [Member]
Segment Reporting Information [Line Items]
Revenues	79,000,000.0	72,900,000	155,500,000	139,800,000
Non-US [Member] | Operating Segments [Member] | Surgical Solutions [Member]
Segment Reporting Information [Line Items]
Revenues	$ 44,900,000	$ 55,900,000	$ 94,000,000.0	$ 111,100,000

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Label	Element	Value
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 633,800,000