ADVANCING CONNECTED CARE J.P. Morgan Healthcare Conference John Groetelaars, President and CEO January 8, 2019
Forward looking statements and non-gaap financial measures This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein that are not historical facts are forward-looking statements, including without limitation statements regarding Hill-Rom s ability to drive sustainable profitable growth and shareholder value, the timing and success of new product launches and portfolio expansion, operational execution, the achievement of long-range financial objectives, portfolio transformation through mergers and acquisitions and optimization initiatives, the continuation of stable customer demand trends, a stable U.S. capital environment and stable global macro-environment, the timing and success of the divestiture of non-core assets, our ability to reduce debt, any change to the one-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans, objectives, projections, expectations and intentions. Such forwardlooking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Hill-Rom s results could be materially adversely affected. For a more in-depth discussion of factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading Risk Factors in the company's previously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Hill-Rom assumes no obligation to update or revise any forward-looking statements. Certain financial figures presented herein have been presented on an adjusted basis (non-gaap). Reconciliation between non-gaap financial measures and reported U.S. GAAP measures are included in the appendices to this slide deck. 2
Our mission Every day, around the world, we enhance outcomes for patients and their caregivers Insightfully Close providing real-time insights Vitally Connected with ecosystem of solutions Uniquely Committed to healthcare teams globally Always Advancing to meet customer needs 3
Compelling investment opportunity Leadership Global medical technology leader with a diversified portfolio Innovation Advancing category leadership with healthcare solutions Value Transforming to drive sustainable profitable growth and shareholder value 2018 Revenue US$ Billions Patient Support Systems $2.85B FY 2018 Surgical Solutions Front Line Care New Product Revenue US$ Millions $150+ $300+ $400+ Key Valuation Metrics As of 12/31/2018 $6.0B Market Capitalization $7.7B Enterprise Value +6% LTM Total Shareholder Return $66M Fiscal 2018 Returned to Shareholders* Note: Hill-Rom fiscal year end is September 30 2017 2018 2019 Outlook *Includes dividends and share repurchases 4
Executing our strategic priorities Advancing category leadership with differentiated solutions and innovation Expanding internationally and penetrating emerging markets Transforming the portfolio with select M&A and optimization initiatives Driving operational execution and strong financial performance 5
Positioned for accelerating growth Diversified Product Portfolio Strong Global Presence Customer Relationships + C-Suite Access Leadership In Acute + Ambulatory Care Recognized Global Brands Large Field Service Team Commitment To Quality Engaged Culture 6
A differentiated portfolio of connected solutions Patient Support Systems Front Line Care Surgical Solutions CWS + Patient Handling Med-Surg Beds Other PSS $1.4B FY 2018 Specialty Beds Rental + Services Other FLC Respiratory Care Physical Assessment Thermometry + Blood Pressure $960M FY 2018 Vital Signs Other OR Consumables Patient Positioning Blades + Scalpels $458M FY 2018 OR Booms, Pendants + Other OR Tables + Lights Bed Frames + Surfaces Safe Patient Handling Clinical Workflow Solutions Respiratory Care Vision Care Vital Signs Operating Room Tables Operating Room Lights Operating Room Consumables 7
Growing category leadership in attractive markets $6B+ +2% - 3% Weighted Average Market Growth Rate $5B+ $4B+ $4B+ $4B+ $2B+ $1B+ Point-Of-Care Patient Safety + Therapy Care Communications Non-Invasive Respiratory Support Patient Monitoring Physical Exams + Diagnostics Vision Screening + Diagnostics Surgical Workflow + Positioning Market Growth: +1% +6% - 7% +5% +2% - 3% +3% +6% +1% - 3% Patient Support Systems Front Line Care Surgical Solutions Source: The Boston Consulting Group 2017 research and analysis 8
Capitalizing on new product launches New Product Drivers Centrella Smart+ Bed Connex Spot Monitor Envella Air Fluidized Therapy Bed New Product Revenue $US Millions $400+ $300+ 2019 Product Launches iled 7 Surgical Light Integrated Table Motion Monarch Airway Clearance System $150+ LINQ Mobile App HR/RR Powered By EarlySense RetinaVue Imager Spot Vision Screener 90% New Product Revenue 2017 2018 2019 Outlook Surgical Solutions Front Line Care Patient Support Systems WatchCare Incontinence Next-Gen RetinaVue 9
Accelerating growth with new products Core Revenue Growth* +4% +4% - 5% ~200 BPS 2019 New Product Contribution +2% H1 2018 H2 2018 FY 2019 Outlook New Product Contribution *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business 10
Addressing challenges with connected innovations Focus Areas Key Healthcare Challenges $27B $36B 2.5M 80%+ $426K Note: See appendix for source references 11
Creating a digital eco-system of connected devices Connected Care Solutions Centrella Smart+ Bed Data Flow Hill-Rom Universal Gateway Real-Time Clinical Communications Vital Signs Monitoring NaviCare Nurse Call Liko Smart Lift ~750K Connectable Hill-Rom Devices Status Board In-Room Display EMR / HIS WatchCare Incontinence* LINQ Mobile App HR/RR Powered By EarlySense Hill-Rom Cloud Analytics *Product not yet available, launch expected 2019 12
Advancing connected care in acute care Centrella Smart+ Bed HR/RR Powered By EarlySense Connex Spot Monitor WatchCare Incontinence LINQ Mobile App Value Proposition And Benefits Improving patient safety and satisfaction Advancing mobility Decreasing length of stay Detecting patient deterioration Reducing patient falls and pressure injuries Improving clinical communication Reduction In Hospital LOS⁶ Reduction In Total Falls⁷ 33% 55% Reduction In Documentation Errors With Vitals + EMR Connected⁸ 94% Note: See appendix for source references; LOS length of stay 13
Advancing connected care in ambulatory care Diabetic Retinal Exam Compliance Rate With RetinaVue⁹ Vision Screening Completion Rate With Spot Vision Screener¹⁰ Spot Vision Screener RetinaVue Imager Monarch Airway Clearance System 90% 87% Value Proposition And Benefits Advancing early detection of vision disorders Increasing compliance to diabetic retinal exams Creating mobility with respiratory therapy Enhancing visibility to therapy session data Facilitating tailored therapy treatment decisions Reduction In In-Patient Admissions With Vest Therapy¹¹ 20% Note: See appendix for source references 14
Improving OR workflow efficiency and safety Average Total Hospital Revenue From OR¹² Total Hospital Costs From OR¹² Integrated Table Motion Hybrid OR Partnerships iled 7 Surgical Light 70% 40% Value Proposition And Benefits Improving OR efficiency and utilization Increasing flexibility in scheduling Enhancing efficient patient turnover Maximizing surgical capabilities Increasing visibility and intraoperative decision making Enhancing patient and caregiver safety Image Guided Surgery Growth¹³ 15% Note: See appendix for source references 15
Reinvigorating emerging markets commercial operations International Penetration % of 2018 Revenue 31% 22% Middle East & Africa Revenue International Capabilities Strong global channel and brand New product launches Portfolio registrations Expanding commercial capabilities R&D for key markets 9% EM Opportunities Establishing new leadership Assessing product categories Emerging Markets Developed Markets Total International 2016 2017 2018 +18% Revenue CAGR 2016-2018 Developing go-to-market strategies Increasing distributor channel visibility Enhancing capabilities and infrastructure 16
Transforming portfolio to drive higher durable growth Capital Revenue % of Total Revenue 2010 2020 Outlook ~70% 2020 Non-Capital Revenue Revenue Mix % of Total Revenue 2017 2020 Outlook ~60% 2020 Revenue In High-Growth Segments ~50% ~80% <40% ~60% ~30% ~40% ~20% ~20% Acute Care Bed Frames* Capital-Based Revenue <4% Growth 4%+ Growth Note: Axis not to scale; *Includes all MedSurg and Specialty bed frames sold into the acute care setting; 2020 Outlook based on 2020 Long-Range Plan presented during Q4 2017 earnings release 17
Delivering strong track record of performance Revenue Adjusted Operating Margin Adjusted EPS $2.85B 17.3% $4.75 $2.74B 16.3% $3.38 $3.86 $2.66B 15.3% 2016 2017 2018 +3% Core Revenue* CAGR 2016-2018 2016 2017 2018 +200 BPS Margin Expansion 2016-2018 2016 2017 2018 +19% Adjusted EPS CAGR 2016-2018 Note: Adjusted gross margin, operating margin and EPS are non-gaap measures. See reconciliation to reported GAAP numbers in the appendix to this presentation; Axis not to scale; *Core revenue excludes foreign currency, divestitures and exit of non-strategic assets the company has exited, and Mortara prior to the anniversary date of the acquisition 18
Generating significant cash flow Operating Cash Flow US$ Millions $395 $311 $281 Free Cash Flow US$ Millions $198 $214 $306 Financial Flexibility Reducing debt levels Reinvesting in business (R&D and CapEx) Sustaining quarterly dividend Improved ability to deploy capital with disciplined M&A strategy Accelerating growth and diversified revenue streams; attractive financial returns Strengthening clinical and economic value with customers Adding experienced business resources 2016 2017 2018 2016 2017 2018 3x Higher 2015-2018 Free Cash Flow ~4.5x Peak Leverage ~3.2x FY 2018 Leverage Note: 2015 Free Cash Flow was $93M; Leverage calculated as Total Debt divided by EBITDA as defined in Hill-Rom s compliance certificate 19
Accelerating 2019 growth and profitability 2019 Outlook 2018 Results 2019 Outlook +4% - 5% Revenue Growth (Reported) +4% Adjusted Gross Margin 49.0% +1% - 2% +50 bps +7% - 9% Adjusted Operating Margin 17.3% Adjusted EPS $4.75 +100 bps $5.08 - $5.16 +12% - 14% Note: Adjusted gross margin, operating margin and EPS are non-gaap measures. See reconciliation to reported GAAP numbers in the appendix to this presentation; Guidance excludes the impact of ASC 606; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business; **Stock-Based Compensation 20
Executing business optimization initiatives Accelerate Growth $50M+ Cumulative Savings Reinvesting to drive growth: Reduce Complexity Improve Cost Structure Developing new products Reinvigorating emerging markets Enhancing commercial capabilities Executing plans in FY 2019 Realizing savings / funding investments Augmenting growth beyond 2020 LRP Identifying additional savings opportunities 21
Compelling outlook focused on value creation Revenue Operating Margin Earnings Per Share Operating Cash Flow +4% - 5% Core CAGR* $3.0B+ 300+ BPS 19% - 20% +12% - 14% CAGR $5.40 - $5.70 +12% - 14% CAGR ~$1.2B $3.86 $806M $2.7B+ 16.3% 2017 2020 Outlook 2017 2020 Outlook 2017 2020 Outlook 2015-2017 Cumulative 2018-2020 Cumulative Outlook Note: 2020 Outlook based on 2020 Long-Range Plan presented during Q4 2017 earnings release; Adjusted operating margin and EPS are non- GAAP measures; Axis not to scale; CAGR calculated 2017-2020; *Core revenue excludes foreign currency, divestitures and exit of non-strategic assets (third-party rental and third-party surfaces); collectively, 2017 divestitures and non-strategic revenue totaled ~$100M 22
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Appendix: References + Supplemental Schedules 24
References 1. https://www.sec.gov/archives/edgar/data/1492674/000119312517285136/d351103dex991. 2. Health Research & Educational Trust. (2016, October). Preventing patient falls: A systematic approach from the Joint Commission Center for Transforming Healthcare project. Chicago, IL: Health Research & Educational Trust. 3. https://www.o-wm.com/article/pressure-ulcers-united-states-inpatient-population-2008-2012-results-retrospective. 4. CMS Advisory Board analysis. 5. Wheeler. Overview of the Hospital VBP Purchasing. Center for Medicare and Medicaid Services. Page 37. Feb, 2015. 6. Klein KE, Mulkey MR, Bena JF, Albert NM. (2015). Clinical and psychologic effects of early mobilization in patients treated in a neurologic ICU: A comparative study. Critical Care Medicine, 43(4):865-73. 7. Hill-Rom Case Study. West Branch Reg Med Ctr. Oct. 2016. 8. CIN: Computers, Informatics, Nursing: Eliminating Errors in Vital Signs Documentation, Fieler, Vickie K. PhD, RN, AOCN; Jaglowski, Thomas BSN, RN; Richards, Karen DNP, RN, NE-BC, 2013. 9. Comparing the Effectiveness of Telemedicine and Traditional Surveillance in Providing Diabetic Retinopathy Screening Examinations: A Randomized Controlled Trial; Mansberger et al, Telemedicine and e-health, Vol. 19 No. 12, Dec. 2013. 10. Implementation of Instrument-Based Vision Screening for Preschool-Age Children in Primary Care (Published: July 2017 PEDIATRICS). 11. The Impact of High-Frequency Chest Wall Oscillation on Healthcare Use in Patients with Neuromuscular Diseases. Lechtzin N, Wolfe LF, Frick KD. Ann Am Thorac Soc. 2016 Jun;13(6):904-9. 12. https://www.openanesthesia.org/or_costs_labor_vs_materials. 13. 2018 Blueframe Surigcal Solutions Market Assessment US and EU. 25
2018 Revenue Schedule Q1 2018 Q1 2017 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 243.6 $ 90.8 $ 334.4 $ 248.4 $ 86.8 $ 335.2-1.9% 4.6% -0.2% -1.9% -2.0% -1.9% Front Line Care 158.2 66.4 224.6 147.7 54.1 201.8 7.1% 22.8% 11.3% 7.1% 17.0% 9.8% Surgical Solutions 50.9 59.8 110.7 50.0 50.4 100.4 1.8% 18.6% 10.3% 1.8% 9.7% 5.8% Total Hill-Rom $ 452.7 $ 217.0 $ 669.7 $ 446.1 $ 191.3 $ 637.4 1.5% 13.4% 5.1% 1.5% 6.5% 3.0% Q2 2018 Q2 2017 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 248.7 $ 106.3 $ 355.0 $ 263.1 $ 99.8 $ 362.9-5.5% 6.5% -2.2% -5.5% -2.0% -4.5% Front Line Care 162.9 75.0 237.9 146.9 64.1 211.0 10.9% 17.0% 12.7% 10.9% 10.1% 10.7% Surgical Solutions 54.4 63.2 117.6 51.6 53.4 105.0 5.4% 18.4% 12.0% 5.4% 5.8% 5.6% Total Hill-Rom $ 466.0 $ 244.5 $ 710.5 $ 461.6 $ 217.3 $ 678.9 1.0% 12.5% 4.7% 1.0% 3.5% 1.8% Q3 2018 Q3 2017 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 268.6 $ 91.1 $ 359.7 $ 255.0 $ 99.7 $ 354.7 5.3% -8.6% 1.4% 5.3% -12.5% 0.3% Front Line Care 169.5 69.5 239.0 162.8 64.3 227.1 4.1% 8.1% 5.2% 4.1% 3.7% 4.0% Surgical Solutions 55.6 54.3 109.9 51.6 55.7 107.3 7.8% -2.5% 2.4% 7.8% -7.9% -0.4% Total Hill-Rom $ 493.7 $ 214.9 $ 708.6 $ 469.4 $ 219.7 $ 689.1 5.2% -2.2% 2.8% 5.2% -6.6% 1.4% Q4 2018 Q4 2017 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 293.7 $ 86.7 $ 380.4 $ 273.2 $ 97.9 $ 371.1 7.5% -11.4% 2.5% 7.5% -9.3% 3.1% Front Line Care 189.7 69.0 258.7 174.3 71.1 245.4 8.8% -3.0% 5.4% 8.8% -1.1% 5.9% Surgical Solutions 60.6 59.5 120.1 63.0 58.8 121.8-3.8% 1.2% -1.4% -3.8% 2.7% -0.7% Total Hill-Rom $ 544.0 $ 215.2 $ 759.2 $ 510.5 $ 227.8 $ 738.3 6.6% -5.5% 2.8% 6.6% -3.6% 3.4% YTD 2018 YTD 2017 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 1,054.6 $ 374.9 $ 1,429.5 $ 1,039.7 $ 384.2 $ 1,423.9 1.4% -2.4% 0.4% 1.4% -6.6% -0.7% Front Line Care 680.3 279.9 960.2 631.7 253.6 885.3 7.7% 10.4% 8.5% 7.7% 6.8% 7.4% Surgical Solutions 221.5 236.8 458.3 216.2 218.3 434.5 2.5% 8.5% 5.5% 2.5% 2.4% 2.4% Total Hill-Rom $ 1,956.4 $ 891.6 $ 2,848.0 $ 1,887.6 $ 856.1 $ 2,743.7 3.6% 4.1% 3.8% 3.6% -0.3% 2.4% 26
2017 Revenue Schedule Q1 2017 Q1 2016 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 248.4 $ 86.8 $ 335.2 $ 241.4 $ 100.3 $ 341.7 2.9% -13.5% -1.9% 2.9% -10.7% -1.1% Front Line Care 147.7 54.1 201.8 155.1 65.1 220.2-4.8% -16.9% -8.4% -4.8% -15.7% -8.0% Surgical Solutions 50.0 50.4 100.4 44.3 55.0 99.3 12.9% -8.3% 1.1% 12.9% -4.5% 3.2% Total Hill-Rom $ 446.1 $ 191.3 $ 637.4 $ 440.8 $ 220.4 $ 661.2 1.2% -13.2% -3.6% 1.2% -10.6% -2.7% Q2 2017 Q2 2016 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 263.1 $ 99.8 $ 362.9 $ 258.4 $ 93.8 $ 352.2 1.8% 6.4% 3.0% 1.8% 9.2% 3.8% Front Line Care 146.9 64.1 211.0 132.2 53.1 185.3 11.1% 20.7% 13.9% 11.1% 22.8% 14.5% Surgical Solutions 51.6 53.4 105.0 46.0 49.1 95.1 12.2% 8.8% 10.4% 12.2% 12.6% 12.4% Total Hill-Rom $ 461.6 $ 217.3 $ 678.9 $ 436.6 $ 196.0 $ 632.6 5.7% 10.9% 7.3% 5.7% 13.7% 8.2% Q3 2017 Q3 2016 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 255.0 $ 99.7 $ 354.7 $ 258.7 $ 102.3 $ 361.0-1.4% -2.5% -1.7% -1.4% -0.2% -1.1% Front Line Care 162.8 64.3 227.1 139.2 53.5 192.7 17.0% 20.2% 17.9% 17.0% 23.6% 18.8% Surgical Solutions 51.6 55.7 107.3 50.8 50.9 101.7 1.6% 9.4% 5.5% 1.6% 12.4% 7.0% Total Hill-Rom $ 469.4 $ 219.7 $ 689.1 $ 448.7 $ 206.7 $ 655.4 4.6% 6.3% 5.1% 4.6% 9.0% 6.0% Q4 2017 Q4 2016 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 273.2 $ 97.9 $ 371.1 $ 278.9 $ 103.4 $ 382.3-2.0% -5.3% -2.9% -2.0% -8.7% -3.8% Front Line Care 174.3 71.1 245.4 158.4 53.1 211.5 10.0% 33.9% 16.0% 10.0% 31.8% 15.5% Surgical Solutions 63 58.8 121.8 56.1 56.1 112.2 12.3% 4.8% 8.6% 12.3% 0.9% 6.6% Total Hill-Rom $ 510.5 $ 227.8 $ 738.3 $ 493.4 $ 212.6 $ 706.0 3.5% 7.1% 4.6% 3.5% 4.0% 3.6% Fiscal Year 2017 Fiscal Year 2016 % Growth @ Actual Rates % Growth @ Constant Rates United States International Total United States International Total United States International Total United States International Total Patient Support Systems $ 1,039.7 $ 384.2 $ 1,423.9 $ 1,037.4 $ 399.8 $ 1,437.2 0.2% -3.9% -0.9% 0.2% -2.8% -0.6% Front Line Care 631.7 253.6 885.3 584.9 224.8 809.7 8.0% 12.8% 9.3% 8.0% 14.0% 9.7% Surgical Solutions 216.2 218.3 434.5 197.2 211.1 408.3 9.6% 3.4% 6.4% 9.6% 5.0% 7.2% Total Hill-Rom $ 1,887.6 $ 856.1 $ 2,743.7 $ 1,819.5 $ 835.7 $ 2,655.2 3.7% 2.4% 3.3% 3.7% 3.7% 3.7% Note: Segment revenue by U.S. and International for Fiscal Year ended 9/30/2017 and 9/30/2016 in US$ million; Certain revenue amounts have been reclassified for Surgical Solutions between U.S. and International to more accurately align with the destination of the revenue and to be consistent with the 2018 presentation. These changes do not have a significant impact in comparison to previously reported amounts and growth rates 27
Appendix: Reconciliation Of Non-GAAP Disclosures 28
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share Gross Margin Year Ended September 30, 2018 Income Operating Margin 1 Before Income Taxes Income Tax Expense Diluted EPS Gross Margin Year Ended September 30, 2017 Income Operating Margin 1 Before Income Taxes Income Tax Expense Diluted EPS GAAP Basis 49.0% 10.2% $ 197.2 $ (55.2) $ 3.73 48.1% 10.0% $ 183.0 $ 50.7 $ 1.99 Adjustments: Acquisition and integration costs - 0.4% 11.1 3.0 0.12 0.2% 0.9% 23.5 9.7 0.21 Acquisition-related intangible asset amortization - 3.8% 106.9 28.2 1.16-4.0% 108.4 34.2 1.10 Field corrective actions - - - - - - - - (0.2) - Litigation expenses - 0.2% 5.8 1.5 0.06 - -0.3% 5.7 2.1 0.05 Special charges - 2.7% 77.6 21.1 0.84-1.9% 37.4 4.8 0.49 Tax method and law changes and related costs - 1.6 79.2 (1.15) - - - (2.2) 0.03 Gain on disposition - - (1.0) - (0.01) - - (1.0) (0.4) (0.01) Adjusted Basis 49.0% 17.3% $ 399.2 $ 77.8 $ 4.75 48.3% 16.3% $ 357.0 $ 98.7 $ 3.86 1 Total does not add due to rounding. 29
Reconciliation: Gross Margin, Operating Margin And Earnings Per Share Gross Margin Year Ended September 30, 2016 Income Operating Margin 1 Before Income Taxes Income Tax Expense Diluted EPS 1 Gross Margin Year Ended September 30, 2015 Income Operating Margin 1 Before Income Taxes Income Tax Expense Diluted EPS GAAP Basis 47.3% 8.7% $ 138.3 $ 15.5 $ 1.86 44.3% 4.2% $ 65.1 $ 18.3 $ 0.82 Adjustments: Acquisition and integration costs 0.8% 1.5% 38.9 11.3 0.41 0.8% 3.2% 62.8 18.0 0.76 Acquisition-related intangible asset amortization - 3.6% 95.9 31.7 0.96-1.7% 34.1 9.8 0.42 FDA remediation expenses - - - - - - 0.2% 3.8 1.2 0.04 Field corrective actions - - 0.2 (0.1) - 0.2% 0.2% 4.5 1.4 0.05 Litigation settlements and expenses - - - - - - - (0.6) (0.2) (0.01) Special charges - 1.5% 39.9 13.4 0.40-2.1% 41.2 10.7 0.52 Supplemental stock compensation charge - - - - - - 0.3% 6.1 2.2 0.07 Foreign valuation allowance - - - 19.5 (0.29) - - - 1.9 (0.03) Debt refinancing - - 12.9 4.7 0.12 - - - - - Gain on disposition - - (10.1) (3.7) (0.10) - - - - - Adjusted Basis 48.1% 15.3% $ 316.0 $ 92.3 $ 3.38 45.3% 11.8% $ 217.0 $ 63.3 $ 2.64 1 Total does not add due to rounding. 30