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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 14, 2015

HILL-ROM HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Indiana (State or other jurisdiction of incorporation)	1-6651 (Commission File Number)	35-1160484 (IRS Employer Identification No.)
1069 State Route 46 East Batesville, Indiana (Address of principal executive offices)		47006-8835 (Zip Code)
(812) 934-7777 (Registrant's telephone number, including area code)
Not Applicable (Former name or former address, if changed since last report.)

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

ý

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01    Other Events.

        As previously disclosed, on June 16, 2015, Hill-Rom Holdings, Inc. ("Hill-Rom") entered into a Merger Agreement by and among Hill-Rom, Empire Merger Sub Corp. and Welch Allyn Holdings, Inc. ("Welch Allyn), providing for the acquisition of Welch Allyn by Hill-Rom (the "Merger"). On July 14, 2015, Hill-Rom issued a press release announcing that the U.S. Federal Trade Commission granted early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with the Merger. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01    Financial Statements and Exhibits.

(a)

Financial statements of businesses acquired.

        Consolidated audited financial statements of Welch Allyn Holdings, Inc. and subsidiaries comprised of the consolidated balance sheets as of December 31, 2014 and 2013, the related statements of income and comprehensive income, stockholders' equity and cash flows for each year in the three-year period ended December 31, 2014 and the related notes to the consolidated financial statements are attached hereto as Exhibit 99.2.

        Interim unaudited condensed consolidated financial statements of Welch Allyn Holdings, Inc. and subsidiaries comprised of the unaudited condensed consolidated balance sheets as of April 4, 2015 and December 31, 2014, the related unaudited condensed consolidated statements of income and comprehensive income, stockholders' equity and cash flows for the periods ended April 4, 2015 and March 29, 2014 and the related notes to the unaudited condensed consolidated financial statements are attached hereto as Exhibit 99.3.

(b)

Pro forma financial information.

        The unaudited pro forma condensed combined balance sheet for Hill-Rom Holdings, Inc. as of March 31, 2015, the related condensed combined income statements for the period ended March 31, 2015 and the fiscal year ended September 30, 2014 and the related notes to the unaudited pro forma condensed combined financial information are attached hereto as Exhibit 99.4.

(d)

Exhibits:

Exhibit No.		Description
	23.1	Consent of Deloitte & Touche LLP, independent registered public accounting firm for Welch Allyn Holdings, Inc.
	99.1	Press release, dated July 14, 2015, issued by Hill-Rom Holdings, Inc.
	99.2	Consolidated audited financial statements of Welch Allyn Holdings, Inc. and subsidiaries as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012.
	99.3	Interim unaudited condensed consolidated financial statements of Welch Allyn Holdings, Inc. and subsidiaries as of April 4, 2015 and December 31, 2014 and for the periods ended April 4, 2015 and March 29, 2014.
	99.4	Unaudited pro forma condensed combined financial information of Hill-Rom Holdings, Inc. as of March 31, 2015 and for the period ended March 31, 2015 and the fiscal year ended September 30, 2014.

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 hereunto duly authorized.

	HILL-ROM HOLDINGS, INC.                      (Registrant)
DATE: July 14, 2015	By:	/s/ STEVEN J. STROBEL
	Name:	Steven J. Strobel
	Title:	Senior Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)

Exhibit Index

Exhibit No.		Description
	23.1	Consent of Deloitte & Touche LLP, independent registered public accounting firm for Welch Allyn Holdings, Inc.
	99.1	Press release, dated July 14, 2015, issued by Hill-Rom Holdings, Inc.
	99.2	Consolidated audited financial statements of Welch Allyn Holdings, Inc. and subsidiaries as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012.
	99.3	Interim unaudited condensed consolidated financial statements of Welch Allyn Holdings, Inc. and subsidiaries as of April 4, 2015 and December 31, 2014 and for the periods ended April 4, 2015 and March 29, 2014.
	99.4	Unaudited pro forma condensed combined financial information of Hill-Rom Holdings, Inc. as of March 31, 2015 and for the period ended March 31, 2015 and the fiscal year ended September 30, 2014.

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Item 8.01 Other Events.
Item 9.01 Financial Statements and Exhibits.

SIGNATURES
Exhibit Index

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

        We consent to the incorporation by reference in Registration Statement Nos. 333-157341, 333-157338, 333-88354, 333-49669, and 333-88328 on Form S-8 of Hill-Rom Holdings, Inc. of our report dated February 16, 2015, relating to the consolidated financial statements of Welch Allyn Holdings, Inc. and subsidiaries as of December 31, 2014 and 2013 and for the three years in the period ended December 31, 2014 appearing in this Current Report on Form 8-K of Hill-Rom Holdings, Inc. dated July 14, 2015.

/s/ Deloitte & Touche LLP

Rochester, New York
July 14, 2015

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Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS

EX-99.1

Exhibit 99.1

                                                                                                                                           

FOR IMMEDIATE RELEASE

Hill-Rom Contacts

Investor Relations

Blair A. (Andy) Rieth, Jr.

Vice President, Investor Relations

312-819-7259

andy.rieth@hill-rom.com

Media

Larry Baumann

Executive Director, Corporate Communications

312-819-7248

larry.baumann@hill-rom.com

Matt Sherman or Alyssa Cass

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

HILL-ROM’S PROPOSED ACQUISITION OF WELCH ALLYN RECEIVES ANTITRUST CLEARANCE

CHICAGO, IL — July 14, 2015 — Hill-Rom Holdings, Inc. (NYSE: HRC) (“Hill-Rom”) today announced that the U.S. Federal Trade Commission has granted early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, in connection with Hill-Rom’s planned acquisition of Welch Allyn Holdings, Inc. (“Welch Allyn”).

As previously announced on June 17, 2015, Hill-Rom and Welch Allyn have entered into a definitive merger agreement under which Hill-Rom will acquire Welch Allyn for approximately $2.05 billion in cash and stock. The two companies have nearly two centuries of medical device innovation between them and will combine their unique strengths to develop new technologies that enhance outcomes for patients and their caregivers. Hill-Rom continues to expect that the transaction will close before the end of September 2015, subject to other customary closing conditions.

About Hill-Rom Holdings, Inc.

Hill-Rom is a leading global medical technology company with approximately 8,000 employees worldwide. We partner with health care providers in more than 100 countries by focusing on patient care solutions that improve clinical and economic outcomes in five core areas: Advancing Mobility, Wound Care and Prevention, Clinical Workflow, Surgical Safety and Efficiency, and Respiratory Health. Hill-Rom’s people, products, and programs work towards one mission: Every day, around the world, we enhance outcomes for patients and their caregivers.

About Welch Allyn, Inc.

Since 1915 Welch Allyn has brought a unique perspective to developing diagnostic solutions by combining pragmatic knowledge with a visionary spirit of innovation and ongoing improvement. As a leading global manufacturer of physical examination instruments and accessories and EMR-connected vital signs and cardiac monitoring solutions, the company has a steadfast commitment to delivering superlative medical products, services and solutions that help healthcare professionals provide better care for their patients. Welch Allyn is headquartered in Skaneateles Falls, N.Y. (USA) and employs nearly 2,600 people in 26 different countries. Visit www.welchallyn.com for more information. Like us on Facebook and follow us on Twitter and LinkedIn.

Disclosure Regarding Forward Looking Statements

Certain statements herein contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the Company’s future plans, objectives, beliefs, expectations, representations and projections. It is important to note that forward-looking statements are subject to risks and uncertainties, and are not guarantees of future performance, and the Company’s actual results could differ materially from those set forth in any forward-looking statements. Risks and uncertainties include, but are not limited to, the likelihood that the transaction is consummated, the expected benefits of the transaction, general marketplace conditions and competition, adverse litigation or government action, and changes to laws and regulations applicable to our industry. 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. The Company assumes no obligation to update or revise any forward-looking statements.

Additional Information and Where to Find It

Hill-Rom has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 to register shares of Hill-Rom common stock that will be issued to Welch Allyn shareholders in connection with the transaction, which includes a proxy statement/prospectus that will be delivered to Welch Allyn’s shareholders in connection with their required approval of the transaction. INVESTORS AND SECURITYHOLDERS OF WELCH ALLYN ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER FILINGS THAT MAY BE MADE WITH THE SEC IN CONNECTION WITH THE TRANSACTION WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. The registration statement and proxy statement/prospectus and other documents which will be filed by Hill-Rom with the SEC, when filed, will be available free of charge at the SEC’s website at www.sec.gov, or from Hill-Rom, 1069 State Route 46 East, Batesville, Indiana 47006, Attention Corporate Secretary. Certain executive officers and directors of Welch Allyn have interests in the proposed transaction that may differ from the interests of stockholders generally. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to appropriate registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

EX-99.2

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Exhibit 99.2

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Welch Allyn Holdings, Inc. and Subsidiaries
Skaneateles Falls, New York

        We have audited the accompanying consolidated financial statements of Welch Allyn Holdings, Inc. and subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2014 and 2013, and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for the three years in the period ended December 31, 2014, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

        Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

        Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

        An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

        We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Welch Allyn Holdings, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the three years in the period ended December 31, 2014 in accordance with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP
February 16, 2015

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WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013

(In thousands, except share and per share amounts)

	2014		2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	178,448	$	145,149
Trade receivables, less allowances of $2,451 in 2014 and $2,805 in 2013		67,674		83,690
Inventories		57,623		53,105
Other current assets		13,488		12,762
Deferred income taxes		16,716		17,869
Total current assets		333,949		312,575
OTHER ASSETS:
Intangible assets—net of accumulated amortization of $25,275 in 2014 and $20,663 in 2013:
Customer base		23,991		27,965
Patents		719		1,046
Trademarks		5,302		4,392
Goodwill		108,643		100,758
Noncurrent deferred income taxes		12,524		3,690
Other assets		163,217		147,113
PROPERTY, PLANT, AND EQUIPMENT:
Land, buildings, and improvements		74,844		77,017
Machinery and equipment		201,575		198,493
Total property, plant, and equipment		276,419		275,510
Accumulated depreciation		177,404		170,028
Property, plant, and equipment—net		99,015		105,482
TOTAL ASSETS	$	747,360	$	703,021

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WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2014 AND 2013

(In thousands, except share and per share amounts)

	2014		2013
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	21,123	$	24,163
Accrued expenses		89,980		93,281
Accrual for restructuring charges		4,764		9,547
Accrued income taxes		3,585		2,962
Total current liabilities		119,452		129,953
OTHER NON CURRENT LIABILITIES		2,589
ACCRUED POSTRETIREMENT BENEFITS		15,042		12,985
LONG-TERM RESTRUCTURING ACCRUAL		16		2,477
LONG-TERM INCENTIVE OBLIGATION		33,731		22,629
DEFERRED COMPENSATION OBLIGATION		31,341		30,256
Total liabilities		202,171		198,300
STOCKHOLDERS' EQUITY:
Common stock, with a par value of $.01 per share:
Class A—voting: 107,442,600 shares authorized, 107,412,876 issued, and 107,158,238 outstanding; including 254,638 shares in treasury		1,069		73
in 2014 and 29,724 in 2013
Class B—nonvoting: authorized 50,000,000 shares, issued 486,345 shares, including 157,675 shares in treasury in 2014 and 157,475 in 2013		3		608
Accumulated other comprehensive income		14,226		20,286
Retained earnings		682,139		633,861
		697,437		654,828
Less cost of shares in treasury		152,248		150,107
Total stockholders' equity		545,189		504,721
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	747,360	$	703,021

See notes to consolidated financial statements.

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WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

	2014			2013		2012
	(In thousands)
NET SALES	$	683,772		$	700,915	$	683,118
COST OF GOODS SOLD		334,461			348,612		337,245
RESTRUCTURING COST OF GOODS SOLD		5,917			11,745		3,905
GROSS MARGIN		343,394			340,558		341,968
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		278,683			295,102		289,025
RESTRUCTURING CHARGES		1,142			7,922		9,235
TRADEMARK AND GOODWILL IMPAIRMENT		—			2,454		4,950
OPERATING INCOME		63,569			35,080		38,758
INVESTMENT INCOME—Net of interest expense		2,707			2,232		1,282
OTHER INCOME		2,568			4,194		2,536
INCOME BEFORE PROVISION FOR INCOME TAXES		68,844			41,506		42,576
PROVISION FOR INCOME TAXES		20,175			10,305		12,155
NET INCOME		48,669			31,201		30,421
OTHER COMPREHENSIVE (EXPENSE) INCOME—Net of tax:
Change in unrealized gains on available-for-sales securities		109			3,565		2,624
Postretirement benefit plan		(1,379	)		3,349		(964	)
Foreign currency translation adjustments		(6,354	)		991		1,223
Change in fair value of derivatives		1,564			875		(687	)
Other comprehensive (expense) income		(6,060	)		8,780		2,196
COMPREHENSIVE INCOME	$	42,609		$	39,981	$	32,617

See notes to consolidated financial statements.

4

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

	Class A		Class B			Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total
	(In thousands)
BALANCE—December 31, 2011	$	73	$	608		$	591,320		$	9,310		$	(147,449	)	$	453,862
Net income for 2012							30,421									30,421
Change in unrealized gains on available-for-sale securities—net of taxes										2,624						2,624
Postretirement benefit plan—net of taxes										(964	)					(964	)
Foreign currency translation adjustments										1,223						1,223
Change in fair value of derivatives—net of taxes										(687	)					(687	)
Dividends							(19,081	)								(19,081	)
Shares purchased for treasury													(1,569	)		(1,569	)
BALANCE—December 31, 2012		73		608			602,660			11,506			(149,018	)		465,829
Net income for 2013							31,201									31,201
Change in unrealized gains on available-for-sale
securities—net of taxes										3,565						3,565
Postretirement benefit plan—net of taxes										3,349						3,349
Foreign currency translation adjustments										991						991
Change in fair value of derivatives—net of taxes										875						875
Shares purchased for treasury													(1,089	)		(1,089	)
BALANCE—December 31, 2013		73		608			633,861			20,286			(150,107	)		504,721
Stock Redenomination		996		(605	)		(391	)
Net income for 2014							48,669									48,669
Change in unrealized gains on available-for-sale securities—net of taxes										109						109
Postretirement benefit plan—net of taxes										(1,379	)					(1,379	)
Foreign currency translation adjustments										(6,354	)					(6,354	)
Change in fair value of derivatives—net of taxes										1,564						1,564
Shares purchased for treasury													(2,141	)		(2,141	)
BALANCE—December 31, 2014	$	1,069	$	3		$	682,139		$	14,226		$	(152,248	)	$	545,189

See notes to consolidated financial statements.

5

WELCH ALLYN HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

	2014			2013			2012
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	48,669		$	31,201		$	30,421
Adjustments to reconcile net income to net cash provided by operating activities:
Trademark and other asset impairment		1,400			2,773			5,683
Provision for depreciation and amortization		24,912			24,491			23,617
Provision for bad debts		(354	)		328			195
Provision for deferred income taxes		(6,188	)		(7,345	)		(3,426	)
Change in long-term incentive and deferred compensation		12,692			8,990			(6,242	)
Change in cash surrender value of Company-owned life insurance		(1,858	)		(5,668	)		(2,361	)
Gain on sale of securities		(2,117	)		(1,747	)		(1,600	)
Income on equity method investments		(356	)					(434	)
Change in operating assets and liabilities:
Accounts receivable		17,097			(4,848	)		(2,273	)
Inventories		(4,645	)		6,398			2,335
Other assets		(6,656	)		(390	)		(8,212	)
Accounts payable and accrued expenses		(7,634	)		17,989			(1,736	)
Restructuring reserve		(7,244	)		2,482			9,542
Accrued pension and postretirement benefits		245			660			609
Accrued income taxes		3,212			2,271			1,837
Net cash provided by operating activities		71,175			77,585			47,955
INVESTING ACTIVITIES:
Purchases of investments		(177	)		(15,794	)		(8,459	)
Sales of investments		6,379			4,800			25,860
Additions to property, plant and equipment		(13,158	)		(13,643	)		(14,266	)
Advances to related-party trust		(2,426	)		(2,712	)		(8,006	)
Purchases of businesses		(12,011	)		—			434
Investments in businesses		(9,849	)		(4,464	)		(3,318	)
Net cash used in investing activities		(31,242	)		(31,813	)		(7,755	)
FINANCING ACTIVITIES:
Acquisition of treasury stock		(2,141	)		(1,089	)		(1,569	)
Dividends Paid		—			—			(19,081	)
Net cash used in financing activities		(2,141	)		(1,089	)		(20,650	)
EFFECT OF EXCHANGE RATE CHANGES		(4,493	)		(536	)		874
CHANGE IN CASH AND CASH EQUIVALENTS		33,299			44,147			20,424
CASH AND CASH EQUIVALENTS—Beginning of year		145,149			101,002			80,578
CASH AND CASH EQUIVALENTS—End of year	$	178,448		$	145,149		$	101,002
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—
Cash paid during the year for:
Interest	$	289		$	322		$	409
Income taxes	$	24,239		$	15,366		$	13,530
Noncash investing and financing activities—property, plant, and equipment unpaid
at end of year	$	353		$	665		$	325
Accrued contingent consideration for purchases of businesses	$	2,200		$	—		$	—
Accrued investment obligation	$	1,000		$	—		$	—

See notes to consolidated financial statements.

6

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014,2013, AND 2012

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Description of Business—Operations of Welch Allyn Holdings, Inc. and Subsidiaries (the "Company") involve the development, manufacture, marketing, and service of quality innovative illumination and diagnostic products throughout the world. The Company's significant manufacturing operations are located in the United States and Mexico. The Company also has sales distribution centers in Europe, Africa, Asia, and Australia. Principal products include reusable and disposable medical diagnostic instruments and equipment as well as miniature lamps. The Company generally sells its products on open account and performs periodic credit evaluations on its customers.

        Accumulated Other Comprehensive Income—The amounts in accumulated other comprehensive income as of December 31, 2014 and 2013, are as follows:

	2014			2013
Unrealized gains on available-for-sale securities—net of deferred tax expense of $4,154 in 2014 and $4,090 in 2013	$	7,073		$	6,964
Foreign currency translation adjustments		6,638			12,992
Adjustment for other postretirement benefit plan—net of deferred tax (benefit) expense of $(784) in 2014 and $26 in 2013		(1,335	)		44
Changes in fair value of derivatives—net of deferred tax expense of $1,087 in 2014 and $168 in 2013		1,850			286
	$	14,226		$	20,286

        Changes in accumulated other comprehensive income, including amounts reclassified into earnings, are as follows:

	Unrealized Gains on Available-For-Sale Securities(1)			Foreign Currency Translation Adjustment			Adjustment for Postretirement Benefit Plan			Changes in Fair Value of Derivatives(2)			Total
Balance at December 31, 2012—net of deferred taxes	$	3,399		$	12,001		$	(3,305	)	$	(589	)	$	11,506
Gross changes		6,164			991			5,316			1,967			14,438
Reclassification into earnings		(505	)								(578	)		(1,083	)
Tax		(2,094	)					(1,967	)		(514	)		(4,575	)
Balance at December 31, 2013—net of deferred taxes		6,964			12,992			44			286			20,286
Gross changes		1,718			(6,354	)		(2,189	)		2,767			(4,058	)
Reclassification into earnings		(1,545	)								(286	)		(1,831	)
Tax		(64	)					810			(917	)		(171	)
Balance at December 31, 2014—net of deferred taxes	$	7,073		$	6,638		$	(1,335	)	$	1,850		$	14,226

(1)

Reclassifed from accumulated other comprehensive income into investment income.

7

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014,2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(2)

Reclassified from accumulated other comprehensive income into net sales and cost of goods sold.

        Derivatives—The Company accounts for derivative instruments in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC), Topic 815, Derivatives and Hedging.

        The Company utilizes foreign currency forward contracts to reduce its exposure to foreign currency risk due to fluctuations in exchange rates associated with forecasted foreign currency denominated sales and intercompany inventory purchases. The maturities of these contracts do not exceed twelve months. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. For derivative instruments designated as fair value hedges, the changes in fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivative instruments designated as cash flow hedges, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (OCI), and the ineffective portions are recognized in earnings.

        As of December 31, 2014 and 2013, the fair values of the Company's foreign currency forward contracts were as follows:

		Fair Value
	Balance Sheet Location
Type of Derivative		2014		2013
Cash flow hedge assets	Other current assets	$	2,943	$	1,223
Cash flow hedge liabilities	Accrued expenses				(776	)

        Realized gains (losses) on derivatives totaled $842, $721, and ($420) for fiscal years 2014, 2013, and 2012, and were included as a component of net sales and cost of goods sold in the accompanying consolidated statements of income and comprehensive income. Unrealized gains (losses) on cash flow hedges were recorded as a component of OCI.

        As of December 31, 2014, the Company had the following outstanding foreign currency forward contracts that were entered into in order to hedge forecasted purchases and revenues (in thousands):

Foreign Currency	Currency Denomination
Canadian dollar		19,664
Australian dollar		12,533
British Pound sterling		9,754

        Use of Estimates—The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may vary from these estimates. The significant estimates relate to allowance for doubtful receivables, intangible assets, product warranty reserves, income taxes, accrued post retirement obligations, restructuring reserves, inventory valuation and reserves, and various accrued expenses.

8

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014,2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Revenue Recognition—The Company recognizes revenue when all of these criteria have been met: persuasive evidence of an arrangement exists; risk of loss and title pass to the customer; the price is fixed or determinable; and collectibility is reasonably assured. The Company generally ships to distributors under shipping terms that transfer title and risk of loss upon shipment and accordingly recognizes revenue upon shipment. In the United States, the Company sometimes ships direct to customers under FOB destination shipping terms and, therefore, does not recognize revenue until the product is delivered to the customer. Also, the Company ships products to customers under multiple deliverable arrangements. These arrangements generally qualify for separate units of accounting treatment and, therefore, revenue is recognized as each separate unit is delivered.

        Sales Incentives—Group purchasing organization rebates are offered to our distributors. These rebates result from a three-party sourcing arrangement between the Company, a distributor, and an end user at a contracted price and are recorded as a reduction in sales. The Company also participates in programs where it pays a distributor to focus on the sales of the Company's products or to reward them for attaining sales targets. These payments are recorded as a reduction in sales.

        Concentration of Credit Risk—The Company sells its products to a large number of geographically diverse end users and distributors, thereby limiting the credit risk.

        Shipping and Handling—Shipping and handling costs are included in cost of goods sold.

        Consolidation—The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and are prepared in conformity with accounting principles generally accepted in the United States of America. All intercompany accounts and transactions have been eliminated in consolidation.

        Cash and Cash Equivalents—Cash and cash equivalents includes currency on-hand, demand, and other deposits with financial institutions. The Company classifies all money market funds as cash equivalents.

        Allowance for Doubtful Accounts—The allowance for doubtful accounts receivable reflects our best estimate of probable losses in our accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts, and other currently available evidence. The allowance for doubtful accounts was $1,762 and $2,080 as of December 31, 2014 and 2013, respectively. Trade receivable allowances also include estimated sales returns allowances and cash discount reserves of $689 and $725 as of December 31, 2014 and 2013, respectively.

        Fair Value Measurements—The carrying amounts of accounts payable and accounts receivable approximate their fair value due to the short-term nature of these financial instruments.

        ASC Topic 820, Fair Value Measurements and Disclosures, establishes a valuation hierarchy for disclosure of the inputs to the valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are

9

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014,2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

unobservable inputs based on the Company's assumptions used to measure assets and liabilities at fair value. Transfers between levels, if any, are recorded as of the end of the reporting period in which the transfer occurs.

        The Company's financial assets and liabilities recorded at fair value on a recurring basis include cash equivalents (money market funds), long-term investments (Note 8), and derivatives (Note 1), and are categorized as follows as of December 31, 2014 and 2013:

2014	Level 1		Level 2		Level 3		Total
Cash equivalents	$	96	$	—	$	—	$	96
Investment securities		23						23
Long-term investments		60,960						60,960
Foreign currency derivative assets				2,943				2,943
Total instruments at fair value	$	61,079	$	2,943	$	—	$	64,022

2013	Level 1		Level 2			Level 3		Total
Cash equivalents	$	102	$	—		$	—	$	102
Investment securities		24							24
Long-term investments		64,017							64,017
Foreign currency derivative assets				1,223					1,223
Foreign currency derivative liabilities				(776	)				(776	)
Total instruments at fair value	$	64,143	$	447		$	—	$	64,590

        The derivative assets and liabilities are classified as Level 2 within the valuation hierarchy and consist of foreign exchange forward contracts that are measured at fair value using observable market inputs such as forward rates, our own credit risk, and our counterparties' credit risks.

        The Company's assets that are required to be reviewed for impairment when events and circumstances indicate that the carrying value may not be recoverable and the fair value is less than the carrying value include goodwill, intangible assets, and property, plant, and equipment. The fair value determination of the Trimline trademark and the advance payments to investee were calculated using Level 3 fair value assumptions. The Company recorded impairments of goodwill and trademark, as discussed later in the Intangible Assets section of footnote 1. We have recorded impairments of $319 and $734 in 2013 and 2012, respectively, related to purchased software that will no longer be of use to our business as a result of recent restructuring activities.

        In 2014, the Company recorded an impairment of $1,400 of the advance payment to investee, as discussed later in Note 8.

        Investment Securities—The Company measures its investment securities in accordance with ASC Topic 320, Investments—Debt and Equity Securities.

10

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Management determines the appropriate classification of debt securities at the time of purchase and reevaluates such designation as of each balance sheet date. Management has determined that the Company's debt and equity investment securities should be classified as trading and available-for-sale. Trading securities are carried at fair value, with the net unrealized holding gains and losses included in earnings. Available-for-sale securities are carried at fair value, with the net unrealized gains and losses reported in comprehensive income. The fair value of investment securities is based on the quoted market values at December 31, 2014 and 2013. Realized gains and losses and declines in value judged to be other than temporary on available-for-sale securities are included in other comprehensive (expense) income. The cost of securities sold is based on the specific identification method. Interest is included in interest income and dividends on securities classified as available-for-sale are included in other income.

        The Company accounts for investments under the equity method or cost method of accounting based on criteria including ownership percentage and level of influence. Investments accounted for under the equity method are adjusted to reflect the Company's share of gains or losses, allocated based on ownership percentage. At least annually, investments are reviewed to assess whether there are any other than temporary impairments.

        Inventories—Inventories are stated at the lower of cost or market with cost determined under the last-in, first-out (LIFO) and the first-in, first-out (FIFO) methods. Inventories stated on the LIFO basis represented 74% and 72% of total inventories (before LIFO valuation allowances) at December 31, 2014 and 2013, respectively. Had the Company valued all its inventories on the FIFO method, the inventories at December 31, 2014 and 2013, would have been higher by $6,027 and $6,211, respectively. The Company maintains a reserve for excess and obsolete inventory.

        Intangible Assets—Intangible assets consist primarily of goodwill, trademarks, customer base, and patents. Customer base assets are being amortized by the straight-line method over 10 to 11 years. Patents are being amortized by the straight-line method over five to seven years. Trademarks are not being amortized based on the Company's intent to use them indefinitely.

        The Company reviews finite lived assets for impairment when indicators for impairment are identified, in accordance with ASC Topic 350, Intangibles—Goodwill and Other. The Company also reassesses the useful lives of all acquired intangible assets.

        In accordance with the requirements of ASC 350, the Company evaluated the balance of goodwill recorded on the consolidated balance sheet as of September 30, 2014 and 2013, the annual measurement date for impairment. In 2014 and 2013, the Company used the step 0 test when evaluating goodwill for impairment, whereby a qualitative assessment was performed to determine that it was not-more-likely -than -not that the fair value of our reporting units was less than the carrying values of the respective reporting units. Factors assessed in making this determination included macroeconomic and market conditions, financial performance, and changes in management.

        In 2012, changes in our reporting structure resulted in an increase in the number of reporting units. Also in 2012, the Company changed its annual evaluation date for determining whether or not goodwill is impaired from December 31 to September 30. The Company determined the fair value of

11

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

each reporting unit and allocated its goodwill based on the relative fair value of the reporting units. The Company then compared the fair value of each reporting unit to the carrying value. Fair values were determined using a combination of discounted cash flow and market approach valuation methodologies. The Company recorded a goodwill impairment of $4,950 in 2012, relating to our European reporting unit.

        In 2013, the Company recorded an impairment in our Trimline trademark asset which we have classified as an indefinite lived asset since acquiring it in 2010 with the acquisition of the Trimline product line. Some customers have been converting from our Trimline product line to our proprietary Flexiport product line and, therefore, the Trimline sales forecast no longer supported the original capitalized value of the trademark. This impairment has been reported as a component of operating income in the 2013 consolidated statement of income and comprehensive income. In 2014, the Company reviewed the Trimline trademark for impairment and an impairment was not required. The total carrying amount of intangible assets not subject to amortization as of December 31, 2014 and 2013 is $113,945 and $105,150, respectively.

        The following is a summary of changes in the carrying amount of goodwill:

	2014			2013
Goodwill at beginning of year	$	100,758		$	100,799
Additions to Goodwill		9,611
Foreign exchange differences and other		(1,726	)		(41	)
Goodwill at end of year	$	108,643		$	100,758

        Amortizing intangible assets, net are comprised of the following (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer base	$	47,224	$	(19,259	)	$	27,965
Patents		2,450		(1,404	)		1,046
Total amortizing intangible assets at December 31, 2013	$	49,674	$	(20,663	)	$	29,011
Customer base	$	47,379	$	(23,388	)	$	23,991
Patents	$	2,606	$	(1,887	)	$	719
Total amortizing intangible assets at December 31, 2014	$	49,985	$	(25,275	)	$	24,710

        Trademarks are not included on this table as they have indefinite lives. At December 31, 2014 and December 31, 2013 trademarks totaled $5,302 and $4,392, respectively and are included within intangible assets on the balance sheet.

12

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        The amortization expense for fiscal years 2014, 2013, and 2012 was $4,612, $4,815, and $4,685. The estimated weighted-average useful life of intangible assets that are being amortized is 5.8 years. Amortization expense is included in the cost of goods sold and selling, general and administrative section of the statement of income.

        The estimated aggregate amortization expense for each of the five succeeding fiscal years is:

2015	$	4,541
2016		4,397
2017		4,172
2018		4,172
2019		3,359

        Property, Plant, and Equipment—Property, plant, and equipment are recorded at cost. Upon disposal of facilities, the cost and related accumulated depreciation are eliminated from the respective accounts and resulting gains or losses are included in the consolidated statements of income and comprehensive income within other income. Expenditures for maintenance and repairs are charged to operations as incurred.

        Property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value generally is determined from estimated discounted future net cash flows (for assets held-for-use) or net realizable value (for assets held-for-sale).

        Depreciation—The Company provides for depreciation of property, plant, and equipment over their estimated useful lives. Buildings and improvements are depreciated over lives of 20 to 40 years and machinery and equipment generally over lives of 3 to 12 years. Depreciation is computed on the straight-line method. The depreciation expense for fiscal years 2014, 2013, and 2012 was approximately $20,300, $19,676, and $18,932.

        Translation of Foreign Currencies—The consolidated financial statements of the Company's foreign subsidiaries, where the functional currency is not the US Dollar, are translated into U.S. dollar equivalents in accordance with ASC 830, Foreign Currency Matters. Assets and liabilities are translated at period-end exchange rates. Income and expense items are translated at the average exchange rate for the period. The net adjustments from translation are included in accumulated other comprehensive income. Translation adjustments are generally not adjusted for income taxes as they relate to permanent investments in the Company's foreign subsidiaries. Foreign currency transaction gains and losses are recognized in income based on the difference between foreign exchange rates on transaction date and other settlement dates, these amounts are accounted for in the other income line of the

13

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

statement of income. The net aggregate transaction loss included in the consolidated statements of income and comprehensive income was $3,179, $2,613, and $915 for fiscal years 2014, 2013, and 2012.

        Income Taxes—The Company provides for income taxes in accordance with the liability method as set forth in ASC 740, Income Taxes. Under the liability method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at the end of each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

        Deferred income taxes are not provided on the unremitted earnings of subsidiaries outside the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon repatriation of assets from a subsidiary or the sale or liquidation of a subsidiary. Deferred income taxes are provided when the Company no longer considers subsidiary earnings to be permanently reinvested, such as situations where the Company's subsidiaries plan to make future dividend distributions.

        Excise Tax—Beginning in 2013, under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Acts of 2010, among other initiatives, the legislation provides for a 2.3% excise tax on the sale of certain medical devices in the U.S. The Company is required to pay this excise tax on most of its U.S. product sales and $6,427 and $6,889 was recorded in Selling, General, and Administrative Expenses in the 2014 and 2013 consolidated statements of income and comprehensive income, respectively.

        Research and Development—Research and development expenditures are recorded in selling, general, and administrative expenses as incurred and amounted to $49,787, $54,005, and $59,938 for fiscal years 2014, 2013, and 2012.

        Advertising Costs—Advertising costs are expensed as incurred. The total amount charged to advertising expense totaled $1,493, $1,838, and $2,096 for fiscal years 2014, 2013, and 2012.

        Accounting for Share-Based Compensation—The Company values its liabilities incurred under share-based payment arrangements in accordance with ASC 718, Compensation—Stock Compensation (Note 7).

2. INVENTORIES

        The composition of inventories, net of reserves, is as follows at December 31:

	2014		2013
Raw material	$	17,712	$	18,966
Work-in-process		14,998		15,149
Finished goods		24,913		18,990
	$	57,623	$	53,105

14

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

3. INCOME TAXES

        The provision for income taxes consisted of the following:

	2014			2013			2012
Income before income taxes:
Domestic	$	51,978		$	35,910		$	37,148
Foreign		16,866			5,596			5,428
Total	$	68,844		$	41,506		$	42,576
Current:
Federal	$	21,229		$	15,070		$	12,112
State		2,134			1,362			1,326
Foreign		3,000			1,919			1,997
		26,363			18,351			15,435
Deferred:
Federal		(5,814	)		(8,157	)		(3,647	)
State		(196	)		(253	)		(112	)
Foreign		(178	)		364			479
Deferred income tax benefit		(6,188	)		(8,046	)		(3,280	)
Provision for income taxes	$	20,175		$	10,305		$	12,155

        The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. federal income tax rate of 35% to pretax income. The sources and tax effects of the differences are as follows:

	2014			2013			2012
U.S. federal tax expense at statutory rates		35.0	%		35.0	%		35.0	%
State income taxes—net of federal benefit		2.1			2.2			2.0
Research and experimentation credits		(0.9	)		(5.8	)
Domestic production deduction		(1.7	)		(2.2	)		(2.4	)
Impairment of trademark					0.3			4.3
Corporate owned life insurance		(1.0	)		(5.1	)		(2.1	)
Split dollar life insurance								(7.0	)
Impact of foreign operations		(5.2	)		(1.0	)		(3.1	)
Other—net		1.0			1.4			1.9
Effective tax rate		29.3	%		24.8	%		28.6	%

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax

15

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

3. INCOME TAXES (Continued)

purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows:

	2014			2013
Deferred tax assets:
Pension and postretirement benefits	$	5,807		$	4,976
Inventory related		2,867			2,975
Accrued compensation		28,371			23,347
Accrued restructuring		1,694			3,908
Accounts receivable		851			925
Warranty reserve		1,305			1,564
Rebate accrual		2,588			2,010
Net operating loss carryforwards		2,285			2,670
Other deferred tax assets		5,503			3,862
State tax credits		12,904			12,905
Valuation allowance		(15,254	)		(15,849	)
Total deferred tax assets		48,921			43,293
Deferred tax liabilities:
Tax over book depreciation		12,229			14,524
Unrealized gains on marketable securities		5,240			4,258
Other deferred tax liabilities		2,212			2,952
Total deferred tax liabilities		19,681			21,734
Net deferred tax assets	$	29,240		$	21,559
Classification of net deferred tax assets:
Current asset	$	16,716		$	17,869
Non-current asset		12,524			3,690
	$	29,240		$	21,559

        At December 31, 2014 and 2013, there was $12,904 and $12,905, respectively, of future tax benefits associated with state tax credits, which have an indefinite carryforward period. Management believes it is more-likely-than-not that the deferred tax assets will not be realized. As such, a full valuation allowance has been recorded in the total amount of these deferred tax assets.

        At December 31, 2014 and 2013, there was $2,350 and $2,944, respectively, of deferred tax assets reflecting the benefit of $7,046 and $9,674, respectively, in loss carryforwards and other future deductible differences in Brazil, China, and Colombia; the net operating loss carryforwards are not subject to expiration, but there are other limitations that will impact deductibility. Management believes it is more-likely-than-not that the deferred tax assets will not be realized. As such, a full valuation allowance has been recorded in the total amount of these deferred tax assets.

        The Company and its subsidiaries are subject to United States federal income tax as well as income tax in multiple state and foreign jurisdictions. During 2014, the Internal Revenue Service

16

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

3. INCOME TAXES (Continued)

("IRS") initiated its audit for the 2013 calendar year. The Company continued its participation in the IRS Compliance Assurance Program (CAP) for the 2014 calendar year and has submitted the application to remain in CAP for the 2015 calendar year.

        At December 31, 2014, undistributed earnings of consolidated foreign subsidiaries of $29,242 are considered to be indefinitely reinvested in international operations. Accordingly, no provision has been made for deferred taxes related to the future repatriation of such earnings, nor is it practicable to determine the amount of this liability.

        At December 31, 2014 and 2013, there was $2,689 and $1,330, respectively, of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company believes that there will be no significant change in the amount of unrecognized tax benefits in the next 12 months.

        The Company recognized interest accrued related to unrecognized tax benefits in income tax expense. At December 31, 2014 and 2013, the Company accrued approximately $464 and $277 in interest and penalties, respectively, related to uncertain tax positions in the accrued income taxes balance on the consolidated balance sheets.

        The American Taxpayer Relief Act of 2012 (the "Act") was signed into law by President Obama on January 2, 2013. Among other things, the Act extended through 2013 several expired or expiring temporary business tax provisions, commonly referred to as "extenders." Provisions that expired at the end of 2011 were retroactively extended to the beginning of 2012, including the research and experimentation (R&E) credit. Under ASC 740, Income Taxes, the effects of new legislation were recognized upon enactment, which in the U.S. federal jurisdiction is the date the president signs a tax bill into law. Although the R&E credit extension was effective retroactively for 2012, entities could only consider currently enacted tax law as of the 2012 balance sheet date in determining current and deferred taxes. The retroactive tax effects for 2012 and the tax effects for 2013 were $2,404 and were recognized by the Company in 2013. The tax effects for 2014 were $618 and were recognized by the Company in 2014.

        In September of 2013, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations regarding the deductibility and capitalization of expenditures related to tangible property. Compliance with these final regulations is required with companies' federal income tax returns for tax years beginning on or after January 1, 2014. We have assessed these rules and have determined that the impact on our consolidated results of operations, cash flows or financial position is not material.

4. TRANSACTIONS WITH RELATED COMPANIES

        Selling expense in the accompanying consolidated financial statements includes a commission of $20,995, $18,600, and $16,919 for fiscal years 2014, 2013, and 2012, which is paid to a Domestic International Sales Corporation affiliated by common ownership.

        The Company has advanced $34,365 and $32,697 at December 31, 2014 and 2013, respectively, to related-parties, under a split dollar agreement, for the purpose of funding life insurance policies on key stockholders (Note 8). The cash value of these policies has been assigned to the Company as collateral

17

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

4. TRANSACTIONS WITH RELATED COMPANIES (Continued)

for the trusts' obligations to repay the advance. In 2012, this split dollar agreement was converted from an economic regime to a loan regime which converted the advanced monies to an interest-bearing loan. Interest accrued totaled $1,445 and $687 at 2014 and 2013, respectively.

5. BORROWINGS AND LEASE COMMITMENTS

        Line-of-Credit Arrangements—On June 21, 2013, the Company entered into an amended and restated $150,000 five-year unsecured revolving credit facility (the "Revolver"). Interest rates on outstanding loans are based on the London Interbank Offer Rate plus additional basis points determined by the ratio of consolidated outstanding indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), defined as the "Leverage Ratio" in the credit agreement. These rates range from 87.5 basis points to 125 basis points. The maturity date of the Revolver is June 21, 2018.

        The Revolver has financial covenants that:

•

Require that the ratio of consolidated outstanding indebtedness to consolidated EBITDA, (defined as the "Leverage Ratio" in the credit agreement) be no more than 3 to 1 at all times

•

Require that the ratio of consolidated EBITDA less capital expenditures less dividends to scheduled principal payments on indebtedness plus interest expense (defined as the "Fixed Charge Coverage Ratio" in the credit agreement) be more than 2.5 to 1 at all times

        Debt issuance costs related to the Revolver are carried in other assets and amortized to interest expense over the life of the credit facility. This expense is included in the consolidated statements of income and comprehensive income within investment income and amounted to $290, $494 and $663 for fiscal years 2014, 2013, and 2012, respectively.

        As of December 31, 2014, the amount available to borrow against the Revolver was $147,176. There were no amounts outstanding under the Revolver at December 31, 2014.

        As of December 31, 2014 and 2013, the Company had outstanding letters of credit totaling $2,824 and $3,074, respectively, principally related to self-insured health insurance, value added tax guarantees and supplier guarantees, which expire at various times throughout 2015. These letters reduce the Company's borrowing capacity.

        Operating Leases—Future minimum annual payments on operating leases, principally for facilities, office equipment, and automobiles, which expire in one to five-year periods, are as follows for each of the five succeeding fiscal years:

2015	$	3,302
2016		2,532
2017		2,439
2018		2,113
2019		2,136

18

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

5. BORROWINGS AND LEASE COMMITMENTS (Continued)

        Net rental expense is included in selling, general, and administrative expenses in the consolidated statements of income and comprehensive income and amounted to $5,635, $6,501, and $7,129 for fiscal years 2014, 2013, and 2012.

6. STOCKHOLDERS' EQUITY

        Stockholder Agreements—The principal stockholders own 100% of the outstanding Common Stock—Class A (voting) and the majority of the outstanding Common Stock—Class B (non-voting). The stockholders' agreement contains first refusal rights, which require stock to be offered to other principal stockholders as well as the Company before it can be offered for sale otherwise. It also requires transferred non-voting stock be purchased at appraised value as determined by a recognized appraiser of closely held stock and securities.

        The Company is not a party to the agreement, though the voting stockholders shall encourage the Company to redeem sufficient stock from the estate of any deceased principal stockholder, if necessary, to pay estate taxes. The stockholders' agreement allows the principal stockholders the ability to pledge (upon permission of the Company) shares of the Company's voting stock as collateral for loans with third-party bank lending institutions. The Company has agreed with the lender that, in the event of default by the borrower, the Company will purchase the borrower's note from the lender and take possession of the pledged voting stock collateral. Voting stock has been pledged by the principal stockholders against loan commitments totaling $9,000 at December 31, 2014 and 2013. There have been no events of default on these loans.

        The Company has entered into agreements with most of its non-principal Class B stockholders in which the stockholders have the right to sell to the Company, and the Company has the right to buy, all of their Company stock in the event (among other contingencies) of death or in the case of employee stockholders' termination of employment for whatever reason. In the event of such a transaction, the fair market value of the stock is to be derived based upon appraised value. The aggregate value of such stock approximates $3,515 and $3,110 at December 31, 2014 and 2013, respectively.

        Stock Redenomination—In 2014, the Company completed an in-substance stock split of 300 Class A for each outstanding share of Class A and Class B, exclusive of shares held in the Company's treasury. In addition, the value per share of Class A and Class B was reduced from $1.25 per share to $0.01 per share for each issued share, with the difference being reflected in retained earnings.

        Treasury Stock—At December 31, 2014 and 2013, shares held in Treasury consist of 157,675 and 157,475 shares, respectively, of Common Stock—Class B. During 2014 and 2013, the Company acquired 224,914 and 0 shares, respectively, of Common Stock—Class A and 200 and 429 shares, respectively, of Common Stock—Class B, at a cost of $2,141 and $1,089, respectively.

19

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS

        Postretirement Benefits—The Company provides a contributory retiree health care plan covering all eligible employees who retired prior to January 1, 1990, and all eligible employees who have or will retire at normal retirement age between January 1, 1990 and December 31, 2014, with at least five years of active service.

        Benefit obligations and funding policies are at the discretion of the Company's management. Retiree contributions are adjusted annually and the plan contains other cost-sharing features such as deductibles and coinsurance, all of which vary based on the retiree's date of retirement. The accounting for the plan anticipates future cost-sharing changes to the written plan that are consistent with the Company's expressed intent to cap its contribution for all employees who retire after 1998 at the level in effect in 1998.

        A summary of the net periodic postretirement benefit other than pension costs for 2014, 2013, and 2012 is presented below:

	2014		2013		2012
Service cost benefits earned during the period	$	5	$	54	$	49
Interest cost on projected benefit obligation		532		551		660
Amortization of net loss				1,007		687
Amortization of unrecognized prior service cost		146		146		146
Net periodic postretirement benefit cost	$	683	$	1,758	$	1,542

        A discount rate of 3.5% was used in 2014, 4.0% in 2013, and 3.0% in 2012 to determine the actuarial present value of the accrued postretirement benefit obligation. A discount rate of 4.0%, 3.0%, and 3.75% was used in 2014, 2013, and 2012, respectively, to determine the net benefit cost. For measurement purposes, the annual rate of increase in health care costs was assumed to be 6.2% in 2014, 5.8% in 2015, 5.5% in 2016, 14.6% in 2017 and 6.3% in 2018, decreasing eventually to 4.8%. Benefits paid, net of participant contributions of $208 in 2014 and $176 in 2013, were $925 in 2014 and $1,109 in 2013. These amounts were funded by employer contributions and Medicare Part D reimbursements of $925 and $158, respectively, in 2014 and $1,109 and $0, respectively, in 2013. The

20

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

change in benefit obligations, plan assets, and amounts recognized in the consolidated balance sheets were as follows:

	2014			2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	14,446		$	19,113
Service cost		5			54
Interest cost		532			551
Plan participants' contributions		208			176
Actuarial loss/(gain)		2,334			(4,163	)
Benefit payments and expected expenses		(1,291	)		(1,285	)
Medicare Part D reimbursements		158
Benefit obligation at end of year		16,392			14,446
Change in plan assets:
Fair value of plan assets at beginning of year		—			—
Plan participants' contributions		208			176
Employer contributions		925			1,109
Benefit payments and actual expenses		(1,291	)		(1,285	)
Medicare Part D reimbursements		158
Fair value of plan assets at end of year		—			—
Amounts recognized in the consolidated balance sheets:
Current liabilities		1,350			1,461
Non-current liabilities		15,042			12,985
Total amount recognized	$	16,392		$	14,446

        The Company estimates $1,382 in contributions to the postretirement plan will be paid in 2015.

        The benefits expected to be paid in each of the next five years, and in the aggregate for the five years thereafter are:

2016	$	1,359
2017		1,316
2018		1,277
2019		1,237
Years 2020-2024		5,569

        The Company has not prefunded any of its postretirement health care liability and, accordingly, the Company's accumulated postretirement benefit obligation (APBO) and net cost recognized for other postemployment benefits reflect the effects of the recent Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The provisions of this act provide for a federal subsidy for plans that provide prescription drug benefits and meet certain qualifications. The actuarially determined reduction in the APBO at December 31, 2014, is $1,958, with $61 of this reduction

21

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

recognized in 2014. The subsidy effectively reduced amortization by $0 and reduced interest cost by $61.

        Other Benefits—The Company provides a non-contributory life insurance benefit to certain retirees who retired prior to December 31, 1989. Because the amount of the liability relative to this plan is insignificant, it has been combined with the health care plan for purposes of this disclosure.

        The Company has a salary reduction 401(k) plan whereby eligible employees may defer up to 40% of their eligible compensation. The Company matches 50% of employee deferrals, up to 6% of eligible compensation. The Company also contributes a non-elective contribution whereby the Company contributes 5% of eligible compensation on behalf of eligible employees. Employer contributions aggregated $8,196, $8,479, and $10,233 in fiscal years 2014, 2013, and 2012.

        Long-Term Incentive Plans—The Company's Welch Allyn Holdings, Inc. Long-Term Incentive Plan (as amended and restated as of January 1, 2013) and Welch Allyn Holdings, Inc. Board of Directors Long-Term Incentive Plan (Amended and Restated as of January 1, 2012) (the "Plans"), which are Board approved, permit the grant of awards to its employees and non-employee directors. The Plans were established for the purpose of providing grants of Phantom Stock Appreciation Rights (PHASARs) and Phantom Stock Units (PSUs) to a select group of officers and other key employees and non-employee directors of the Company to better align the interests of its employees and non-employee directors with those of its shareholders. A PHASAR is a bookkeeping unit representing the right to receive a payment equal to the excess (if any) of (a) the market value of a phantom unit (a hypothetical share of the common stock of the Company) as of the most recent quarterly valuation immediately preceding the date on which the right is exercised or deemed exercised, over (b) the market value of a phantom unit as of its grant date. A PSU is a bookkeeping unit representing the right to receive payment equal to the market value of a phantom unit as of the quarter immediately preceding the date on which the right is exercised or deemed exercised. PHASAR and PSU awards are granted on January 1 of each year. The compensation expense is recognized ratably over the requisite service period. A PHASAR or PSU phantom unit is valued at its hypothetical market value as determined by the Board of Directors, with assistance from an independent valuation firm on the last day of each quarter. The Company uses the intrinsic value method to determine the fair value of PHASARs and PSUs, and accordingly compensation expense is adjusted each quarter for changes in the hypothetical fair value of the Company's stock until a payment is made to the employee.

        In 2009, the Company initiated a Board approved Performance Phantom Stock Unit Plan (PPSU) which allows for awards of PPSUs to certain key employees. A PPSU is a bookkeeping unit representing the right to receive a payment equal to the fair value of a phantom stock unit as of December 31 immediately preceding the date on which the right is exercised or deemed exercised adjusted based on performance per a matrix which measures both EBITDA and EBITDA return on Shareholder's Equity. The vesting period is three years. The compensation expense is recognized ratably over the requisite service period based on the percent achievement to target. Expenses accrued under these plans were $950, $1,027, and $501 for fiscal years 2014, 2013, and 2012.

        Beginning in 2013, the Company has stopped issuing new PPSU grants and instead replaced PPSUs with a three-year performance income cash incentive plan. The participants each receive a

22

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

targeted cash award and performance is measured against the three year performance income target. There is a three year cliff vesting period and any outstanding awards at the time of a participants' retirement run to completion but are prorated through the retirement date.

        Effective in the second quarter of 2014, the Company redenominated all shares outstanding. This effectively increased all outstanding shares by a factor of 301, with a corresponding reduction in the share price by a factor of 301. Share and share price data have been retroactively adjusted for presentation purposes in this footnote.

        For awards granted on or after January 1, 2006, the following assumptions were made:

For Employees
Requisite service period	Five years PHASARs and PSUs; Three years PPSUs
PHASAR vesting schedule	20% vesting per year for five years and shares can be held up to ten years
PSU vesting schedule	100% cliff vesting after five years and paid after end of year five
PPSU	100% cliff vesting after three years and paid after end of year three
PHASAR forfeiture rate	0%
PSU forfeiture rate	4.5-18%
PPSU forfeiture rate	0%
For Non-Employee Directors
Requisite service period	One year
Vesting schedule	100% after one year
Forfeiture rate	0%

PHASAR Rollforward	Unit		Weighted Average Exercise Price
PHASAR units outstanding—December 31, 2013		85,042,132	$	0.40
Units forfeited		354,157		1.64
Units exercised		18,827,369		0.16
Units granted		874,569		8.62
PHASAR units outstanding—December 31, 2014		66,735,175		0.54

23

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

PSU Rollforward		Weighted Average Grant Date Fair Value
PSU units outstanding—December 31, 2013	36,756,314	$	0.49
Units forfeited	1,044,169		0.81
Units exercised	13,029,294		0.34
Units granted	426,454		8.62
PSU units outstanding—December 31, 2014	23,109,305		0.74
PPSU Rollforward
PPSU units outstanding—December 31, 2013	1,809,311	$	0.55
Units forfeited
Units exercised	1,632,624		0.33
Units granted
PPSU units outstanding—December 31, 2014	176,687		6.53

For Employees Vested Shares	PHASARs		PSUs		PPSUs
Weighted-average exercise price on shares/units outstanding	$	0.39	$	—	$	—
Shares/units outstanding at December 31, 2014		62,080,113		8,216,397		176,687
Weighted-average intrinsic price on shares/units outstanding	$	0.24	$	0.34	$	5.38
Weighted-average remaining contractual term on shares/units outstanding		3.5
Number of shares/units currently exercisable		51,947,483		8,216,397		176,687
Shares exercisable and expected to become exercisable		65,818,329		17,437,758		176,687
Weighted-average intrinsic price on shares/units exercisable	$	0.20	$	0.49	$	5.38
Weighted-average remaining contractual term on shares/units exercisable		3.0
Weighted-average exercise price on shares/units exercisable	$	0.29	$	—	$	—

24

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

For Non-Employee Directors Vested Shares	PHASARs		PSUs
Weighted-average exercise price on shares/units outstanding	$	0.27	$	—
Shares/units outstanding at December 31, 2014		916,846		5,147,702
Weighted-average intrinsic price on shares/units outstanding	$	0.22	$	1.25
Weighted-average remaining contractual term on shares/units outstanding		1.6		1.7
Number of shares/units currently exercisable		916,846		2,153,053
Shares exercisable and expected to become exercisable		916,846		5,147,702
Weighted-average intrinsic price on shares/units exercisable	$	0.16	$	0.49
Weighted-average remaining contractual term on shares/units exercisable		1
Weighted-average exercise price on shares/units exercisable	$	0.27	$	—

For Employees Vested Shares	PHASARs		PSUs		PPSUs
Weighted-average exercise price on shares/units outstanding	$	0.32	$	—	$	—
Shares/units outstanding at December 31, 2013		75,251,505		9,469,761		1,743,994
Weighted-average intrinsic price on shares/units outstanding	$	0.13	$	0.40	$	0.40
Weighted-average remaining contractual term on shares/units outstanding		3.9
Number of shares/units currently exercisable		57,468,124		9,469,761		1,743,994
Shares exercisable and expected to become exercisable		83,714,722		27,984,271		1,806,000
Weighted-average intrinsic price on shares/units exercisable	$	0.13	$	0.40	$	0.40
Weighted-average remaining contractual term on shares/units exercisable		3.0
Weighted-average exercise price on shares/units exercisable	$	0.27	$	—	$	—

25

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

7. EMPLOYEE BENEFITS (Continued)

For Non Employee Directors Vested Shares	PHASARs		PSUs
Weighted-average exercise price on shares/units outstanding	$	0.25	$	—
Shares/units outstanding at December 31, 2013		1,309,350		7,512,057
Weighted-average intrinsic price on shares/units outstanding	$	0.15	$	0.74
Weighted-average remaining contractual term on shares/units outstanding		2.1		1.2
Number of shares/units currently exercisable		1,309,350		2,031,750
Shares exercisable and expected to become exercisable		1,309,350		7,512,057
Weighted-average intrinsic price on shares/units exercisable	$	0.15	$	0.40
Weighted-average remaining contractual term on shares/units exercisable		1.0
Weighted-average exercise price on shares/units exercisable	$	0.25	$	—

        The weighted average grant date intrinsic value for PSUs for 2014 is $8.62 and for PSUs and PPSUs for 2013 is $7.32. The weighted average grant date intrinsic value for PSUs and PPSUs for 2012 is $6.53. The weighted average grant date intrinsic value for PHASARs is $0. The total liability for PHASAR, PSU, and PPSU units outstanding at December 31, 2014 and 2013, is $45,172 and $32,722, respectively. Compensation costs have been charged against income which is included as a component of cost of goods sold and selling, general, and administrative expenses on the consolidated statements of income and comprehensive income. The compensation costs for these plans was $22,996, $21,082, and $7,995 for fiscal years 2014, 2013, and 2012. The total income tax benefit recognized in the consolidated statements of income and comprehensive income for these arrangements was $8,508, $7,800, and $2,958 for fiscal years 2014, 2013, and 2012. Total cash paid to settle PHASARs and PSUs was $11,167 and $11,667 in 2014 and 2013, respectively. The deferral of payments on units exercised in 2014 and 2013 was $1,192 and $280, respectively. As of December 31, 2014, the total compensation cost related to nonvested awards not yet recognized is $10,456. The weighted average period over which this expense is expected to be recognized is 2.5 years. The total liability for PHASAR, PSU, and PPSU units outstanding and units exercised with deferred payments at December 31, 2014 and 2013, is $45,172 and $32,709, respectively, of which $33,731 and $22,629 is presented separately on the consolidated balance sheets at December 31, 2014 and 2013, respectively, and $11,441 and $10,080 is included as a component of accrued expenses on the consolidated balance sheets at December 31, 2014 and 2013, respectively. The total value of shares that became vested during 2014 is $8,205.

26

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

8. OTHER ASSETS

        The composition of other non-current assets is as follows at December 31:

	2014		2013
Cash advanced to related party trusts for split dollar agreements (Note 4)	$	35,810	$	33,384
Trading account investments related to deferred compensation plan		31,327		30,471
Available-for-sale securities		29,633		33,546
Corporate owned life insurance		31,457		29,599
Capitalized software		7,052		6,210
Cost and equity method investments		18,554		7,349
Advance payments to investee		5,389		6,411
Prepaid royalty		2,000
Advance payment to Hubble		1,960
Other		35		143
Total	$	163,217	$	147,113

        The cost basis of trading account investments related to deferred compensation assets held was $28,931 and $26,499 at December 31, 2014 and 2013, respectively. These assets are primarily invested in mutual funds. The Company intends to use our investments in available-for-sale equity securities and corporate owned life insurance to settle long-term incentive plan obligations. Gross unrealized gains and losses accumulated in other comprehensive income are as follows:

	December 31, 2014
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities	$	18,412	$	11,221	$	—	$	29,633
	$	18,412	$	11,221	$	—	$	29,633

	December 31, 2013
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities	$	22,497	$	11,049	$	—	$	33,546
	$	22,497	$	11,049	$	—	$	33,546

        The gross realized gains on sales of available-for-sale securities totaled $2,117, $1,750, and $1,597 for fiscal years 2014, 2013, and 2012. Proceeds from sales of available-for-sale securities amounted to $6,379, $4,784 and $23,357 for fiscal years 2014, 2013, and 2012, respectively. The gross realized gains on sales of trading account investments totaled $1,072, $735, and $503 for fiscal years 2014, 2013, and 2012. Proceeds from sales of trading account investments amounted to $7,040, $5,086 and $5,788 for fiscal years 2014, 2013 and 2012, respectively.

27

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

8. OTHER ASSETS (Continued)

        Unrealized gains on trading account investments totaled $2,396 and $4,206 as of December 31, 2014 and 2013, respectively. The Company bears no risk in changes in the trading security investments as any changes in market value would be equally offset by a change in the liability.

        The Company capitalizes certain eligible costs of software to be sold or otherwise marketed, whether internally developed or purchased. The unamortized software costs included in other assets at December 31, 2014, is $7,052 and at December 31, 2013, is $6,210. The total amortization expense charged to cost of goods sold was $1,624, $1,189, and $397 for fiscal years 2014, 2013, and 2012. Accumulated amortization was $3,493 and $1,869 as of December 31, 2014 and 2013, respectively. The Company generally assigns a five-year useful life to capitalized software assets.

        The Company has made strategic capital investments totaling $18,554 and $7,349 at December 31, 2014 and 2013, respectively.

        This includes the following 2014 investments:

•

An investment of $950 was made to a limited liability company formed to use intellectual property to develop products, including the development of certain technology utilized for the detection, diagnosis, screening and/or monitoring of diseases, conditions and other characteristics of properties through breath. As of December 31, 2014, Welch Allyn had a 40% investment in this investee and has accounted for the investment as an equity method investment.

•

An investment of $5,000 was made to a biotech company that develops advanced body worn sensing and computing technologies for applications in cardiology, respiratory and other complex disease states. Under the terms of the agreement Welch Allyn has exclusive global rights to distribute the Company's cardiac arrhythmia products to physicians. As of December 31, 2014, Welch Allyn had a 31% investment in this investee and has accounted for the investment as an equity method investment.

•

An investment of approximately $1,353 was made to a company that developed a hand-held digital diagnostic set with interchangeable scopes comprised of a digital noon-mydriatic eye fundus camera, otoscope, endoscope and dermoscope. As of December 31, 2014, Welch Allyn had a 20% investment in this investee and has accounted for the investment as an equity method investment.

•

An additional investment of $1,546 was made to a Chinese venture capital firm focused on life science companies. As of December 31, 2014, Welch Allyn had a 5.5% investment in this investee and has accounted for the investment as an equity method investment.

•

An additional investment of $2,000 to a medical device firm to help fund the commercialization of its patient monitoring system. $1,000 of this amount had not been contributed as of December 31, 2014 and is within the accrued expenses line item of the balance sheet. As of December 31, 2014, Welch Allyn had a 5.23% investment in this investee and has accounted for the investment as a cost method investment.

        Assets, liabilities, and net income of investees accounted for under the equity method, in the aggregate, were $105,752, $1,959 and $6,053, respectively.

28

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

8. OTHER ASSETS (Continued)

        Equity method investments totaled $13,223 and $4,019 at December 31, 2014 and 2013, respectively. Gains and losses from equity method investments have been reported as a component of other income in the consolidated statements of income and comprehensive income. Gains (losses) totaled $356, ($433), and $0 for fiscal years 2014, 2013, and 2012. Management evaluates these investments for other than temporary impairment annually.

        In 2012, the Company had also recorded a cash advance to an investee associated with these investments of $8,000, of which $5,389 and $6,411 have been recorded in other assets at December 31, 2014 and 2013, respectively. Management reviews this balance annually for impairment, and in 2014 an impairment of $1,400 was recognized.

9. ACCRUED EXPENSES

        The composition of accrued expenses is as follows:

	2014		2013
Accrued payroll and other employee related expenses	$	29,102	$	37,113
Current portion of incentive obligation		11,441		10,080
Accrued rebates		21,171		19,131
Other		28,266		26,957
Total	$	89,980	$	93,281

10. COMMITMENTS AND CONTINGENCIES

        The Company is involved in various pending and threatened actions arising from its normal business operations. Management believes that the Company has meritorious defenses or claims and it will vigorously protect itself in these actions. In the opinion of management, the outcome of these actions will not have a material effect on the Company's financial position and results of operations.

        The Company offers warranties for its products. The specific terms and conditions of those warranties vary depending upon the product sold. For products sold in the United States, the Company provides a basic limited warranty, including parts and labor, for periods ranging generally from one to five years. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim.

29

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

10. COMMITMENTS AND CONTINGENCIES (Continued)

        Changes in the Company's product liability, included in accrued expenses in the accompanying consolidated balance sheets, during the period are as follows:

	2014			2013
Balance at January 1	$	4,173		$	4,106
Warranties issued		3,579			3,968
Changes in estimates					21
Settlements made		(4,287	)		(3,922	)
Balance at December 31	$	3,465		$	4,173

        Supplier Concentration—Certain of the raw materials or purchased assemblies used by the Company in the manufacture of its products are available from a limited number of suppliers or, in some cases, from a single supplier. Shortages could occur in these essential materials due to an interruption of supply from any of these suppliers. Although the Company has no reason to believe that there will be an interruption in supply of any materials or purchased parts, and although the Company continually reviews its sources of supply, if the Company were unable to procure certain of such materials or purchased assemblies from a number of these limited suppliers, it would be required to reduce its manufacturing operations, which could have a material adverse effect upon its results of operations.

        Regulation—The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively "Health Care Reform") legislated broad-based changes to the U.S. health care system that significantly impact our business operations and financial results, including higher or lower revenue, as well as higher employee medical costs and taxes. Health Care Reform imposes significant new taxes on medical device manufacturers, which will result in a significant increase in the tax burden on our industry and which could have a material negative impact on our financial condition, results of operations and our cash flows. Other elements of Health Care Reform such as comparative effectiveness research, an independent payment advisory board, payment system reforms including shared savings pilots and other provisions could meaningfully change the way healthcare is developed and delivered, and may materially impact numerous aspects of our business, results of operations and financial condition. Many significant parts of Health Care Reform will be phased in over the next several years and require further guidance and clarification in the form of regulations.

11. RESTRUCTURING AND OTHER CHARGES

        In September 2012, the Company announced plans to reshape its business and realign resources to meet the challenges and opportunities of the rapidly changing global healthcare environment. In doing so, the Company established three distinct New Product Development and Technology Centers in New York, Oregon, and Singapore. Also, the Company created a Global Finance Shared Service Center in Mexico and consolidated its North American manufacturing and related support functions at its largest facilities in New York and Mexico. Over the course of the restructure program, the Company aggressively hired select new skills that are critical to supporting the changing nature of healthcare

30

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

11. RESTRUCTURING AND OTHER CHARGES (Continued)

globally and necessary to prepare for future growth. The Company reduced an estimated 10 percent of its current workforce as part of the restructuring effort. This was accomplished with a combination of voluntary and involuntary separations. The total estimated cost of the entire restructuring plan is approximately $55 million, of which approximately $44 million (including $5 million of capital) has been incurred through December 31, 2014. The Company expects to incur and pay the remaining cost for the other portions of the restructuring over the next year. Costs include the following main categories of expense: severance and retention, costs related to the move and consolidation of product lines to New York and Mexico, personnel (including travel and temporary wages paid to backfill employees), and consulting or legal fees. In 2014, restructuring expense includes $1,212 in third party consulting fees spent to help the Company optimize the efficiency and effectiveness of several functions within the business. This amount relates directly to efficiencies in the sourcing area and has been included in restructuring cost of goods sold in the consolidated statement of income and comprehensive income. Severance packages were calculated based on years of service and included appropriate levels of medical coverage.

        The table below shows the related activity recorded in 2014, 2013, and 2012:

	Balance December 31, 2013		Additions to Reserve		Payments			Balance December 31, 2014
Severance and related	$	11,518	$	5,562	$	(12,441	)	$	4,639
All other		506		1,497		(1,862	)		141
Total	$	12,204	$	7,059	$	(14,303	)	$	4,780

	Balance December 31, 2012		Additions to Reserve		Payments			Balance December 31, 2013
Severance and related	$	9,542	$	11,857	$	(9,881	)	$	11,518
All other		570		7,810		(7,874	)		506
Total	$	10,112	$	19,667	$	(17,755	)	$	12,024

	Balance December 31, 2011		Additions to Reserve		Payments			Balance December 31, 2012
Severance and related	$	—	$	11,247	$	(1,705	)	$	9,542
All other				1,893		(1,323	)		570
Total	$	—	$	13,140	$	(3,028	)	$	10,112

        The all other reserve at December 31, 2014 includes employee relocation costs associated with the restructuring efforts.

31

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

12. ACQUISITIONS

        On June 3, 2014, the Company acquired certain assets of PediaVision Holdings, LLC ("PediaVision"), a leading developer of vision technology and inventor of a new generation of user-friendly vision assessment technology that transcends age, developmental capacity and mobility. This acquisition offers the Company a unique opportunity to better serve its customers by offering them a state of the art diagnostic device for conducting eye examinations in a variety of settings. It also complements the Company's existing vision screening technology, specifically, the Welch Allyn SureSight® Vision Screener and Autorefractor.

        The purchase price was $8,112, including a holdback of $1,500. Additional contingent consideration totaling $500 was recognized at the acquisition date to accrue for future payments to the previous owner. Results of this acquisition are included in our consolidated results of operations from the date of acquisition. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from PediaVision based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. Goodwill will be deducted for tax purposes utilizing the straight-line method over a period of 15 years.

        The following table summarizes the fair value of the assets acquired and liabilities assumed:

Current assets	$	235
Fixed assets		109
Intangible assets		8,244
Total asset acquired		8,588
Current liabilities		(476	)
Net assets acquired	$	8,112

        As the values of certain assets acquired and liabilities assumed are preliminary in nature, they are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of our intangible asset valuation. The valuations will be finalized in 2015. When the valuations are finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill.

        The fair values of the assets acquired were determined using the income approach. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted using the Company weighted average cost of capital. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The income fair value measurement approach is based on significant unobservable inputs, including management estimates and assumptions.

32

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

12. ACQUISITIONS (Continued)

        The amounts assigned to major classes of intangible assets are shown below:

Customer base	$	155
Goodwill		7,022
In-process R&D		157
Trademarks		910
Total intangible assets	$	8,244

        On November 7, 2014, the Company acquired certain assets of HealthInterlink, LLC ("HealthInterlink"), a business engaged in researching, developing, manufacturing, marketing, distributing and selling software and other products and solutions for remote patient monitoring. In keeping with the Company's vision to transform care wherever patients and healthcare professionals connect, this acquisition will enable the Company to help clinicians prioritize patient care, allowing for early intervention and facilitating communications with patients outside traditional healthcare settings.

        The purchase price was $4,000, including a holdback of $600. Additional consideration totaling $200 was recognized at the acquisition date to accrue for future payments due to the previous owner over the next 2 years. Results of this acquisition are included in our consolidated results of operations from the date of acquisition. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from HealthInterlink based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. Goodwill will be deducted for tax purposes utilizing the straight-line method over a period of 15 years.

        The following table summarizes the fair value of the assets acquired and liabilities assumed:

Current assets	$	48
Intangible assets		3,968
Total asset acquired		4,016
Current liabilities		(16	)
Net assets acquired	$	4,000

        As the values of certain assets acquired and liabilities assumed are preliminary in nature, they are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of our intangible asset valuation. The valuations will be finalized in 2015. When the valuations are finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill.

        The fair values of the assets acquired were determined using the income approach.

33

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 (Continued)

(In thousands, except share and per share amounts)

12. ACQUISITIONS (Continued)

        The amounts assigned to major classes of intangible assets are shown below:

Software	$	1,379
Goodwill		2,589
Total intangible assets	$	3,968

        Software is accounted for within other non current assets.

13. SUBSEQUENT EVENTS

        The Company has evaluated the impact of subsequent events through February 3, 2015, representing the date at which the consolidated financial statements were available to be issued.

        On January 1, 2015, the Company purchased Hubble Telemedical, Inc. ("Hubble"), a privately-held company that enables remote diabetic retinopathy screening and analysis in primary care and other convenient settings. The acquisition of Hubble further strengthens the Company's leadership position in delivering sight-saving solutions into primary care settings where they can have the largest impact on improving population health while also lowering the cost of care. The total purchase price of this acquisition was $5,217.

        The Company advanced payment to Hubble, on December 31, 2014 in the amount of $1,960, which is included in other non current assets within the balance sheet as of December 31, 2014.

******

34

QuickLinks

Exhibit 99.2
To the Board of Directors and Stockholders of Welch Allyn Holdings, Inc. and Subsidiaries Skaneateles Falls, New York
Management's Responsibility for the Consolidated Financial Statements
Auditors' Responsibility
Opinion

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2014 AND 2013 (In thousands, except share and per share amounts)
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012
WELCH ALLYN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014,2013, AND 2012 (In thousands, except share and per share amounts)

EX-99.3

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Exhibit 99.3

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF APRIL 4, 2015 AND DECEMEBER 31, 2014

(In thousands, except share and per share amounts)

	2015		2014
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	174,485	$	178,448
Trade receivables, less allowances of $2,387 in 2015 and $2,451 in 2014		70,823		67,674
Inventories		57,535		57,623
Other current assets		15,162		13,488
Deferred income taxes		16,702		16,716
Total current assets		334,707		333,949
OTHER ASSETS:
Intangible assets, net		28,706		30,012
Goodwill		107,417		108,643
Noncurrent deferred income taxes		13,301		12,524
Other assets		174,361		163,217
NET PROPERTY, PLANT, AND EQUIPMENT:		94,917		99,015
TOTAL ASSETS	$	753,409	$	747,360

1

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF APRIL 4, 2015 AND DECEMBER 31, 2014

(In thousands, except share and per share amounts)

	2015		2014
	(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	22,467	$	21,123
Accrued expenses		82,016		89,980
Accrual for restructuring charges		3,073		4,764
Accrued income taxes		4,573		3,585
Total current liabilities		112,129		119,452
OTHER NON CURRENT LIABILITIES		5,327		2,589
ACCRUED POSTRETIREMENT BENEFITS		15,178		15,042
LONG-TERM RESTRUCTURING ACCRUAL		—		16
LONG-TERM INCENTIVE OBLIGATION		41,067		33,731
DEFERRED COMPENSATION OBLIGATION		31,087		31,341
Total liabilities		204,788		202,171
STOCKHOLDERS' EQUITY:
Common stock, with a par value of $.01 per share:
Class A—voting: 107,442,600 shares authorized, 107,412,876 issued, and 107,156,303 outstanding; including 256,573 shares in treasury in 2015 and 254,638 in 2014		1,069		1,069
Class B—nonvoting: authorized 50,000,000 shares, issued 486,345 shares, including 157,675 shares in treasury in 2015 and 157,675 in 2014		3		3
Accumulated other comprehensive income		14,417		14,226
Retained earnings		685,411		682,139
		700,900		697,437
Less cost of shares in treasury		152,279		152,248
Total stockholders' equity		548,621		545,189
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	753,409	$	747,360

See notes to unaudited condensed consolidated financial statements.

2

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014

(In thousands)

	2015			2014
	(Unaudited)
NET SALES	$	164,534		$	160,566
COST OF GOODS SOLD		81,883			81,354
RESTRUCTURING COST OF GOODS SOLD		346			2,234
GROSS MARGIN		82,305			76,978
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		77,494			66,256
RESTRUCTURING CHARGES					2,212
OPERATING INCOME		4,811			8,510
INVESTMENT INCOME—Net of interest expense		170			118
OTHER EXPENSE		(56	)		(157	)
INCOME BEFORE PROVISION FOR INCOME TAXES		4,925			8,471
PROVISION FOR INCOME TAXES		1,655			2,982
NET INCOME		3,270			5,489
OTHER COMPREHENSIVE INCOME (EXPENSE)—Net of tax:
Change in unrealized gains on available-for-sales securities		2,857			(578	)
Foreign currency translation adjustments		(2,829	)		(723	)
Change in fair value of derivatives		163			(112	)
Other comprehensive income (expense)		191			(1,413	)
COMPREHENSIVE INCOME	$	3,461		$	4,076

See notes to unaudited condensed consolidated financial statements.

3

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014

(In thousands)

	2015			2014
	(Unaudited)
OPERATING ACTIVITIES:
Net income	$	3,270		$	5,489
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for depreciation and amortization		7,210			6,175
Provision for bad debts		(8	)		(21	)
Provision for deferred income taxes		(4,472	)		(1,419	)
Change in long-term incentive and deferred compensation		7,292			(532	)
Change in cash surrender value of Company-owned life insurance		(1,035	)		(150	)
Income on equity method investments		(105	)		0
Change in operating assets and liabilities:
Accounts receivable		(2,929	)		15,273
Inventories		(66	)		(319	)
Other assets		(2,171	)		(1,162	)
Accounts payable and accrued expenses		(5,998	)		(17,686	)
Restructuring reserve		(1,687	)		(2,545	)
Accrued pension and postretirement benefits		136			0
Accrued income taxes		990			325
Net cash provided by operating activities		427			3,428
INVESTING ACTIVITIES:
Purchases of investments		(11	)		(157	)
Sales of investments					147
Additions to property, plant and equipment		(1,774	)		(3,035	)
Advances to related-party trust		(1,224	)		(1,131	)
Investments in businesses		—			(500	)
Net cash used in investing activities		(3,009	)		(4,676	)
FINANCING ACTIVITIES—Acquisition of treasury stock		(31	)		0
Net cash used in financing activities		(31	)		0
EFFECT OF EXCHANGE RATE CHANGES		(1,350	)		(783	)
CHANGE IN CASH AND CASH EQUIVALENTS		(3,963	)		(2,031	)
CASH AND CASH EQUIVALENTS—Beginning of period		178,448			145,149
CASH AND CASH EQUIVALENTS—End of period	$	174,485		$	143,118
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—Cash paid during the period for:
Interest	$	54		$	64
Income taxes		5,185			4,063
Noncash investing and financing activities—property, plant, and equipment unpaid at end of period		237			180
Accrued contingent consideration for purchases of businesses		5,233			—
Accrued investment obligation		1,000			—

See notes to unaudited condensed consolidated financial statements.

4

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014

(In thousands, except share and per share amounts)

1. BASIS OF PRESENTATION

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification ("ASC") 270, Interim Reporting). Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Welch Allyn Holdings, Inc. and subsidiaries (the "Company"), for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The December 31, 2014 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes included in the audited financial statements for the year ended December 31, 2014. The Company utilizes a fifty-two week fiscal year ending on December 31. The first quarter of 2015 and 2014 each contained 13 weeks and ended on April 4, and March 29, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Description of Business—Operations of the Company involve the development, manufacture, marketing, and service of quality innovative illumination and diagnostic products throughout the world. The Company's significant manufacturing operations are located in the United States and Mexico. The Company also has sales distribution centers in Europe, Africa, Asia, and Australia. Principal products include reusable and disposable medical diagnostic instruments and equipment as well as miniature lamps. The Company generally sells its products on open account and performs periodic credit evaluations on its customers.

5

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Accumulated Other Comprehensive Income—The amounts in accumulated other comprehensive income as of April 4, 2015 and December 31, 2014, are as follows:

	2015			2014
Unrealized gains on available-for-sale securities—net of deferred tax expense of $5,832 in 2015 and $4,154 in 2014	$	9,930		$	7,073
Foreign currency translation adjustments		3,810			6,638
Adjustment for other postretirement benefit plan—net of deferred tax (benefit) of $(784) in 2015 and 2014		(1,335	)		(1,335	)
Changes in fair value of derivatives—net of deferred tax expense of $1,182 in 2015 and $1,087 in 2014		2,012			1,850
	$	14,417		$	14,226

        Changes in accumulated other comprehensive income, including amounts reclassified into earnings, are as follows:

	Unrealized Gains on Available-For-Sale Securities			Foreign Currency Translation Adjustment			Adjustment for Postretirement Benefit Plan			Changes in Fair Value of Derivatives(1)			Total
Balance at December 31, 2013—net of deferred taxes	$	6,964		$	12,992		$	44		$	286		$	20,286
Gross changes		1,718			(6,354	)		(2,189	)		2,767			(4,058	)
Reclassification into earnings		(1,545	)								(286	)		(1,831	)
Tax		(64	)					810			(917	)		(171	)
Balance at December 31, 2014—net of deferred taxes		7,073			6,638			(1,335	)		1,850			14,226
Gross changes		4,535			(2,829	)					899			2,605
Reclassification into earnings											(641	)		(641	)
Tax		(1,678	)								(95	)		(1,773	)
Balance at April 4, 2015—net of deferred taxes	$	9,930		$	3,809		$	(1,335	)	$	2,013		$	14,417

(1)

Reclassified from accumulated other comprehensive income into net sales and cost of goods sold.

6

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Intangible Assets:    Amortizing intangible assets, net are comprised of the following (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer base	$	47,379	$	(23,388	)	$	23,991
Patents		2,606	$	(1,887	)	$	719
Total amortizing intangible assets at December 31, 2014	$	49,985	$	(25,275	)	$	24,710
Customer base	$	47,379	$	(24,566	)	$	22,813
Patents		2,607	$	(2,016	)	$	591
Total amortizing intangible assets at April 4, 2015	$	49,986	$	(26,582	)	$	23,404

        Trademarks are not included on this table as they have indefinite lives. At April 4, 2015 and December 31, 2014 trademarks totaled $5, 302 and $5,302, respectively and are included within intangible assets on the balance sheet.

3. INVENTORIES

        The composition of inventories, net of reserves, is as follows as of April 4, 2015 and December 31, 2014:

	2015		2014
Raw material	$	18,312	$	17,712
Work-in-process		14,735		14,998
Finished goods		24,488		24,913
	$	57,535	$	57,623

4. INCOME TAXES

        The effective tax rate was 33.6 percent for the three months ended April 4, 2015 compared to 35.2 percent for the comparable prior year period.

        The effective rate for the three months ended April 4, 2015 is lower than the comparable period primarily due to the favorable impact of corporate owned life insurance and foreign rate differential.

        As of April 4, 2015, the balance of unrecognized tax benefits is approximately $2.7 million. It is reasonably possible that a reduction of up to $0.4 million of the balance of unrecognized tax benefits will occur within the next twelve months as a result of potential audit settlements.

7

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

5. TRANSACTIONS WITH RELATED COMPANIES

        Selling expense in the accompanying unaudited condensed consolidated financial statements includes a commission of $4,950 and $4,807 as of April 4, 2015 and March 29, 2014, respectively, which is paid to a Domestic International Sales Corporation affiliated by common ownership.

        The Company has advanced $35,391 and $34,365 at April 4, 2015 and December 31, 2014, respectively, to related-parties, under a split dollar agreement, for the purpose of funding life insurance policies on key stockholders (Note 7). The cash value of these policies has been assigned to the Company as collateral for the trusts' obligations to repay the advance. In 2012, this split dollar agreement was converted from an economic regime to a loan regime which converted the advanced monies to an interest-bearing loan. Interest accrued totaled $1,643 and $1,445 at April 4, 2015 and December 31, 2014, respectively.

6. EMPLOYEE BENEFITS

        Postretirement Benefits—The Company provides a contributory retiree health care plan covering all eligible employees who retired prior to January 1, 1990, and all eligible employees who have retired at normal retirement age between January 1, 1990 and December 31, 2014, with at least five years of active service.

        Benefit obligations and funding policies are at the discretion of the Company's management. Retiree contributions are adjusted annually and the plan contains other cost-sharing features such as deductibles and coinsurance, all of which vary based on the retiree's date of retirement. The accounting for the plan anticipates future cost-sharing changes to the written plan that are consistent with the Company's expressed intent to cap its contribution for all employees who retire after 1998 at the level in effect in 1998.

        The change in the benefit obligation is as follows:

At December 31, 2014	$	16,392
Net periodic postretirement benefit cost		136
At April 4, 2015	$	16,528

        Net periodic postretirement benefit cost is comprised of the following:

	Three Months Ended
	April 4, 2015		March 29, 2014
Service cost	$	—	$	1
Interest cost		136		133
Amortization of unrecognized prior service cost		—		36
Net periodic postretirement benefit cost	$	136	$	170

8

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

7. OTHER ASSETS

        The composition of other non-current assets is as follows as of April 4, 2015 and December 31, 2014:

	2015		2014
Cash advanced to related party trusts for split dollar agreements (Note 5)	$	37,034	$	35,810
Trading account investments related to deferred compensation plan		31,024		31,327
Available-for-sale securities		34,181		29,633
Corporate owned life insurance		32,492		31,457
Capitalized software		13,559		7,052
Cost and equity method investments		18,658		18,554
Advance payments to investee		5,389		5,389
Prepaid royalty		2,000		2,000
Advance payment to Hubble		—		1,960
Other		25		35
Total	$	174,361	$	163,217

        The cost basis of trading account investments related to deferred compensation assets held was $28,428 and $28,931 at April 4, 2015 and December 31, 2014, respectively. These assets are primarily invested in mutual funds. The Company intends to use our investments in available-for-sale equity securities and corporate-owned life insurance to settle long-term incentive plan obligations. Gross unrealized gains and losses accumulated in other comprehensive income are as follows:

	April 4, 2015
	Cost		Gross Unrealized Gains		Gross Unrealized Losses	Estimated Fair Value
Available-for-sale securities	$	18,424	$	15,756	$	$	34,180
	$	18,424	$	15,756	$	$	34,180

	December 31, 2014
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities	$	18,412	$	11,221	$	—	$	29,633
	$	18,412	$	11,221	$	—	$	29,633

9

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

8. ACCRUED EXPENSES

        The composition of accrued expenses as of April 4, 2015 and December 31, 2014 are as follows:

	2015		2014
Accrued payroll and other employee related expenses	$	14,385	$	29,102
Current portion of long-term incentive obligation		12,717		11,441
Accrued rebates		22,333		21,171
Other		32,581		28,266
Total	$	82,016	$	89,980

9. COMMITMENTS AND CONTINGENCIES

        The Company is involved in various pending and threatened actions arising from its normal business operations. Management believes that the Company has meritorious defenses or claims and it will vigorously protect itself in these actions. In the opinion of management, the outcome of these actions will not have a material effect on the Company's financial position and results of operations.

        The Company offers warranties for its products. The specific terms and conditions of those warranties vary depending upon the product sold. For products sold in the United States, the Company provides a basic limited warranty, including parts and labor, for periods ranging generally from one to five years. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim.

        Changes in the Company's product liability, included in accrued expenses in the accompanying unaudited condensed consolidated balance sheet, during the period are as follows:

	2015
At December 31, 2014	$	3,465
Warranties issued		795
Changes in estimates
Settlements made		(601	)
At April 4, 2015	$	3,659

10. ACQUISITIONS

        On June 3, 2014, the Company acquired certain assets of PediaVision Holdings, LLC ("PediaVision"), a leading developer of vision technology and inventor of a new generation of user-friendly vision assessment technology that transcends age, developmental capacity and mobility. This acquisition offers the Company a unique opportunity to better serve its customers by offering them a state of the art diagnostic device for conducting eye examinations in a variety of settings. It also complements the Company's existing vision screening technology, specifically, the Welch Allyn SureSight® Vision Screener and Autorefractor.

10

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

10. ACQUISITIONS (Continued)

        The purchase price was $8,112, including a holdback of $1,500. Additional contingent consideration totaling $500 was recognized at the acquisition date to accrue for future payments to the previous owner. Results of this acquisition are included in our consolidated results of operations from the date of acquisition. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from PediaVision based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. Goodwill will be deducted for tax purposes utilizing the straight-line method over a period of 15 years.

        The following table summarizes the fair value of the assets acquired and liabilities assumed:

Current assets	$	235
Fixed assets		109
Intangible assets		8,244
Total asset acquired		8,588
Current liabilities		(476	)
Net assets acquired	$	8,112

        As the estimate values of certain assets acquired and liabilities assumed are preliminary in nature, they are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of our intangible asset valuation. The valuations will be finalized in 2015. When the valuations are finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill.

        The fair values of the assets acquired were determined using the income approach. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted using the Company weighted average cost of capital. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The income fair value measurement approach is based on significant unobservable inputs, including management estimates and assumptions.

        The amounts assigned to major classes of intangible assets are shown below:

Customer base	$	155
Goodwill		7,022
In-process R&D		157
Trademarks		910
Total intangible assets	$	8,244

        On November 7, 2014, the Company acquired certain assets of HealthInterlink, LLC ("HealthInterlink"), a business engaged in researching, developing, manufacturing, marketing, distributing and selling software and other products and solutions for remote patient monitoring. In keeping with the Company's vision to transform care wherever patients and healthcare professionals

11

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

10. ACQUISITIONS (Continued)

connect, this acquisition will enable the Company to help clinicians prioritize patient care, allowing for early intervention and facilitating communications with patients outside traditional healthcare settings.

        The purchase price was $4,000, including a holdback of $600. Additional consideration totaling $200 was recognized at the acquisition date to accrue for future payments due to the previous owner over the next 2 years. Results of this acquisition are included in our consolidated results of operations from the date of acquisition. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from HealthInterlink based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. Goodwill will be deducted for tax purposes utilizing the straight-line method over a period of 15 years.

        The following table summarizes the fair value of the assets acquired and liabilities assumed:

Current assets	$	48
Intangible assets		3,968
Total asset acquired		4,016
Current liabilities		(16	)
Net assets acquired	$	4,000

        The fair values of the assets acquired were determined using the income approach.

        The amounts assigned to major classes of intangible assets are shown below:

Software	$	1,379
Goodwill		2,589
Total intangible assets	$	3,968

        Software is accounted for within other non current assets.

        On January 1, 2015, the Company acquired Hubble Telemedical, Inc. ("Hubble"), a privately-held company that enables remote diabetic retinopathy screening and analysis in primary care and other convenient settings. The acquisition of Hubble further strengthens the Company's leadership position in delivering sight-saving solutions into primary care settings where they can have the largest impact on improving population health while also lowering the cost of care.

        The purchase price totaled $5,217, including a holdback of $200 and contingent consideration of $3,057. The holdback is due on or before the 30^th day following the one-year anniversary of the closing date. The fair value of accrued contingent consideration recorded by the Company represents the estimated fair value of the contingent consideration the Company expects to pay to the former shareholders upon the achievement of certain financial milestones. The fair value of the contingent consideration liability was estimated by discounting to present value the contingent payments expected to be made utilizing a risk adjusted discount rate.

        Results of this acquisition are included in our consolidated results of operations from the date of acquisition. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from Hubble based on their fair values as of the close of the acquisition.

12

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (Continued)

(In thousands, except share and per share amounts)

10. ACQUISITIONS (Continued)

        The following table summarizes the fair value of the assets acquired and liabilities assumed:

Current assets	$	932
Deferred tax asset		244
Fixed assets		11
Intangible assets-software		6,929
Total asset acquired		8,116
Current liabilities		(718	)
Non current deferred tax liability		(2,181	)
Net assets acquired	$	5,217

        As the estimated values of certain assets acquired and liabilities assumed are preliminary in nature, they are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of our intangible asset valuation. The valuations will be finalized in 2015. When the valuations are finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill.

        The fair values of the assets acquired were determined using the income approach. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted using the Company weighted average cost of capital. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The income fair value measurement approach is based on significant unobservable inputs, including management estimates and assumptions.

11. SUBSEQUENT EVENTS

        The Company has evaluated the impact of subsequent events through July 13, 2015, representing the date at which the consolidated financial statements were available to be issued.

        On May 4, 2015, the Company acquired substantially all assets of Scale-Tronix, Inc ("Scale-Tronix") for $40 million. The initial purchase price accounting is incomplete at the time these unaudited condensed consolidated interim financial statements were issued.

        Scale-Tronix is a leading manufacturer of medical scales and patient weighing systems for hospitals, clinics and extended-care facilities around the world. This acquisition gives the Company an opportunity to better serve its hospital and physician customers by offering a variety of clinical-grade scales that capture a vital piece of patient-specific information at the point-of-care.

        On June 17, 2015, Hill-Rom Holdings, Inc. (NYSE: HRC) ("Hill-Rom") and the Company announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which Hill-Rom will acquire Welch Allyn for approximately $2.05 billion in cash and stock.

******

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Exhibit 99.3

WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF APRIL 4, 2015 AND DECEMEBER 31, 2014 (In thousands, except share and per share amounts)
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 (In thousands, except share and per share amounts)
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (In thousands)
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (In thousands)
WELCH ALLYN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF APRIL 4, 2015 AND DECEMBER 31, 2014 AND FOR THE THREE MONTHS ENDED APRIL 4, 2015 AND MARCH 29, 2014 (In thousands, except share and per share amounts)

EX-99.4

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Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        On June 16, 2015, Hill-Rom Holdings, Inc. ("Hill-Rom") entered into a Merger Agreement (the "Merger Agreement"), by and among Hill-Rom, Empire Merger Sub Corp. ("Merger Sub") and Welch Allyn Holdings, Inc. ("Welch Allyn"), providing for the acquisition of Welch Allyn by Hill-Rom. Pursuant to the terms of the Merger Agreement, Merger Sub will be merged with and into Welch Allyn with Welch Allyn surviving the Merger as a wholly owned subsidiary of Hill-Rom (the "Merger").

        Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock—Class A, no par value per share, of Welch Allyn and common stock—Class B, $.01 par value per share, of Welch Allyn (collectively, the "Welch Allyn Common Stock"), as of the closing of the Merger, will be converted into the right to receive a portion of the aggregate merger consideration, consisting of cash consideration of $1,625,000,000 (the "Cash Consideration") and 8,133,722 shares of common stock, without par value, of Hill-Rom (the "Equity Consideration") subject to adjustments for net working capital, cash, indebtedness and selling expenses (collectively, the "Merger Consideration"). The Merger Agreement has been approved by the Board of Directors of Hill-Rom and the Board of Directors of Welch Allyn.

        In connection with the Merger, Hill-Rom entered into a commitment letter (the "Commitment Letter") with the Commitment Parties. The Commitment Letter provides that the Commitment Parties will commit to provide Hill-Rom (i) (A) a $1.0 billion senior secured term loan A facility (the "TLA Facility"), (B) a $725 million senior secured term loan B facility (the "TLB Facility") and (C) a $500 million senior secured revolving facility (the "Revolving Facility", and collectively with the TLA Facility and the TLB Facility, the "Senior Secured Facilities"), and (ii) up to a $500 million senior unsecured increasing rate bridge facility (the "Bridge Facility"). The Senior Secured Facilities will be secured by all assets (subject to certain agreed upon exceptions) of Hill-Rom's material domestic subsidiaries. The Commitment Parties have the right to syndicate the Senior Secured Facilities to a group of lenders. In addition, a senior unsecured high-yield note ("High Yield Notes") offering will be undertaken, the successful issuance of which will eliminate the need for the Bridge Facility. The issuance of the High Yield Notes, however, is not guaranteed to be successful, which may require Hill-Rom to utilize either some or all of the Bridge Facility for a portion of the acquisition funding costs.

        The following unaudited pro forma condensed combined financial statements, referred to as the pro forma financial statements, present the combination of the historical consolidated financial statements of Hill-Rom and Welch Allyn, adjusted to give effect to the Merger and the incurrence of debt financing to complete the Merger.

        The unaudited pro forma condensed combined balance sheet, referred to as the pro forma balance sheet, combines the unaudited historical condensed consolidated balance sheet of Hill-Rom as of March 31, 2015 and the unaudited historical condensed consolidated balance sheet of Welch Allyn as of April 4, 2015, to give effect to Hill-Rom's acquisition of Welch Allyn and related financing transactions (collectively, the "Transactions"), as if they had occurred on March 31, 2015.

        The unaudited pro forma condensed combined income statement for the fiscal year ended September 30, 2014 assumes that the Merger took place on October 1, 2013, the beginning of Hill-Rom's most recently completed fiscal year. Hill-Rom's audited consolidated statement of income for the fiscal year ended September 30, 2014 has been combined with Welch Allyn's audited consolidated statement of income for the fiscal year ended December 31, 2014. The unaudited pro forma condensed combined income statement for the six months ended March 31, 2015 assumes that the Merger took place on October 1, 2013, the beginning of Hill-Rom's most recently completed fiscal year. Hill-Rom's unaudited consolidated statement of income for the six months ended March 31, 2015

1

has been combined with the combination of Welch Allyn's unaudited consolidated statement of income for the three months ended December 31, 2014 and Welch Allyn's unaudited consolidated statement of income for the three months ended April 4, 2015. Given the different fiscal year ends of Hill-Rom and Welch Allyn, the Welch Allyn unaudited consolidated statement of income for the three months ended December 31, 2014 has been included in both the fiscal year ended September 30, 2014 and the six months ended March 31, 2015 pro forma condensed combined income statements. Sales and net income for Welch Allyn for the three months ended December 31, 2014 were $192.1 million and $12.6 million, respectively. The unaudited pro forma condensed combined income statement for the fiscal year ended September 30, 2014 and the unaudited pro forma condensed combined income statement for the six months ended March 31, 2015 are collectively referred to as the pro forma income statements.

        The pro forma adjustments are preliminary and have been made solely for purposes of developing the pro forma financial information for illustrative purposes. The actual results reported in periods following the Transactions may differ significantly from that reflected in these pro forma financial statements for a number of reasons, including, but not limited to, differences between the assumptions used to prepare these pro forma financial statements and actual amounts, cost savings from operating efficiencies and impact of potential synergies, the impact of the incremental costs incurred in integrating Welch Allyn's operations, changes in the allocation of purchase price, and the actual interest rates applicable to the funds borrowed to finance the acquisition of Welch Allyn.

        As a result, the pro forma information does not purport to be indicative of what the financial condition or results of operations would have been had the Transactions been completed on the applicable dates of this pro forma financial information. The pro forma financial statements are based upon the historical financial statements of Hill-Rom and Welch Allyn and do not purport to project the future financial condition and results of operations after giving effect to the transaction.

        The pro forma adjustments and related assumptions are described in the accompanying notes presented on the following pages. The pro forma adjustments are based on assumptions relating to the consideration paid and the allocation of the purchase price thereof to the acquired assets and liabilities of Welch Allyn based on preliminary estimates of fair value. The final purchase price and the allocation thereof will differ from that reflected in the pro forma financial statements after final valuation procedures are performed and amounts are finalized.

        The following unaudited pro forma condensed combined financial information is derived from the historical financial statements of Hill-Rom and Welch Allyn and has been prepared to illustrate the effects of the acquisition, including the financing of the acquisition of Welch Allyn by Hill-Rom. This pro forma financial information should be read in conjunction with the historical financial statements and the accompanying notes of Hill-Rom and Welch Allyn.

2

Hill-Rom Holdings, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Income Statement
For Six Months Ended March 31, 2015
($ in millions)

	Historical
	Hill-Rom Holdings Inc.			Welch Allyn Holdings Inc. and subsidiaries		Reclass (Note-2)			Pro Forma Adjustments			Note	Pro Forma As Adjusted
Net Revenue
Capital sales	$	749.1		$	356.6	$	(3.5	)	$	—			$	1,102.2
Rental revenue		190.7			—		—			—				190.7
Total revenue		939.8			356.6		(3.5	)		—				1,292.9
Cost of Revenue
Cost of goods sold		434.4			176.5		(1.8	)		(0.5	)	A		608.6
Rental expenses		91.3			—		—			—				91.3
Total cost of revenue		525.7			176.5		(1.8	)		(0.5	)			699.9
Gross Profit		414.1			180.1		(1.7	)		0.5				593.0
Research and development expenses		44.0			—		26.4			—		A		70.4
Selling and administrative expenses		305.0			160.6		(28.1	)		12.8		A and Note-3		450.3
Special charges		7.5			—		—			—				7.5
Operating Profit		57.6			19.5		—			(12.3	)			64.8
										—
Interest expense		(6.2	)		—		—			(47.1	)	B		(53.3	)
Investment income and other, net		2.2			1.2		—			—				3.4
Income before income taxes		53.6			20.7		—			(59.4	)			14.9
Income tax expense		15.4			4.8		—			(21.8	)	C		(1.6	)
Net income	$	38.2		$	15.9	$	—		$	(37.6	)		$	16.5
Net Income per Common Share—Basic	$	0.67											$	0.25
Net Income per Common Share—Diluted	$	0.66											$	0.25
Dividends per Common Share	$	0.31											$	0.27
Average Common Shares Outstanding—Basic		56,841								8,134				64,975
Average Common Shares Outstanding—Diluted		57,894								8,134				66,028

3

Hill-Rom Holdings, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Income Statement
For Year Ended September 30, 2014
($ in millions)

	Historical
	Hill-Rom Holdings Inc.			Welch Allyn Holdings Inc. and subsidiaries		Reclass (Note-2)			Pro Forma Adjustments			Note	Pro Forma As Adjusted
Net Revenue
Capital sales	$	1,301.4		$	683.8	$	(6.7	)	$	—			$	1,978.5
Rental revenue		384.7			—									384.7
Total revenue		1,686.1			683.8		(6.7	)		—				2,363.2
Cost of Revenue
Cost of goods sold		730.2			340.4		(8.2	)		1.3		A		1,063.7
Rental expenses		176.0			—					—				176.0
Total cost of revenue		906.2			340.4		(8.2	)		1.3				1,239.7
Gross Profit		779.9			343.4		1.5			(1.3	)			1,123.5
Research and development expenses		71.9			—		49.8			0.1		A		121.8
Selling and administrative expenses		548.3			278.7		(52.7	)		31.2		A and Note-3		805.5
Special charges		37.1			1.1		4.4			—				42.6
Operating Profit		122.6			63.6		—			(32.6	)			153.6
Interest expense		(9.8	)		—		—			(87.3	)	B		(97.1	)
Investment income and other, net		2.4			5.3		—			—				7.7
Income Before Income taxes		115.2			68.9		—			(119.9	)			64.2
Income tax expense		54.6			20.2		—			(44.0	)	C		30.8
Net income	$	60.6		$	48.7	$	—		$	(75.9	)		$	33.4
Net Income per Common Share—Basic	$	1.05											$	0.51
Net Income per Common Share—Diluted	$	1.04											$	0.50
Dividends per Common Share	$	0.60											$	0.53
Average Common Shares Outstanding—Basic		57,555								8,134				65,689
Average Common Shares Outstanding—Diluted		58,523								8,134				66,657

4

Hill-Rom Holdings, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Combined Balance Sheet
As of March 31, 2015
($ in millions)

	Historical
	Hill-Rom Holdings, Inc.			Welch Allyn Holdings, Inc. and subsidiaries			Reclass (Note-2)			Pro Forma Adjustments			Notes	Pro Forma As Adjusted
ASSETS
Current Assets
Cash and cash equivalents	$	114.5		$	174.5		$	—		$	(183.0	)	D	$	106.0
Trade receivables, net of allowances		368.0			70.8			—			—				438.8
Inventories		168.7			57.5			—			27.5		Note-3		253.7
Deferred income taxes		41.9			16.7			—			(14.9	)	I		43.7
Other current assets		51.5			15.2			—			—				66.7
Total current assets		744.6			334.7			—			(170.4	)			908.9
Property, plant, and equipment, net		286.0			94.9			—			24.6		Note-3		405.5
Intangible assets:
Goodwill		387.3			107.4			—			1,151.2		Note-3		1,645.9
Software and other, net		236.9			28.7			13.6			841.7		Note-3		1,120.9
Deferred income taxes		21.5			13.3			—			(16.3	)	I		18.5
Other assets		29.9			174.4			(13.6	)		(53.8	)	F		136.9
Total Assets	$	1,706.2		$	753.4		$	—		$	1,777.0			$	4,236.6
LIABILITIES
Current Liabilities
Trade accounts payable	$	87.7		$	22.5		$	—		$	—			$	110.2
Short-term borrowings		128.7			—			—			(71.5	)	E		57.2
Accrued compensation		76.1			—			14.4			—				90.5
Accrued product warranties		27.2			—			3.7			—				30.9
Other current liabilities		82.0			89.6			(18.1	)		(28.2	)	G		125.3
Total current liabilities		401.7			112.1			—			(99.7	)			414.1
Long-term debt		449.8			—			—			1,767.7		E		2,217.5
Accrued pension and postretirement benefits		74.4			15.2			—			—				89.6
Deferred income taxes		27.8			—			—			325.6		I		353.4
Other long-term liabilities		30.2			77.5			—			(72.2	)	H		35.5
Total liabilities		983.9			204.8			—			1,921.4				3,110.1
SHAREHOLDERS' EQUITY
Capital Stock:
Preferred stock—without par value:		—			—			—			—				—
Common stock—without par value		4.4			1.1			—			(1.1	)	J		4.4
Additional paid-in-capital		140.4			—			—			425.0		J		565.4
Retained earnings		1,520.2			685.4			—			(706.2	)	J		1,499.4
Accumulated other comprehensive income/(loss)		(143.5	)		14.4			—			(14.4	)	J		(143.5	)
Treasury stock, at cost		(799.2	)		(152.3	)		—			152.3		J		(799.2	)
Total Shareholders' equity		722.3			548.6			—			(144.4	)			1,126.5
Total Liabilities and Shareholders' Equity	$	1,706.2		$	753.4		$	—		$	1,777.0			$	4,236.6

5

Hill-Rom Holdings, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Financial Statements

Note 1—Basis of presentation

        The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting under U.S. GAAP and are based on the historical consolidated financial statements of Hill-Rom Holdings, Inc. for the year ended September 30, 2014 and six months ended March 31, 2015 and the historical consolidated financial statements of Welch Allyn Holdings, Inc. for the fiscal year ended December 31, 2014 and the combination of the three month periods ended December 31, 2014 and April 4, 2015. Sales and net income for the Welch Allyn three month period ended December 31, 2014 included in both pro forma periods were $192.1 million and $12.6 million, respectively.

        The unaudited pro forma condensed combined income statement for Hill-Rom and Welch Allyn for the year ended September 30, 2014 and six months ended March 31, 2015 give effect to Hill-Rom's acquisition of Welch Allyn.

        We prepared the unaudited pro forma condensed combined financial information using the acquisition method of accounting, which is based upon Accounting Standards Codification ("ASC") 805, Business Combinations, the Financial Accounting Standard Board's ("FASB") standard related to business combinations. The business combination standard incorporates the FASB standard related to fair value measurement concepts. We have adopted both FASB standards related to business combinations and fair value measurements as required. The FASB standard issued related to business combinations requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. In addition, the standard establishes that the consideration transferred be measured at the closing date of the acquisition at the then-current market price. The transaction fees and expenses have been excluded from the unaudited pro forma condensed combined income statements as they are non-recurring. ASC 820, Fair Value Measurements and Disclosures, the FASB's standard related to fair value measurements, defines the term "fair value" and sets forth the valuation requirements for any asset or liability measured at fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of inputs used to develop the fair value measures. Fair value is defined in the standard as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." This is an exit price concept for the valuation of the asset or liability. In addition, market participants are assumed to be buyers and sellers in the principal (or the most advantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. As a result of these standards, we may be required to record assets that we do not intend to use or sell (defensive assets) and/or to value assets at fair value measurements that do not reflect our intended use of those assets. Many of these fair value measurements can be highly subjective, and it is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

        The assumptions and related pro forma adjustments described below have been developed based on assumptions and adjustments, including assumptions relating to the consideration paid and the allocation thereof to the assets acquired and liabilities assumed from Welch Allyn based on preliminary estimates of fair value. The final purchase price allocation will differ from that reflected in the pro forma financial statements after final valuation procedures are performed and amounts are finalized.

        The unaudited pro forma condensed combined financial statements are preliminary, are provided for illustrative purposes only and do not purport to represent what our actual consolidated results of operations or consolidated financial position would have been had the transactions occurred on the date assumed, nor are they indicative of our future consolidated results of operations or financial

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position. The actual results reported in periods following the transactions may differ significantly from those reflected in these pro forma financial statements for a number of reasons, including, but not limited to, differences between the assumptions used to prepare these pro forma financial statements and actual amounts, cost savings from operating efficiencies, timing and impact of potential synergies, the impact of the incremental costs incurred in integrating Welch Allyn's operations, changes in the allocation of purchase price, and the actual interest rates applicable to the funds borrowed to finance the acquisition of Welch Allyn. As a result, the pro forma information does not purport to be indicative of what the financial condition or results of operations would have been had the transactions been completed on the applicable dates of this pro forma financial information. The pro forma financial statements are based upon the historical consolidated financial statements of Hill-Rom and Welch Allyn and do not purport to project the future financial condition and results of operations after giving effect to the transaction.

Note 2—Reclassification Adjustments to Welch Allyn Financial Statements

        The following reclassification adjustments have been made to the historical balance sheet and statements of income of Welch Allyn to conform financial statement line item classification with Hill-Rom's presentation as follows:

Reclassification included in the unaudited adjusted historical consolidated statement of income for the six months ended March 31, 2015 ($ in millions):

	Before Reclassification		Reclassification Increase (Decrease)			After Reclassification
Capital Sales	$	356.6	$	(3.5)	(1)	$	353.1
Cost of goods sold		176.5		(1.8)	(2)		174.7
Research and development expenses		—		26.4	(2)		26.4
Selling and administrative expenses		160.6		(28.1)	(2)		132.5

(1)

Reclassification adjustment represents GPO Administration fees which are shown in Selling and Administrative expenses by Welch Allyn. Hill-Rom has a policy to net such fees against revenue.

(2)

Welch Allyn costs and expenses have been reclassified to conform financial statement line item classification with Hill-Rom's presentation.

Reclassification included in the unaudited adjusted historical consolidated statement of income for the fiscal year ended September 30, 2014 ($ in millions):

	Before Reclassification		Reclassification Increase (Decrease)			After Reclassification
Capital Sales	$	683.8	$	(6.7)	(1)	$	677.1
Cost of goods sold		340.4		(8.2)	(2)		332.2
Research and development expenses		—		49.8	(2)		49.8
Selling and administrative expenses		278.7		(52.7)	(2)		226.0
Special charges		1.1		4.4	(2)		5.5

(1)

Reclassification adjustment represents GPO Administration fees which are shown in Selling and Administrative expenses by Welch Allyn. Hill-Rom has a policy to net such fees against revenue.

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(2)

Welch Allyn costs and expenses have been reclassified to conform financial statement line item classification with Hill-Rom's presentation.

Reclassification adjustments included in the unaudited adjusted historical consolidated balance sheet to conform financial statement line item classification with Hill-Rom's presentation as of March 31, 2015 ($ in millions):

	Before Reclassification		Reclassification Increase (Decrease)			After Reclassification
Software and other, net	$	28.7	$	13.6	(1)	$	42.3
Other assets		174.4		(13.6)	(1)		160.8
Accrued compensation		—		14.4	(2)		14.4
Accrued product warranties		—		3.7	(2)		3.7
Other current liabilities		89.6		(18.1)	(2)		71.5

(1)

Adjustment represents a reclassification between Other assets and Software and other to conform financial statement line item classification with Hill-Rom's presentation.

(2)

Adjustment represents a reclassification between Accrued compensation, Accrued product warranties and Other current liabilities to conform financial statement line item classification with Hill-Rom's presentation.

Note 3—Purchase Price Allocation

        The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the allocation of the preliminary estimated purchase price to identifiable assets to be acquired and liabilities to be assumed, with the excess recorded as goodwill. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material. The purchase price allocation in these unaudited pro forma condensed combined financial statements is based upon an estimated purchase price of approximately $2,228.9 million. This amount was derived in accordance with the Merger Agreement based on (i) 8,133,722 shares of Hill-Rom common stock, valued at $425.0 million based on the volume weighted average price of Hill-Rom's common stock for the preceding 10 trading days as reported by Bloomberg at the close of trading on June 16, 2015 and (ii) $1,625.0 million of cash consideration, subject to adjustment in accordance with the terms of the Merger Agreement.

        The total preliminary Merger consideration is calculated as follows ($ in millions):

Cash consideration	$	1,625.0
Estimated merger consideration adjustments:
Estimated working capital adjustment		8.6
Cash on hand		174.5
Indebtedness		(4.2	)
Adjusted cash consideration		1,803.9
Hill-Rom common stock to be issued		425.0
Total preliminary merger consideration	$	2,228.9

        The actual value of Hill-Rom common stock to be issued in the Merger will depend on the market price of shares of Hill-Rom common stock at the closing date of the Merger, and therefore the actual purchase price will fluctuate with the market price of Hill-Rom common stock until the Merger is consummated.

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        The table below represents a preliminary allocation of the total Merger consideration to Welch Allyn's tangible and intangible assets acquired and liabilities assumed based on Hill-Rom management's preliminary estimate of their respective fair values ($ in millions):

Purchase Price Allocation
Cash and cash equivalents	$	174.5
Working capital excluding cash and cash equivalents(1)		78.4
Property, plant and equipment, net(2)		119.5
Intangible assets(3)		884.0
Goodwill(4)		1,258.5
Other long-term assets(5)		60.1
Other long-term liabilities(5)		(20.5	)
Deferred income tax liabilities(6)		(325.6	)
Total preliminary merger consideration	$	2,228.9

(1)

Includes preliminary step-up to acquired inventories of $27.5 million.

(2)

The preliminary property, plant and equipment fair value estimate is based on a preliminary valuation.

(3)

The preliminarily intangible asset fair value estimates are based on a preliminary valuation and are subject to change. The preliminary intangible assets associated with the Transactions include trade names, customer base and technologies as outlined below:

	Fair Value		Useful Life
Trade names	$	377.4	Indefinite
Customer base		458.4	10 years
Technologies		48.2	4 - 5 years
Total Welch Allyn intangible assets	$	884.0

(4)

Preliminary goodwill resulting from the Transactions is primarily due to enhanced customer relevance and a stronger competitive position resulting from the Merger, including a complimentary commercial position, product portfolio, and enhanced synergies.

(5)

The preliminary fair value estimates of other long term assets and liabilities assumed on acquisition of Welch Allyn Business.

(6)

Deferred income taxes on acquired intangibles and property step-up.

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Note 4—Income Statement Adjustments

        The unaudited pro forma condensed combined income statements reflect the following adjustments ($ in millions):

A.

Cost of goods sold, Research and development expenses, and Selling and administrative expenses:

	For the Six Months Ended March 31, 2015			For the Year Ended September 30, 2014
COGS—Depreciation expense(1)	$	(0.5	)	$	1.3
R&D—Depreciation expense(1)	$	—		$	0.1
SG&A—Depreciation expense(1)	$	(0.5	)	$	1.0
SG&A—Amortization expense(2)		25.3			51.2
DISC Commission expense(3)		(12.0	)		(21.0	)
Total pro forma adjustment to selling and administrative expenses	$	12.8		$	31.2

(1)

Adjustments have been included in the unaudited pro forma condensed combined income statements for the six months ended March 31, 2015 and year ended September 30, 2014 to eliminate historical depreciation expense of $11.3 and $20.3, respectively, related to historical values of Welch Allyn property, plant and equipment, and to record estimated depreciation expenses of $10.3 and $22.7, respectively, based on estimated preliminary values of the acquired property, plant and equipment. The estimated preliminary values of the acquired property, plant and equipment have a weighted average useful life of 15.0 years.

(2)

Adjustments have been included in the unaudited pro forma condensed combined income statements for the six months ended March 31, 2015 and year ended September 30, 2014 to eliminate historical amortization expense of $2.6 and $4.6, respectively, related to historical values of Welch Allyn intangible assets, and to record estimated amortization expenses of $27.9 and $55.8, respectively, based on estimated preliminary values of the acquired intangible assets. The estimated preliminary values of the acquired intangible assets have a weighted average useful life of 9.0 years.

(3)

Represents the reversal of the commission expense paid to a Domestic International Sales Corporation ("DISC") affiliated by common ownership under Welch Allyn. The DISC was not acquired in the transaction and is not permitted under IRS regulations for public companies.

B.

Interest expense:

        In connection with the Merger, Hill-Rom entered into a Commitment Letter with the Commitment Parties. The Commitment Letter provides that the Commitment Parties will commit to provide Hill-Rom (i) (A) a $1.0 billion TLA Facility, (B) a $725 million senior secured TLB Facility and (C) a $500 million senior secured Revolving Facility, and (ii) up to a $500 million senior unsecured increasing rate Bridge Facility. The Senior Secured Facilities will be secured by all assets (subject to certain agreed upon exceptions) of Hill-Rom's material domestic subsidiaries. The Commitment Parties have the right to syndicate the Senior Secured Facilities to a group of lenders.

        In addition, a senior unsecured High Yield Notes offering will be undertaken, the successful issuance of which will eliminate the need for the Bridge Facility. The issuance of the High Yield Notes, however is not guaranteed to be successful, which may require Hill-Rom to utilize either some or all of the Bridge Facility for a portion of the acquisition funding costs. Any borrowings on the Bridge Facility

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are expected to be repaid by the issuance of High Yield Notes upon completion of such an offering. Outstanding borrowings on the Bridge Facility would carry higher interest rates, resulting in an additional estimated $10.0 million of interest expense over the 18 month pro forma period, with an increasing differential thereafter.

        The following reconciliation provides additional details behind the pro forma interest expense adjustment reflected in the accompanying unaudited pro forma condensed combined income statement ($ in millions):

	For the Six Months Ended March 31, 2015			For the Year Ended September 30, 2014
Interest expense associated with borrowings to complete the proposed Merger and refinance certain existing Hill-Rom debt(1)	$	(47.7	)	$	(85.8	)
Amortization of fees		(4.0	)		(7.9	)
Pro forma interest expense		(51.7	)		(93.7	)
Elimination of the historical interest expense of Hill-Rom Holdings, Inc.(2)		4.6			6.4
Pro forma interest expense adjustment	$	(47.1	)	$	(87.3	)

(1)

Interest expense reflects a weighted average interest rate of 4.1% over the period.

(2)

Elimination of interest on Hill-Rom existing debt to be repaid with the proceeds of the planned borrowings.

        An increase in the variable interest rates assumed in the weighted average interest rate of 0.125% would result in an increase in interest expense for the 18 month pro forma period of approximately $1.5 million.

C.

Income tax expense ($ in millions):

	For the Six Months Ended March 31, 2015			For the Year Ended September 30, 2014
Income tax expense(1)	$	(21.8	)	$	(44.0	)

(1)

Tax effects of pro forma adjustments reflect a blended statutory tax rate of 37%.

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Note 5—Balance Sheet Adjustments

        The unaudited pro forma condensed combined balance sheet reflects the following adjustments ($ in millions):

D.

Cash and cash equivalents:

Hill-Rom term loan repayment(1)	$	(528.8	)
Debt issuance cost(2)		(45.3	)
High Yield Notes(3)		500.0
Cash consideration(4)		(1,803.9	)
New Term Loan Facilities(3)		1,725.0
Hill-Rom Merger costs(5)		(30.0	)
Total pro forma adjustment to cash and cash equivalents	$	(183.0	)

(1)

Represents the extinguishment of Hill-Rom's revolving and historical term loans.

(2)

Represents capitalized financing fees related to the New Term Loan Facilities, the New Revolving Facility and the High Yield Notes.

(3)

For a discussion of the New Term Loan Facilities and the High Yield Notes see Section-E, Long term debt, below.

(4)

Represents the estimated amount of cash consideration to be paid on the acquisition of Welch Allyn.

(5)

Estimated Merger fees including legal and professional fees.

E.

Long term debt:

        Adjustments to reflect the debt capitalization structure assumed to be outstanding for all periods presented in the above pro forma financial statements is as follows ($ in millions):

	Long Term			Current			Total
Senior secured term loan A facility	$	950.0		$	50.0		$	1,000.0
Senior secured term loan B facility		717.8			7.2			725.0
High Yield Notes		500.0			—			500.0
Pro forma debt		2,167.8			57.2			2,225.0
Elimination of the historical debt of Hill-Rom Holdings, Inc.—long term		(400.1	)		—			(400.1	)
Elimination of the historical debt of Hill-Rom Holdings, Inc.—current		—			(128.7	)		(128.7	)
Long term and current debt adjustments	$	1,767.7		$	(71.5	)	$	1,696.2

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F.

Other assets:

Corporate owned life insurance(1)	$	(32.5	)
Available-for-sale securities(2)		(34.2	)
Deferred compensation(3)		(31.1	)
Capitalized financing fees(4)		45.3
Write-off of Hill-Rom capitalized financing fees(5)		(1.3	)
Total pro forma adjustment to other assets	$	(53.8	)

(1)

Represents amount related to Welch Allyn's Corporate owned life insurance asset which is held to fund the long term incentive plan to be settled at close of the Merger.

(2)

Represents investments by Welch Allyn in available-for-sale equity securities which are held to fund the long term incentive plan to be settled at close of the Merger.

(3)

Represents Welch Allyn trading account investments held with third party to fund deferred compensation plan which will be settled at close of the Merger.

(4)

Represents the capitalized financing fees related to the New Term Loan Facilities, the New Revolving Facility and the High Yield Notes.

(5)

Represents the write-off of capitalized financing fees related to the extinguishment of debt.

G.

Other current liabilities:

DISC liability(1)	$	(5.0	)
Short term portion of long term incentive plan(2)		(12.7	)
Write-off of Hill-Rom capitalized financing fees(3)		(0.5	)
Tax impact of Merger expenses(4)		(10.0	)
Total pro forma adjustment to other current liabilities	$	(28.2	)

(1)

Represents the liability in connection with the Domestic International Sale Corporation (a related party) which will be satisfied at or before close as described above.

(2)

Represents settlement of short-term portion of Welch Allyn long-term incentive plan obligation which will be satisfied at close of the Merger.

(3)

Represents tax benefit on write-off of capitalized financing fees related to extinguishment of Hill-Rom debt.

(4)

Represents estimated tax benefit on Merger expenses.

H.

Other long-term liabilities:

Long term incentive plan(1)	$	(41.1	)
Deferred compensation(2)		(31.1	)
Total pro forma adjustment to other long-term liabilities	$	(72.2	)

(1)

Represents settlement of long-term portion of Welch Allyn long-term incentive plan obligation which will be satisfied on the closing date of the Merger.

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(2)

Represents settlement of deferred compensation liability on closing date of Merger as a result of change in control provisions of the plan.

I.

Deferred income taxes were adjusted as follows(1):

Short-term deferred tax liability of inventory step-up	$	(10.2	)
Elimination of deferred tax associated with short term portion of long term incentive plan		(4.7	)
Total pro forma adjustment to current deferred income tax asset	$	(14.9	)
Removal of Welch Allyn deferred liability on deductible goodwill	$	3.5
Elimination of deferred tax associated with deferred compensation plan adjustment		(10.6	)
Elimination of deferred tax associated with long term incentive plan		(15.0	)
Elimination of deferred tax on available-for-sale securities adjustment		5.8
Total pro forma adjustment to non-current deferred income tax asset	$	(16.3	)
Deferred tax liability on intangible and PP&E step-up	$	325.6

(1)

Reflects an adjustment to deferred tax assets and liabilities representing a blended global statutory rate of approximately 37% multiplied by either (i) the preliminary fair value adjustments made to the assets to be acquired and liabilities to be assumed, excluding goodwill, or (ii) the applicable pro forma adjustments to related assets and liabilities that will or will not be assumed by the combined company included herein. For purposes of these unaudited pro forma condensed financial statements, a global blended statutory tax rate of approximately 37% has been used. This does not reflect Hill-Rom's expected effective tax rate, which will include other tax charges and benefits, and does not take in to account any historical or possible future tax events that may impact Hill-Rom following the consummation of the Transaction.

J.

Equity

        All outstanding shares of Welch Allyn common stock will be exchanged for 8,133,722 shares of Hill-Rom common stock and the Cash Consideration in connection with the Merger. The estimated fair value of the equity-based consideration to acquire Welch Allyn common stock outstanding totaled $425.0 million, which is based on Hill-Rom's volume weighted average common stock price for the preceding 10 trading days as reported by Bloomberg at the close of trading on June 16, 2015. It is possible that the value of the fixed number of shares will fluctuate prior to the closing date of the Merger. For purposes of these pro forma statements, it is assumed the equity consideration is valued at $425 million.

        The table below summarizes the change in stockholders' equity as a result of the acquisition:

	Common Stock			APIC		Retained Earnings			AOCI			Treasury Stock
Issuance of shares of Hill-Rom's common stock	$	—		$	425.0	$	—		$	—		$	—
Elimination of Welch Allyn shareholders' equity		(1.1	)		—		(685.4	)		(14.4	)		152.3
Hill-Rom related merger costs, net of tax		—			—		(20.0	)		—			—
Write-off of Hill-Rom capitalized financing fees, net of tax		—			—		(0.8	)		—			—
Total pro-forma adjustment	$	(1.1	)	$	425.0	$	(706.2	)	$	(14.4	)	$	152.3

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Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Hill-Rom Holdings, Inc. and Subsidiaries Unaudited Pro Forma Condensed Combined Income Statement For Six Months Ended March 31, 2015 ($ in millions)
Hill-Rom Holdings, Inc. and Subsidiaries Unaudited Pro Forma Condensed Combined Income Statement For Year Ended September 30, 2014 ($ in millions)
Hill-Rom Holdings, Inc. and Subsidiaries Unaudited Pro Forma Condensed Combined Balance Sheet As of March 31, 2015 ($ in millions)
Hill-Rom Holdings, Inc. and Subsidiaries Notes to Unaudited Pro Forma Financial Statements

Note 1—Basis of presentation
Note 2—Reclassification Adjustments to Welch Allyn Financial Statements
Note 3—Purchase Price Allocation
Note 4—Income Statement Adjustments
Note 5—Balance Sheet Adjustments