SECOND QUARTER

2017 EARNINGS CALL

AUGUST 2, 2017
SECOND QUARTER EARNINGS CALL AGENDA

CEO Transition
Robert Abernathy
Chairman

Strategic Vision
Joe Woody
Chief Executive Officer

Second Quarter Results

and 2017 Outlook
Steve Voskuil
Chief Financial Officer

Second Quarter 2017 Earnings Call 2

CONFERENCE CALL REMINDERS

FORWARD-LOOKING INFORMATION

Certain matters in this presentation and conference call, including our 2017 outlook, expectations and planning
assumptions, and any estimates, projections, and statements relating to our business plans or objectives,
constitute forward-looking statements and are based upon managements expectations and beliefs concerning
future events impacting the Company.
These statements are subject to risks and uncertainties, including currency exchange risks, cost savings and
reductions, raw material, energy, and other input costs, competition, market demand, economic condition, and
legislative and regulatory actions. There can be no assurance that these future events will occur as anticipated
or that the Companys results will be as estimated. Forward-looking statements speak only as of the date they
were made, and we undertake no obligation to publicly update them. For a more complete listing and
description of other factors that could cause the Companys future results to differ materially from those
expressed in any forward-looking statements, see the Companys most recent Form 10-K and Quarterly Reports
on Form 10-Q.

NON-GAAP FINANCIAL MEASURES

Management believes that non-GAAP financial measures enhance investors understanding and analysis of the
companys performance. As such, results and outlook have been adjusted to exclude certain items for relevant
time periods as indicated in the non-GAAP reconciliations to the comparable GAAP financial measures included
in this presentation and in todays earnings release posted on our website (www.halyardhealth.com/investors).

Second Quarter 2017 Earnings Call 3

CEO TRANSITION
ROBERT ABERNATHY
CHAIRMAN
CEO TRANSITION

Recently announced retirement

as CEO

Board elected Joe Woody as the

new CEO

Transition seamless, efficient and

tracking to plan

Retiring as Chairman effective

September 1

Ron Dollens will take over as non-

executive Chairman

Second Quarter 2017 Earnings Call 5

CEO TRANSITION
Joe Woody
Experienced CEO with more
than 20 years in the Medical
Technology industry
Proven record of portfolio
transformations by:
- Driving growth
- Accelerating innovation
- Understanding and anticipating
evolving customer and patient
needs

Experience and leadership skills

ideal for Halyards
transformation
Second Quarter 2017 Earnings Call 6
PROGRESS ACHIEVED

Advancing our transformation:

- Accelerated Medical Devices growth
- Executed first acquisition
- Built a solid foundation for growth
- Reestablished Halyards innovative
culture

Second Quarter 2017 Earnings Call 7

CEO TRANSITION

Incredible journey leading

Halyard

Confident about our future

Outstanding leader at the helm

Well-prepared for next phase

of growth

Second Quarter 2017 Earnings Call 8

STRATEGIC VISION
JOE WOODY
CHIEF EXECUTIVE OFFICER
OVERVIEW

Experience and background

MedTech industry trends

Opportunities for Halyard

Second Quarter 2017 Earnings Call 10

EXPERIENCE AND BACKGROUND

Experienced MedTech CEO

Twenty plus years experience
in developing and driving
transformation strategies
Core elements relevant to
Halyard:
- Pivoting towards high-growth,
profitable markets
- Reinforcing the innovation culture
- Focusing on understanding and
anticipating customer needs

Second Quarter 2017 Earnings Call 11

OPPORTUNITIES FOR HALYARD
Three Key Focus Areas
Markets
- Expand into high growth end-markets in
the U.S. and internationally

Products
- Leverage effectiveness of non-opioid
pain therapies
- Differentiated and preferred products
- Deliver improved patient outcomes and
healthcare economic benefits

Technology
- Leverage existing and new technologies
- Drive a new generation of advanced
technologies and clinical therapies
Second Quarter 2017 Earnings Call 12
MEDICAL DEVICE INDUSTRY TRENDS

Enormous market potential

Incorporate M&A as a growth
driver

Corpak an excellent example of

our:
- Ability to identify strategic, accretive
acquisitions
- Effectively integrate and leverage into
our infrastructure

Second Quarter 2017 Earnings Call 13

STRATEGIC VISION

Accelerate our transformation

Continued focus on growth
through:
- Strategic M&A
- Product development
- Market expansion
- Generate more synergies and
increase productivity

Second Quarter 2017 Earnings Call 14

STRATEGIC VISION

Next phase of strategy:

- Enhance our execution
- Energize culture
- Sustain and enhance strategic
focus on customers
- Increase speed and
performance of initiatives

Second Quarter 2017 Earnings Call 15

2017 PRIORITIES

Deliver plan

Fuel growth pipeline

Second Quarter 2017 Earnings Call 16

DELIVERING OUR PLAN

Completed another solid quarter

Delivered adjusted diluted EPS of $0.51

Raised 2017 adjusted diluted EPS to

$1.85 to $2.05

Second Quarter 2017 Earnings Call 17

FUELING OUR GROWTH PIPELINE
Building on strengths
Continued investment in fast
growing Interventional Pain
- Launched COOLIEF direct to
patient marketing campaign
- Strong response and market
development opportunity

Launched three products

- Commitment to improve
outcomes and safety
- Year-to-date launched seven
products
- On track to launch more than a
dozen products
Second Quarter 2017 Earnings Call 18
SECOND QUARTER 2017 RESULTS
STEVE VOSKUIL
CHIEF FINANCIAL OFFICER
SECOND QUARTER CONSOLIDATED PERFORMANCE
In millions
Total Net Sales Adjusted Gross Profit

$145 $145

$400 36% 36%

$399

Q2 2016 Q2 2017 Q2 2016 Q2 2017

Net sales down $1 million Favorable impacts: portfolio shift, manufacturing

Including Corpak, volume increased 3%, efficiencies and favorable currency exchange rates
partially offset by lower selling price Offset by lower selling prices and anticipated
higher nitrile costs

Second Quarter 2017 Earnings Call 20

SECOND QUARTER CONSOLIDATED PERFORMANCE
In millions

Adjusted Operating Profit Adjusted operating profit

excludes:
$2 million for acquisition-
related charges
10% 10%
$6 million for litigation
matters

$41 $40 $5 million intangible

amortization expense
Partially offset by a $2 million
spin-related benefit
Q2 2016 Q2 2017

Second Quarter 2017 Earnings Call 21

SECOND QUARTER CONSOLIDATED PERFORMANCE

Adjusted EBITDA of $51 million

Reported adjusted diluted EPS of $0.51
Performance benefited from:
- Greater manufacturing and distribution
efficiencies
- Lower than planned R&D expense
- Adjusted effective tax rate of 27.2%

Second Quarter 2017 Earnings Call 22

SECOND QUARTER MEDICAL DEVICES
In millions

Net Sales Operating Profit

$149
$142 $41
$29

20% 27%

Q2 2016 Q2 2017 Q2 2016 Q2 2017

Net sales increased 5%, aided by Operating profit increased 40%

Corpak sales Higher volumes, manufacturing efficiencies
Organic volume increased 3% and lower SG&A expense drove performance
IV Infusion volume shifted to 4th quarter

Second Quarter 2017 Earnings Call 23

SECOND QUARTER S&IP
In millions

Net Sales Operating Profit

$257 $247 $25

$15
10% 6%

Q2 2016 Q2 2017 Q2 2016 Q2 2017

Year-to-date ahead of plan Performance impacted by anticipated higher nitrile

Net sales decreased 4% costs and lower selling price
Partially offset by manufacturing efficiencies and
Volume growth in Exam Gloves was offset by Facial favorable exchange rates
Protection and Exam Gloves sold to K-C
Lower selling prices concentrated in Exam Gloves

Second Quarter 2017 Earnings Call 24

BALANCE SHEET AND CASH FLOW

Ended the quarter with

$155 million of cash
Generated $13 million of
free cash flow
Project full-year free cash
flow of $100 million

Second Quarter 2017 Earnings Call 25

2017 OUTLOOK
Raising adjusted diluted EPS
outlook to $1.85 to $2.05
Lowering commodity inflation
expectation to $5 to $10 million
Factors offsetting commodity
benefit:
- Foreign currency headwind
- Anniversary manufacturing efficiency
projects
- Relocating some distribution centers
- Accelerating R&D investment

Other key planning assumptions

remain unchanged
Second Quarter 2017 Earnings Call 26
SUMMARY
Well positioned to deliver our plan and fuel growth pipeline
Increased guidance
Firepower to accelerate transformation into leading Medical
Devices company

Second Quarter 2017 Earnings Call 27

Q&A
APPENDICES
2017 OUTLOOK SUMMARY

February August

Adjusted diluted EPS $1.70 to $2.00 $1.85 to $2.05

Net sales 0% to 2% 0% to 2%
Medical Devices
Includes 3% growth attributed to CORPAK 7% to 9% 7% to 9%
S&IP, excluding sales to Kimberly-Clark
Contemplates 2% to 4% lower selling prices 0% to -2% 0% to -2%
S&IP sales to Kimberly-Clark $40M to $45M $40M to $45M
Corporate sales $10M to $15M $10M to $15M
FX translation impact on net sales 0% to -2% 0% to -2%
Commodity inflation $10M to $20M $5M to $10M
Research & Development $40M to $45M $40M to $45M
Adjusted effective tax rate 32% to 34% 32% to 34%

Note: Guidance updates denoted in bold green text.

Second Quarter 2017 Earnings Call 30

NON-GAAP RECONCILIATIONS
In millions

Gross Profit Operating Profit

Three Months Ended Six Months Ended Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

2017 2016 2017 2016 2017 2016 2017 2016

As reported $ 144.6 $ 140.7 $ 287.5 $ 277.2 $ 29.2 $ 17.6 $ 55.5 $ 50.7

Spin-related transition charges (1.7) 0.1 (1.6) 0.1 (1.5) 2.3 (0.8) 3.9

Acquisition-related charges 0.7 3.5 1.2 3.5 1.7 9.2 3.3 10.3

Litigation and legal 5.7 6.4 13.7 10.0

Intangibles amortization 0.9 0.9 1.9 1.5 5.3 5.7 10.8 10.9

As adjusted non-GAAP $ 144.5 $ 145.2 $ 289.0 $ 282.3 $ 40.4 $ 41.2 $ 82.5 $ 85.8

Second Quarter 2017 Earnings Call 31

 NON-GAAP RECONCILIATIONS
In millions
Income before taxes Income tax provision

Three Months Ended Six Months Ended Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

2017 2016 2017 2016 2017 2016 2017 2016

As reported $ 21.9 $ 9.4 $ 41.0 $ 34.7 $ (4.8) $ (2.9) $ (11.1) $ (14.0)

Effective tax rate, as reported 21.9% 30.9% 27.1% 40.3%

Spin-related transition charges (1.5) 2.3 (0.8) 3.9 0.6 (1.0) 0.3 (1.6)

Acquisition-related charges 1.7 9.2 3.3 10.3 (0.6) (3.5) (1.2) (3.9)

Litigation and legal 5.7 6.4 13.7 10.0 (2.2) (2.4) (5.2) (3.8)

Intangibles amortization 5.3 5.7 10.8 10.9 (2.0) (1.9) (4.1) (3.9)

Regulatory tax changes 3.7

As adjusted non-GAAP $ 33.1 $ 33.0 $ 68.0 $ 69.8 $ (9.0) $ (11.7) $ (21.3) $ (23.5)

Effective tax rate, as adjusted 27.2% 35.5% 31.3% 33.7%

Second Quarter 2017 Earnings Call 32

NON-GAAP RECONCILIATIONS
In millions, except per share amounts

Net Income
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016

As reported $ 17.1 $ 6.5 $ 29.9 $ 20.7

Diluted EPS, as reported $ 0.36 $ 0.14 $ 0.63 $ 0.44

Spin-related transition charges (0.9) 1.3 (0.5) 2.3

Acquisition-related charges 1.1 5.7 2.1 6.4
Litigation and legal 3.5 4.0 8.5 6.2
Intangibles amortization 3.3 3.8 6.7 7.0
Thailand statutory tax rate change 3.7

As adjusted non-GAAP $ 24.1 $ 21.3 $ 46.7 $ 46.3

Diluted EPS, as adjusted $ 0.51 $ 0.45 $ 0.99 $ 0.99

Second Quarter 2017 Earnings Call 33

NON-GAAP RECONCILIATIONS
In millions

EBITDA
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
EBITDA, as reported $ 45.4 $ 33.8 $ 87.9 $ 82.5

Spin-related transition charges (1.5) 2.3 (0.8) 3.9

Acquisition-related charges 1.6 9.0 3.0 10.1

Litigation and legal 5.7 6.4 13.7 10.0

Adjusted EBITDA $ 51.2 $ 51.5 $ 103.8 $ 106.5

Second Quarter 2017 Earnings Call 34

NON-GAAP RECONCILIATIONS
In millions, except per share amounts
Free Cash Flow

Three Months Ended Six Months Ended

June 30, June 30,

2017 2016 2017 2016

Cash provided by operating activities $ 19.7 $ 51.5 $ 56.7 $ 94.0

Capital expenditures (6.4) (6.1) (16.6) (14.1)

Free Cash Flow $ 13.3 $ 45.4 $ 40.1 $ 79.9

Estimated Range

Adjusted diluted earnings per share $ 1.85 to $ 2.05

Amortization (0.28) to (0.28)

Spin-related transition expenses 0.01 to 0.01

Acquisition related charges (0.09) to (0.07)

Other (0.38) to (0.28)

Diluted earnings per share (GAAP) $ 1.11 to $ 1.43

Second Quarter 2017 Earnings Call 35