Financial Presentation

Financial Presentation

Certain of the statements that will be made during this meeting, as well as statements contained in our 2006 Annual Report to Shareholders and Annual Report on Form 10-K filed with the SEC, along with the statements in other reports filed with the SEC, external documents and oral presentations, which are not historical are forward-looking statements. The forward-looking statements represent the Company s present expectations or beliefs concerning future events. Such statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. Examples of these factors are included in our SEC filings.

Vision To be the worldwide leader at anticipating needs and providing valued solutions to the sleep and respiratory markets.

Objectives Growth Revenues: Mid-teens Earnings per share: 17-18% Optimize Value Creators Consistent performance Leadership in core/broaden the scope

Market Needs Anticipate the needs of the market Provide range of solutions to fill current and emerging needs Sense alternative ways to fill a need Develop or acquire new and different solutions for emerging needs

Four-Prong Investment Strategy WHITE SPACE Anticipating Needs Partnerships, Acquisitions, Research & Development Leadership in Core Sales Initiatives Competition Known Market Segment

Decentralized Organization Sleep and Home Respiratory Group Hospital Group International Group Sleep Disordered Breathing Home Respiratory Care Sleep Well Ventures Critical Care Respiratory Drug Delivery Children s Medical Ventures Europe, Africa & Middle East Asia Pacific Latin America & Canada Sleep Therapy Patient Interface Diagnostic & Clinical Info Sys

Revenues & Net Income $1,000 $800 Revenues Net Income $759.5 $911.5 $1,046.1 $629.8 $600 $494.9 $400 $200 $0 $42.3 $57.9 $71.8 $88.3 6/30/02 6/30/03 6/30/04 6/30/05 $108.4 6/30/06 Dollars in Millions

Leadership in Core Obstructive Sleep Apnea Total Ventilation Solutions SM International Expansion

Sleep Disordered Breathing Under penetrated / Growth market ($1.8 billion) 15% - 20% Diagnosed Significant co-morbidities Hypertension Diabetes Stroke Heart Failure Growing awareness 80% - 85% Undiagnosed 18-20 Million Suffer Symptomatic OSA (Moderate-Severe)

Key Differentiators Sales channel strength Sleep Diagnostics & Therapeutics market presence Technology leadership / Intellectual property Solution selling

Sleep Sales Force Sleep Lab focus Homecare Provider focus National Accounts Sleep Diagnostics 190 sales professionals Direct in key international markets

Sleep Diagnostic System Alice 5 advanced systems for the diagnosis of sleep disorders Portable diagnostics - Stardust Clinical thought leader relationships

Sleep Therapy REMstar M Series smaller sleeker product Encore for clinical monitoring to assist with patient care Full product range to support our various customers needs Flex technology

REMstar Product Range BiPAP Auto with Bi-Flex BiPAP autosv REMstar REMstar Plus with C-Flex REMstar Pro with C-Flex CPAP REMstar Auto with A-Flex BiPAP and Vent Support BASIC CPAP HIGH END COMPLIANCE

CPAP Waveform Inhalation Flow Exhalation CPAP Pressure 10 9 8 7 Rx Pressure Level

C-Flex Waveform Inhalation Flow Exhalation C-Flex Pressure 10 9 8 7 Rx Pressure Level

A-Flex Waveform Inhalation Flow Exhalation Auto Pressure 12 11 10 9 A-Flex

Flex Technology Clinically Proven For Comfortable CPAP Therapy C-Flex patients used therapy an average of 1 hour and 42 minutes longer per night than patients on traditional CPAP C-Flex patients were 3.8 times more likely to use their therapy approximately 6 hours a night A-Flex next major innovation for compliance

BiPAP autosv Proven product Launched in all markets Targeted toward patients with complex apnea

Patient Interface Patient compliance impacted by choice of interface Comfort, ease of sealing, simple designs key patient requirements Helping customers manage replacement business remains an opportunity Sleep Therapy and Patient Interface devices should work as a system

Optimize Mask Comfort OptiLife Seals quickly and easily Lightweight Multiple cushion sizes Unrestricted side sleeping

Strong Patient Interface Lineup Nasal Mask Pillows Full Face Mask ComfortGel ComfortSelect OptiLife ComfortFull 2 ComfortClassic ComfortLite 2

Broad Range of Ventilation Solutions Noninvasive Invasive Respiratory Monitoring

Critical Care Key Differentiator is Noninvasive Ventilation Noninvasive Ventilation Invasive Ventilation

Noninvasive Ventilation Proven to Reduce Costs and Improve Outcomes At South Miami Hospital, patients on mechanical ventilation had 47% reduction in length of stay 55% decrease in cost per case Total cost savings $11,082,855 over 3 year period

Growing Trend in Noninvasive Ventilation Approximately 20-25% of patients are noninvasively ventilated Demand for noninvasive vents and interfaces growing 15-20% per year Underutilized Market share leader in stand-alone ventilation with 80% of market Strategy develop further adoption of noninvasive technique

Strong Sales and Service Channel Leading U.S. channel with 65 sales and clinical support people Acclaimed 24x7 service support R&D and manufacturing locations in CA and CT

Leadership in Core International Expansion Focus on growth markets/regions above market growth rates in sleep expanding home NIV Investment in direct presence Successful acquisitions Products/programs designed for specific country requirements

Focused Associates 1,020 International Associates Located in 25 Countries

International Acquisitions Stimotron, Germany, 1997 Fuji RC Co. Ltd., Japan, 2002 Caradyne, Ireland, 2004 Profile Therapeutics, plc, United Kingdom, 2004 Pilger Homecare, GmbH, Switzerland, 2004 Markos Mefar, Italy, 2004 Normed AS, Norway, 2006 Mayo Healthcare (Homecare assets), Australia, 2007 Spiropharma AS, 2007

Infrastructure 13 Direct Organizations Respironics Canada Respironics Italy Respironics France Normed AS Norway Spiropharma AS Denmark Respironics do Brasil Respironics UK and EAME Distribution Center Respironics Deutschland Respironics Switzerland EAME Sales and Marketing Office Respironics China Asia Pacific Service Center Respironics Australia Respironics Fuji 67 Branch Offices

Customers Conduct Business in 131 Countries

International as a Percentage of Consolidated Revenues Compound Growth of 30.2% $1,000 $800 $600 Consolidated Revenues International as % of Consolidated Revenues $629.8 $759.6 $911.5 $1,046.1 $400 $494.9 $200 23% 28% 28% 31% 31% $0 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Dollars in Millions

Broaden the Scope Respiratory Drug Delivery Home Respiratory Care Children s Medical Ventures Sleep Well Ventures

Nebulizer Compressors Nebulizer Handsets Drug Delivery Enhancement Broaden the Scope Respiratory Drug Delivery Drug Specific Invasive & Noninvasive Neonatal Drug Delivery

Precision Dosing of I-neb Under penetrated opportunity to deliver drugs with a narrow therapeutic index Proprietary AAD technology With AAD TIME Side Effects Therapeutic Window Limited Efficacy

Broaden the Scope Home Respiratory Care Supports the respiratory-impaired patient in the home Opportunity for long-term growth Expansion in home ventilation and oxygen New product introductions

Broaden the Scope Children s Medical Ventures Sleep and respiratory solutions that promote the best developmental outcomes for patients Sleep & Respiratory / NICU Developmental Outcomes Reduced Costs

Broaden the Scope Sleep Well Ventures U.S. Problem Sleeper Population: 135M Adults Solution Seekers Solution Avoiders Pill Likers Pill Dislikers

Sleep Well Ventures Focus Airway Instability Insomnia Sleep/Wake Cycle Sleep Disturbance

Revenues By Group 1,200 1,000 $ of Revenue 800 600 400 200 International Hospital Sleep & Home Respiratory 30% CAGR 22% CAGR 16% CAGR 0 FY02 FY03 FY04 FY05 FY06 Fiscal Year Dollars in Millions

Financial Update

Revenues By Group Domestic Sleep and Home Respiratory Group $150,813 49% International $100,455 33% Domestic Hospital Group $56,122 18% As of 3/31/07 Dollars in Thousands

Revenues By Group 3QFY06 3QFY07 Change % Change Domestic Sleep and Home Respiratory $135,643 $150,813 $15,170 11% Domestic Hospital $ 49,337 $ 56,122 $6,785 14% International $ 82,332 $ 100,455 $18,123 22% Total $267,312 $307,390 $40,078 15% Dollars in Thousands

Growth Drivers 3QFY06 3QFY07 Change % Change Domestic Sleep Therapy $106,842 $125,662 $18,820 18% Domestic Critical Care $ 24,994 $ 30,232 $ 5,238 21% International Sleep Therapy $ 35,747 $ 46,776 $11,029 31% International Hospital $ 23,988 $ 29,865 $ 5,877 25% Dollars in Thousands

Income Statement Highlights 3QFY06 3QFY07 % Growth Sales $267,312 $307,390 15% Gross Margin* $146,982 $164,600 12% Gross Margin % 55% 54% Net Income $27,862 $34,051 22% Net Income* $30,068 $36,189 20% EPS 0.38 0.46 21% EPS* 0.41 0.48 19% *Excluding the impact of stock option expensing Dollars in Thousands Except EPS

Balance Sheet Highlights Cash and Short-Term Investments $ 318,670 Working Capital $ 531,716 Total Assets $1,167,107 Long-Term Obligations $ 26,891 Shareholders Equity $ 888,314 Long-Term Debt/Equity 3% As of 3/31/07 Dollars in Thousands

Financial Presentation