Capital Allocation 2013 R.W. Baird Industrial Conference 6 SWK Capital Allocation Priorities Remain Intact… Extending Self Imposed M&A Hiatus On Major Transactions For Another 1-2 Years Maintaining A Strong Investment Grade Credit Rating Deploying Excess FCF To Share Repurchases Will Be The Primary Use Of Cash After Deleveraging …Actions Demonstrating Commitment To Maximizing Total Shareholder Return *Adjusted For Hybrid Capital Equity Credit Consistent With Our Operational Priorities, The Current Focus Is On Overall Company Profitability And Addressing Security Performance Reduce One-Time Costs To Significantly Lower Levels In 2014 Pursuit Of Small Bolt-On Acquisitions Will Continue Where Overseas Cash Is Trapped To Enable Incremental Emerging Market Growth Capital Structure Comprised Of Debt, Equity & Hybrid Capital Considering Near-Term Use Of Hybrid Capital – Committed To Offsetting Any Resulting Share Dilution Deleveraging Remains A Near Term Priority To Achieve Debt To EBITDA* Commitment Of ~2.0X Protects Access To Credit In Virtually Any Market And Ability To Maintain An Active Commercial Paper Program Approximately $1 Billion Of Equity Derivatives Will Be Used Opportunistically To Lock In Attractive Prices Over The Next Two Years SWK Will Return Capital To Shareholders In Excess Of 50% Until Acquisition Target Valuation Levels Become Attractive Again | 
