Mail Stop 7010
March 28, 2006
Mr. Gregory N. Miller
Hillenbrand Industries, Inc.
1069 State Route 46 East
Batesville, Indiana 47006-8835
Re: Hillenbrand Industries, Inc.
Form 10-K for the year ended September 30, 2005
Form 10-Q for the period ended December 31, 2005
Filed December 23, 2005
File No. 1-6651
Dear Mr. Miller:
We have reviewed your response letter dated March 17, 2006
and
have the following additional comments. Where indicated, we think
you should revise your document in response to these comments. If
you disagree, we will consider your explanation as to why our
comment
is inapplicable or a revision is unnecessary. Please be as
detailed
as necessary in your explanation. In some of our comments, we may
ask you to provide us with information so we may better understand
your disclosure. After reviewing this information, we may raise
additional comments.
FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 2005
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition - Sales and Rentals, page 81
1. We note your response to comment 5 from our letter dated
February
16, 2006. In future filings, please revise your discussion of
"deviations" to clarify that in all instances, you recognize
revenue
upon the transfer of risk of loss and the rewards of ownership to
the
buyer. We believe that this additional insight into your
accounting
policy will be useful to your investors.
2. We note your response to comment 7 from our letter dated
February
16, 2006. In future filings, please revise your discussion of The
Vest to briefly explain the reasons why it is not appropriate to
recognize revenue prior to receipt of authorization for billing
from
the applicable paying entity. We believe that this additional
insight into your accounting policy will be useful to your
investors.
3. We note your response to comment 8 from our letter dated
February
16, 2006. In future filings, please expand your discussion of
deferred revenues related to services to include a summary of the
information that you supplementally provided to us. In this
regard,
you should clarify that your deferred revenues relate to either
separately sold service and maintenance contracts or to services
that
are part of a multiple deliverable arrangement under EITF 00-21,
and
clarify your revenue recognition policy for each of these.
Note 17 - Commitments and Contingencies
4. We note your response to comment 13 from our letter dated
February
16, 2006 and the updates provided in Note 13 to your December 31,
2005 Form 10-Q. We have the following additional comments:
Spartanburg Regional Healthcare System:
* In future quarterly and annual Exchange Act filings, please
briefly
describe your company initiated discounting practices and clarify
the
period for which these discounting practices have been in effect.
Also confirm to us that you will continue to disclose the period
for
which you have committed to continue these discounting practices
under the settlement agreement.
* We remind you that Item 303(a)(3)(ii) of Regulation S-K requires
MD&A analysis of any known trends or uncertainties that have had,
or
that you reasonably expect will have, a material favorable or
unfavorable impact on your results. To the extent that changes to
or
discontinuation of these company initiated discounting practices
occur, or you reasonably expect such changes or discontinuation to
occur in the future, please confirm to us that you will address
any
material actual or expected impact of these changes in your MD&A
analysis of your results of operations.
FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2005
MD&A
Results of Operations, page 27
5. We note that you changed your reportable segments in the first
quarter of your fiscal year 2006, as you had previously announced.
We also note that your analysis of results of operations continues
to
focus on the distinction between your sale of products and your
rental business within your Hill-Rom subsidiary. Notwithstanding
the
reasons for providing this breakdown between sales and rentals
that
are contained in your response to comment 1 from our letter dated
February 16, 2006, based on the internal management reports that
were
provided to us thus far, it appears that management separately
budgets and tracks the gross profits from sales versus rentals.
It
also appears that sales and rentals have historically yielded
different gross margins, and we note that you highlight these
different gross margins and explain the reasons for these
differences
to your investors in both your current MD&A analysis and in your
prior Exchange Act filings. Given the above, it remains unclear
to
us that management does not separately evaluate sales and rentals
when assessing the performance of the segments within your Hill-
Rom
subsidiary. Please advise. Also, please provide us with a copy
of
the internal management reports that were used by your CODM and
your
Board of Directors to assess your company`s performance during the
most recent fiscal quarter. If the reports that you provide to us
do
not contain divisional income before special charges for each of
your
segments, please explain to us how you determined that this was
the
measure of segmental profit or loss that is used by your CODM to
evaluate the performance of your segments, and tell us how your
CODM
obtains those numbers.
* * *
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a response letter that keys your responses to our comments
and provides any requested information. Detailed letters greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your responses to our comments.
If you have any questions regarding these comments, please
direct them to Jennifer Thompson, Staff Accountant, at (202) 551-
3737
or, in her absence, to John Hartz, Senior Assistant Chief
Accountant,
at (202) 551-3689 or the undersigned at (202) 551-3768.
Sincerely,
John Cash
Accounting Branch Chief
Mr. Gregory N. Miller
Hillenbrand Industries, Inc.
March 28, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE