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The children’s health is poor except the baby’s and its is perfect.
(Random House Unabridged Dictionary)

This being an example from the dictionary, there’s no context to derive what this, the baby’s and its, means from. Is it mean there’s only an exceptional one, in the set of the children, that has perfect health, which is a baby? (except the baby's (=its) health is perfect)

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"its" is a possessive pronoun that means "of it" - here: "of the baby" since babies are often referred to with the neuter pronoun "it."

So to paraphrase the sentence:

The children's health is poor except the baby's and the baby's [health] is perfect.

Remember "its" without an apostrophe means "of it," whereas "it's" is a contraction of "it is."

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    The example sentence also has incorrect punctuation, as it's missing a comma, which is probably adding to the confusion. It should be: The children's health is poor except the baby's, and its is perfect. – Kai Jul 25 '14 at 17:36
  • So, in short, it's missing a comma. – Lightness Races in Orbit Jul 25 '14 at 17:39
  • Yes, Kai is right. The comma is grammatically correct AND it represents an important pause in speech, which makes this easier understand. Additionally note that the word "its" would additionally be stressed in speech, contrasting the baby's health with the health of the other children. This could optionally be represented by italics in writing. – CocoPop Jul 25 '14 at 17:55

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