Hospira 10-K 18 Feb 10 2009 FY Annual report Financial data

Consolidated Statements of Inco

Consolidated Statements of Income and Comprehensive Income (Loss) (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Consolidated Statements of Income and Comprehensive Income (Loss)
Net sales	3879.3	3629.5	3436.2
Cost of products sold	2422.9	2286.8	2240.5
Restructuring and impairment	94.2	22.4	21.8
Research and development	240.5	211.9	201.2
Acquired in-process research and development		0.5	88
Selling, general and administrative	618.8	590.1	582.1
Total operating costs and expenses	3376.4	3111.7	3133.6
Income From Operations	502.9	517.8	302.6
Interest expense	106.3	116.2	134.5
Other expense (income), net	11.8	-5.9	-19.7
Income Before Income Taxes	384.8	407.5	187.8
Income tax (benefit) expense	-19.1	86.6	51
Net Income	403.9	320.9	136.8
Earnings Per Common Share:
Basic (in dollars per share)	2.51	2.02	0.87
Diluted (in dollars per share)	2.47	1.99	0.85
Weighted Average Common Shares Outstanding:
Basic (in shares)	161	159.2	156.9
Diluted (in shares)	163.2	161.3	160.2
Comprehensive Income (Loss) :
Foreign currency translation adjustments, net of taxes of $0.0	249.3	-307.6	116.8
Pension liability adjustments, net of taxes of $1.4, $25.3 and $(5.6), respectively	-5.4	-40.1	8.8
Unrealized gains (losses) on marketable equity securities, net of taxes of $0.0, $0.0 and $3.2, respectively	6.6	-16.5	-5.4
Reclassification of other-than-temporary impairment charge included in net income	16.6
Reclassification of losses on terminated cash flow hedges, net of taxes of $(0.6), $(0.4) and $1.1, respectively	1	0.7	-1.8
Other comprehensive income (loss)	268.1	-363.5	118.4
Net Income	403.9	320.9	136.8
Comprehensive Income (Loss)	$672	-42.6	255.2

1_Consolidated Statements of In

Consolidated Statements of Income and Comprehensive Income (Loss) (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Consolidated Statements of Income and Comprehensive Income (Loss)
Foreign currency translation adjustments, taxes	$0	$0	$0
Pension liability adjustments, taxes	1.4	25.3	-5.6
Unrealized gains (losses) on marketable equity securities, taxes	0	0	3.2
Reclassification of losses on terminated cash flow hedges, taxes	-0.6	-0.4	1.1

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Flow From Operating Activities:
Net income	403.9	320.9	136.8
Adjustments to reconcile net income to net cash from operating activities-
Depreciation	168.6	183.2	183
Amortization of intangible assets	61.5	68.7	52.1
Write-off of acquired in-process research and development		0.5	88
Step-up value of acquired inventories sold			53.1
Stock-based compensation expense	40.5	42	39.4
Deferred income tax and other tax adjustments	-66.3	43.5	-3.1
Impairment and other asset charges	95.8		7.5
Net gains on sales of assets		(3)	(5)
Changes in assets and liabilities-
Trade receivables	97.2	-55.4	-47.6
Inventories	54.4	-117.9	34.4
Prepaid expenses and other assets	8.2	12.9	17.7
Trade accounts payable	-4.2	49.5	11.5
Other liabilities	107.5	15.8	-40.3
Other, net	-22.2	23.4	23.6
Net Cash Provided by Operating Activities	944.9	584.1	551.1
Cash Flow From Investing Activities:
Capital expenditures (including instruments placed with or leased to customers of $23.0, $30.5 and $36.7 in 2009, 2008 and 2007, respectively)	-159.4	-164.3	-210.5
Acquisitions, net of cash acquired, and payments for contingent consideration	-86.6	-26.1	-1980.5
Purchases of intangibles and other investments	-14.3	-50.8	-5.5
(Purchases) sales of marketable securities		-24.5	10.4
Settlements of foreign currency contracts			-55.7
Proceeds from disposition of businesses and assets	49.2	0.8	13.8
Net Cash Used in Investing Activities	-211.1	-264.9	(2,228)
Cash Flow From Financing Activities:
Issuance of long-term debt, net of fees paid	246.7		3336.2
Repayment of long-term debt	-681.2	-95.2	-1825.2
Other borrowings, net	2.6	6.3	-6.2
Excess tax benefit from stock-based compensation arrangements	0.8	1	2.3
Proceeds from stock options exercised	122.5	27.8	73.1
Net Cash (Used in) Provided by Financing Activities	-308.6	-60.1	1580.2
Effect of exchange rate changes on cash and cash equivalents	37	-16.4	15.8
Net change in cash and cash equivalents	462.2	242.7	-80.9
Cash and cash equivalents at beginning of year	483.8	241.1	322
Cash and cash equivalents at end of year	946	483.8	241.1
Cash paid during the year-
Interest	108.7	120.8	127.4
Income taxes, net of refunds	28.4	14.9	72.4

2_Consolidated Statements of Ca

Consolidated Statements of Cash Flows (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Consolidated Statements of Cash Flows
Instruments placed with or leased to customers	$23	30.5	36.7

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets:
Cash and cash equivalents	$946	483.8
Trade receivables, less allowances of $6.2 in 2009 and $6.7 in 2008	498.1	583.4
Inventories	755.4	830.5
Deferred income taxes	185.9	172.2
Prepaid expenses	34.3	35.7
Other receivables	41.5	43.7
Assets held for sale	65
Total Current Assets	2526.2	2149.3
Property and equipment, net	1147.8	1192.1
Intangible assets, net	406.5	404.4
Goodwill	1243.4	1167.4
Deferred income taxes	54.5	70.1
Investments	49.3	37.6
Other assets	75.2	53.2
Total Assets	5502.9	5074.1
Current Liabilities:
Short-term borrowings	23.6	338.3
Trade accounts payable	229.5	231.5
Salaries, wages and commissions	176.5	144.7
Deferred income taxes	0.1	1.5
Other accrued liabilities	438.3	331.5
Liabilities related to assets held for sale	13.9
Total Current Liabilities	881.9	1047.5
Long-term debt	1707.3	1,834
Deferred income taxes	18.6	25.2
Post-retirement obligations and other long-term liabilities	271.4	391
Shareholders' Equity:
Common stock	1.7	1.7
Preferred stock	0	0
Treasury stock, at cost	-299.8	-299.8
Additional paid-in capital	1409.5	1234.2
Retained earnings	1540.1	1136.2
Accumulated other comprehensive loss	-27.8	-295.9
Total Shareholders' Equity	2623.7	1776.4
Total Liabilities and Shareholders' Equity	5502.9	5074.1

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Consolidated Balance Sheets
Allowance on trade receivables	6.2	6.7

Consolidated Statements of Chan

Consolidated Statements of Changes in Shareholders' Equity (USD $)
In Millions	Common Stock	Treasury Stock, at cost	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Total
Balances at Dec. 31, 2006	1.7	-299.8	1033.3	676.6	-50.8	$1,361
Balances in shares at Dec. 31, 2006	155.9
Net income				136.8		136.8
Other comprehensive income (loss)					118.4	118.4
Adoption of the provisions of ASC Topic 740, "Income Taxes"				2.1		2.1
Changes in shareholders' equity related to incentive stock programs			126.9			126.9
Changes in shareholders' equity related to incentive stock programs (in shares)	2.7
Balances at Dec. 31, 2007	1.7	-299.8	1160.2	815.5	67.6	1745.2
Balances in shares at Dec. 31, 2007	158.6
Net income				320.9		320.9
Other comprehensive income (loss)					-363.5	-363.5
ASC Topic 718, "Compensation - Retirement Benefits" transition amount, net of tax of $0.1				-0.2		-0.2
Changes in shareholders' equity related to incentive stock programs			74			74
Changes in shareholders' equity related to incentive stock programs (in shares)	1
Balances at Dec. 31, 2008	1.7	-299.8	1234.2	1136.2	-295.9	1776.4
Balances in shares at Dec. 31, 2008	159.6
Net income				403.9		403.9
Other comprehensive income (loss)					268.1	268.1
Changes in shareholders' equity related to incentive stock programs			175.3			175.3
Changes in shareholders' equity related to incentive stock programs (in shares)	3.9
Balances at Dec. 31, 2009	1.7	-299.8	1409.5	1540.1	-27.8	2623.7
Balances in shares at Dec. 31, 2009	163.5

3_Consolidated Statements of Ch

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2008
Consolidated Statements of Changes in Shareholders' Equity
ASC Topic 718, "Compensation - Retirement Benefits" transition amount, tax	0.1

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies	Note1Summary of Significant Accounting Policies Description of Business Hospira,Inc. ("Hospira") is a global specialty pharmaceutical and medication delivery company that develops, manufactures and markets products that help improve the safety, cost and productivity of patient care. Hospira's portfolio includes generic acute-care and oncology injectables, as well as integrated infusion therapy and medication management systems. Hospira's portfolio of products is used by hospitals and alternate site providers, such as clinics, home healthcare providers and long-term care facilities. Basis of Presentation The consolidated financial statements, prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"), include the accounts of Hospira and all of its controlled majority-owned subsidiaries. All intercompany balances and transactions have been eliminated. Subsequent events that occurred after December31, 2009, up until the filing with the Securities and Exchange Commission ("SEC") were considered in the preparation of these consolidated financial statements. Reclassifications For comparative purposes, Hospira made certain reclassifications to prior year amounts. Hospira reclassified costs that were previously reported in Cost of products sold and Research and development to Restructuring and impairment, a separate operating costs and expenses line item. Hospira also reclassified deferred tax adjustments previously reported in Other liabilities and Other, net to Deferred income tax and other tax adjustments, a separate cash flow line item. The reclassifications did not affect net income, net cash provided by operating activities or shareholders' equity. In 2008, Hospira re-aligned its segment presentation to reflect how the business is managed. Hospira has three reportable segments: Americas; Europe, Middle East and Africa ("EMEA") and Asia Pacific ("APAC"). The 2007 segment disclosure has been reclassified to conform to the 2008 and 2009 presentation. Use of Estimates The financial statements include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include, but are not limited to, provisions for chargebacks and rebates, inventory exposure reserves, income tax liabilities, pension and other post-retirement benefits liabilities and loss contingencies. Revenue Recognition Hospira recognizes revenues from product sales when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable and collectibility is reasonably assured. For other than certain drug delivery pumps and contract manufacturing, product revenue is recognized when products are delivered to customers and title passes. In certain circumstances, Hospira enters into arrangements in which it commits to provide multiple elements (deliverables) to its customers. In these cases, total revenue is divided among the separate deliverables based on their relative fair value and is recognized for each deliverable in accordance with the applicable revenue recognition criteria.

Business Acquisitions

Business Acquisitions
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Business Acquisitions	Note2Business Acquisitions 2009 Acquisition In December 2009, Hospira acquired TheraDoc,Inc. and its Infection Control AssistantTM and Antibiotic AssistantTM products, software applications that automate hospital-wide surveillance for infection-related events and optimize the utilization of antimicrobials. The purchase price was $63.3million, net of cash acquired. The purchase price was allocated to the Americas segment as follows: intangible assets of $17.1million, mostly technology based, that will be amortized over their estimated useful lives (5 to 8years, weighted average 6years); non-tax deductible goodwill of $47.9million; and other assets, net of $5.1million. The impact of this acquisition was not material to Hospira's results of operations in 2009. In 2009, Hospira announced an agreement to acquire a certain business of Orchid Chemicals PharmaceuticalsLtd. ("Orchid Pharma") for approximately $400million. While Hospira has taken actions and incurred costs associated with the pending transaction that are reflected in Hospira's financial statements, the pending acquisition of Orchid Pharma will not be reflected in the financial statements until the closing of the transaction. The transaction has been unanimously approved by Hospira's and Orchid Pharma's Boards of Directors and approved by Orchid Pharma's shareholders. The acquisition is subject to customary closing conditions. The transaction is expected to be completed in the first quarter of 2010. 2008 Acquisitions Hospira acquired Sculptor Developmental Technologies and its VeriScanTM Rx product, a software application that supports bar code medication administration at the point of care. Additionally, Hospira acquired the EndoToolTM glucose management system, a software system that helps establish and maintain patient glycemic control in acute, critical care and operating room settings. The purchase price for the acquisitions combined was allocated to the Americas segment as follows: intangible assets of $10.4million, mostly technology based, that will be amortized over their estimated useful lives (3 to 7years, weighted average 5years); acquired in-process research and development of $0.5million that was expensed at the date of acquisition; non-tax deductible goodwill of $23.3million; and other assets and (liabilities), net of $(1.7) million. Approximately $15.0million of deferred consideration related to one of the 2008 acquisitions was paid in 2009. The impact of these acquisitions was not material to Hospira's results of operations in 2008. 2007 Acquisition On February2, 2007, Hospira acquired all the outstanding ordinary shares of Mayne Pharma (including those shares issuable pursuant to stock options) for $2,055.0million. The $2,055.0million purchase price includes the cash purchase price and direct acquisition costs. Mayne Pharma primarily manufactures and sells specialty injectable pharmaceuticals. The results of operations of Mayne Pharma are included in Hospira's results for periods on and after February2, 2007. The following allocation of the purchase price, which was finalized as of December31, 2007, has been allocated to the tangible and

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Investments	Note3Investments Investments as of December 31, consist of the following: (dollars in millions) 2009 2008 Investments, at cost(1) $ 19.2 $ 16.1 Investments, at fair value(2) 12.7 6.1 Investments, at equity(3) 17.4 15.4 $ 49.3 $ 37.6 (1) Cost investments consist of investments in companies over which Hospira does not have significant influence or ownership of more than 20%. (2) Fair value investments consist of marketable securities classified as available-for-sale. (3) Equity investments consist of investments in affiliated companies over which Hospira has significant influence but not the majority of the equity or risks and rewards. As a result of the Mayne Pharma acquisition, Hospira has a joint venture with Cadila Healthcare Limited, a pharmaceutical company located in India, which began commercial manufacturing of injectable cytotoxic drugs in the first half of 2009. Hospira's share of (earnings) or losses of the investees included in Other expense (income), net was $(1.9) million, $4.7million, and $1.2million for 2009, 2008 and 2007, respectively. In 2009, Hospira assessed the decline in the market value of marketable equity securities to be other-than-temporary, primarily due to the duration and severity of the investment's decline in market value and the near-term prospects for recovery to the original invested value. Accordingly, Hospira recognized a non-cash, impairment charge of $16.6million in Other expense (income), net. The changes in market value are reported, net-of-tax, in accumulated other comprehensive income (loss) until the investment is sold or considered other-than-temporarily impaired in periods subsequent to the 2009 impairment. The fair value of the investment may continue to be impacted by the volatility in the global equity markets, Hospira's ability and intent to remain invested among other factors. In 2007, Hospira recorded an impairment loss of $1.4million on a portion of the portfolio of marketable equity securities classified as available-for-sale and realized a gain of $6.4million as most of these investments were sold.

Restructuring Actions and Asset

Restructuring Actions and Asset Impairments
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Restructuring Actions and Asset Impairments	Note4Restructuring Actions and Asset Impairments As part of its strategy to improve margins and cash flows, Hospira has taken a number of actions to reduce operating costs and optimize operations. The costs related to these actions consist primarily of severance and other employee benefits, accelerated depreciation resulting from the decreased useful lives of the buildings and certain equipment, impairments, other asset charges and other exit costs. Project Fuel 2009 Actions. In 2009, Hospira announced details of a restructuring and optimization plan, ("Project Fuel,"), which will occur over the next two years from the date of the announcement. Project Fuel includes the following activities: optimizing the product portfolio, evaluating non-strategic assets and streamlining the organizational structure. Hospira expects to incur aggregate restructuring costs and other asset charges related to these actions in the range of $100million to $110million on a pre-tax basis. During 2009, Hospira incurred in the Americas, EMEA and APAC segment pre-tax restructuring costs of $22.7million, $1.8million and $2.8million, respectively; $27.3million, pre-tax, in aggregate to date. During 2009, inventory charges of $18.7million and $4.6million related to product portfolio optimization, impacting the Americas and EMEA segments, respectively, are included in Cost of products sold. As part of the Project Fuel initiatives, Hospira committed to dispose of certain non-strategic businesses and the underlying assets over the next succeeding twelve months from the date of commitment. In some instances, the range of proceeds received from these disposals was less than the historical carrying value. As a result of these commitments, non-cash, pre-tax impairment charges of $52.8million were recognized in Restructuring and impairment during 2009. Hospira incurred $42.9million, $7.6million and $2.3million of impairment charges in the Americas, EMEA and APAC segment, respectively. Additionally, pre-tax inventory charges of $3.1million were recognized in Cost of products sold. The impairment charges recognized during 2009 reduced property and equipment, net for these businesses by $22.7million, allocated goodwill by $7.6million and intangible assets by $22.5million. Hospira received cash of $46.6million upon completion of the disposal of the critical care business and the oral pharmaceutical contract manufacturing facility in Salisbury, Australia ("Salisbury"), and will provide certain limited transition services related to critical care products through 2010. Subsequent to the Salisbury transaction close, Hospira will receive contingent consideration based on sales for each of the next six years. As of December31, 2009, the remaining assets held for sale included $26.2million of property and equipment, $17.9million of goodwill and $20.9million of other assets, net and liabilities related to assets held for sale included $7.1million of post-retirement obligations and $6.8million of other liabilities. These assets held for sale, net related to a facility in Wasserburg, Germany ("Wasserburg") which primarily performed contract manufacturing in the EMEA segm

Collaborative Arrangements

Collaborative Arrangements
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Collaborative Arrangements	Note5Collaborative Arrangements Hospira enters into collaborative arrangements with third parties for product development and commercialization. These arrangements typically involve two (or more) parties who are active participants in the collaboration and are exposed to significant risks and rewards dependent on the commercial success of the activities. Hospira's rights and obligations under these collaborative arrangements vary. These collaborations usually involve various activities including research and development, marketing and selling, and distribution. Hospira has numerous collaborative arrangements, none of which are in the aggregate or individually significant or exceed 5.0% of annual Research and development costs, except for the following. Hospira and ChemGenex Pharmaceuticals Limited ("ChemGenex") entered into a collaborative agreement to develop, license, and commercialize ChemGenex's oncology product candidate in EMEA. Hospira will be responsible for sales and marketing. ChemGenex is responsible for development, regulatory approval and manufacturing. In 2009, Hospira recorded a charge of $16.0million in Research and development related to an initial payment and development milestone charge. Hospira may be required to pay up to approximately $12.0million upon reaching regulatory approval and up to approximately $87.0million of commercial sales milestones. Hospira will also make royalty payments based upon commercial sales. Hospira and Altea Therapeutics Corporation ("Altea") have a collaborative agreement to develop, license, and commercialize a new delivery system for a hematology related product. Hospira will be responsible for global sales and marketing. Altea is responsible for development, regulatory approval, and manufacturing. Hospira may be obligated to pay $4.5million upon reaching a development milestone and $9.5million upon reaching a regulatory approval milestone. Hospira also may be required to pay up to $95.0million for milestones based upon achieving certain commercial sales targets. During 2009 and 2008, Hospira recognized milestone payments of $0.0million and $1.5million, respectively, in Research and development. Hospira and Bioceuticals Arzneimittel AG ("Bioceuticals") have a licensing and marketing agreement for RetacritTM, a biogeneric version of erythropoietin, to be sold in certain countries in Europe and the U.S. Hospira is responsible for global sales and marketing. Bioceuticals is responsible for development, regulatory approval, and manufacturing. In 2006, Hospira recorded a charge of $20.6million related to an initial payment primarily for EMEA segment-related development milestones. In 2007, Hospira recognized a product right intangible of $16.8million upon reaching an EMEA segment regulatory approval milestone. Upon U.S. regulatory pathway approval, among other factors, Hospira could be required to pay milestones of up to approximately $22million. In addition, Hospira will make royalty payments based upon commercial sales. During 2009, 2008 and 2007, Hospira recognized $1.6million, $1.6million and $0.0million, respectively, in Cost of products sold.

Fair Value Measures

Fair Value Measures
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Fair Value Measures	Note6Fair Value Measures The following table summarizes the basis used to measure certain assets and liabilities at fair value, under the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures," as of December31, in the balance sheet: Fair Value Measurements at Reporting Date, Using: Description (dollars in millions) 2009 Quoted Prices in Active Markets for Identical Items (Level1) Significant Other Observable Inputs (Level2) Significant Unobservable Inputs (Level3) Financial Assets: Interest rate swap contracts $ 2.5 $ $ 2.5 $ Available-for-sale marketable equity securities 12.7 12.7 Foreign currency forward exchange contracts 5.4 5.4 Financial Liabilities: Foreign currency forward exchange contracts 1.4 1.4 Fair Value Measurements at Reporting Date, Using: Description (dollars in millions) 2008 Quoted Prices in Active Markets for Identical Items (Level1) Significant Other Observable Inputs (Level2) Significant Unobservable Inputs (Level3) Financial Assets: Available-for-sale marketable equity securities $ 6.1 $ 6.1 $ $ Financial Liabilities: Foreign currency forward exchange contracts 12.7 12.7 The fair value of the Level1 assets is based on quoted market prices of the identical underlying security in an active market. The fair value of the Level2 assets and liabilities is primarily based on market observable inputs to quoted market prices, benchmark yields and broker/dealer quotes. Level3 inputs, as applicable, are unobservable inputs which reflect assumptions developed by management to measure assets and liabilities at fair value. The carrying values of certain financial instruments, including primarily cash and cash equivalents, accounts receivable, accounts payable and short term borrowings, approximate their estimated fair values due to their short-term nature. The carrying value and estimated aggregate fair value, based primarily on market prices (Level1), of the senior unsecured notes as of December31, are as follows: 2009 2008 (dollars in millions) Carrying Value Fair Value Carrying Value Fair Value Senior unsecured notes $ 1,700.0 $ 1,838.4 $ 2,125.0 $ 1,924.5

Financial Instruments and Deriv

Financial Instruments and Derivatives
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Financial Instruments and Derivatives	Note7Financial Instruments and Derivatives Hospira accounts for derivatives in accordance with ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). Hospira's operations are exposed to currency exchange-rate risk, which is mitigated by Hospira's use of foreign currency forward exchange contracts ("forward contracts"). The objective is to reduce volatility of earnings and cash flows associated with foreign currency exchange-rate changes. Currency exposures primarily in Euros, Australian dollars, and British pounds include foreign currency denominated assets and liabilities, commitments and anticipated foreign currency revenue and expenses, including inter-company payables, receivables and loans. These forward contracts are not designated as hedges in accordance with the provisions of ASC 815, and, therefore, changes in the fair value are recognized in earnings in Other expense (income), net, during the term of the forward contract. As of December31, 2009, Hospira has $32.2million net notional value of forward contracts primarily denominated in Euros, Australian dollars, and British pounds that mature within one to six months. Hospira is exposed to the impact of interest rate changes. Hospira's objective is to manage interest rate changes on cash flows and reduce volatility on earnings. Hospira utilizes a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. Hospira may use interest rate swap contracts on certain borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. In 2009, Hospira entered into $300.0million notional amount interest rate swap contracts whereby $200.0million of the $400.0million senior unsecured notes due June 2014 and $100.0million of the $250.0million senior unsecured notes due May 2015 were effectively converted from fixed to floating-rate debt. For these fair value hedges, changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed-rate debt due to changes in market interest rates. Interest rate swap contract gains and losses are included in Interest expense. There was no ineffectiveness during the calendar year ended December31, 2009. The following table summarizes Hospira's fair value of outstanding derivatives as of December31: (dollars in millions) Consolidated Balance Sheet Presentation 2009 2008 Derivatives not designated as hedging instruments Foreign currency forward exchange contracts: Other receivables $ 5.4 $ Other accrued liabilities 1.4 12.7 Derivatives designated as hedging instruments Interest rate swap contracts: Other receivables 0.6 Other assets 1.9 The impact on earnings for the years ended December31 from derivative activity was as follows: (dollars in millions) Presentation of (Gain) Loss Recognized on Derivatives 2009 2008 2007 Derivatives not designated as hedging instruments Foreign currency forward exchange contracts Other expense (income), net $ 5.6 $

Pension and Post-Retirement Ben

Pension and Post-Retirement Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Pension and Post-Retirement Benefits	Note8Pension and Post-Retirement Benefits Retirement plans consist of defined benefit and legislated obligations such as employee severance indemnity plans ("pension plans"), post-retirement medical and dental plans ("medical and dental plans") and defined contribution plans. Plans cover certain employees both in and outside of the U.S. Net Pension and Medical and Dental Benefit Cost Net cost recognized for the years ended December31, for Hospira's pension and post-retirement medical and dental benefit plans, is as follows: Pension Plans Medical and Dental Plans (dollars in millions) 2009 2008 2007 2009 2008 2007 Service cost for benefits earned during the year $ 1.2 $ 1.2 $ 3.0 $ 0.1 $ 0.2 $ 0.6 Interest cost on projected benefit obligations 26.3 25.5 25.3 3.3 3.7 3.5 Expected return on plans' assets (27.7 ) (28.9 ) (29.4 ) Net amortization 3.6 2.4 4.7 0.5 1.3 0.9 Curtailment of benefits(1) 1.7 (1.7 ) 0.6 (5.0 ) Net cost $ 3.4 $ 1.9 $ 1.9 $ 3.9 $ 5.8 $ (1) The curtailment charge for pension plans in 2008 relates to the shutdown of the Montreal, Canada, manufacturing plant. The net curtailment income for pension plans and post-retirement medical and dental plans in 2007 relate to the planned shutdown of the Montreal, Canada; Ashland, Ohio; and Donegal, Ireland plants. Changes in Benefit Obligations and Plan Assets Information about the changes in benefit obligations and plan assets for the years ended December31, and the funded status as of December31, for Hospira's U.S. and international plans is as follows: Pension Plans Medical and Dental Plans (dollars in millions) 2009 2008 2009 2008 Projected benefit obligations at beginning of year $ 429.0 $ 445.2 $ 53.9 $ 66.9 Service cost 1.2 1.2 0.1 0.2 Interest cost 26.3 25.5 3.3 3.7 (Gains) losses, primarily changes in discount rates and medical trend rates, plan design changes, and differences between actual and estimated health care costs 27.1 (18.6 ) 3.2 (12.5 ) Benefits paid (19.7 ) (27.2 ) (3.1 ) (3.9 ) Other(1) (7.2 ) 2.9 0.6 (0.5 ) Projected benefit obligations at end of year $ 456.7 $ 429.0 $ 58.0 $ 53.9 Plans' assets at fair value at beginning of year $ 282.3 $ 376.7 $ $ Actual return on plans' assets 45.8 (67.4 ) Company contributions 31.7 6.9 3.1 3.9 Benefits paid (19.7 ) (27.2 ) (3.1 ) (3.9 ) Other(1) (6.7 ) Plans' assets at fair value at end of year $ 340.1 $ 282.3 $ $ Funded status $ (116.6 ) $ (146.7 ) $ (58.0 ) $ (53.9 ) Amount recognized in the consolidated balance sheet: Prepaid benefit cost $ $ $

Taxes on Earnings

Taxes on Earnings
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Taxes on Earnings	Note9Taxes on Earnings Earnings before taxes, and the related provisions for taxes on earnings, for the years ended December31, were as follows: (dollars in millions) 2009 2008 2007 Earnings Before Taxes Domestic $ 74.8 $ 190.5 $ 54.9 Foreign 310.0 217.0 132.9 Total $ 384.8 $ 407.5 $ 187.8 Taxes on Earnings Current: U.S. Federal $ (104.5 ) $ 13.3 $ 11.4 State 4.0 6.0 2.4 Foreign 21.3 8.0 (11.5 ) Total current (79.2 ) 27.3 2.3 Deferred: Domestic 33.4 49.5 29.4 Foreign 26.7 9.8 19.3 Total deferred 60.1 59.3 48.7 Total $ (19.1 ) $ 86.6 $ 51.0 Operating loss carryforwards at December31, 2009 amounted to $79.0million, which are subject to expiration in periods from 2014 through 2026, or are unlimited. Hospira adopted the provisions of ASC 740 on Accounting for Uncertainty in Income Taxes on January1, 2007. As a result of the implementation of ASC 740, Hospira recognized a $2.1million decrease in the liability for unrecognized tax benefits. This decrease in the liability resulted in an increase in the January1, 2007 balance of retained earnings of $2.1million. The gross amount of unrecognized tax benefits at December31, 2009 and 2008 was $73.6million and $174.9million, respectively. The amount, if recognized, that would affect the effective tax rate was $65.5million and $157.3million at December31, 2009 and 2008, respectively. Hospira recognizes interest and penalties accrued in relation to unrecognized tax benefits in income tax expense, which is consistent with the reporting in prior periods. As of December31, 2009 and 2008, Hospira has recorded liabilities of $5.7million and $18.7million, respectively, for the payment of interest and penalties. In 2009, the Internal Revenue Service ("IRS") audit of Hospira's 2004 and 2005 tax returns was concluded and the years were effectively settled. The outcome of the audit settlement is a reduction in the gross unrecognized tax benefits for both the audit years settled and resultant impact on tax years 2006 through 2008 in aggregate totaling $100.7million, of which $91.9million is recognized in the results for year ended December31, 2009, as a discrete income tax benefit. The U.S. federal tax returns for Hospira for 2006 and 2007 are currently under examination by the IRS. Hospira expects the audit fieldwork and the issuance of the initial IRS audit report to be completed within the next twelve months. However, ultimate resolution of the IRS audit is dependent on a number of factors and procedures that cannot be predicted at this time. In addition, other tax jurisdictions are in various audit stages for certain Hospira subsidiaries and certain tax statutes are expected to close within the next 12months. Accordingly, it is reasonably possible that a change in unrecognized tax benefits will occur within the next 12months; however, qua

Sales-Type Leases

Sales-Type Leases
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Sales-Type Leases	Note10Sales-Type Leases The net investment in sales-type leases of certain medication management systems as of December31, consists of the following: (dollars in millions) 2009 2008 Minimum lease payments receivable $ 31.7 $ 36.4 Unearned interest income (3.8 ) (3.9 ) Net investment in sales-type leases 27.9 32.5 Current portion(1) (11.4 ) (13.8 ) Net investment in sales-type leases, less current portion(1) $ 16.5 $ 18.7 (1) The current and long-term portions are recorded in Trade receivables and Other assets, respectively, in the consolidated balance sheets. Future minimum amounts due under customer agreements accounted for as sales-type leases as of December31, 2009 are as follows: (dollars in millions) Sales-Type Leases 2010 $ 12.9 2011 8.6 2012 4.3 2013 2.8 2014 and thereafter 3.1 $ 31.7

Short-term Borrowings and Long-

Short-term Borrowings and Long-term Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Short-term Borrowings and Long-term Debt	Note11Short-term Borrowings and Long-term Debt Hospira's debt as of December31, consists of the following: (dollars in millions) 2009 2008 Long-term debt: Term loan due March 2010 (weighted-average floating interest rate of 5.74% at December31, 2008) $ $ 1.2 Floating rate notes due March 2010 (weighted-average floating interest rate of 4.77% at December31, 2008) 375.0 5.55% Notes due March 2012 500.0 500.0 5.90% Notes due June 2014 400.0 400.0 6.40% Notes due May 2015 250.0 6.05% Notes due March 2017 550.0 550.0 Other, due 2015 3.9 5.3 Deferred gains on terminated interest rate swap instruments 3.5 4.4 Fair value of interest rate swap instruments 1.9 Unamortized debt discount (2.0 ) (1.9 ) Total long-term debt 1,707.3 1,834.0 Short-term borrowings: 4.95% Notes due June 2009 300.0 Current portion of Term loan due March 2010 3.8 Deferred gains on terminated interest rate swap instruments 1.0 2.1 Other 22.6 32.4 Total short-term borrowings 23.6 338.3 Total debt $ 1,730.9 $ 2,172.3 The aggregate maturities of debt, excluding deferred gains on terminated interest rate swap instruments and unamortized debt discount, for each of the next five years are as follows: $22.6million in 2010, $0.0million in 2011, $500.0million in 2012, $0.0million in 2013, $400.0 million in 2014 and $803.9million thereafter. Senior Unsecured Notes and Other Borrowings In January 2009, the remaining $5.0million in principal outstanding as of December31, 2008, under the $500.0million three-year term loan facility due in March 2010, was paid. In May 2009, Hospira issued $250.0million aggregate principal amount of 6.40% notes which are due May15, 2015, with interest due semi-annually, for general corporate purposes. This issuance contains covenants consistent with other existing borrowings. In June 2009, Hospira repaid in full the $300.0million aggregate principal amount of 4.95% notes upon maturity. In December 2009, Hospira redeemed $375.0million aggregate principal amount and accrued interest of floating rate notes due March 2010. In connection with acquisitions, facility expansions, international capital structure optimization and equipment lease requirements, Hospira enters into other borrowings including mortgages, lease arrangements and promissory notes. These borrowings bear a weighted average interest rate of approximately 7.3% and 4.1% in 2009 and 2008, respectively, with principal and interest due in various intervals, and are primarily unsecured. As of December31, 2009 and 2008, Hospira had $26.5million and $37.7million, respectively, of other borrowings outstanding, of which $22.6million and $32.4million, respectively, were classified as short-term. During 2008, Hospira terminated $300.0million notional amount of its fixed-to-floating interest rate swap agreements related to its $300.0million 4.95% senior unsecured notes due in 2009 and $300.0milli

Segment and Geographic Informat

Segment and Geographic Information
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Segment and Geographic Information	Note12Segment and Geographic Information Hospira conducts operations worldwide and is managed in three reportable segments: Americas, EMEA and APAC. The Americas segment includes the U.S., Canada and Latin America; the EMEA segment includes Europe, the Middle East and Africa; and the APAC segment includes Asia, Japan and Australia. Hospira has five operating segments: U.S., Canada, Latin America, EMEA and APAC. Hospira has aggregated U.S., Canada, and Latin America within the America's reportable segment in accordance with the provisions of ASC Topic 280 "Segment Reporting." In all segments, Hospira sells a broad line of products, including specialty injectable pharmaceuticals, other pharmaceuticals, medication management systems and other devices. Specialty Injectable Pharmaceuticals include generic injectables and proprietary specialty injectables. Other Pharmaceuticals include large volume intravenous solutions, nutritionals and contract manufacturing services. Medication Management Systems include infusion pumps, related software, services and administration sets. Other Devices include gravity administration sets, critical care products (through August 2009) and other device products. Hospira's underlying accounting records are maintained on a legal-entity basis for government and public reporting requirements. Segment disclosures are on a performance basis consistent with internal management reporting. For internal management reporting, intersegment transfers of inventory are recorded at standard cost and are not a measure of segment income from operations. The costs of certain corporate functions, stock-based compensation, interest expense, and other expense (income), net that benefit the entire organization are not allocated. The following segment information has been prepared in accordance with the internal accounting policies of Hospira, as described above. Reportable segment information: Net Sales for the Years Ended December31, Income (Loss) from Operations for the Years Ended December31, (dollars in millions) 2009 2008 2007 2009 2008 2007 Americas $ 3,063.3 $ 2,778.3 $ 2,658.9 $ 625.5 $ 598.0 $ 445.3 EMEA 542.8 583.8 552.1 1.8 12.8 (16.6 ) APAC 273.2 267.4 225.2 7.0 23.0 (4.2 ) Total reportable segments $ 3,879.3 $ 3,629.5 $ 3,436.2 634.3 633.8 424.5 Corporate functions (90.9 ) (74.0 ) (82.5 ) Stock-based compensation (40.5 ) (42.0 ) (39.4 ) Income from operations 502.9 517.8 302.6 Interest expense and other expense, net (118.1 ) (110.3 ) (114.8 ) Income before income taxes $ 384.8 $ 407.5 $ 187.8 Depreciation and Amortization for the Years Ended December31, Additions to Long-Term Assets for the Years Ended December31, (dollars in millions) 2009 2008 2007

Shareholders' Equity

Shareholders' Equity
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Shareholders' Equity	Note13Shareholders' Equity Common Stock Hospira is authorized to issue 400.0million shares of common stock, par value $0.01 per share, and 50.0million shares of preferred stock, par value $0.01 per share, of which four million shares are designated as SeriesA Junior Participating Preferred Stock for issuance in connection with the exercise of preferred share purchase rights as described below. At December31, 2009 and 2008, approximately 15.0million and 5.5million shares of common stock were reserved for issuance under various employee incentive programs, respectively. As of December31, 2009 and 2008, 171.1million and 167.2million shares are issued and 163.5million and 159.6million shares are outstanding, respectively. Treasury Stock In February 2006, Hospira's Board of Directors authorized the repurchase of up to $400.0million of Hospira's common stock in accordance with Rule10b-18 under the Securities Exchange Act of 1934. The repurchase of shares commenced in early March 2006. As of December31, 2009, Hospira had repurchased 7.6million shares for $299.8million in the aggregate under the 2006 board authorization, all of which were purchased during 2006. Hospira does not expect to repurchase any shares in 2010 under this program. Preferred Share Purchase Rights Each outstanding share of common stock provides the holder with one Preferred Share Purchase Right ("Right"). Upon exercise, each Right entitles the holder to purchase 1/100thof a share of SeriesA Junior Participating Preferred Stock of Hospira at a price initially set at $100, subject to amendment or adjustment. The Rights will become exercisable only if a person or group (an "acquirer") acquires, or obtains the rights to acquire, without prior approval of the Board of Directors, more than 15% of Hospira's common stock, or an acquirer announces a tender offer that may result in the acquisition of such percentage (a "Triggering Event"). After a Triggering Event, Rights held by an acquirer are not exercisable or exchangeable as described below. If a Triggering Event occurs, each Right will generally be exercisable for common stock of Hospira having a value equal to twice the exercise price of the Right. If the Triggering Event involves an acquisition of Hospira or over 50% of its assets or earning power, each Right will be exercisable for common stock of the acquirer having a value equal to twice the exercise price of the Right. If a Triggering Event occurs in which the acquirer acquires or obtains the right to acquire less than 50% of Hospira's common stock, Hospira's Board of Directors, in its discretion, may require that each Right be exchanged for one share of Hospira's common stock or for preferred stock having a value equal to one share of common stock. The Rights will expire on April11, 2014, unless earlier exchanged or redeemed at $0.01 per Right or unless that date is extended by the Board of Directors. The Board of Directors may amend the rights agreement, and may approve acquisitions of Hospira or its securities such that the Rights would not apply to such approved acquisitions. The Rights are intended to have anti-takeover effects and may have the effec

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Earnings Per Share	Note14Earnings Per Share Basic earnings per share are computed by dividing net income by the number of weighted average common shares outstanding during the reporting period. Diluted earnings per share are calculated to give effect to all potentially dilutive common shares that were outstanding during the reporting period. The following table shows basic and diluted earnings per share and the effect of stock options on the weighted average number of shares outstanding used in calculating diluted earnings per share as of December31: (shares in millions, except per share amounts) 2009 2008 2007 Weighted average basic common shares outstanding 161.0 159.2 156.9 Assumed exercise of stock options 2.2 2.1 3.3 Weighted average dilutive common shares outstanding 163.2 161.3 160.2 Earnings Per Common Share: Basic $ 2.51 $ 2.02 $ 0.87 Diluted $ 2.47 $ 1.99 $ 0.85 For 2009, 2008 and 2007, there were outstanding options to purchase approximately 5.3million, 7.5million and 2.5million shares of Hospira stock, respectively, for which the exercise price of the options exceeded the average stock price. Accordingly, these options are excluded from the diluted earnings per share calculation for these periods.

Incentive Stock Program

Incentive Stock Program
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Incentive Stock Program	Note15Incentive Stock Program Plan Overview Hospira's 2004 Long-Term Stock Incentive Plan ("2004 Plan"), as amended, provides for the grant of shares of stock options, stock appreciation rights, stock awards (restricted stock, restricted stock units, performance shares, and performance units) and cash-based awards to employees and non-employee directors. In May 2009, shareholders approved amendments primarily to extend the Plan by tenyears to May14, 2019, and to increase the number of shares that may be granted during the life of the 2004 Plan by 13.0million shares. The option exercise price generally may not be less than the underlying stock's fair market value at the date of grant, and the maximum term of an option is ten years. The amounts granted each calendar year to any one employee or non-employee director is limited depending on the type of award. Stock options comprise the majority of awards granted since inception of the 2004 Plan. As of December31, 2009, approximately 15.0million shares remain available for grant. In March 2009 and 2008, and May 2007, 3.5million, 2.3million and 2.7million options were granted to certain employees for the annual stock option grants, respectively. These options were awarded at the fair market value at the time of grant, generally vest over three years and have either a seven or a ten-year term. Option Activity and Outstanding Options A summary of information related to stock options for the years ended is as follows: Hospira Stock Options Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value (dollars in millions) Outstanding at January1, 2008 13,133,815 $ 34.84 Granted 2,527,445 43.51 Exercised (1,073,124 ) 29.39 Lapsed (494,881 ) 43.19 Outstanding at December31, 2008 14,093,255 36.52 Granted 3,754,732 23.54 Exercised (3,987,623 ) 32.89 Lapsed (742,528 ) 37.03 Outstanding at December31, 2009(1) 13,117,836 $ 33.87 5.1 $ 224.7 Exercisable at December31, 2009 7,153,661 $ 36.63 2.4 $ 102.8 (1) The difference between options outstanding and those expected to vest is not significant. The total intrinsic value of options exercised during 2009, 2008 and 2007 was $31.7million, $12.9million and $35.6million, respectively. Summarized information about Hospira stock options outstanding and exercisable as of December31, 2009, is as follows: Options Outstanding Exercisable Options Range of Exercise Prices Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $12.01- $25.00 3,595,060 6.0 $ 22.19 198,897 $ 22.90 $25.01- $30.00 1,129,964 4.3 27.06 1,116,132 27.07 $30.01- $35.00 1,421,163 4.9 32.28 1,356,813 32.35 $35.01- $40.00 2,906,740 4.0 39.

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Commitments and Contingencies	Note16Commitments and Contingencies Other Commercial Commitments Hospira's other commercial commitments as of December31, 2009, representing commitments not recorded on the balance sheet, but potentially triggered by future events, primarily consist of non-debt letters of credit to provide credit support for certain transactions as requested by third parties. In the normal course of business, Hospira provides indemnification for guarantees it arranges in the form of bonds guaranteeing the payment of value added taxes, performance bonds, custom bonds and bid bonds. As of December31, 2009, Hospira had $29.8million of these commitments, with a majority expiring in 2010. No amounts have been drawn under these letters of credit or bonds. Leases Minimum future operating lease payments, including lease payments for real estate, vehicles, computers and office equipment, as of December31, 2009, are: (dollars in millions) 2010 $ 22.1 2011 18.9 2012 14.5 2013 10.6 2014 9.4 Remaining Years 23.0 Total minimum future lease payments $ 98.5 Lease expense under operating leases totaled $30.0million, $26.3million and $26.9million for the years ended December31, 2009, 2008 and 2007, respectively. Litigation Hospira is involved in various claims and legal proceedings, as well as product liability claims and proceedings related to Hospira's business, including in some instances when Hospira operated as part of Abbott Laboratories ("Abbott"). Hospira has been named as a defendant in a lawsuit alleging generally that the spin-off of Hospira from Abbott resulted in a mass termination of employees so as to interfere with the future attainment of benefits in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"). The lawsuit was filed on November8, 2004, in the U.S. District Court for the Northern District of Illinois, and is captioned: Myla Nauman, Jane Roller and Michael Loughery v. Abbott Laboratories and Hospira,Inc. Plaintiffs generally seek reinstatement in Abbott benefit plans, disgorgement of profits and attorneys fees. On November18, 2005, the complaint was amended to assert an additional claim against Abbott and Hospira for breach of fiduciary duty under ERISA. Hospira has been dismissed as a defendant with respect to the fiduciary duty claim. By Order dated December30, 2005, the Court granted class action status to the lawsuit. As to the sole claim against Hospira, the court certified a class defined as: "all employees of Abbott who were participants in the Abbott Benefit Plans and whose employment with Abbott was terminated between August22, 2003, and April30, 2004, as a result of the spin-off of the HPD [Hospital Products Division] /creation of Hospira announced by Abbott on August22, 2003, and who were eligible for retirement under the Abbott Benefit Plans on the date of their terminations." Hospira denies all material allegations asserted against it in the complaint. Trial of this matter has concluded, but the court has not rendered a decision. In 2008, Hospira received notice from Abbott requesting that Hospira indemnify Abbot

Other Expense

Other Expense (Income), Net
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Other Expense (Income), Net	Note17Other Expense (Income), Net Years Ended December31, (dollars in millions) 2009 2008 2007 Interest income $ (7.6 ) $ (9.3 ) $ (15.1 ) Foreign exchange 1.0 (2.1 ) (1.6 ) All other expense (income)(1) 18.4 5.5 (3.0 ) Total $ 11.8 $ (5.9 ) $ (19.7 ) (1) Includes impairment and (gains) on the sale of marketable equity securities.

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Inventories	Note18Inventories AsofDecember31, (dollars in millions) 2009 2008 Finished products $ 405.3 $ 510.1 Work in process 143.9 130.6 Materials 206.2 189.8 Total $ 755.4 $ 830.5

Other Accrued Liabilities

Other Accrued Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Other Accrued Liabilities	Note19Other Accrued Liabilities AsofDecember31, (dollars in millions) 2009 2008 Accrued rebates(1) $ 156.0 $ 107.4 Income taxes payable 29.1 14.1 All other 253.2 210.0 Total $ 438.3 $ 331.5 (1) Hospira's generic oxaliplatin sales, launched in the U.S. in 2009, contributed to the increase.

Post-retirement Obligations and

Post-retirement Obligations and Other Long-term Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Post-retirement Obligations and Other Long-term Liabilities	Note20Post-retirement Obligations and Other Long-term Liabilities AsofDecember31, (dollars in millions) 2009 2008 Accrued post-retirement medical and dental costs(1) $ 54.2 $ 49.8 Pension liabilities(1) 115.3 145.7 Unrecognized tax benefits, penalties and interest(2) 73.6 174.9 All other 28.3 20.6 Total $ 271.4 $ 391.0 (1) See Note8 regarding changes in accrued post-retirement medical and dental costs and pension liabilities. (2) Decrease in 2009 reflects conclusion and effective settlement of the IRS audit of Hospira's 2004 and 2005 U.S. tax returns.

Quarterly Data

Quarterly Data (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Notes to Consolidated Financial Statements
Quarterly Data (Unaudited)	Note21Quarterly Data (Unaudited) (dollars in millions, except for per share amounts) 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter 2009 Net Sales $ 859.7 $ 956.9 $ 1,007.5 $ 1,055.2 Gross Profit(1) 319.6 346.2 395.6 395.0 Income From Operations 114.7 91.1 161.5 135.6 Net Income 165.5 25.5 116.2 96.7 Earnings per common share, basic $ 1.04 $ 0.16 $ 0.72 $ 0.59 Earnings per common share, diluted $ 1.03 $ 0.16 $ 0.71 $ 0.58 Weighted average common shares outstanding, basic 159.5 160.5 161.1 162.6 Weighted average common shares outstanding, diluted 160.6 162.4 163.7 165.9 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter 2008 Net Sales $ 888.7 $ 901.6 $ 925.5 $ 913.7 Gross Profit(1) 317.0 335.2 333.8 356.7 Income From Operations 111.7 117.7 132.7 155.7 Net Income 65.4 69.1 81.8 104.6 Earnings per common share, basic $ 0.41 $ 0.43 $ 0.51 $ 0.66 Earnings per common share, diluted $ 0.41 $ 0.43 $ 0.51 $ 0.65 Weighted average common shares outstanding, basic 158.7 159.1 159.4 159.5 Weighted average common shares outstanding, diluted 161.0 161.5 161.6 160.9 (1) Gross profit is defined as Net sales less Cost of products sold.

Schedule II-Valuation and Quali

Schedule II-Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Valuation and Qualifying Accounts
Schedule II-Valuation and Qualifying Accounts	Hospira,Inc. ScheduleIIValuation and Qualifying Accounts For the Three Years Ended December31, 2009 (dollars in millions) Allowance for doubtful accounts: Column A Column B Column C Column D Column E Description Balance at beginning of year Additions charged to costs and expenses(1) Deductions(2) Balance at end of year Year ended December31, 2009 $ 6.7 $ 2.2 $ (2.7 ) $ 6.2 Year ended December31, 2008 14.1 7.9 (15.3 ) 6.7 Year ended December31, 2007 13.7 8.1 (7.7 ) 14.1 (1) 2007 includes $1.5million related to the Mayne Pharma acquisition. (2) Represents accounts written off as uncollectible, net of collections on accounts previously written off. 2008 includes $4.0million of certain reclassifications. Inventory reserves: Column A Column B Column C Column D Column E Description Balance at beginning of year Additions charged to costs and expenses(1) Deductions Balance at end of year Year ended December31, 2009 $ 67.8 $ 125.1 $ (82.2 ) 110.7 Year ended December31, 2008 64.8 62.3 (59.3 ) 67.8 Year ended December31, 2007 48.2 54.3 (37.7 ) 64.8 (1) The increase in 2009 relates to product portfolio optimization charges associated with Project Fuel and product corrective action related charges. Includes $15.1million related to the 2007Mayne Pharma acquisition.

Document and Entity Information

Document and Entity Information (USD $)
In Millions, except Share data	12 Months Ended Dec. 31, 2009	Feb. 05, 2010	Jun. 30, 2009
Document and Entity Information
Entity Registrant Name	HOSPIRA INC
Entity Central Index Key	0001274057
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			6201.4
Entity Common Stock, Shares Outstanding		163,850,606