Hospira 8-K Hospira Reports Third-quarter 2007 Results

Exhibit 99.1

Version 9 Draft 4 — 11/2/07 — 5pm Not For Immediate
Release

HOSPIRA REPORTS THIRD-QUARTER 2007 RESULTS

— Reaffirms Earnings Projections for 2007 —

LAKE FOREST, Ill., Nov. 8, 2007 — Hospira, Inc. (NYSE: HSP), a leading global hospital products company, today reported results for the third quarter ended Sept. 30, 2007.

•Net sales increased 29.6 percent to $838.0 million in the third quarter of 2007, compared to $646.6 million in the third quarter last year. Net sales excluding Mayne Pharma sales grew 4.0 percent.

•Adjusted* third-quarter 2007 diluted earnings per share were $0.49 versus $0.45 in 2006. GAAP third-quarter 2007 diluted earnings per share were $0.37 versus $0.35 for the same period last year.

“The third quarter was one of solid growth for Hospira’s core products and continued progress across the company, and we remain on track to achieve our 2007 earnings projections,” said Christopher B. Begley, chairman and chief executive officer. “We’re on schedule with our Mayne Pharma integration, and we recently achieved another milestone toward launching our first biogeneric next year in Europe. In advancing our strategies, we are positioning Hospira for sustained future growth.”

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HOSPIRA REPORTS THIRD-QUARTER 2007 RESULTS
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Third-quarter Financial Highlights

The following table highlights net sales, net income and diluted earnings per share (EPS) results for the quarter ended Sept. 30:

In $ millions, except per share amounts	GAAP Three Months Ended Sept. 30,				%	Adjusted* Three Months Ended Sept. 30,				%
	2007		2006		Change	2007		2006		Change
Net Sales	$	838.0	$	646.6	29.6%	n/a		n/a		n/a
Net Income	$	59.4	$	55.9	6.1%	$	78.7	$	72.9	7.9	%
Diluted EPS	$	0.37	$	0.35	5.7%	$	0.49	$	0.45	8.9	%

The primary components of the year-over-year increase in net sales for the third quarter are as follows:

•Mayne Pharma acquisition — 25.6 percentage points;

•Favorable volume/mix in the legacy Hospira business — 2.1 percentage points;

•Favorable pricing in the U.S. — 0.9 percentage point; and

•Favorable foreign currency translation — 0.9 percentage point.

A schedule detailing sales by product line for the three-month and nine-month periods ended Sept. 30, 2007 and 2006 is attached to this press release.

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In conjunction with the previous table, the following summarizes the financial results for the third quarter of 2007 compared to the same period in 2006:

In $ millions	GAAP Three Months Ended Sept. 30,						%	Adjusted* Three Months Ended Sept. 30,						%
	2007			2006			Change	2007			2006			Change
Gross Profit	$	294.5		$	219.0		34.5%	$	316.5		$	237.6		33.2	%
R&D	$	51.4		$	36.5		41.0%	$	50.8		$	36.2		40.2	%
S,G&A	$	136.5		$	103.5		31.9%	$	129.4		$	99.6		30.0	%
Income from Operations	$	106.6		$	79.1		34.9%	$	136.4		$	101.8		33.9	%
Statistics (as a % of Net Sales)
Gross Profit	35.1		%	33.9		%		37.8		%	36.7		%
R&D	6.1		%	5.6		%		6.1		%	5.6		%
S,G&A	16.3		%	16.0		%		15.4		%	15.4		%
Income from Operations	12.7		%	12.2		%		16.3		%	15.7		%

Results under U.S. Generally Accepted Accounting Principles (GAAP) include amortization of intangibles resulting from the Mayne Pharma acquisition and the Mayne Pharma integration charges in 2007; charges related to Hospira’s manufacturing optimization initiatives in 2007 and 2006; and other items as detailed in the schedules attached to this press release.

The year-over-year improvement in adjusted* gross profit as a percentage of net sales, or gross margin, was driven by the inclusion of Mayne Pharma in the consolidated results and a better mix of Hospira legacy products.

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The inclusion of the results of Mayne Pharma accounted for most of the increase in adjusted* Research and Development (R&D) and the adjusted* Selling, General and Administrative (S,G&A). The increase in R&D was also driven by higher spending related to the clinical trials for Precedex^Ò, a proprietary drug for conscious sedation.  Broad-based inflation also affected the adjusted* S,G&A results.

The increase in adjusted* income from operations as a percentage of net sales, or operating margin, was driven by the higher gross margin, which was partially offset by higher adjusted* R&D as a percentage of sales.

Nine-month Financial Highlights

The following table highlights the key financial metrics for the first nine months of 2007 compared to the same period in 2006:

In $ millions, except per  share amounts	GAAP Nine Months Ended Sept. 30,				%		Adjusted* Nine Months Ended Sept. 30,				%
	2007		2006		Change		2007		2006		Change
Net Sales	$	2,490.2	$	1,982.0	25.6%		n/a		n/a		n/a
Net Income	$	60.7	$	190.3	(68.1%	)	$	250.6	$	244.0	2.7	%
Diluted EPS	$	0.38	$	1.18	(67.8%	)	$	1.57	$	1.51	4.0	%

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Results under GAAP include the effects of the write-off of acquired in-process R&D relating to the Mayne Pharma acquisition, purchase accounting charges and amortization of intangibles resulting from the Mayne Pharma acquisition, and the Mayne Pharma integration charges in 2007; charges related to Hospira’s manufacturing optimization initiatives in 2007 and 2006; and other items as detailed in the schedules attached to this press release.

Cash Flow

Cash flow from operations for the first nine months of 2007 was $354.5 million, up from $331.9 million in 2006.

Capital expenditures were $128.7 million for the first nine months of 2007, compared to $183.6 million for the same period in 2006. The decline is due to lower expenditures in 2007 related to the company’s manufacturing optimization initiatives and to information technology as the company completed the build-out of its independent system in 2006.

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HOSPIRA REPORTS THIRD-QUARTER 2007 RESULTS
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2007 Projections

Hospira continues to project that adjusted* diluted earnings per share for 2007 will be in the range of $2.11 to $2.16. The reconciliation between the projected adjusted* diluted earnings per share and GAAP earnings per share is:

Diluted earnings per share — adjusted*	$2.11 - $2.16
Estimated charges related to previously
announced manufacturing optimization
initiatives (mid-point of an estimated range of
$0.13 to $0.17 per diluted share for 2007)	($0.15	)
Estimated integration and other acquisition-related
expenses (mid-point of an estimated range of
$0.18 to $0.22 per diluted share for 2007)	($0.20	)
Estimated purchase accounting charges, which
include acquired in-process R&D and inventory step-up
charges resulting from the Mayne Pharma acquisition
(mid-point of an estimated range of $0.74 to $0.76
per diluted share for 2007)	($0.75	)
Estimated $49 million for the amortization of
intangibles related to the Mayne Pharma acquisition
(11 months of 2007)	($0.21	)
Diluted earnings per share — GAAP	$0.80 - $0.85

The company continues to expect net sales growth for 2007 to be approximately 26 to 28 percent. Excluding Mayne Pharma sales, the company expects net sales growth to be in its previously projected range of 3 to 4 percent.

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The company continues to project that cash flow from operations in 2007 will be in the $450 million to $500 million range. The company also continues to expect that depreciation and amortization, excluding amortization of intangibles related to the Mayne Pharma acquisition, will be between $185 million and $195 million. Capital expenditures are now projected to be between $220 million and $240 million.

*Use of Non-GAAP Financial Measures

Non-GAAP financial measures used in this press release are reconciled to the most comparable measures calculated in accordance with GAAP in the schedules attached to this release. For more information regarding these non-GAAP financial measures, please see Hospira’s Current Report on Form 8-K filed with the Securities and Exchange Commission on the date of this press release.

Webcast

Hospira will hold a conference call for investors and media at 8 a.m. Central Time on Thursday, Nov. 8, 2007. A live webcast of the conference call will be available at www.hospirainvestor.com. Listeners should log on approximately 10 minutes in advance to ensure proper computer setup for receiving the webcast. A replay will be available on the Hospira Web site for 30 days following the call.

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HOSPIRA REPORTS THIRD-QUARTER 2007 RESULTS
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About Hospira

Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness™ by developing, manufacturing and marketing products that help improve the productivity, safety and efficacy of patient care. In February 2007, Hospira acquired Mayne Pharma Limited to become the world leader in specialty generic injectable pharmaceuticals. With 70 years of service to the hospital industry, Hospira’s portfolio includes one of the industry’s broadest lines of generic acute-care and oncology injectables, which help address the high cost of proprietary pharmaceuticals; and integrated solutions for medication management and infusion therapy. Headquartered north of Chicago in Lake Forest, Ill., Hospira has approximately 15,000 employees worldwide. Hospira’s news releases and other information can be found at www.hospira.com.

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HOSPIRA REPORTS THIRD-QUARTER 2007 RESULTS
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Private Securities Litigation Reform Act of 1995 —
A Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including projections of certain measures of Hospira’s results of operations, projections of certain charges and expenses, statements regarding the financial impact of the acquisition of Mayne Pharma, and other statements regarding Hospira’s goals and strategy. Hospira cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Hospira’s operations and may cause actual results to be materially different from expectations include the risks, uncertainties and factors discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Hospira’s Annual Report on Form 10-K for the year ended Dec. 31, 2006, and subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission, which are incorporated by reference. Hospira undertakes no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.

Contacts:

Media	Financial Community
Stacey Eisen	Lynn McHugh
(224) 212-2276	(224) 212-2363
Jason Hodges
(224) 212-2863

###

Hospira, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(dollars and shares in thousands, except for per share amounts)

	Three Months Ended September 30,										% Change		Nine Months Ended September 30,											% Change
	2007					2006							2007					2006
Net sales	$			838,019		$			646,640		29.6	%	$		2,490,173			$		1,982,035				25.6	%
Cost of products sold	543,488					427,612					27.1	%	1,654,855					1,293,125						28.0	%
Gross Profit	294,531					219,028					34.5	%	835,318					688,910						21.3	%
Research and development	51,409					36,470					41.0	%	147,478					106,526						38.4	%
Acquired in-process research and development	—					—					nm		84,800					—						nm
Selling, general and administrative	136,495					103,506					31.9	%	414,393					316,373						31.0	%
Income From Operations	106,627					79,052					34.9	%	188,647					266,011						(29.1	)%
Interest expense	34,675					8,059					330.3	%	102,541					22,999						345.8	%
Other income, net	(6,138				)	(4,099				)	49.7	%	(12,014			)		(12,394				)		(3.1	)%
Income Before Income Taxes	78,090					75,092					4.0	%	98,120					255,406						(61.6	)%
Income tax expense	18,711					19,147					(2.3	%)	37,419					65,128						(42.5	)%
Net Income	$	59,379				$		55,945			6.1	%	$	60,701					$		190,278		(68.1		)%
Earnings Per Common Share:
Basic	$		0.38			$	0.36				5.6	%	$	0.39			$				1.21			(67.8	)%
Diluted	$		0.37			$	0.35				5.7	%	$	0.38			$				1.18			(67.8	)%
Weighted Average Common Shares Outstanding:
Basic	157,091					156,359					0.5	%	156,628				157,897							(0.8	)%
Diluted	160,072					158,781					0.8	%	159,528				161,214							(1.0	)%

nm = Percent change is not meaningful.

Hospira, Inc.

Reconciliation of Condensed Consolidated Statements of Income

(Unaudited)

(dollars and shares in thousands, except per share amounts)

	Three Months Ended September 30,																		% Change vs.
	2007									2006									Prior Year
	GAAP			Adjustments			Adjusted			GAAP			Adjustments			Adjusted			GAAP		Adjusted
Net sales	$	838,019		$	—		$	838,019		$	646,640		$	—		$	646,640		29.6	%	29.6	%
Cost of products sold	543,488			(21,983		)A	521,505			427,612			(18,566		)D	409,046			27.1	%	27.5	%
Gross Profit	294,531			21,983			316,514			219,028			18,566			237,594			34.5	%	33.2	%
Research and development	51,409			(635		)B	50,774			36,470			(262		)E	36,208			41.0	%	40.2	%
Selling, general and administrative	136,495			(7,105		)B	129,390			103,506			(3,943		)E	99,563			31.9	%	30.0	%
Income From Operations	106,627			29,723			136,350			79,052			22,771			101,823			34.9	%	33.9	%
Interest expense	34,675			—			34,675			8,059			—			8,059			330.3	%	330.3	%
Other income, net	(6,138		)	—			(6,138		)	(4,099		)	—			(4,099		)	49.7	%	49.7	%
Income Before Income Taxes	78,090			29,723			107,813			75,092			22,771			97,863			4.0	%	10.2	%
Income tax expense	18,711			10,399		C	29,110			19,147			5,807		C	24,954			(2.3	)%	16.7	%
Net Income	$	59,379		$	19,324		$	78,703		$	55,945		$	16,964		$	72,909		6.1	%	7.9	%
Earnings Per Common Share:
Basic	$	0.38		$	0.12		$	0.50		$	0.36		$	0.11		$	0.47		5.6	%	6.4	%
Diluted	$	0.37		$	0.12		$	0.49		$	0.35		$	0.10		$	0.45		5.7	%	8.9	%
Weighted Average Common Shares Outstanding:
Basic	157,091			157,091			157,091			156,359			156,359			156,359			0.5	%	0.5	%
Diluted	160,072			160,072			160,072			158,781			158,781			158,781			0.8	%	0.8	%
Statistics (as a % of Net Sales, except for income tax rate)
Gross Profit	35.1		%				37.8		%	33.9		%				36.7		%
R&D	6.1		%				6.1		%	5.6		%				5.6		%
S, G&A	16.3		%				15.4		%	16.0		%				15.4		%
Income From Operations	12.7		%				16.3		%	12.2		%				15.7		%
Income Before Income Taxes	9.3		%				12.9		%	11.6		%				15.1		%
Net Income	7.1		%				9.4		%	8.7		%				11.3		%
Income Tax Rate	24.0		%				27.0		%	25.5		%				25.5		%

A —	Includes intangible assets amortization of $13,350 related to the Mayne Pharma acquisition; charges of $7,991 related to the planned closures of the Donegal, Ireland; Ashland, OH; Montreal, Canada; and North Chicago, IL facilities as part of Hospira's manufacturing optimization initiatives; and Mayne Pharma integration charges of $642.
B —	Acquisition integration charges.
C —	Reflects the tax effect of the above adjustments.
D —	Includes charges of $18,291 related to the planned closures of the Donegal, Ireland; Ashland, OH; Montreal, Canada; and North Chicago, IL facilities as part of Hospira's manufacturing optimization initiatives; and non-recurring transition charges of $275.
E —	Non-recurring transition charges as a result of the spin-off.

nm = Percent change is not meaningful.

Hospira, Inc.

Reconciliation of Condensed Consolidated Statements of Income

(Unaudited)

(dollars and shares in thousands, except per share amounts)

	Nine Months Ended September 30,																		% Change vs.
	2007									2006									Prior Year
	GAAP			Adjustments			Adjusted			GAAP			Adjustments			Adjusted			GAAP		Adjusted
Net sales	$	2,490,173		$	—		$	2,490,173		$	1,982,035		$	—		$	1,982,035		25.6	%	25.6	%
Cost of products sold	1,654,855			(126,081		)A	1,528,774			1,293,125			(45,697		)G	1,247,428			28.0	%	22.6	%
Gross Profit	835,318			126,081			961,399			688,910			45,697			734,607			21.3	%	30.9	%
Research and development	147,478			(1,277		)B	146,201			106,526			(3,266		)H	103,260			38.4	%	41.6	%
Acquired in-process research and development	84,800			(84,800		)C	—			—			—			—			nm		nm
Selling, general and administrative	414,393			(25,153		)B	389,240			316,373			(23,144		)H	293,229			31.0	%	32.7	%
Income From Operations	188,647			237,311			425,958			266,011			72,107			338,118			(29.1	)%	26.0	%
Interest expense	102,541			(2,265		)D	100,276			22,999			—			22,999			345.8	%	336.0	%
Other income, net	(12,014		)	(5,653		)E	(17,667		)	(12,394		)	—			(12,394		)	(3.1	)%	42.5	%
Income Before Income Taxes	98,120			245,229			343,349			255,406			72,107			327,513			(61.6	)%	4.8	%
Income tax expense	37,419			55,285		F	92,704			65,128			18,387		F	83,515			(42.5	)%	11.0	%
Net Income	$	60,701		$	189,944		$	250,645		$	190,278		$	53,720		$	243,998		(68.1	)%	2.7	%
Earnings Per Common Share:
Basic	$	0.39		$	1.21		$	1.60		$	1.21		$	0.34		$	1.55		(67.8	)%	3.2	%
Diluted	$	0.38		$	1.19		$	1.57		$	1.18		$	0.33		$	1.51		(67.8	)%	4.0	%
Weighted Average Common Shares Outstanding:
Basic	156,628			156,628			156,628			157,897			157,897			157,897			(0.8	)%	(0.8	)%
Diluted	159,528			159,528			159,528			161,214			161,214			161,214			(1.0	)%	(1.0	)%
Statistics (as a % of Net Sales, except for income tax rate)
Gross Profit	33.5		%				38.6		%	34.8		%				37.1		%
R&D	5.9		%				5.9		%	5.4		%				5.2		%
S, G&A	16.6		%				15.6		%	16.0		%				14.8		%
Income From Operations	7.6		%				17.1		%	13.4		%				17.1		%
Income Before Income Taxes	3.9		%				13.8		%	12.9		%				16.5		%
Net Income	2.4		%				10.1		%	9.6		%				12.3		%
Income Tax Rate	38.1		%				27.0		%	25.5		%				25.5		%

A —	Includes inventory step-up charge of $53,113 and intangible assets amortization of $34,940 related to the Mayne Pharma acquisition; charges of $33,434 related to the planned closures of the Donegal, Ireland; Ashland, OH; Montreal, Canada; and North Chicago, IL facilities as part of Hospira's manufacturing optimization initiatives; a reduction of the obligation associated with the 2005 sale of the Salt Lake City manufacturing plant to ICU Medical ($1,579); and Mayne Pharma integration charges of $6,173.
B —	Acquisition integration charges.
C —	Acquired in-process research and development related to the acquisition of Mayne Pharma.
D —	Other acquisition-related charge: bridge loan fees incurred as a result of the Mayne Pharma acquisition expensed upon refinancing of loan during the first quarter.
E —	Other acquisition-related charge: foreign exchange losses related to the Mayne Pharma acquisition.
F —	Reflects the tax effect of the above adjustments, except for the non-tax deductible write-off of acquired in-process research and development related to the Mayne Pharma acquisition in 2007.
G —	Includes charges of $50,242 related to the planned closures of the Donegal, Ireland; Ashland, OH; Montreal, Canada; and North Chicago, IL facilities as part of Hospira's manufacturing optimization initiatives; a reduction of the obligation associated with the sale of the Salt Lake City manufacturing plant to ICU Medical ($1,100); a gain on the sale of the Donegal, Ireland facility ($7,851); and non-recurring transition charges of $4,406.
H —	Non-recurring transition charges as a result of the spin-off.

nm = Percent change is not meaningful.

Hospira, Inc.

Reconciliation of Diluted Earnings Per Share

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007			2006
Diluted Earnings Per Share - GAAP	$	0.37	$	0.35	$	0.38		$	1.18
Adjustments:
Mayne Pharma acquisition related:
Acquired in-process research and development	—		—		0.53			—
Inventory step-up charge	—		—		0.23			—
Integration and other acquisition-related charges	0.03		—		0.16			—
Intangible assets amortization	0.06		—		0.15			—
Charges related to manufacturing optimization initiatives	0.03		0.08		0.13			0.23
Non-recurring transition charges as a result of the spin-off	—		0.02		—			0.14
Gain on the sale of the Donegal, Ireland facility	—		—		—			(0.04		)
Reduction of obligation related to the 2005 sale of the Salt Lake City, UT manufacturing plant	—		—		(0.01		)	(0.01		)
Subtotal of Adjustments	0.12		0.10		1.19			0.33
Diluted Earnings per Share - Adjusted	$	0.49	$	0.45	$	1.57		$	1.51

Adjustment figures may not add due to rounding.

Hospira, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(dollars in thousands)

	September 30,		December 31,
	2007		2006
Assets
Current Assets:
Cash and cash equivalents	$	236,428	$	322,045
Net trade receivables	565,988		335,334
Inventories	820,702		626,934
Prepaid expenses, deferred income taxes and other receivables	245,721		238,577
Total Current Assets	1,868,839		1,522,890
Net property and equipment	1,245,456		1,039,431
Intangible assets, net of amortization	544,467		17,103
Goodwill	1,254,005		91,857
Deferred income taxes	68,182		76,367
Investments	29,399		31,341
Other assets	70,063		68,598
Total Assets	$	5,080,411	$	2,847,587
Liabilities and Shareholders’ Equity
Current Liabilities:
Short-term borrowings	$	96,557	$	4,532
Trade accounts payable	188,204		130,968
Salaries, wages and commissions	132,709		102,037
Other accrued liabilities	397,829		368,689
Total Current Liabilities	815,299		606,226
Long-term debt	2,273,944		702,044
Post-retirement obligations, deferred income taxes and other long-term liabilities	374,502		178,228
Commitments and Contingencies
Shareholders’ Equity	1,616,666		1,361,089
Total Liabilities and Shareholders’ Equity	$	5,080,411	$	2,847,587

Hospira, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(dollars in thousands)

	Nine Months Ended September 30,
	2007			2006
Cash Flow From Operating Activities:
Net income	$	60,701		$	190,278
Adjustments to reconcile net income to net cash from operating activities—
Depreciation	136,191			114,731
Amortization of intangibles	37,081			1,446
Write-off of acquired in-process research and development	84,800			—
Stock-based compensation expense	31,603			27,819
Changes in assets and liabilities—
Trade receivables	(25,650		)	(23,979		)
Inventories	49,701			(101,637		)
Prepaid expenses and other assets	5,676			(13,648		)
Trade accounts payable	(8,115		)	36,090
Other liabilities	(47,392		)	60,728
Other, net	29,889			40,037
Net Cash Provided by Operating Activities	354,485			331,865
Cash Flow From Investing Activities:
Capital expenditures (including instruments placed with or leased to customers)	(128,674		)	(183,632		)
Acquisition of Mayne Pharma, net of cash acquired	(1,961,285		)	—
Settlements of foreign currency contracts	(55,701		)	—
Proceeds from dispositions of product rights	13,771			—
Other, net	(1,263		)	1,845
Net Cash Used in Investing Activities	(2,133,152		)	(181,787		)
Cash Flow From Financing Activities:
Issuance of long-term debt, net of fees paid	3,336,198			—
Repayment of long-term debt	(1,700,124		)	(111		)
Other borrowings, net	(343		)	1,955
Payment to Abbott Laboratories for international assets	—			(124,251		)
Common stock repurchased	—			(299,766		)
Excess tax benefit from stock-based compensation arrangements	865			3,373
Proceeds from stock options exercised	40,464			39,576
Net Cash Provided by (Used in) Financing Activities	1,677,060			(379,224		)
Effect of exchange rate changes on cash and cash equivalents	15,990			2,128
Net change in cash and cash equivalents	(85,617		)	(227,018		)
Cash and cash equivalents at beginning of period	322,045			520,610
Cash and cash equivalents at end of period	$	236,428		$	293,592
Supplemental Cash Flow Information:
Cash paid during the period-
Interest	$	57,663		$	23,434
Income taxes, net	$	57,623		$	21,224

Hospira, Inc.

Net Sales by Product Line

(Unaudited)

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007		2006		% Change		2007		2006		% Change
U.S. —
Specialty Injectable Pharmaceuticals	$	208,363	$	198,362	5.0	%	$	619,761	$	590,915	4.9	%
Medication Delivery Systems	216,245		199,029		8.6	%	660,049		626,498		5.4	%
Injectable Pharmaceutical Contract Manufacturing	33,518		38,090		(12.0	)%	111,632		139,879		(20.2	)%
Sales to Abbott Laboratories	18,604		25,038		(25.7	)%	55,791		70,860		(21.3	)%
Mayne Pharma	26,262		—		nm		75,862		—		nm
Other	71,175		72,506		(1.8	)%	213,029		211,749		0.6	%
Total U.S.	574,167		533,025		7.7	%	1,736,124		1,639,901		5.9	%
International —
Sales to Third Parties	112,637		97,277		15.8	%	334,470		290,232		15.2	%
Sales to Abbott Laboratories	11,972		16,338		(26.7	)%	37,882		51,902		(27.0	)%
Mayne Pharma	139,243		—		nm		381,697		—		nm
Total International	263,852		113,615		132.2	%	754,049		342,134		120.4	%
Net Sales	$	838,019	$	646,640	29.6	%	$	2,490,173	$	1,982,035	25.6	%
Net Sales excluding Mayne Pharma	$	672,514	$	646,640	4.0	%	$	2,032,614	$	1,982,035	2.6	%

nm = Percent change is not meaningful.

Hospira, Inc.

Segment Information

(Unaudited)

(dollars in thousands)

	Three Months Ended September 30,
	Net Sales						Income from Operations
	2007		2006		% Change		2007			2006			% Change
U.S.	$	574,167	$	533,025	7.7	%	$	104,384	A	$	80,623	A	29.5	%
International	263,852		113,615		132.2	%	22,127		B	10,831		B	104.3	%
Total reportable segments	$	838,019	$	646,640	29.6	%	126,511			91,454			38.3	%
Corporate functions							(19,884		)C	(12,402		)C	60.3	%
Income from operations							106,627			79,052			34.9	%
Other, net							(28,537		)D	(3,960		)	nm
Income before income taxes							$	78,090		$	75,092		4.0	%

Included in the reported Income before income taxes above, are the following charges:
A — U.S.
Mayne Pharma acquisition related:
Acquired in-process research and development	$	—	$	—
Inventory step-up charge	—		—
Integration and other acquisition-related charges	1,285		—
Intangible assets amortization	3,270		—
Charges related to manufacturing optimization initiatives	4,804		9,749
Non-recurring transition charges as a result of the spin-off, integration and other acquisition-related charges	454		3,605
Reduction of obligation related to the 2005 sale of the Salt Lake City, UT manufacturing plant	—		—
Total U.S.	9,813		13,354
B — International
Mayne Pharma acquisition related:
Acquired in-process research and development	—		—
Inventory step-up charge	—		—
Integration and other acquisition-related charges	1,643		—
Intangible assets amortization	10,080		—
Charges related to manufacturing optimization initiatives	3,187		8,542
Non-recurring transition charges as a result of the spin-off	—		663
Gain on the sale of the Donegal, Ireland facility	—		—
Total International	14,910		9,205
C — Corporate
Integration and other acquisition-related charges	5,000		—
Non-recurring transition charges as a result of the spin-off	—		212
Total Corporate	5,000		212
D — Other, net
Integration and other acquisition-related charges	—		—
Total Other, net	—		—
Total	$	29,723	$	22,771

nm = Percent change is not meaningful.

Hospira, Inc.

Segment Information

(Unaudited)

(dollars in thousands)

	Nine Months Ended September 30,
	Net Sales								Income from Operations
	2007			2006			% Change		2007			2006			% Change
U.S.	$		1,736,124	$		1,639,901	5.9	%	$	211,600	A	$	277,738	E	(23.8	)%
International	754,049			342,134			120.4	%	34,378		B	29,445		F	16.8	%
Total reportable segments	$	2,490,173		$	1,982,035		25.6	%	245,978			307,183			(19.9	)%
Corporate functions									(57,331		)C	(41,172		)G	39.2	%
Income from operations									188,647			266,011			(29.1	)%
Other, net									(90,527		)D	(10,605		)	nm
Income before income taxes									$	98,120		$	255,406		(61.6	)%

Included in the reported Income before income taxes above, are the following charges:
A — U.S.
Mayne Pharma acquisition related:
Acquired in-process research and development	$	66,300		$	—
Inventory step-up charge	11,171			—
Integration and other acquisition-related charges	13,638			—
Intangible assets amortization	8,720			—
Charges related to manufacturing optimization initiatives	24,162			25,506
Non-recurring transition charges as a result of the spin-off, integration and other acquisition-related charges	566			19,890
Reduction of obligation related to the 2005 sale of the Salt Lake City, UT manufacturing plant	(1,579		)	(1,100		)
Total U.S.	122,978			44,296
B — International
Mayne Pharma acquisition related:
Acquired in-process research and development	18,500			—
Inventory step-up charge	41,942			—
Integration and other acquisition-related charges	3,085			—
Intangible assets amortization	26,220			—
Charges related to manufacturing optimization initiatives	9,272			24,736
Non-recurring transition charges as a result of the spin-off	—			8,326
Gain on the sale of the Donegal, Ireland facility	—			(7,851		)
Total International	99,019			25,211
C — Corporate
Integration and other acquisition-related charges	15,314			—
Non-recurring transition charges as a result of the spin-off	—			2,600
Total Corporate	15,314			2,600
D — Other, net
Integration and other acquisition-related charges	7,918			—
Total Other, net	7,918			—
Total	$	245,229		$	72,107

nm = Percent change is not meaningful.