Exhibit 3 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

February 22, 2006

Date of Report (Date of Earliest Event Reported)

HOSPIRA, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

275 N. Field Drive

Lake Forest, Illinois 60045

(Address Of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, Including Area Code: (224) 212-2000

Not Applicable

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the 

following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

1-31946 20-0504497

(Commission File Number) (I.R.S. Employer Identification No.)

Source: HOSPIRA, INC., 8-K, 2/28/2006 | Powered by Intelligize
Item 1.01 Entry into a Material Definitive Agreement

On February 22, 2006, the nominations and compensation committee of Hospira’s board of directors approved the performance measures 

by which 2006 awards will be determined under the Hospira, Inc. 2004 Performance Incentive Plan. Hospira’s named executive officers are

participants in that plan. The committee will consider Hospira’s earnings (adjusted as described in the press release announcing Hospira’s results 

of operations), cash flows, net sales and corporate well-being for purposes of determining 2006 plan awards.

Item 2.02 Results of Operations and Financial Condition

On February 28, 2006, Hospira issued a press release announcing its 2005 fourth-quarter and full-year results of operations. Such press 

release is furnished as Exhibit 99.1, and incorporated by reference into this Item 2.02. In such press release, Hospira uses various non-GAAP 

financial measures. Please refer to the section of the press release entitled “*Use of Non-GAAP Financial Measures” for further information 

regarding those non-GAAP financial measures.

Item 7.01 Other Regulation FD Disclosure

On February 28, 2005, Hospira issued a press release announcing that its board of directors approved a $400 million share repurchase 

program. Such press release is furnished as Exhibit 99.2, and incorporated by reference into this Item 7.01.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits.

Exhibits 99.1 and 99.2 are furnished pursuant to Items 2.02 and 7.01 hereof, respectively, and should not be deemed to be “filed” under the 

Securities Exchange Act of 1934.

2

Exhibit No. Exhibit

99.1 Press Release, dated February 28, 2006, announcing 2005 fourth-quarter and full-year results of operations.

99.2 Press Release, dated February 28, 2006, announcing that Hospira’s board of directors approved a $400 million 

share repurchase program.

Source: HOSPIRA, INC., 8-K, 2/28/2006 | Powered by Intelligize
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf 

by the undersigned hereunto duly authorized.

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HOSPIRA, INC.

Dated: February 28, 2006 /s/ Brian J. Smith

By: Brian J. Smith

Its: Senior Vice President, General

Counsel and Secretary

Source: HOSPIRA, INC., 8-K, 2/28/2006 | Powered by Intelligize
INDEX OF EXHIBITS

4

Exhibit Description

99.1 Press Release, dated February 28, 2006, announcing 2005 fourth-quarter and full-year results of operations.

99.2 Press Release, dated February 28, 2006, announcing that Hospira’s board of directors approved a $400 million share 

repurchase program.

Source: HOSPIRA, INC., 8-K, 2/28/2006 | Powered by Intelligize
Exhibit 99.1

For Immediate Release

HOSPIRA REPORTS FOURTH-QUARTER AND FULL-YEAR 2005 RESULTS

— Provides Sales and Earnings Projections for 2006 —

• Net sales for the full year of 2005 were $2.63 billion, down 0.7 percent over 2004. Core net sales* for the year grew 5.0 percent. For the

fourth quarter, net sales were $646.2 million, down 7.7 percent from the fourth quarter of 2004.

• Adjusted* full-year diluted earnings per share were $1.91 versus $1.82 for 2004. Adjusted* fourth-quarter diluted earnings per share were

$0.32 versus $0.40 last year.

• GAAP full-year diluted earnings per share were $1.46 versus $1.92 in 2004. GAAP fourth-quarter diluted earnings per share were $0.16

versus $0.31 last year.

LAKE FOREST, Ill., Feb. 28, 2006 — Hospira, Inc. (NYSE:HSP), one of the largest hospital products manufacturers in the United States,

today reported results for the fourth quarter and full year ended Dec. 31, 2005.

“We completed our first full year as a public company with strong operating results,” said Christopher B. Begley, chief executive officer,

Hospira. “Our core net sales* grew 5 percent in 2005 — better than our expectations — and we made substantial progress in what was a critical

year of transition for us, thanks to the hard work and commitment of our employees. Looking forward for 2006, we are building on the momentum we

generated in 2005, and expect to see the investments in our new product development begin to pay off. In addition to completing the spin-off

transition in 2006, we will continue to work toward achieving our longer­term financial goals.”

Hospira, Inc.

275 North Field Drive

Lake Forest, IL 60045

www.hospira.com

-MORESource: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Certain results in this press release are discussed on both a U.S. Generally Accepted Accounting Principles (GAAP) and a non-GAAP

(adjusted) basis. A description of the adjusted financial information is provided in the section “Use of Non­GAAP Financial Measures” contained

in this press release. A reconciliation of the adjusted financial information to the most comparable GAAP measure is contained in the schedules

attached to the press release.

Financial and Operating Review

Consolidated net sales in the quarter decreased 7.7 percent to $646.2 million, compared to $700.3 million in the fourth quarter of 2004. A

schedule detailing sales by product line for the fourth quarters and the full years of 2005 and 2004 is attached to this press release.

In the fourth quarter of 2005, compared to the same quarter of 2004, the components of change in consolidated net sales were as follows:

• Termination of the Berlex agreement to distribute its imaging agents — unfavorable (7.5) percentage points,

• Unfavorable impact of 2004 pump lease adjustment relating to prior periods — (2.0) percentage points,

• Foreign currency translation — unfavorable (0.2) percentage point,

• Improved volume and mix (excluding Berlex and the pump lease adjustment noted above) — 0.7 percentage point, and

• Favorable pricing — 1.3 percentage points.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Gross profit in the quarter was $185.3 million, a decrease of 13.3 percent from $213.8 million in the same period last year. Gross margin in the

quarter was 28.7 percent, compared to 30.5 percent in the prior year’s fourth quarter. Adjusted* gross profit declined 2.7 percent to $210.6 million,

compared to $216.3 million in the same quarter of 2004. The adjusted* gross margin for the fourth quarter of 2005 improved to 32.6 percent from 30.9

percent last year.

The adjusted* gross margin improvement was primarily attributable to:

• Improved volume and mix — 3.7 percentage points, of which 1.8 percentage points represented the impact of the termination of the

Berlex agreement,

• Favorable pricing — 0.9 percentage point,

• Higher commodity costs — (1.0) percentage point,

• Favorability in 2004 related to a lower rate of returned goods versus

historical experience — (1.0) percentage point, and

• Higher freight and distribution costs — (0.9) percentage point.

Research and development (R&D) expense rose 7.7 percent in the quarter to $42.1 million, or 6.5 percent of sales, compared to $39.0 million,

or 5.6 percent of sales, in the fourth quarter of 2004. The company continues to increase its investment in R&D as part of its stated strategy to build

its product pipeline to drive longer-term sales growth.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Selling, general and administrative (S,G&A) expense in the quarter was $112.8 million, compared to $107.7 million in the fourth quarter of

2004. As a percentage of sales, S,G&A was 17.5 percent in the quarter, compared to 15.4 percent in 2004. Adjusted* S,G&A expense in the quarter

was $103.9 million, or 16.1 percent of sales, compared to $92.7 million in the fourth quarter of 2004, or 13.2 percent of sales. The increase in the

adjusted* S,G&A primarily was driven by higher ongoing, incremental costs associated with being an independent, public company.

Income from operations in the quarter was $30.4 million, compared to $67.1 million in the fourth quarter of 2004. The operating margin for

the quarter was 4.7 percent, compared to 9.6 percent for the same period in 2004. Adjusted* income from operations in the quarter was $65.1 million,

a decrease of 23.1 percent from $84.7 million in the fourth quarter of 2004. The adjusted* operating margin for the quarter was 10.1 percent,

compared to 12.1 percent in 2004. The decrease was attributable to the higher R&D and S,G&A spending, which more than offset the improvement

in gross margin.

Interest expense in the quarter was $7.3 million, compared to $7.8 million in the same period of 2004. The decline was primarily due to

higher capitalized interest in the current quarter.

Other income was $5.7 million in the quarter, compared to other income of $1.5 million for 2004. The majority of the change is due to higher

interest income.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Net income in the quarter was $26.6 million, compared to $49.5 million in the fourth quarter of 2004. Adjusted* net income for the quarter

decreased 15.2 percent to $53.4 million, from $62.9 million in 2004. The tax rate for the quarter was 7.4 percent, compared to 18.6 percent in 2004. The

company’s tax rate for the full year, excluding taxes of $9.1 million related to the repatriation of foreign earnings under the Jobs Creation Act of

2004, was 24.0 percent. This full-year rate was a decrease from the previously projected annual rate of 25.5 percent, primarily due to two factors: the

proportionately greater-than-projected mix of income from lower-tax-rate jurisdictions, which was partially driven by the previously announced

impairment charges, and a reduction in state tax expense due to certain state tax credits earned. As a result, the 2005 fourth-quarter tax rate reflects

the adjustment necessary to provide for income taxes at the 24.0 percent rate for the full year, excluding the impact of the repatriation.

Full-Year 2005 Results

Results for the full year of 2005 reflect the company’s status as an independent public company. The 12 months of 2004 reflect results for

the business operated as a part of Abbott Laboratories for the months of January through April, and as a stand-alone business for the subsequent

eight months.

Consolidated net sales for 2005 were $2.63 billion compared to $2.65 billion in 2004, a decrease of 0.7 percent. Net sales for the year were

favorably affected by foreign currency translation of $9.3 million. Excluding the benefit from foreign currency translation, net sales declined 1.0

percent over 2004.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Net income was $235.6 million, compared to $301.6 million in 2004. Diluted earnings per share were $1.46, compared to $1.92 last year.

Adjusted* net income was $308.5 million, compared to $285.6 million last year. Adjusted* diluted earnings per share in 2005 were $1.91, compared to

$1.82 in the prior year.

Cash Flow Items

Cash flow from operations for 2005 was $571.1 million, compared to $387.0 million in 2004.

Depreciation and amortization expense was $156.3 million for 2005, compared to $145.5 million in 2004. The increase is due to higher levels

of capital spending.

Capital expenditures were $256.1 million for 2005, compared to $228.9 million for 2004. The increase is driven by spending related to

building the company’s independent infrastructure, capacity expansion and ongoing projects.

Projections for 2006

Hospira projects that annual net sales growth for the 2006 year will be in the 4 to 6 percent range.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Adjusted* diluted earnings per share for 2006, which exclude the items listed below, are projected to be in the range of $2.05 to $2.10. The

adjusted* operating margin is estimated to be in the 17.0 to 17.5 percent range, excluding options expense.

The reconciliation between the projected adjusted* diluted earnings per share and earnings per share on a GAAP basis is:

Diluted earnings per share — adjusted* $ 2.05 - $2.10

Estimated non-recurring transition expenses related to transitioning into an independent, stand-alone

company (mid-point of an estimated $0.10 to $0.12 per diluted share range for 2006) $ (0.11)

Estimated charges related to previously announced manufacturing optimization initiatives (mid-point of an

estimated $0.25 to $0.29 per diluted share range for 2006) $ (0.27)

Diluted earnings per share — excluding options expense $ 1.67 - $1.72

Estimated stock option expense $ (0.15)

Diluted earnings per share — GAAP basis $ 1.52 - $1.57

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
In addition, the company projects that cash flow from operations in 2006 will be in the $520 million to $570 million range. Depreciation and

amortization is projected to range between $150 million to $160 million. Capital expenditures are projected to be in the $230 million to $260 million

range.

*Use of Non-GAAP Financial Measures

In addition to the results reported in accordance with GAAP in the United States included within this press release, Hospira has provided

certain information that is considered to be non­GAAP financial measures. As used in this press release, “adjusted” refers to operating

performance measures that exclude the non-recurring transition expenses in 2005 and 2004 related to becoming an independent, stand-alone

company; charges related to the company’s manufacturing optimization initiatives, which in 2005 included the sale of the Salt Lake City facility to

ICU Medical, Inc. and the planned closing of the Donegal, Ireland facility; impairment charges in 2005 related to the Montreal, Canada and Ashland,

Ohio facilities; the tax impact of the repatriation of foreign earnings in 2005; and a curtailment gain in 2004.

“Core net sales,” as used in this press release, refer to Hospira’s consolidated net sales excluding U.S. and international sales to Abbott,

sales of Berlex imaging agents under the arrangement that terminated during the second quarter of 2005, and the impact of foreign exchange

translation. Management believes that core net sales provide investors an additional measure to assess the underlying sales trend of Hospira’s

ongoing business.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Management believes that the charges, gains and sales which are excluded in the manner described above are not necessarily indicative of

the company’s base business results. Therefore, management believes that these non­GAAP financial measures, when presented together with,

and reconciled to, the comparable measures presented in accordance with GAAP, are useful to both management and investors in their analysis of

the company’s ongoing business and operating performance. Management believes that such presentation enables investors to have more

complete information with which to assess the company’s base results of operation and prospects. Such presentation also facilitates period­toperiod comparison of Hospira’s base operating results. In addition, management uses this information for operational planning and decisionmaking purposes.

Non-GAAP financial measures should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures

as presented by Hospira may not be comparable to similarly titled measures reported by other companies.

In the fourth quarter of 2005, Hospira incurred non-recurring pre-tax transition expenses of $15.0 million ($11.4 million, or $0.07 per share,

after tax) related to establishing an independent infrastructure. Also included in the fourth quarter 2005 GAAP diluted earnings per share are $0.09

per share for charges related to the planned closing of the Donegal, Ireland facility and impairment charges related to the Montreal, Canada and

Ashland, Ohio facilities.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
In the fourth quarter of 2004, Hospira incurred non-recurring pre-tax transition expenses of $17.6 million ($13.4 million, or $0.09 per share,

after tax) related to establishing an independent infrastructure.

For the full year of 2005, Hospira incurred non-recurring pre-tax transition expenses of $46.0 million ($35.0 million, or $0.21 per share, after

tax) related to establishing an independent infrastructure. The company has previously stated that these non-recurring transition expenses are

expected to total approximately $100 million over the 24-month period ending April 30, 2006. Of these costs, a total of $78.4 million has been incurred

through Dec. 31, 2005. Also included in the full-year 2005 GAAP diluted earnings per share are $0.18 per share for charges associated with the

impairment related to the Montreal, Canada and Ashland, Ohio facilities and the company’s manufacturing optimization initiatives, which for 2005

included the planned closing of the company’s Donegal, Ireland facility and the sale of the Salt Lake City manufacturing facility; and $0.06 per

share related to the company’s decision to repatriate undistributed foreign earnings of $175.0 million under the Jobs Creation Act of 2004.

For the 2004 full year, the non-recurring pre-tax transition expenses were $32.4 million ($24.4 million, or $0.16 per share, after tax). The 2004

results also include the one-time, non-cash curtailment gain of $64.6 million ($40.4 million, or $0.26 per share, after tax) recorded in the second

quarter of 2004.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Webcast

A conference call for investors and media will be held at 9 a.m. Central Time, Tuesday, Feb. 28, 2006. 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 to

receive the webcast. A replay will be available on the Hospira Web site for 30 days following the call.

About Hospira

Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing WellnessTM by developing,

manufacturing and marketing products that help improve the productivity, safety and efficacy of patient care. With 70 years of service to the

hospital industry, Hospira’s portfolio includes one of the industry’s broadest lines of generic acute­care injectables, which help address the high

cost of proprietary pharmaceuticals; integrated solutions for medication management and infusion therapy; and the leading U.S. injectable contract

manufacturing business. Headquartered in Lake Forest, Ill., north of Chicago, Hospira has approximately 13,000 employees and 14 manufacturing

facilities worldwide. Hospira’s news releases and other information can be found at www.hospira.com.

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
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 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 factors, risks and uncertainties set

forth under the heading “Item 1 Business — Risk Factors” in Hospira’s Annual Report on Form 10­K for the year ended Dec. 31, 2004, filed with

the Securities and Exchange Commission (SEC) and in Hospira’s other SEC filings, including its quarterly reports on Form 10­Q, 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

Tareta Adams

(224) 212-2535

###

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Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Consolidated Statements of Income

(Unaudited)

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

Three Months Ended December 31 Twelve Months Ended December 31

2005 2004 % Change 2005 2004 % Change

Net sales $ 608,485 $ 654,303 (7.0) $ 2,457,588 $ 2,465,052 (0.3)

Net sales to Abbott

Laboratories 37,665 46,013 (18.1) 169,108 179,984 (6.0)

Total Net Sales 646,150 700,316 (7.7) 2,626,696 2,645,036 (0.7)

Cost of products sold 460,850 486,508 (5.3) 1,777,640 1,858,435 (4.3)

Gross Profit 185,300 213,808 (13.3) 849,056 786,601 7.9

Research and

development 42,067 39,049 7.7 138,834 119,583 16.1

Selling, general and

administrative 112,840 107,664 4.8 373,607 304,004 22.9

Curtailment of postretirement medical

and dental benefits — — nm — (64,636) nm

Income From

Operations 30,393 67,095 (54.7) 336,615 427,650 (21.3)

Interest expense 7,334 7,806 (6.0) 28,276 18,758 50.7

Other (income), net (5,646) (1,484) nm (13,736) (2,628) nm

Income Before

Income Taxes 28,705 60,773 (52.8) 322,075 411,520 (21.7)

Income tax expense 2,128 11,297 (81.2) 86,437 109,968 (21.4)

Net Income $ 26,577 $ 49,476 (46.3) $ 235,638 $ 301,552 (21.9)

Earnings Per Common

Share:

Basic $ 0.16 $ 0.32 (50.0) $ 1.48 $ 1.93 (23.3)

Diluted $ 0.16 $ 0.31 (48.4) $ 1.46 $ 1.92 (24.0)

Weighted Average

Common Shares

Outstanding:

Basic 161,171 156,401 3.0 159,275 156,187 2.0

Diluted 164,144 158,047 3.9 161,634 157,160 2.8

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Reconciliation of Consolidated Statements of Income

(Unaudited)

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

Three Months Ended December 31,

2005 2004 % Change vs. Prior Year

GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjusted

Net sales $ 608,485 $ — $ 608,485 $ 654,303 $ — $ 654,303 (7.0) (7.0)

Net sales to Abbott Laboratories 37,665 — 37,665 46,013 — 46,013 (18.1) (18.1)

Total Net Sales 646,150 — 646,150 700,316 — 700,316 (7.7) (7.7)

Cost of products sold 460,850 (25,281)(A) 435,569 486,508 (2,511)(B) 483,997 (5.3) (10.0)

Gross Profit 185,300 25,281 210,581 213,808 2,511 216,319 (13.3) (2.7)

Research and development 42,067 (531)(B) 41,536 39,049 (87)(B) 38,962 7.7 6.6

Selling, general and administrative 112,840 (8,934)(B) 103,906 107,664 (14,965)(B) 92,699 4.8 12.1

Income From Operations 30,393 34,746 65,139 67,095 17,563 84,658 (54.7) (23.1)

Interest expense 7,334 — 7,334 7,806 — 7,806 (6.0) (6.0)

Other (income), net (5,646) — (5,646) (1,484) — (1,484) nm nm

Income Before Income Taxes 28,705 34,746 63,451 60,773 17,563 78,336 (52.8) (19.0)

Income tax expense 2,128 7,963(C) 10,091 11,297 4,145(D) 15,442 (81.2) (34.7)

Net Income $ 26,577 $ 26,783 $ 53,360 $ 49,476 $ 13,418 $ 62,894 (46.3) (15.2)

Earnings Per Common Share:

Basic $ 0.16 $ 0.17 $ 0.33 $ 0.32 $ 0.09 $ 0.41 (50.0) (19.5)

Diluted $ 0.16 $ 0.16 $ 0.32 $ 0.31 $ 0.09 $ 0.40 (48.4) (20.0)

Weighted Average Common Shares

Outstanding:

Basic 161,171 161,171 161,171 156,401 156,401 156,401 3.0 3.0

Diluted 164,144 164,144 164,144 158,047 158,047 158,047 3.9 3.9

Statistics (as a% of Total Net Sales,

except for income tax rate)

Gross Profit 28.7% 32.6% 30.5% 30.9%

R&D 6.5% 6.4% 5.6% 5.6%

SG&A 17.5% 16.1% 15.4% 13.2%

Income From Operations 4.7% 10.1% 9.6% 12.1%

Income Before Income Taxes 4.4% 9.8% 8.7% 11.2%

Net Income 4.1% 8.3% 7.1% 9.0%

Income tax rate 7.4% 15.9% 18.6% 19.7%

(A)— Includes impairment charges of $13,074 related to the Montreal and Ashland, Ohio manufacturing facilities, $6,338 related to the planned

Donegal, Ireland, manufacturing plant closure, $350 related to the sale of the Salt Lake City manufacturing plant to ICU Medical, and nonrecurring transition costs of $5,519.

(B)— Non-recurring transition costs.

(C)— Includes the impact of decreasing the overall effective tax rate from 25.5% to 24.0%, and ($361) tax impact of earnings repatriation related to

The American Jobs Creations Act.

(D)— Includes the impact of decreasing the overall effective tax rate from 26.0% to 24.7%.

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Reconciliation of Consolidated Statements of Income

(Unaudited)

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

Twelve Months Ended December 31,

2005 2004 % Change vs. Prior Year

GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjusted

Net sales $ 2,457,588 $ — $ 2,457,588 $ 2,465,052 $ — $ 2,465,052 (0.3) (0.3)

Net sales to Abbott Laboratories 169,108 — 169,108 179,984 — 179,984 (6.0) (6.0)

Total Net Sales 2,626,696 — 2,626,696 2,645,036 — 2,645,036 (0.7) (0.7)

Cost of products sold 1,777,640 (48,722)(A) 1,728,918 1,858,435 (4,819)(B) 1,853,616 (4.3) (6.7)

Gross Profit 849,056 48,722 897,778 786,601 4,819 791,420 7.9 13.4

Research and development 138,834 (906)(B) 137,928 119,583 (279)(B) 119,304 16.1 15.6

Selling, general and administrative 373,607 (34,249)(B) 339,358 304,004 (27,123)(B) 276,881 22.9 22.6

Curtailment of post-retirement medical

and dental benefits — — — (64,636) 64,636(C) — nm nm

Income From Operations 336,615 83,877 420,492 427,650 (32,415) 395,235 (21.3) 6.4

Interest expense 28,276 — 28,276 18,758 — 18,758 50.7 50.7

Other (income), net (13,736) — (13,736) (2,628) (189)(B) (2,817) nm nm

Income Before Income Taxes 322,075 83,877 405,952 411,520 (32,226) 379,294 (21.7) 7.0

Income tax expense 86,437 10,991(D) 97,428 109,968 (16,234)(C) 93,734 (21.4) 3.9

Net Income $ 235,638 $ 72,886 $ 308,524 $ 301,552 $ (15,992) $ 285,560 (21.9) 8.0

Earnings Per Common Share:

Basic $ 1.48 $ 0.46 $ 1.94 $ 1.93 $ (0.10) $ 1.83 (23.3) 6.0

Diluted $ 1.46 $ 0.45 $ 1.91 $ 1.92 $ (0.10) $ 1.82 (24.0) 4.9

Weighted Average Common Shares

Outstanding:

Basic 159,275 159,275 159,275 156,187 156,187 156,187 2.0 2.0

Diluted 161,634 161,634 161,634 157,160 157,160 157,160 2.8 2.8

Statistics (as a % of Total Net Sales,

except for income tax rate)

Gross Profit 32.3% 34.2% 29.7% 29.9%

R&D 5.3% 5.3% 4.5% 4.5%

SG&A 14.2% 12.9% 11.5% 10.5%

Income From Operations 12.8% 16.0% 16.2% 14.9%

Income Before Income Taxes 12.3% 15.5% 15.6% 14.3%

Net Income 9.0% 11.7% 11.4% 10.8%

Income tax rate 26.8% 24.0% 26.7% 24.7%

(A) — Includes an impairment charge of $2,429 and other charges of $13,754 related to the sale of the Salt Lake City manufacturing plant to ICU

Medical, $8,616 related to the planned closure of the Donegal, Ireland, manufacturing plant, impairment charges of $13,074 related to the

Montreal and Ashland, Ohio manufacturing facilities, and non-recurring transition costs of $10,849.

(B) — Non-recurring transition costs.

(C) — 2004 curtailment gain ($64,636) is tax effected at 37.5%, while 2004 non-recurring transition costs were tax effected at 24.7%.

(D) — Includes $9,139 tax impact of earnings repatriation related to The American Jobs Creation Act.

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Consolidated Balance Sheets

(Unaudited)

(dollars in thousands)

December 31 December 31

2005 2004

Assets

Current Assets:

Cash and cash equivalents $ 520,610 $ 127,695

Marketable securities — 72,438

Net trade receivables 327,146 326,356

Inventory 510,268 518,324

Deferred income taxes 144,124 116,295

Prepaid expenses, deferred income taxes and other receivables 59,017 37,217

Total Current Assets 1,561,165 1,198,325

Net property and equipment 990,813 946,304

Intangible assets, net of amortization 14,926 1,057

Goodwill 89,197 80,973

Deferred income taxes 17,692 —

Other assets 115,389 116,131

Total Assets $ 2,789,182 $ 2,342,790

Liabilities and Shareholders’ Equity

Current Liabilities:

Short-term borrowings $ 2,579 $ —

Trade accounts payable 129,865 101,537

Salaries, wages, and commissions 107,615 77,875

Other accrued liabilities 277,098 190,740

Due to Abbott, net 79,079 166,042

Total Current Liabilities 596,236 536,194

Due to Abbott, net — 23,100

Long-term debt 695,285 698,841

Deferred income taxes 3,958 4,575

Post-retirement obligations and other long-term liabilities 165,836 96,161

Commitments and Contingencies — —

Total Liabilities 1,461,315 1,358,871

Total Shareholders’ Equity 1,327,867 983,919

Total Liabilities and Shareholders’ Equity $ 2,789,182 $ 2,342,790

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(dollars in thousands)

Twelve Months Ended December 31

2005 2004

Cash Flow From (Used in) Operating Activities:

Net income $ 235,638 $ 301,552

Adjustments to reconcile net income to net cash from operating activities—

Depreciation 154,460 141,245

Amortization of intangibles 1,831 4,278

Impairment of long-lived assets 13,074 —

Curtailment of post-retirement medical and dental benefits — (64,636)

Trade receivables (10,707) (28,051)

Inventories (9,722) 22,715

Prepaid expenses and other assets (8,094) (3,914)

Trade accounts payable and other liabilities 164,196 51,515

Other, net 30,411 (37,681)

Net Cash From Operating Activities 571,087 387,023

Cash Flow (Used in) From Investing Activities:

Acquisitions of property and equipment (256,108) (228,854)

Proceeds from asset dispositions 31,818 —

Acquisition of business (23,590) —

Purchase of intangibles and other investments (8,990) —

Purchase of marketable securities, net — (72,438)

Sales of marketable securities 72,438 —

Net Cash (Used in) Investing Activities (184,432) (301,292)

Cash Flow From (Used in) Financing Activities:

Net transactions with Abbott Laboratories prior to spin-off — 24,209

Pre-distribution dividend to Abbott — (700,000)

Payment to Abbott for international assets (116,727) —

Issuance of long-term debt, net of fees paid 5,252 1,393,344

Repayment of long-term debt (124) (700,000)

Other borrowings, net 1,385 —

Proceeds from stock options exercised 118,819 23,046

Net Cash From Financing Activities 8,605 40,599

Effect of exchange rate changes on cash and cash equivalents (2,345) 1,365

Net change in cash and cash equivalents 392,915 127,695

Cash and cash equivalents at beginning of period 127,695 —

Cash and cash equivalents at end of period $ 520,610 $ 127,695

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Sales by Product Line

(Unaudited)

(dollars in millions)

Three Months Ended December 31 Twelve Months Ended December 31

2005 2004

Percent

Change vs.

Prior Year* 2005 2004

Percent

Change vs.

Prior Year*

U.S. —

Specialty Injectable Pharmaceuticals $ 214 $ 233 (8.0) $ 845 $ 894 (5.5)

Medication Delivery Systems 197 217 (8.7) 796 783 1.7

Injectable Pharmaceutical Contract

Manufacturing 33 49 (33.2) 179 179 0.0

Sales to Abbott Laboratories 25 25 (2.8) 105 120 (12.6)

Other 68 63 7.1 263 244 7.3

Total U.S. 537 587 (8.5) 2,188 2,220 (1.5)

International —

Sales to Third Parties 96 92 3.9 375 365 2.7

Sales to Abbott Laboratories 13 21 (36.3) 64 60 7.0

Total International Sales 109 113 (3.6) 439 425 3.3

Consolidated Net Sales $ 646 $ 700 (7.7) $ 2,627 $ 2,645 (0.7)

Reconciliation of Consolidated Net Sales to Core Net Sales

2005 2004

Percent

Change vs.

Prior Year* 2005 2004

Percent

Change vs.

Prior Year*

Consolidated Net Sales $ 646 $ 700 (7.7) $ 2,627 $ 2,645 (0.7)

Less:

Sales to Abbott Laboratories (38) (46) (169) (180)

Berlex imaging agents — (52) (67) (197)

Impact of foreign currency 2 — (9) —

Core Net Sales $ 610 $ 602 1.4 $ 2,382 $ 2,268 5.0

* Percent change computed based on unrounded numbers.

Note: Three months ended December 31, 2004 includes an adjustment to net sales of approximately $14 million related to prior periods resulting from

the reclassification of certain drug delivery pump leases from operating to sales-type leases. Approximately one-half of the adjustment relates to

2003 and the remaining half relates to the first three quarters of 2004. The adjustment is not material to any prior period.

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Hospira, Inc.

Segment Information

(Unaudited)

(dollars in thousands)

Three Months Ended December 31 Twelve Months Ended December 31

Net Sales Income from Operations Net Sales Income from Operations

2005 2004 % Change 2005 2004 % Change 2005 2004 % Change 2005 2004 (1) % Change

U.S. $ 536,676 $ 586,808 (8.5) $ 38,786 $ 77,785 (50.1) $ 2,187,775 $ 2,220,070 (1.5) $ 328,517 $ 404,876 (18.9)

International 109,474 113,508 (3.6) 10,410 14,558 (28.5) 438,921 424,966 3.3 68,407 88,723 (22.9)

Total reportable

segments $ 646,150 $ 700,316 (7.7) 49,196 92,343 (46.7) $ 2,626,696 $ 2,645,036 (0.7) 396,924 493,599 (19.6)

Corporate functions (18,803) (25,248) (25.5) (60,309) (65,949) (8.6)

Income from

operations 30,393 67,095 (54.7) 336,615 427,650 (21.3)

Other, net (1,688) (6,322) nm (14,540) (16,130) nm

Income before

income taxes $ 28,705 $ 60,773 (52.8) $ 322,075 $ 411,520 (21.7)

(1) 2004 U.S. Income from operations includes curtailment benefit of $64,636.

Source: HOSPIRA, INC., EX-99.1, 2/28/2006 | Powered by Intelligize
Exhibit 99.2

For Immediate Release

Media

Stacey Eisen

(224) 212-2276

Tareta Adams

(224) 212-2535

Financial Community

Lynn McHugh

(224) 212-2363

HOSPIRA BOARD AUTHORIZES $400 MILLION

SHARE REPURCHASE PROGRAM

LAKE FOREST, Ill., Feb. 28, 2006 — Hospira, Inc. (NYSE:HSP), one of the largest hospital products manufacturers in the United States,

today announced that its board of directors has authorized the repurchase of up to $400 million of the company’s common stock.

“Our strong results since becoming an independent company almost two years ago underscore Hospira’s fundamental operating strength

and future prospects,” said Christopher B. Begley, chief executive officer, Hospira. “We believe those prospects make an investment in our stock a

good use of a portion of our growing cash position at this time. Furthermore, the share repurchase program is a tangible demonstration of our

commitment to return value to our shareholders, while retaining flexibility to pursue future growth initiatives.”

Hospira, Inc.

275 North Field Drive

Lake Forest, IL 60045

www.hospira.com

-MORESource: HOSPIRA, INC., EX-99.2, 2/28/2006 | Powered by Intelligize
The new program authorizes the company to repurchase common shares from time to time through the open market in compliance with

securities regulations and other legal requirements. The size and timing of any purchases are at the discretion of company management, based on

factors such as price, business and market conditions.

Shares of stock repurchased under the plan will be held as treasury shares and will be available for general corporate purposes. As of Dec.

31, 2005, the company had approximately 161.7 million shares of common stock outstanding.

About Hospira

Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing WellnessTM by developing,

manufacturing and marketing products that help improve the productivity, safety and efficacy of patient care. With 70 years of service to the

hospital industry, Hospira’s portfolio includes one of the industry’s broadest lines of generic acute­care injectables, which help address the high

cost of proprietary pharmaceuticals; integrated solutions for medication management and infusion therapy; and the leading U.S. injectable contract

manufacturing business. Headquartered in Lake Forest, Ill., north of Chicago, Hospira has approximately 13,000 employees and 14 manufacturing

facilities worldwide. Hospira’s news releases and other information can be found at www.hospira.com.

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Source: HOSPIRA, INC., EX-99.2, 2/28/2006 | Powered by Intelligize
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 statements regarding Hospira’s intention to repurchase shares of its stock. Hospira cautions that these forward­looking statements

are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements,

including uncertainties as to the market price of Hospira’s stock, market conditions in general and Hospira’s future operating performance.

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 factors, risks and uncertainties set forth under the heading “Item 1 Business — Risk Factors”

in Hospira’s Annual Report on Form 10­K for the year ended Dec. 31, 2004, filed with the Securities and Exchange Commission (SEC) and in

Hospira’s other SEC filings, including its quarterly reports on Form 10­Q, 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.

###

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Source: HOSPIRA, INC., EX-99.2, 2/28/2006 | Powered by Intelligize