LAKE FOREST, Ill., July 31, 2013 /PRNewswire/ -- Hospira, Inc.
(NYSE: HSP), the world's leading provider of injectable drugs and
infusion technologies, today reported results for the second
quarter ended June 30, 2013. Net
sales for the quarter were $1.0
billion and adjusted* diluted earnings per share were
$0.55. (Adjusted* measures exclude
certain specified items as described later in this press release
and the attached schedules.) On a U.S. Generally Accepted
Accounting Principles (GAAP) basis, diluted earnings per share were
$0.20.
"Results for the second quarter were in line with our
expectations," said F. Michael
Ball, chief executive officer. "In addition, it was a
quarter of several milestone achievements for Hospira, such as the
positive opinion from the European Medicines Agency (EMA) on our
biosimilar infliximab, Inflectra™, and the U.S. launch of the new
premix versions of our branded sedation agent, Precedex™. While we
continued to make progress in supply recovery and in advancing our
quality-improvement initiatives, we still have work to do to
reinforce our foundation. We are working through our commitments to
the U.S. Food and Drug Administration (FDA), as well as seeking
alignment with global regulatory bodies regarding our devices. We
are driving forward to ensure we meet the expectations of our
regulators and customers, and remain focused on the execution of
our quality and growth initiatives. We believe these actions are
positioning Hospira for a stronger, more competitive future with
sustainable, long-term shareholder value."
Second-Quarter 2013 Results
The following table highlights selected financial results
for the second quarter of 2013 compared to the same period in
2012:
|
In $ millions,
except per
share
amounts
|
GAAP
Three Months Ended June 30,
|
% Change
|
Adjusted*
Three Months Ended June 30,
|
% Change
|
|
2013
|
2012
|
2013
|
2012
|
|
Net Sales
|
$1,026.2
|
$1,033.3
|
(0.7)%
|
n/a
|
n/a
|
n/a
|
|
Gross Profit (Net Sales less Cost of Products
Sold)
|
$318.7
|
$283.5
|
12.4%
|
$388.9
|
$370.8
|
4.9%
|
|
Income (Loss) from Operations
|
$52.2
|
$(2.2)
|
nm
|
$126.4
|
$117.3
|
7.8%
|
|
Diluted Earnings (Loss) per Share
|
$0.20
|
$(0.02)
|
nm
|
$0.55
|
$0.51
|
7.8%
|
|
Statistics (as a % of Net
Sales)
|
|
Gross Profit (Net Sales less Cost of Products
Sold)
|
31.1%
|
27.4%
|
|
37.9%
|
35.9%
|
|
|
Income (Loss) from Operations
|
5.1%
|
(0.2)%
|
|
12.3%
|
11.4%
|
|
Results under GAAP include items as detailed in the
schedules attached to this press release.
Net sales were $1.0 billion
in the second quarter of 2013, a decrease of 0.7 percent compared
to the second quarter of 2012. Continued strong global sales of
Precedex and higher pricing on certain Specialty Injectable
Pharmaceuticals (SIP) products in the U.S. were more than offset by
the impact of pricing erosion of certain newer U.S. SIP
products and lower device sales. The lower device
sales were primarily a result of an expanded import alert announced
in February 2013 by the
FDA.
Adjusted* income from operations increased 7.8 percent to
$126 million in the second quarter of
2013, compared to $117 million in the
second quarter of 2012. The increase mainly reflects favorable
product mix compared to the second quarter of 2012, which more than
offset a year-over-year increase in Selling, General and
Administration expense and higher manufacturing costs related to
the company's quality initiatives. On a GAAP basis, income from
operations was $52 million compared
to a loss from operations of $2
million in the second quarter of 2012. The second quarter of
2012 included facilities optimization charges and higher
restructuring charges.
The effective tax rate on an adjusted basis* in the
quarter was a benefit of 17.1 percent compared to a benefit of 19.0
percent in the second quarter of 2012. The decrease is primarily
due to a 2013 tax benefit related to the reinstatement of the U.S.
federal Research & Development tax credit and other
corporate provisions for 2013. On a GAAP basis, the second-quarter
2013 effective tax rate was a benefit of 27.9 percent compared to a
benefit of 70.1 percent in the second quarter of 2012. The benefit
during both periods primarily resulted from higher quality- and
device-related charges incurred in higher tax-rate
jurisdictions.
Cash Flow
Cash flow from operations for the first six months of 2013
was $51 million compared to
$216 million for the same period of
2012. The decrease is mainly due to lower income from operations in
the first six months of 2013 primarily related to the investments
in the company's quality-improvement initiatives, as well as to
higher working capital.
Capital expenditures were $153
million for the first six months of 2013, compared to
$137 million for the same period in
2012. The increase reflects additional planned expenditures
at several of the company's manufacturing facilities related to
modernization initiatives, as well as Information Technology
projects.
2013 Projections
Hospira continues to project the year-over-year change to
2013 adjusted* net sales to be negative 1 percent to positive
1 percent, on a constant-currency basis. Adjusted* net sales
exclude the first-quarter 2013 impact of customer sales allowances
associated with the company's new device strategy announced in May
2013. On a GAAP basis, the year-over-year change to net
sales is now expected to range between negative 5 percent and
negative 3 percent. Foreign exchange is now expected
to detract from net sales by a negative 1
percent.
The company continues to expect full-year 2013 adjusted*
diluted earnings per share to range between $2.00 and $2.10, representing flat to 5 percent
growth.
The reconciliation between the projected 2013 adjusted*
diluted earnings per share and projected GAAP diluted earnings per
share follows:
|
|
|
|
|
|
|
|
|
Diluted earnings per share --
adjusted*
|
|
|
|
|
|
|
$2.00 -
$2.10
|
|
|
|
|
|
|
|
|
|
Estimated charges related to the company's device
strategy (mid-point of an estimated range
of
$0.91
to $0.99 per diluted
share)
|
|
|
|
|
|
|
$(0.95)
|
|
|
|
|
|
|
|
|
|
Estimated amortization of intangible assets related
to
certain acquisitions
(mid-point of an estimated range
of $0.29 to $0.33 per
diluted share)
|
|
|
|
|
|
|
$(0.31)
|
|
|
|
|
|
|
|
|
|
Impairment of certain assets
|
|
|
|
|
|
|
$(0.06)
|
|
|
|
|
|
|
|
|
|
Estimated charges for certain quality and
product-related
matters (mid-point of
an estimated range of
$0.33 to
$0.41 per diluted share)
|
|
|
|
|
|
|
$(0.37)
|
|
|
|
|
|
|
|
|
|
Estimated charges related to capacity
expansion
(mid-point of an
estimated range of $0.08
to $0.10
per diluted share)
|
|
|
|
|
|
|
$(0.09)
|
|
|
|
|
|
|
|
|
|
Estimated acquisition and integration-related
charges
associated with the
pending acquisition of an API-related
business from Orchid
Chemicals & Pharmaceuticals
(mid-point of an
estimated range of $0.04 to $0.06
per diluted
share)
|
|
|
|
|
|
|
$(0.05)
|
|
|
|
|
|
|
|
|
|
Other restructuring charges
|
|
|
|
|
|
|
$(0.02)
|
|
|
|
|
|
|
|
|
|
Estimated loss on consideration of early
extinguishment
of debt (mid-point of
an estimated range of $0.13 to $0.15
per diluted
share)
|
|
|
|
|
|
|
$(0.14)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share -- GAAP
|
|
|
|
|
|
|
$0.01 -
$0.11
|
|
|
|
|
|
|
|
|
The adjusting items are shown net of tax in aggregate of
$138 million, which is calculated for
the specified adjustments stated above, based on the statutory tax
rates in the various tax jurisdictions in which the items are
expected to occur.
The company continues to project that cash flow from
operations in 2013 will be between $200 million and $250 million. Depreciation and
amortization guidance also remains unchanged at between
$255 million and $275 million. The
company now expects capital expenditures to range between
$350 million and $400 million.
*Use of Non-GAAP Financial Measures
Adjusted* 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 furnished to the Securities and Exchange Commission on the
date of this press release.
Webcast/Complementary Material
Hospira will hold a conference call for investors and
media at 8 a.m. Central time on
Wednesday, July 31, 2013. A live
webcast of the conference call will be available on Hospira's
website at www.hospirainvestor.com. Listeners should log on
approximately 10 minutes in advance to ensure proper setup for
receiving the webcast. In addition, complementary information will
be available on the presentations page of the Investor Relations
website at the beginning of the conference call. A replay will be
available on the Hospira website for 30 days following the
call.
About Hospira
Hospira, Inc. is the world's leading provider
of injectable drugs and infusion technologies. Through its broad,
integrated portfolio, Hospira is uniquely positioned to Advance
Wellness™ by improving patient and caregiver safety while reducing
healthcare costs. The company is headquartered in Lake Forest,
Ill., and has approximately 16,000 employees. Learn more at
www.hospira.com.
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, expenses,
and cash flow; and other statements regarding Hospira's goals,
plans and strategy. Hospira cautions that these forward-looking
statements are subject to risks and uncertainties, including
adequate and sustained progress on the company's quality
initiatives, continuous improvement activities and device
strategy, that may cause actual results to
differ materially from those indicated in the forward-looking
statements. Economic, competitive, governmental, regulatory, legal,
technological, manufacturing supply, quality 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 latest Annual
Report on Form 10-K and subsequent Forms 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.
|
Hospira,
Inc.
|
|
Condensed
Consolidated Statements of Income (Loss)
|
|
(Unaudited)
|
|
(dollars and
shares in millions, except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
%
Change
|
|
|
|
2013
|
|
2012
|
|
|
|
Net sales
|
|
|
$
1,026.2
|
|
$
1,033.3
|
|
(0.7)%
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
|
707.5
|
|
749.8
|
|
(5.6)%
|
|
Restructuring and
impairment
|
|
|
2.9
|
|
32.2
|
|
(91.0)%
|
|
Research and
development
|
|
|
74.4
|
|
83.6
|
|
(11.0)%
|
|
Selling, general and
administrative
|
|
|
189.2
|
|
169.9
|
|
11.4 %
|
|
Total operating costs and expenses
|
|
|
974.0
|
|
1,035.5
|
|
(5.9)%
|
|
Income (Loss) From
Operations
|
|
|
52.2
|
|
(2.2)
|
|
nm
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
19.9
|
|
21.0
|
|
(5.2)%
|
|
Other expense,
net
|
|
|
10.1
|
|
8.6
|
|
17.4 %
|
|
Income (Loss) Before
Income Taxes
|
|
|
22.2
|
|
(31.8)
|
|
(169.8)%
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
|
(6.2)
|
|
(22.3)
|
|
(72.2)%
|
|
Equity income from
affiliates, net
|
|
|
(4.5)
|
|
(7.0)
|
|
(35.7)%
|
|
Net Income
(Loss)
|
|
|
$
32.9
|
|
$
(2.5)
|
|
nm
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
0.20
|
|
$
(0.02)
|
|
nm
|
|
Diluted
|
|
|
$
0.20
|
|
$
(0.02)
|
|
nm
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
165.5
|
|
165.1
|
|
0.2 %
|
|
Diluted
|
|
|
166.3
|
|
165.1
|
|
0.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross
Profit (1)(2)
|
|
|
$
388.9
|
|
$
370.8
|
|
4.9 %
|
|
Adjusted Income From
Operations (1)
|
|
|
$
126.4
|
|
$
117.3
|
|
7.8 %
|
|
Adjusted Net Income
(1)
|
|
|
$
92.1
|
|
$
84.9
|
|
8.5 %
|
|
Adjusted Diluted
Earnings Per Share (1)
|
|
|
$
0.55
|
|
$
0.51
|
|
7.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statistics (as a % of
net sales, except for income tax rate):
|
|
|
|
|
GAAP Three Months
Ended June 30,
|
|
Adjusted(1)Three Months Ended June
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Gross Profit
(2)
|
31.1 %
|
|
27.4 %
|
|
37.9 %
|
|
35.9 %
|
|
Income (Loss) From
Operations
|
5.1 %
|
|
(0.2)%
|
|
12.3 %
|
|
11.4 %
|
|
Net Income
(Loss)
|
3.2 %
|
|
(0.2)%
|
|
9.0 %
|
|
8.2 %
|
|
Income Tax
Rate
|
27.9 %
|
|
70.1 %
|
|
17.1 %
|
|
19.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted financial
measures exclude certain specified items as described and
reconciled to comparable GAAP financial measures in the
Reconciliation of GAAP to Non-GAAP Financial Measures contained in
this press release.
|
|
(2)
|
Gross profit is
defined as Net sales less Cost of products sold. Adjusted gross
profit excludes certain specified items, as indicated in the
previous footnote.
|
|
nm - Percentage
change is not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Condensed
Consolidated Statements of (Loss) Income
|
|
(Unaudited)
|
|
(dollars and
shares in millions, except for per share amounts)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
%
Change
|
|
2013
|
|
2012
|
|
|
|
Net sales
|
$
1,910.2
|
|
$
1,999.2
|
|
(4.5)%
|
|
|
|
|
|
|
|
Cost of products
sold
|
1,441.4
|
|
1,415.7
|
|
1.8 %
|
|
Restructuring and
impairment
|
11.7
|
|
32.2
|
|
(63.7)%
|
|
Research and
development
|
148.2
|
|
152.7
|
|
(2.9)%
|
|
Selling, general and
administrative
|
375.3
|
|
354.1
|
|
6.0 %
|
|
Total operating costs and expenses
|
1,976.6
|
|
1,954.7
|
|
1.1 %
|
|
(Loss)
income From Operations
|
(66.4)
|
|
44.5
|
|
(249.2)%
|
|
|
|
|
|
|
|
Interest
expense
|
39.5
|
|
43.3
|
|
(8.8)%
|
|
Other expense,
net
|
12.4
|
|
9.9
|
|
25.3 %
|
|
(Loss) Before
Income Taxes
|
(118.3)
|
|
(8.7)
|
|
nm
|
|
|
|
|
|
|
|
Income tax
benefit
|
(64.5)
|
|
(26.4)
|
|
144.3 %
|
|
Equity income from
affiliates, net
|
(10.1)
|
|
(20.1)
|
|
(49.8)%
|
|
Net (Loss)
Income
|
$
(43.7)
|
|
$
37.8
|
|
(215.6)%
|
|
|
|
|
|
|
|
(Loss) Earnings Per
Common Share:
|
|
|
|
|
|
|
Basic
|
$
(0.26)
|
|
$
0.23
|
|
(213.0)%
|
|
Diluted
|
$
(0.26)
|
|
$
0.23
|
|
(213.0)%
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
Basic
|
165.4
|
|
164.9
|
|
0.3 %
|
|
Diluted
|
165.4
|
|
165.9
|
|
(0.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Sales
(1)(2)
|
$
2,014.5
|
|
$
1,999.2
|
|
0.8 %
|
|
Adjusted Gross Profit
(1)(3)
|
$
748.4
|
|
$
728.3
|
|
2.8 %
|
|
Adjusted Income From
Operations (1)
|
$
227.6
|
|
$
221.5
|
|
2.8 %
|
|
Adjusted Net Income
(1)
|
$
178.2
|
|
$
163.3
|
|
9.1 %
|
|
Adjusted Diluted
Earnings Per Share (1)
|
$
1.07
|
|
$
0.98
|
|
9.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statistics (as a % of
net sales, except for income tax rate):
|
|
|
|
|
|
|
GAAP Six Months Ended
June 30,
|
|
Adjusted(1)Six Months Ended June
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Gross Profit
(3)
|
24.5 %
|
|
29.2 %
|
|
37.2 %
|
|
36.4 %
|
|
(Loss) Income From
Operations
|
(3.5)%
|
|
2.2 %
|
|
11.3 %
|
|
11.1 %
|
|
Net (Loss)
Income
|
(2.3)%
|
|
1.9 %
|
|
8.8 %
|
|
8.2 %
|
|
Income Tax
Rate
|
54.5 %
|
|
303.4 %
|
|
10.1 %
|
|
19.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted financial
measures exclude certain specified items as described and
reconciled to comparable GAAP financial measures in the
Reconciliation of GAAP to Non-GAAP Financial Measures contained in
this press release.
|
|
(2)
|
There were no
adjustments included in GAAP Net sales for the six months ended
June 30, 2012.
|
|
(3)
|
Gross profit is
defined as Net sales less Cost of products sold. Adjusted gross
profit excludes certain specified items, as indicated in the
previous footnote.
|
|
nm - Percentage
change is not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited)
|
|
(dollars in
millions, except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2013 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit(1)
|
|
Income
From
Operations
|
|
Net
Income(2)
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
$
318.7
|
|
$
52.2
|
|
$
32.9
|
|
$
0.20
|
|
Specified
Items:
|
|
|
|
|
|
|
|
|
|
Device strategy charges (A)
|
|
14.6
|
|
17.0
|
|
11.6
|
|
0.07
|
|
Amortization of certain intangible assets (B)
|
|
17.6
|
|
17.6
|
|
12.2
|
|
0.07
|
|
Impairment of certain assets (C)
|
|
—
|
|
—
|
|
9.1
|
|
0.05
|
|
Certain quality and product related charges
(D)
|
|
34.0
|
|
34.0
|
|
22.6
|
|
0.14
|
|
Capacity expansion related charges (E)
|
|
4.0
|
|
4.0
|
|
2.6
|
|
0.02
|
|
Acquisition and integration related charges
(F)
|
|
—
|
|
1.1
|
|
0.7
|
|
—
|
|
Other restructuring charges (G)
|
|
—
|
|
0.5
|
|
0.4
|
|
—
|
|
Adjusted financial
measures (3)
|
|
$
388.9
|
|
$
126.4
|
|
$
92.1
|
|
$
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
three months ended June 30, 2013 include:
|
|
(A)
|
Device strategy
charges: $14.6 million in Cost of products sold, and $2.4 million
reported in Restructuring and impairment. These charges include
device related customer accommodations, other asset impairments,
accelerated depreciation, consulting and other costs associated
with Hospira's device strategy.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma Limited ("Mayne
Pharma") and a generic injectable business by Hospira Healthcare
India Private Limited ("Hospira India").
|
|
(C)
|
Impairment of certain
assets: $9.3 million reported in Other expense, net, related to
impairments of certain investments.
|
|
(D)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, and device
product review and remediation costs to address identified issues.
These charges are primarily associated with Hospira's response to
the United States Food and Drug Administration ("FDA") warning
letters and charges related to certain device related remediation
activities.
|
|
(E)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(F)
|
Acquisition and
integration related charges reported in Selling, general, and
administrative include costs for the pending acquisition and
integration of an active pharmaceutical ingredient
business.
|
|
(G)
|
Other restructuring
charges: $0.5 million reported in Restructuring and impairment.
These charges include severance charges associated with Hospira's
commercial reorganization.
|
|
|
|
|
|
Three months ended
June 30, 2012 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit(1)
|
|
(Loss) Income
From
Operations
|
|
Net (Loss)
Income(2)
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
$
283.5
|
|
$
(2.2)
|
|
$
(2.5)
|
|
$
(0.02)
|
|
Specified Items:
|
|
|
|
|
|
|
|
|
|
Facilities Optimization charges (A)
|
|
—
|
|
17.4
|
|
10.7
|
|
0.06
|
|
Amortization of certain intangible assets(B)
|
|
17.8
|
|
17.8
|
|
12.4
|
|
0.08
|
|
Impairment of certain assets(C)
|
|
—
|
|
2.7
|
|
7.1
|
|
0.04
|
|
Certain quality and product related charges
(D)
|
|
58.4
|
|
58.4
|
|
35.7
|
|
0.22
|
|
Capacity expansion related charges (E)
|
|
5.3
|
|
5.3
|
|
3.6
|
|
0.02
|
|
Other restructuring charges (F)
|
|
5.8
|
|
17.9
|
|
17.9
|
|
0.11
|
|
Adjusted financial
measures (3)
|
|
$
370.8
|
|
$
117.3
|
|
$
84.9
|
|
$
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
three months ended June 30, 2012 include:
|
|
(A)
|
Facilities
Optimization charges: $17.4 million reported in Restructuring and
impairment. The equipment and facility impairment charges are
associated with Hospira's plans to exit a specialty injectable drug
finishing operation.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma, Javelin
Pharmaceuticals, Inc. ("Javelin Pharma") and a generic
injectable business by Hospira India.
|
|
(C)
|
Impairment of certain
assets: $2.7 million reported in Restructuring and impairment, and
$8.4 million reported in Other expense, net. These charges
relate to impairments of an intangible asset and a certain
investment, respectively.
|
|
(D)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, extended
production downtime related costs, failure to supply penalties,
device product review and remediation costs to address identified
issues, and costs for corrective actions including product recalls.
These charges are directly associated with Hospira's response to
the FDA 2010 warning letter and subsequent Form 483 observations
and charges related to Hospira's comprehensive device product
review and certain device related remediation
activities.
|
|
(E)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(F)
|
Other restructuring
charges: $12.1 million reported in Restructuring and impairment,
and $5.8 million reported in Cost of products sold. These
charges include equipment impairments, inventory charges, and
contract termination charges associated with Hospira's plans to
exit a non-strategic product line.
|
|
(1)
|
Gross profit is
defined as Net sales less Cost of products sold.
|
|
(2)
|
Adjusted net income
is shown net of tax of $24.3 million and $40.5 million for the
three months ended June 30, 2013 and 2012, respectively, based on
the statutory tax rates in the various tax jurisdictions in which
the items occurred.
|
|
(3)
|
The Non-GAAP
financial measures contained in this press release (including
adjusted gross profit, adjusted income from operations, adjusted
net income and adjusted diluted Earnings Per Share) adjust for
certain specified items. All Non-GAAP financial measures are
intended to supplement the applicable GAAP measures and should not
be considered in isolation from, or a replacement for, financial
measures prepared in accordance with GAAP. Refer to Hospira's
Form 8-K furnished on July 31, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited)
|
|
(dollars in
millions, except for per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June
30, 2013 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
Gross
Profit(1)
|
|
(Loss) Income
From
Operations
|
|
Net (Loss)
Income(2)
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
$
1,910.2
|
|
$
468.8
|
|
$
(66.4)
|
|
$
(43.7)
|
|
$
(0.26)
|
|
Specified
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Device
strategy charges (A)
|
|
104.3
|
|
191.4
|
|
198.5
|
|
145.9
|
|
0.88
|
|
Amortization of certain intangible assets (B)
|
|
—
|
|
35.8
|
|
35.8
|
|
24.9
|
|
0.15
|
|
Impairment of certain assets (C)
|
|
—
|
|
—
|
|
—
|
|
11.1
|
|
0.06
|
|
Certain
quality and product related charges (D)
|
|
—
|
|
44.7
|
|
44.7
|
|
30.0
|
|
0.18
|
|
Capacity
expansion related charges (E)
|
|
—
|
|
7.7
|
|
7.7
|
|
5.0
|
|
0.03
|
|
Acquisition & integration related charges
(F)
|
|
—
|
|
—
|
|
2.8
|
|
1.8
|
|
0.01
|
|
Other
restructuring charges (G)
|
|
—
|
|
—
|
|
4.5
|
|
3.2
|
|
0.02
|
|
Adjusted financial
measures (3)
|
|
$
2,014.5
|
|
$
748.4
|
|
$
227.6
|
|
$
178.2
|
|
$
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
six months ended June 30, 2013 include:
|
|
(A)
|
Device strategy
charges: $104.3 million reported in Net sales, $87.1 million in
Cost of products sold and $7.1 million in Restructuring and
impairment. These charges include device related customer sales
allowances, customer accommodations, contract termination,
collection and destruction costs, inventory charges, other asset
impairments, accelerated depreciation, consulting and other costs
associated with Hospira's device strategy.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma and a generic
injectable business by Hospira India.
|
|
(C)
|
Impairment of certain
assets: $11.3 million reported in Other expense, net, related to
impairments of certain investments.
|
|
(D)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, and device
product review and remediation costs to address identified issues.
These charges are primarily associated with Hospira's response to
the FDA warning letters and charges related to certain device
related remediation activities.
|
|
(E)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(F)
|
Acquisition and
integration related charges reported in Selling, general, and
administrative include costs for the pending acquisition and
integration of an active pharmaceutical ingredient
business.
|
|
(G)
|
Other restructuring
charges: $4.5 million reported in Restructuring and impairment.
These charges include severance charges associated with Hospira's
commercial reorganization.
|
|
|
|
|
|
Six months ended June
30, 2012 Reconciliation of GAAP to Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit(1)
|
|
Income
From
Operations
|
|
Net
Income(2)
|
|
Diluted
EPS
|
|
GAAP Financial
Measures
|
|
|
|
$
583.5
|
|
$
44.5
|
|
$
37.8
|
|
$
0.23
|
|
Specified
Items:
|
|
|
|
|
|
|
|
|
|
|
|
Facilities Optimization charges (A)
|
|
|
|
—
|
|
17.4
|
|
10.7
|
|
0.06
|
|
Amortization of certain intangible assets (B)
|
|
|
|
36.5
|
|
36.5
|
|
25.4
|
|
0.15
|
|
Impairment of certain assets(C)
|
|
|
|
—
|
|
2.7
|
|
7.1
|
|
0.04
|
|
Certain
quality and product related charges (D)
|
|
|
|
95.3
|
|
95.3
|
|
59.6
|
|
0.36
|
|
Capacity
expansion related charges (E)
|
|
|
|
7.2
|
|
7.2
|
|
4.8
|
|
0.03
|
|
Other
restructuring charges(F)
|
|
|
|
5.8
|
|
17.9
|
|
17.9
|
|
0.11
|
|
Adjusted financial
measures (3)
|
|
|
|
$
728.3
|
|
$
221.5
|
|
$
163.3
|
|
$
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the
six months ended June 30, 2012 include:
|
|
(A)
|
Facilities
Optimization charges: $17.4 million reported in Restructuring and
impairment. The equipment and facility impairment charges relate to
Hospira's plans to exit a specialty injectable drug finishing
operation.
|
|
(B)
|
Amortization of
certain intangible assets reported in Cost of products sold
resulting from acquisitions including Mayne Pharma, Javelin Pharma
and a generic injectable business by Hospira India.
|
|
(C)
|
Impairment of certain
assets: $2.7 million reported in Restructuring and impairment, and
$8.4 million reported in Other expense, net. These charges
relate to impairments of an intangible asset and a certain
investment, respectively.
|
|
(D)
|
Certain quality and
product related charges reported in Cost of products sold primarily
include third party oversight and consulting costs, extended
production downtime related costs, failure to supply penalties,
device product review and remediation costs to address identified
issues, and costs for corrective actions including product recalls.
These charges are directly associated with Hospira's response to
the FDA 2010 warning letter and subsequent Form 483 observations
and charges related to Hospira's comprehensive device product
review and certain device related remediation
activities.
|
|
(E)
|
Capacity expansion
related charges reported in Cost of products sold include start-up
charges related to manufacturing capacity expansion in
India.
|
|
(F)
|
Other restructuring
charges: $12.1 million reported in Restructuring and impairment,
and $5.8 million reported in Cost of products sold. These
charges include equipment impairments, inventory charges, and
contract termination charges associated with Hospira's plans to
exit a non-strategic product line.
|
|
(1)
|
Gross profit is
defined as Net sales less Cost of products sold.
|
|
(2)
|
Adjusted net income
is shown net of tax of $83.4 million and $59.9 million for the six
months ended June 30, 2013 and 2012, respectively, based on the
statutory tax rates in the various tax jurisdictions in which the
items occurred.
|
|
(3)
|
The Non-GAAP
financial measures contained in this press release (including
adjusted net sales, adjusted gross profit, adjusted income from
operations, adjusted net income and adjusted diluted Earnings Per
Share) adjust for certain specified items. All Non-GAAP
financial measures are intended to supplement the applicable GAAP
measures and should not be considered in isolation from, or a
replacement for, financial measures prepared in accordance with
GAAP. Refer to Hospira's Form 8-K furnished on July 31,
2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
|
2013
|
|
2012
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
683.2
|
|
$
772.1
|
|
Trade
receivables, less allowances of $12.9 in 2013 and $12.7 in
2012
|
|
667.5
|
|
646.9
|
|
Inventories, net
|
|
1,032.8
|
|
997.8
|
|
Deferred
income taxes
|
|
199.8
|
|
214.4
|
|
Prepaid
expenses
|
|
83.5
|
|
53.9
|
|
Other
receivables
|
|
91.2
|
|
75.3
|
|
Total Current Assets
|
|
2,758.0
|
|
2,760.4
|
|
Property and
equipment, net
|
|
1,452.8
|
|
1,445.1
|
|
Intangible assets,
net
|
|
218.6
|
|
266.8
|
|
Goodwill
|
|
1,063.1
|
|
1,079.1
|
|
Deferred income
taxes
|
|
327.4
|
|
296.8
|
|
Investments
|
|
37.3
|
|
71.8
|
|
Other
assets
|
|
157.7
|
|
168.6
|
|
Total Assets
|
|
$
6,014.9
|
|
$
6,088.6
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Short-term borrowings
|
|
$
459.2
|
|
$
28.9
|
|
Trade
accounts payable
|
|
273.0
|
|
276.0
|
|
Salaries, wages and commissions
|
|
156.0
|
|
144.0
|
|
Other
accrued liabilities
|
|
581.8
|
|
580.3
|
|
Total Current Liabilities
|
|
1,470.0
|
|
1,029.2
|
|
Long-term
debt
|
|
1,301.9
|
|
1,706.8
|
|
Deferred income
taxes
|
|
3.1
|
|
4.4
|
|
Post-retirement
obligations and other long-term liabilities
|
|
342.8
|
|
306.5
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
2,897.1
|
|
3,041.7
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
6,014.9
|
|
$
6,088.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
Six Months Ended June
30,
|
|
Cash Flow From
Operating Activities:
|
2013
|
|
2012
|
|
Net
(loss) income
|
$
(43.7)
|
|
$
37.8
|
|
Adjustments to reconcile net (loss) income to net cash from
operating activities-
|
|
|
|
|
Depreciation
|
84.7
|
|
82.3
|
|
Amortization of intangible assets
|
43.5
|
|
41.8
|
|
Stock-based compensation expense
|
20.7
|
|
20.1
|
|
Undistributed equity income from affiliates
|
(10.1)
|
|
(20.1)
|
|
Distributions received from equity affiliates
|
30.1
|
|
—
|
|
Deferred
income taxes
|
(59.2)
|
|
(25.3)
|
|
Impairment and other asset charges
|
64.8
|
|
47.0
|
|
Gains on
disposition of assets
|
—
|
|
(0.9)
|
|
Changes in
assets and liabilities-
|
|
|
|
|
Trade
receivables
|
(34.6)
|
|
3.0
|
|
Inventories
|
(110.0)
|
|
5.6
|
|
Prepaid
expenses and other assets
|
(49.7)
|
|
(44.9)
|
|
Trade
accounts payable
|
3.4
|
|
(8.5)
|
|
Other
liabilities
|
101.7
|
|
76.4
|
|
Other,
net
|
9.0
|
|
1.8
|
|
Net Cash Provided by Operating Activities
|
50.6
|
|
216.1
|
|
|
|
|
|
Cash Flow From
Investing Activities:
|
|
|
|
|
Capital expenditures (including instruments placed with or leased
to customers)
|
(152.7)
|
|
(137.4)
|
|
Purchases of intangibles and other investments
|
(9.9)
|
|
(7.8)
|
|
Proceeds from disposition of businesses and assets
|
1.4
|
|
8.3
|
|
Net Cash Used in Investing Activities
|
(161.2)
|
|
(136.9)
|
|
|
|
|
|
Cash Flow From
Financing Activities:
|
|
|
|
|
Other borrowings, net
|
32.4
|
|
42.3
|
|
Excess tax benefit from stock-based compensation
arrangements
|
0.5
|
|
1.8
|
|
Proceeds from stock options exercised
|
6.1
|
|
4.8
|
|
Net Cash Provided by Financing Activities
|
39.0
|
|
48.9
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(17.3)
|
|
(5.3)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
(88.9)
|
|
122.8
|
|
Cash and cash
equivalents at beginning of period
|
772.1
|
|
597.5
|
|
Cash and cash
equivalents at end of period
|
$
683.2
|
|
$
720.3
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid during the
period-
|
|
|
|
|
Interest
|
$
51.4
|
|
$
51.3
|
|
Income taxes, net of
refunds
|
$
19.4
|
|
$
0.7
|
|
Accrued capital
expenditures
|
$
18.4
|
|
$
8.9
|
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
|
Net Sales by
Product Line
|
|
|
(Unaudited)
|
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2013
|
|
2012
|
|
% Change at
Actual
Currency
Rates
|
|
% Change at
Constant
Currency
Rates(1)
|
|
|
Americas—
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
$
539.3
|
|
$
491.7
|
|
9.7 %
|
|
9.9 %
|
|
|
Medication
Management
|
176.5
|
|
213.4
|
|
(17.3)%
|
|
(17.0)%
|
|
|
Other
Pharma
|
100.4
|
|
105.2
|
|
(4.6)%
|
|
(4.5)%
|
|
|
Total
Americas
|
816.2
|
|
810.3
|
|
0.7 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Europe, Middle
East & Africa ("EMEA")—
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
82.0
|
|
82.3
|
|
(0.4)%
|
|
(1.9)%
|
|
|
Medication
Management
|
27.0
|
|
30.2
|
|
(10.6)%
|
|
(11.9)%
|
|
|
Other
Pharma
|
20.3
|
|
22.8
|
|
(11.0)%
|
|
(10.1)%
|
|
|
Total EMEA
|
129.3
|
|
135.3
|
|
(4.4)%
|
|
(5.5)%
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
("APAC")—
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
68.5
|
|
70.2
|
|
(2.4)%
|
|
1.0 %
|
|
|
Medication
Management
|
10.5
|
|
11.5
|
|
(8.7)%
|
|
(7.8)%
|
|
|
Other
Pharma
|
1.7
|
|
6.0
|
|
(71.7)%
|
|
(71.7)%
|
|
|
Total APAC
|
80.7
|
|
87.7
|
|
(8.0)%
|
|
(5.1)%
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$
1,026.2
|
|
$
1,033.3
|
|
(0.7)%
|
|
(0.4)%
|
|
|
|
|
|
|
|
|
|
|
|
Global—
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
$
689.8
|
|
$
644.2
|
|
7.1 %
|
|
7.4 %
|
|
|
Medication
Management
|
214.0
|
|
255.1
|
|
(16.1)%
|
|
(16.0)%
|
|
|
Other
Pharma
|
122.4
|
|
134.0
|
|
(8.7)%
|
|
(8.4)%
|
|
|
Net Sales
|
$
1,026.2
|
|
$
1,033.3
|
|
(0.7)%
|
|
(0.4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Non-GAAP
financial measures contained in this press release include
comparisons at constant currency rates, which reflect comparative
local currency balances at prior period foreign exchange rates.
Hospira calculated these percentages by taking current period
reported net sales less the respective prior period reported net
sales, divided by the prior period reported net sales, all at the
respective prior period's foreign exchange rates. This measure
provides information on the change in net sales assuming that
foreign currency exchange rates have not changed between the prior
and the current period. Management believes the use of this measure
aids in the understanding of our change in net sales without the
impact of foreign currency and provides greater transparency into
Hospira's results of operations.
|
|
|
|
|
|
|
Hospira,
Inc.
|
|
Net Sales by
Product Line
|
|
(Unaudited)
|
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjusted(1)(3)
|
|
|
GAAP Net Sales
2013
|
|
Adjusted Net
Sales
2013(1)(3)
|
|
GAAP Net
Sales 2012
|
|
% Change at
Actual
Currency
Rates
|
|
% Change at
Constant
Currency
Rates(2)
|
|
% Change at
Actual
Currency
Rates
|
|
% Change at
Constant
Currency
Rates(2)
|
|
Americas—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
$
1,050.4
|
|
$
1,050.4
|
|
$
949.4
|
|
10.6 %
|
|
10.9 %
|
|
10.6 %
|
|
10.9 %
|
|
Medication
Management
|
275.2
|
|
363.6
|
|
426.6
|
|
(35.5)%
|
|
(35.2)%
|
|
(14.8)%
|
|
(14.5)%
|
|
Other
Pharma
|
189.0
|
|
189.0
|
|
204.6
|
|
(7.6)%
|
|
(7.5)%
|
|
(7.6)%
|
|
(7.5)%
|
|
Total
Americas
|
1,514.6
|
|
1,603.0
|
|
1,580.6
|
|
(4.2)%
|
|
(3.9)%
|
|
1.4 %
|
|
1.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
164.4
|
|
164.4
|
|
158.5
|
|
3.7 %
|
|
2.4 %
|
|
3.7 %
|
|
2.4 %
|
|
Medication
Management
|
45.3
|
|
58.5
|
|
61.0
|
|
(25.7)%
|
|
(26.7)%
|
|
(4.1)%
|
|
(5.1)%
|
|
Other
Pharma
|
36.8
|
|
36.8
|
|
43.7
|
|
(15.8)%
|
|
(15.1)%
|
|
(15.8)%
|
|
(15.1)%
|
|
Total EMEA
|
246.5
|
|
259.7
|
|
263.2
|
|
(6.3)%
|
|
(7.3)%
|
|
(1.3)%
|
|
(2.2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APAC—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
126.8
|
|
126.8
|
|
122.7
|
|
3.3 %
|
|
6.0 %
|
|
3.3 %
|
|
6.0 %
|
|
Medication
Management
|
17.8
|
|
20.5
|
|
23.7
|
|
(24.9)%
|
|
(24.5)%
|
|
(13.5)%
|
|
(13.1)%
|
|
Other
Pharma
|
4.5
|
|
4.5
|
|
9.0
|
|
(50.0)%
|
|
(50.0)%
|
|
(50.0)%
|
|
(50.0)%
|
|
Total APAC
|
149.1
|
|
151.8
|
|
155.4
|
|
(4.1)%
|
|
(1.9)%
|
|
(2.3)%
|
|
(0.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$
1,910.2
|
|
$
2,014.5
|
|
$
1,999.2
|
|
(4.5)%
|
|
(4.2)%
|
|
0.8 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Injectable
Pharmaceuticals
|
$
1,341.6
|
|
$
1,341.6
|
|
$
1,230.6
|
|
9.0 %
|
|
9.3 %
|
|
9.0 %
|
|
9.3 %
|
|
Medication
Management
|
338.3
|
|
442.6
|
|
511.3
|
|
(33.8)%
|
|
(33.7)%
|
|
(13.4)%
|
|
(13.3)%
|
|
Other
Pharma
|
230.3
|
|
230.3
|
|
257.3
|
|
(10.5)%
|
|
(10.3)%
|
|
(10.5)%
|
|
(10.3)%
|
|
Net Sales
|
$
1,910.2
|
|
$
2,014.5
|
|
$
1,999.2
|
|
(4.5)%
|
|
(4.2)%
|
|
0.8 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted Net sales
for the six months ended June 30, 2013 excludes charges of $104.3
million related to the device strategy. The device strategy charges
are reported in the respective Medication Management Net sales by
product line as follows: Americas-$88.4 million, EMEA-$13.2 million
and APAC-$2.7 million. There were no adjustments included in GAAP
Net sales for the six months ended June 30, 2012.
|
|
(2)
|
The Non-GAAP
financial measures contained in this press release include
comparisons at constant currency rates, which reflect comparative
local currency balances at prior period foreign exchange rates.
Hospira calculated these percentages by taking current period
reported net sales less the respective prior period reported net
sales, divided by the prior period reported net sales, all at the
respective prior period's foreign exchange rates. This measure
provides information on the change in net sales assuming that
foreign currency exchange rates have not changed between the prior
and the current period. Management believes the use of this measure
aids in the understanding of our change in net sales without the
impact of foreign currency and provides greater transparency into
Hospira's results of operations.
|
|
(3)
|
Adjusted financial
measures exclude certain specified items as described and
reconciled to comparable GAAP financial measures in the
Reconciliation of GAAP to Non-GAAP Financial Measures contained in
this press release.
|
|
|
SOURCE Hospira, Inc.