HSP

GAAP

Three Months Ended
September 30,

%
Change

Adjusted*

Three Months Ended
September 30,

%
Change

2014

2014

2013

Net Sales

$1,150.6

$1,008.2

14.1%

$1,150.6

$1,008.2

14.1%

Gross Profit (Net Sales less Cost of Products Sold)

$431.3

$290.2

48.6%

$478.0

$371.4

28.7%

Income from Operations

$227.5

$29.8

nm

$192.6

$122.0

57.9%

Diluted Earnings per Share

$0.92

$0.01

nm

$0.74

$0.51

45.1%

Statistics (as a % of Net Sales)

Gross Profit (Net Sales less Cost of Products Sold)

37.5%

28.8%

41.5%

36.8%

Income from Operations

19.8%

3.0%

16.7%

12.1%

nm: Percentage change is not meaningful.

Hospira, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

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

Three Months Ended September 30,

% Change

2014

Net sales

$   1,150.6

$   1,008.2

14.1 %

Cost of products sold

719.3

718.0

0.2 %

Restructuring, impairment and (gain) on disposal of assets, net

(106.3)

9.8

nm

Research and development

86.3

69.9

23.5 %

Selling, general and administrative

223.8

180.7

23.9 %

Total operating costs and expenses

923.1

978.4

(5.7)%

Income From Operations

227.5

29.8

nm

Interest expense

19.2

23.3

(17.6)%

Other expense, net

4.3

39.0

(89.0)%

Income (Loss) Before Income Taxes

204.0

(32.5)

nm

Income tax expense (benefit)

48.6

(31.7)

253.3 %

Equity income from affiliates, net

(3.2)

(2.7)

18.5 %

Net Income

$     158.6

$         1.9

nm

Earnings Per Common Share:

Basic

$       0.94

$       0.01

nm

Diluted

$       0.92

$       0.01

nm

Weighted Average Common Shares Outstanding:

Basic

168.9

165.7

1.9 %

Diluted

171.8

167.0

2.9 %

Adjusted Gross Profit ⁽¹⁾⁽²⁾

$     478.0

$     371.4

28.7 %

Adjusted Income From Operations ⁽¹⁾

$     192.6

$     122.0

57.9 %

Adjusted Net Income ⁽¹⁾

$     127.5

$       84.5

50.9 %

Adjusted Diluted Earnings Per Share ⁽¹⁾

$       0.74

$       0.51

45.1 %

Statistics (as a % of Net sales, except for income tax rate)

GAAP Three Months Ended September 30,

Adjusted ⁽¹⁾ Three Months Ended September 30,

2014

2013

2013

Gross Profit ⁽²⁾

37.5 %

28.8 %

41.5 %

36.8 %

Income From Operations

19.8 %

3.0 %

16.7 %

12.1 %

Net Income

13.8 %

0.2 %

11.1 %

8.4 %

Income Tax Rate

23.8 %

97.5 %

26.5 %

17.5 %

(1)

Adjusted financial measures are Non-GAAP measures and exclude 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 specified items, as indicated in the previous footnote.

nm

Percentage change is not meaningful.

Hospira, Inc.

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

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

Nine Months Ended September 30,

% Change

2014

2013

Net sales

$  3,337.2

$  2,918.4

14.4 %

Cost of products sold

2,136.3

2,159.5

(1.1)%

Restructuring, impairment and (gain) on disposal of assets, net

(92.0)

21.4

nm

Research and development

245.2

218.1

12.4 %

Selling, general and administrative

621.1

556.0

11.7 %

Total operating costs and expenses

2,910.6

2,955.0

(1.5)%

Income (Loss) From Operations

426.6

(36.6)

nm

Interest expense

58.9

62.8

(6.2)%

Other expense, net

1.4

51.3

(97.3)%

Income (Loss) Before Income Taxes

366.3

(150.7)

343.1 %

Income tax expense (benefit)

84.1

(96.2)

187.4 %

Equity income from affiliates, net

(15.2)

(12.7)

19.7 %

Net Income (Loss)

$     297.4

$      (41.8)

nm

Earnings (Loss) Per Common Share:

Basic

$       1.77

$      (0.25)

nm

Diluted

$       1.75

$      (0.25)

nm

Weighted Average Common Shares Outstanding:

Basic

167.7

165.5

1.3 %

Diluted

170.2

165.5

2.8 %

Adjusted Net Sales ⁽¹⁾⁽²⁾

$  3,337.2

$  3,022.7

10.4 %

Adjusted Gross Profit ⁽¹⁾⁽³⁾

$  1,362.1

$  1,119.8

21.6 %

Adjusted Income From Operations ⁽¹⁾

$     523.4

$     349.6

49.7 %

Adjusted Net Income ⁽¹⁾

$     351.3

$     262.7

33.7 %

Adjusted Diluted Earnings Per Share ⁽¹⁾

$       2.06

$       1.58

30.4 %

Statistics (as a % of Net sales, except for income tax rate)

GAAP Nine Months Ended September 30,

Adjusted ⁽¹⁾ Nine Months Ended September 30,

2014

2013

2014

2013

Gross Profit ⁽³⁾

36.0 %

26.0 %

40.8 %

37.0 %

Income (Loss) From Operations

12.8 %

(1.3)%

15.7 %

11.6 %

Net Income (Loss)

8.9 %

(1.4)%

10.5 %

8.7 %

Income Tax Rate

23.0 %

63.8 %

26.5 %

12.7 %

(1)

Adjusted financial measures are Non-GAAP measures and exclude 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 Device Strategy charges included in GAAP Net sales for the nine months ended September 30, 2014.

(3)

Gross profit is defined as Net sales less Cost of products sold. Adjusted gross profit excludes specified items, as indicated in the previous footnotes.

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 September 30, 2014 Reconciliation of GAAP to Non-GAAP Financial Measures:

Gross Profit ⁽¹⁾

Income From
Operations

Net Income

Diluted EPS

GAAP Financial Measures

$          431.3

$                        227.5

$     158.6

$        0.92

Specified Items ⁽²⁾

Device Strategy charges ^(A)

3.3

3.3

3.2

0.02

Amortization of certain intangible assets ^(B)

12.8

12.8

10.1

0.06

Certain quality and product related charges ^(C)

12.3

12.3

7.9

0.05

Capacity expansion related charges ^(D)

16.4

16.4

10.8

0.06

Acquisition and integration related charges ^(E)

1.9

26.7

24.1

0.14

Divestiture gains ^(F)

—

(105.8)

(86.8)

(0.51)

Other restructuring charges (releases) ^(G)

—

(0.6)

(0.4)

—

Adjusted financial measures ⁽³⁾

$          478.0

$                        192.6

$     127.5

$        0.74

GAAP results for the three months ended September 30, 2014 include:

(A)

Device Strategy charges: $3.3 million reported in Cost of products sold. These charges include consulting, customer accommodations, 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 and an active pharmaceutical ingredient business by Hospira Healthcare India Private Limited ("Hospira India").

(C)

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, and device product review and remediation costs to address identified issues. These charges are primarily associated with Hospira's response to certain United States Food and Drug Administration ("FDA") warning letters and charges related to certain device related remediation activities.

(D)

Capacity expansion related charges reported in Cost of products sold include start-up charges related to manufacturing capacity expansion in India.

(E)

Acquisition and integration related charges: $1.9 million reported in Cost of products sold and $24.8 million reported in Selling, general and administrative related to the acquisition and integration of an active pharmaceutical ingredient business. Charges reported in Selling, general and administrative include an allowance on an advance to an entity controlled by the primary shareholder of Orchid Chemicals & Pharmaceuticals Ltd.'s ("Orchid").

(F)

Divestiture gains reported in Restructuring, impairment and (gain) on disposal of assets, net related to the sale of Hospira's clinical surveillance software business, Theradoc, Inc. ("Theradoc"), and Hospira's surgical suction product line.

(G)

Other restructuring charges (releases): $(0.6) million reported in Restructuring, impairment and (gain) on disposal of assets, net. These releases include accrual reversals associated with Hospira's commercial reorganization.

Three Months Ended September 30, 2013 Reconciliation of GAAP to Non-GAAP Financial Measures:

Gross Profit ⁽¹⁾

Income From
Operations

Net Income

Diluted EPS

GAAP Financial Measures

$          290.2

$                         29.8

$        1.9

$        0.01

Specified Items ⁽²⁾

Device Strategy charges ^(A)

15.7

18.9

13.8

0.08

Amortization of certain intangible assets ^(B)

16.4

16.4

11.5

0.07

Impairment of certain assets ^(C)

—

3.5

(0.4)

—

Certain quality and product related charges ^(D)

42.5

42.5

27.7

0.17

Capacity expansion related charges ^(E)

6.6

6.6

4.3

0.03

Acquisition and integration related charges ^(F)

—

1.2

0.7

—

Other restructuring charges ^(G)

—

3.1

2.2

0.01

Early debt extinguishment charges ^(H)

—

—

22.8

0.14

Adjusted financial measures ⁽³⁾

$          371.4

$                        122.0

$       84.5

$        0.51

GAAP results for the three months ended September 30, 2013 include:

(A)

Device Strategy charges: $15.7 million in Cost of products sold and $3.2 million reported in Restructuring, impairment and (gain) on disposition of assets, net. These charges include consulting, customer accommodations, other asset impairments, accelerated depreciation, 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: $3.5 million reported in Restructuring, impairment and (gain) on disposal of assets, net and $3.1 million reported in Other expense, net. These charges relate to impairments of certain intangible assets and investments, 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, 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 then pending acquisition and integration of an active pharmaceutical ingredient business.

(G)

Other restructuring charges: $3.1 million reported in Restructuring, impairment and (gain) on disposal of assets, net. These charges include severance charges associated with Hospira's commercial reorganization.

(H)

Early debt extinguishment charges: $33.4 million reported in Other expense, net and $3.0 million reported in Interest expense. These charges include a make whole provision, write-off of debt issue costs, discounts and deferred gain on interest rate hedges, and interest expense associated with an overlap of outstanding debt.

(1)

Gross profit is defined as Net sales less Cost of products sold.

(2)

Specified items are shown net of tax in aggregate of an expense of $3.8 million and benefit of $49.0 million for the three months ended September 30, 2014 and 2013, 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 specified items.  Management believes the Non-GAAP financial measures represent the amounts directly related to the ongoing operations of the business and uses these measures in evaluating performance. 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 and may not be comparable to, or calculated in the same manner as, Non-GAAP financial measures published by other companies.  Refer to Hospira's Form 8-K furnished on November 6, 2014.

Hospira, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(dollars in millions, except for per share amounts)

Nine Months Ended September 30, 2014 Reconciliation of GAAP to Non-GAAP Financial Measures:

Gross Profit ⁽¹⁾

Income From
Operations

Net Income

Diluted EPS

GAAP Financial Measures

$       1,200.9

$                        426.6

$               297.4

$        1.75

Specified Items ⁽²⁾

Device Strategy charges ^(A)

15.3

16.6

13.7

0.08

Amortization of certain intangible assets ^(B)

48.2

48.2

34.7

0.20

Impairment of certain assets ^(C)

—

6.1

3.8

0.02

Certain quality and product related charges ^(D)

51.4

51.4

32.9

0.19

Capacity expansion related charges ^(E)

44.4

44.4

29.3

0.17

Acquisition and integration related charges ^(F)

1.9

29.5

22.3

0.13

Facilities optimization charges ^(G)

—

5.0

3.1

0.02

Divestiture gains ^(H)

—

(105.8)

(86.8)

(0.51)

Other restructuring charges ^(I)

—

1.4

0.9

0.01

Adjusted financial measures ⁽³⁾

$       1,362.1

$                        523.4

$               351.3

$        2.06

GAAP results for the nine months ended September 30, 2014 include:

(A)

Device Strategy charges: $15.3 million reported in Cost of products sold and $1.3 million reported in Restructuring, impairment and (gain) on disposal of assets, net. These charges include consulting, customer accommodations, collection and destruction costs, accelerated depreciation, 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 and an active pharmaceutical ingredient business by Hospira India.

(C)

Impairments of certain property and equipment assets reported in Restructuring, impairment and (gain) on disposal of assets, net.

(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, and device product review and remediation costs to address identified issues. These charges are primarily associated with Hospira's response to certain 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: $1.9 million reported in Cost of products sold and $27.6 million reported in Selling, general and administrative, and ($5.8) million of foreign exchange hedge gains reported in Other expense, net related to the acquisition and integration of an active pharmaceutical ingredient business. Charges reported in Selling, general and administrative include an allowance on an advance to an entity controlled by the primary shareholder of Orchid.

(G)

Facilities optimization charges reported in Restructuring, impairment and (gain) on disposal of assets, net related to the sale of the Buffalo, NY, manufacturing facility.

(H)

Divestiture gains reported in Restructuring, impairment and (gain) on disposal of assets, net related to the sale of Hospira's clinical surveillance software business, Theradoc, and Hospira's surgical suction product line.

(I)

Other restructuring charges: $1.4 million reported in Restructuring, impairment and (gain) on disposal of assets, net. These charges include severance costs associated with Hospira's commercial reorganization.

Nine Months Ended September 30, 2013 Reconciliation of GAAP to Non-GAAP Financial Measures:

Net Sales

Gross Profit ⁽¹⁾

(Loss) Income From
Operations

Net (Loss) Income

Diluted EPS

GAAP Financial Measures

$                2,918.4

$          758.9

$                        (36.6)

$                (41.8)

$       (0.25)

Specified Items ⁽²⁾

Device Strategy charges ^(A)

104.3

207.1

217.4

159.8

0.97

Amortization of certain intangible assets ^(B)

—

52.3

52.3

36.5

0.22

Impairment of certain assets ^(C)

—

—

3.5

10.8

0.06

Certain quality and product related charges ^(D)

—

87.2

87.2

57.6

0.35

Capacity expansion related charges ^(E)

—

14.3

14.3

9.3

0.06

Acquisition and integration related charges ^(F)

—

—

3.9

2.4

0.01

Other restructuring charges ^(G)

—

—

7.6

5.3

0.03

Early debt extinguishment charges ^(H)

—

—

—

22.8

0.14

Diluted share impact

(0.01)

Adjusted financial measures ⁽³⁾

$                3,022.7

$       1,119.8

$                        349.6

$               262.7

$        1.58

GAAP results for the nine months ended September 30, 2013 include:

(A)

Device Strategy charges: $104.3 million reported in Net sales, $102.8 million reported in Cost of products sold and $10.3 million reported in Restructuring, impairment and (gain) on disposal of assets, net. These charges include customer sales allowances, consulting, customer accommodations, contract termination, collection and destruction costs, inventory charges, other asset impairments, accelerated depreciation, 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: $3.5 million reported in Restructuring, impairment and (gain) on disposal of assets, net and $14.5 million reported in Other expense, net. These charges relate to impairments of certain intangible assets and investments, 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, 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 then pending acquisition and integration of an active pharmaceutical ingredient business.

(G)

Other restructuring charges: $7.6 million reported in Restructuring, impairment and (gain) on disposal of assets, net. These charges include severance charges associated with Hospira's commercial reorganization.

(H)

Early debt extinguishment charges: $33.4 million reported in Other expense, net and $3.0 million reported in Interest expense. These charges include a make whole provision, write-off of debt issue costs, discounts and deferred gain on interest rate hedges, and interest expense associated with an overlap of outstanding debt.

(1)

Gross profit is defined as Net sales less Cost of products sold.

(2)

Specified items are shown net of tax in aggregate of $37.1 million and $132.6 million for the nine months ended September 30, 2014 and 2013, 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 specified items.  Management believes the Non-GAAP financial measures represent the amounts directly related to the ongoing operations of the business and uses these measures in evaluating performance. 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 and may not be comparable to, or calculated in the same manner as, Non-GAAP financial measures published by other companies.  Refer to Hospira's Form 8-K furnished on November 6, 2014.

Hospira, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(dollars in millions)

September 30,

December 31,

2014

2013

Assets

Current Assets:

 Cash and cash equivalents

$          541.4

$         798.1

 Trade receivables, less allowances of $10.3 and $11.2, respectively

610.2

574.3

 Inventories, net

1,190.0

1,066.2

 Deferred income taxes and other

215.2

208.6

 Prepaid expenses

71.3

90.0

 Other receivables

131.1

101.3

Total Current Assets

2,759.2

2,838.5

Property and equipment, net

1,787.7

1,574.2

Intangible assets, net

145.1

172.2

Goodwill

1,093.0

1,057.7

Deferred income taxes

314.6

358.9

Investments

257.1

33.1

Other assets

136.4

144.3

Total Assets

$       6,493.1

$      6,178.9

Liabilities and Shareholders' Equity

Current Liabilities:

 Short-term borrowings

$            12.9

$           93.7

 Trade accounts payable

356.1

329.2

 Salaries, wages and commissions

212.7

185.4

 Other accrued liabilities

588.2

556.8

Total Current Liabilities

1,169.9

1,165.1

Long-term debt

1,749.2

1,747.0

Deferred income taxes

6.9

3.2

Post-retirement obligations and other long-term liabilities

215.4

301.7

Commitments and Contingencies

Total Shareholders' Equity

3,351.7

2,961.9

Total Liabilities and Shareholders' Equity

$       6,493.1

$      6,178.9

Hospira, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(dollars in millions)

Nine Months Ended September 30,

Cash Flow From Operating Activities:

2014

2013

Net Income (Loss)

$297.4

$ (41.8)

Adjustments to reconcile Net Income (Loss) to net cash from operating activities-

Depreciation

134.7

128.9

Amortization of intangible assets

60.8

63.8

Loss on early debt extinguishment

—

33.4

Stock-based compensation expense

40.3

31.1

Undistributed equity income from affiliates

(15.2)

(12.7)

Distributions received from equity affiliates

16.3

30.1

Deferred income taxes and other tax adjustments

12.8

(119.7)

Impairments and other asset charges

7.3

73.1

Gain on disposal of assets

(100.8)

(0.9)

Changes in assets and liabilities, net of the effects of acquisitions-

Trade receivables

(57.4)

11.2

Inventories

(100.4)

(144.3)

Prepaid expenses and other assets

(8.2)

(48.7)

Trade accounts payable

33.4

(11.3)

Other liabilities

(0.3)

60.0

Other, net

13.6

9.3

Net Cash Provided by Operating Activities

61.5

Cash Flow From Investing Activities:

Capital expenditures (including instruments placed with or leased to customers)

(279.0)

(248.5)

Acquisitions, net of cash acquired

(223.4)

—

Purchases of intangibles and other investments

(35.2)

(12.2)

Purchase of debt security

(200.0)

—

Proceeds from disposal of businesses and assets

130.7

1.4

Net Cash Used in Investing Activities

(606.9)

(259.3)

Cash Flow From Financing Activities:

Issuance of long-term debt, net of fees paid

—

691.8

Repayment of long-term debt

—

(650.0)

Payment on early debt extinguishment

—

(39.8)

Other borrowings, net

(84.8)

56.0

Excess tax benefit from stock-based compensation arrangements

4.4

1.1

Proceeds from stock options exercised

105.9

13.0

Net Cash Provided by Financing Activities

25.5

72.1

Effect of exchange rate changes on cash and cash equivalents

(9.6)

(14.6)

Net change in cash and cash equivalents

(256.7)

(140.3)

Cash and cash equivalents at beginning of period

798.1

772.1

Cash and cash equivalents at end of period

$631.8

Supplemental Cash Flow Information:

Cash paid during the period-

Interest

$101.7

$  93.7

Income taxes, net of refunds

$  40.6

$  55.7

Accrued capital expenditures

$  27.9

$  12.2

Hospira, Inc.

Net Sales by Product Line

(Unaudited)

(dollars in millions)

Three Months Ended September 30,

2014

2013

% Change at
Actual Currency
Rates

% Change at
Constant Currency
Rates⁽¹⁾

Americas—

  Specialty Injectable Pharmaceuticals

$   629.8

$   539.8

16.7 %

16.9 %

  Medication Management

169.9

175.2

(3.0)%

(1.9)%

  Other Pharma

139.3

89.2

56.2 %

56.5 %

Total Americas

939.0

804.2

16.8 %

17.2 %

Europe, Middle East & Africa ("EMEA")—

  Specialty Injectable Pharmaceuticals

87.1

80.4

8.3 %

8.0 %

  Medication Management

25.6

23.9

7.1 %

6.7 %

  Other Pharma

22.4

19.2

16.7 %

11.5 %

Total EMEA

135.1

123.5

9.4 %

8.3 %

Asia Pacific ("APAC")—

  Specialty Injectable Pharmaceuticals

63.4

64.8

(2.2)%

(2.3)%

  Medication Management

12.0

10.7

12.1 %

12.1 %

  Other Pharma

1.1

5.0

(78.0)%

(78.0)%

Total APAC

76.5

80.5

(5.0)%

(5.2)%

Net Sales

$1,150.6

$1,008.2

14.1 %

14.3 %

Global—

  Specialty Injectable Pharmaceuticals

$   780.3

$   685.0

13.9 %

14.0 %

  Medication Management

207.5

209.8

(1.1)%

(0.2)%

  Other Pharma

162.8

113.4

43.6 %

42.9 %

Net Sales

$1,150.6

$1,008.2

14.1 %

14.3 %

(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)

Nine Months Ended September 30,

Adjusted⁽¹⁾⁽³⁾

GAAP Net Sales
2014

GAAP Net Sales
2013

Adjusted Net Sales
2013⁽¹⁾⁽³⁾

% 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

$                   1,825.8

$                   1,590.4

$               1,590.4

14.8 %

15.5 %

14.8 %

15.5 %

  Medication Management

516.7

450.4

538.8

14.7 %

16.6 %

(4.1)%

(2.5)%

  Other Pharma

351.5

278.1

278.1

26.4 %

26.8 %

26.4 %

26.8 %

Total Americas

2,694.0

2,318.9

2,407.3

16.2 %

17.1 %

11.9 %

12.8 %

EMEA—

  Specialty Injectable Pharmaceuticals

257.5

244.7

244.7

5.2 %

2.2 %

5.2 %

2.2 %

  Medication Management

79.2

69.2

82.4

14.5 %

11.0 %

(3.9)%

(6.8)%

  Other Pharma

63.8

56.0

56.0

13.9 %

8.0 %

13.9 %

8.0 %

Total EMEA

400.5

369.9

383.1

8.3 %

4.8 %

4.5 %

1.1 %

APAC—

  Specialty Injectable Pharmaceuticals

198.5

191.6

191.6

3.6 %

7.3 %

3.6 %

7.3 %

  Medication Management

33.4

28.5

31.2

17.2 %

21.1 %

7.1 %

10.6 %

  Other Pharma

10.8

9.5

9.5

13.7 %

13.7 %

13.7 %

13.7 %

Total APAC

242.7

229.6

232.3

5.7 %

9.3 %

4.5 %

8.0 %