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Hospira Reports Second-Quarter 2011 Results
Date:7/27/2011

rges relate to facilities optimization from the closure or departure from certain manufacturing and research and development ("R&D") facilities and include costs for severance and other employee benefits, accelerated depreciation and relocation of production and R&D operations.(C)

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.(D)

Certain quality and product related charges reported in Cost of products sold primarily include third party oversight and consulting costs and penalties for failure to supply certain product to customers. These charges are directly associated with Hospira's response to the United States Food and Drug Administration ("FDA") Warning Letter received in April 2010.(E)

Acquisition and integration-related charges: $1.2 million reported in Research and development and $(1.0) million reported in Selling, general and administrative. These charges include acquisition and integration costs resulting from acquisitions including Javelin Pharma and a generic injectable business by Hospira India.(F)

Retractable Technologies, Inc. (“RTI”) litigation settlement and related charges reported in Selling, general and administrative.(G)

Research and development charge resulting from an initial payment related to an agreement with DURECT and corresponding milestone reached for development of a long-acting local anesthetic product that has not yet achieved regulatory approval.(1)

Gross profit is defined as Net sales less Cost of products sold.(2)

Adjusted Net Income is shown net of tax of $7.0 million and $35.7 million for the three months ended June 30, 2011 and 2010, respectively, based on the statutory tax rate in the various tax jurisdictions in which the adjustments occurred.(3)

The Non-GAAP financial measures contained in this press release (including ad
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SOURCE Hospira, Inc.
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