1274057--3/15/2006--HOSPIRA

related topics

{regulation, government, change}

{product, candidate, development}

{property, intellectual, protect}

{cost, operation, labor}

{tax, income, asset}

{operation, international, foreign}

{product, market, service}

{gas, price, oil}

{system, service, information}

{loss, insurance, financial}

{acquisition, growth, future}

{stock, price, share}

{competitive, industry, competition}

{interest, director, officer}

{capital, credit, financial}

Hospira's historical financial information may not be indicative of its future results as an independent company. Hospira has a limited history operating as an independent company, and may experience increased costs as it progresses in its transition to an independent company that could decrease its overall profitability. Hospira may not successfully transition its operations outside the United States. As Hospira builds its information technology infrastructure and transitions data to its own systems, it could experience temporary business interruptions and incur substantial additional costs. Hospira's obligation to indemnify Abbott from liabilities relating to its business could be burdensome. There could be significant liability if the distribution of Hospira stock in the spin-off is determined to be a taxable transaction. Hospira faces significant competition and may not be able to compete effectively. If Hospira does not introduce new products in a timely manner, its products may become obsolete over time, customers may not buy its products, and its sales and profitability may decline. Hospira depends on the success of product collaboration agreements. Hospira is subject to the cost-containment efforts of hospital buying groups, wholesalers, distributors, third-party payors and government organizations. If Hospira is unable to maintain its GPO pricing agreements, sales of its products could decline. Hospira and its suppliers and customers are subject to various governmental regulations, and it could be costly to comply with these regulations and to develop compliant products and processes. The manufacture of Hospira's products is highly exacting and complex, and if Hospira or its suppliers encounter problems manufacturing products, Hospira's business could suffer. Hospira is experiencing higher costs to produce its products as a result of rising oil and gas prices. Hospira depends on third parties to supply raw materials and other components and may not be able to obtain sufficient quantities of these materials, which could limit Hospira's ability to manufacture products on a timely basis and could harm its profitability. Hospira's cost reduction activities have resulted in significant charges. These activities may disrupt Hospira's business and may not result in the intended cost savings. Hospira's manufacturing capacity could limit its ability to expand its business without significant capital investment. Hospira may acquire other businesses, license rights to technologies or products from third parties, or form alliances that could cause it to incur significant expenses, which could negatively affect its profitability. To take advantage of strategic opportunities, Hospira may need to raise additional capital, which may not be available on acceptable terms, or at all. Hospira conducts sales activity outside of the United States and is subject to additional business risks that may cause its sales and profitability to decline. Hospira is subject to healthcare fraud and abuse regulations that could result in significant liability and require Hospira to change its business practices and restrict its operations in the future. State and federal investigations and existing and future lawsuits relating to the alleged reporting of false or misleading pricing information in connection with Medicare and Medicaid programs could have a material adverse effect on Hospira's business, profitability and financial condition. Income taxes can have an unpredictable effect on Hospira's results of operations and result in greater than anticipated liabilities. Hospira may incur product liability losses and insurance coverage could be inadequate or unavailable to cover these losses. If Hospira is unable to protect its intellectual property rights or if Hospira infringes the intellectual property rights of third parties, its business and prospects could be harmed. Hospira has outstanding stock options, which may dilute the ownership of its existing shareholders.

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1274057--3/15/2006--HOSPIRA_INC